Last Updated on June 5, 2020
Combining the artistic, the creative, and the meticulous, the vinyl cutting industry doesn’t only offer a fun way to exercise your creative nature, but it can even offer a valuable business opportunity. Vinyl cutting businesses may specialize in everything from automotive decals to home decor and decals and stickers. If you’re full of great ideas, like to create eye-catching designs, and are looking for a business that you can start even on a part-time business, then it might be time to start a vinyl business all your own.
Vinyl businesses provide cut vinyl for many different purposes. Some businesses may specialize in vinyl for car decoration, precisely cutting pieces to fit particular vehicles. Other businesses may specialize in decals which can be applied to vehicles, walls, and other surfaces. Businesses that take a crafting approach may affix cut vinyl to many different items, like water bottles, drinking glasses, and notebooks, before selling those items.
These businesses all use a vinyl cutter to cut rolls of vinyl into unique designs. While traditional vinyl cutters were manually operated, most of today’s machines are powered and work in conjunction with a computer. Customization is a major aspect in this industry, and many businesses allow customers to pick their own colors and designs, and to even incorporate their names into designs.
According to Transparency Market Research, the vinyl cutting market encompasses residential, commercial, and industrial purposes. Businesses distribute products through both brick and mortar locations and online. This is a worldwide market, though the North American market is expected to dominate the market because of increased demand for cutters and products. The Asia Pacific and European markets are expected to follow right behind the North American market.
Many trends are influencing the vinyl cutting and decal industry. According to Sign Warehouse, the demand for adhesive-backed vinyl vehicle graphics is growing. There are plenty of opportunities in new car customization, with the recent revival of racing stripes and decals. Additionally, an increased popularity of carbon fiber vinyl accents and paint replacement with vinyl means there are plenty of vinyl cutting opportunities in the auto industry.
Eco-Friendly Crafts highlights that the craft vinyl industry is thriving, too. Vinyl has become a popular craft item, and vinyl cutting is a quickly growing niche. The emergence of Cricut and Silhouette Cameo machines have allowed crafters to pick up this hobby, while entrepreneurs can turn crafting into businesses by selling decals, wall decor, garments, and many other items made with vinyl.
While vinyl is highly popular, plastic pollution poses an environmental challenge, and the creation, use, and disposal of vinyl does emit a toxic chemical called dioxin. Eco-conscious consumers may increasingly seek out products made with eco-friendly, PVC-free vinyl, which is free of chlorine and dioxins. This vinyl is highly popular for children’s toys and other vinyl crafts, and we’re likely to see a growing market for this safer, eco-friendly vinyl.
A vinyl business’ target market will partially depend on its specialization. A business that creates vinyl decals and wraps for vehicles will market to vehicle owners with disposable income who highly value their vehicles’ appearance. A business that specializes in more craft-related products may market to the general public, or may have a more refined target market by focusing on consumers who share a common interest, like pets, and who are looking for customized goods.
Skills, experience, and education useful in running a vinyl business
Starting a vinyl business doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this type of business.
Design skills. Vinyl business owners may create designs from hand, so artistic and design skills can be valuable and can give the business an advantage in being able to custom create designs to spec.
Aesthetic knowledge. Aesthetic knowledge is an advantage and it will help a business owner to choose designs and colors that look great and that will sell.
Math skills. Creating vinyl products can require some math and measurement skills to ensure that the cut vinyl fits appropriately.
Computer and machine knowledge. Vinyl cutters work in conjunction with computers, so knowledge of both types of systems and the ability to troubleshoot some issues will be helpful.
Awareness of current trends. By staying informed of current industry trends, a business owner can ensure that they offer the products and designs that will appeal to customers and that will sell well. This is particularly important when it comes to the automotive industry.
Customer service skills. Previous customer service experience and strong customer service skills can help to create a positive customer experience and earn returning customers.
Attention to detail. Attention to detail is important in quality control and in ensuring that orders are filled correctly. A business owner who has excellent attention to detail can minimize mistakes and help to keep the cost of wasted product down.
Costs to Start a Vinyl Business
A vinyl cutting business requires a minimum upfront investment. Depending on the model that a business needs, the vinyl cutter can be one of the largest expenses, but decent craft models also start around $300. It’s possible to start a smaller decal cutting business for $2,000.
Common startup costs for a vinyl cutting business:
- Vinyl cutter
- Inventory of vinyl
Steps to Starting a Vinyl Business
Step 1. Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a clothing line business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Step 2. Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC. Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements.
Related: Comparison of Business Entities
Step 3. Select your Location
It’s possible to start a smaller vinyl business out of a spare room in the home, saving on initial rent costs. As the business grows, it may be time to expand into a commercial space. Rent costs will depend on the space’s size, location, and amenities.
Related: Choosing a business location
Step 4. Apply for Business Licenses and Permits
There are no specific licenses for vinyl businesses however there are some common local, state and federal registrations a business may need depending on it’s location. Some of these include a sales tax permit, Employer Identification Number, Occupancy Permit among others.
Step 5. Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a vinyl business is another. While the cost to start a vinly business is low, getting a business loan can be difficult. In order to get a loan, the borrower(s) will need to have good credit and be able invest 15-25% of their money towards the total start-up costs.
Step 6. Get your Marketing Plan in Place
Marketing is essential not only when a business first launches, but also on an ongoing basis to attract new customers. Marketing can take on many forms, including social media marketing, online advertising, print advertising, and more. Marketing costs vary depending on the type and volume of marketing performed.
Step 7. Get Insurance
A vinyl business will need several types of insurance for full coverage:
- General liability insurance helps to cover expenses like medical bills or legal fees that could occur if a customer is hurt while on the business’ property.
- Commercial property insurance helps to cover expenses if the business’ equipment or inventory are ever damaged or destroyed in an event like a fire.
- Worker’s compensation insurance can help to cover expenses like lost wages and medical bills that might result if an employee is hurt while working.
Many factors can affect insurance policy costs, including the value of the business’ equipment and the number of employees on staff. To get the most accurate idea of what insurance will cost, request quotes from multiple insurance providers. When comparing the quotes, don’t just look at how the premiums compare. Instead, consider other factors, like coverage limits, exclusions, and deductibles, too.
Step 8. Hiring Employees
Specific data on salary rates for vinyl cutters isn’t available, but it’s reasonable to assume that the salaries would be similar to those of cutter operators. According to PayScale, cutter operators earn an average of $16.27 per hour, though hourly rates can range from $11.03 to $23.04.
In addition to the costs of employee salaries, a business also needs to be prepared for other employee-related expenses like paid time off, health insurance contributions, and worker’s comp insurance.
Related: Hiring your first employee
How much can you potentially make owning a vinyl business?
While information on average vinyl business incomes isn’t available, it’s important to remember that many factors can influence a business’ income. The number of years a business has been in operation, its area of specialty, its profit margins, and even the effectiveness of its marketing can all affect profits. To increase a business’ chances of bringing in higher profits, it’s important to find a way to specialize or to offer a product or service that consumers can’t find elsewhere.
Things to consider before starting a vinyl business
Because so many crafters have purchased vinyl cutting machines, this industry can be competitive unless you find a way to differentiate your business. Tackling larger cutting jobs that smaller crafting cutters can’t handle is one option. Specializing in a unique product or custom designs is another option. Be sure to perform plenty of market research to identify a need in the market before investing in a vinyl business.
While many businesses are run out of stores or workspaces, some vinyl business owners take to the road. Traveling trucks and trailers allow vinyl cutters to sell decals, stickers, and other goods at fairs and festivals. This can be a good way to reach new audiences and get your business in front of a large amount of customers in a short period of time. While this business model requires a greater investment than other, non-mobile business models do, it could be an effective way to boost a business.
According to Foam Core Print, it’s important for you to be aware of copyrights that surround designs. If you download a design and then sell the product that you’ve created, you could be sued for copyright infringement because you didn’t create the original design. Selling pieces that you’ve created with trademarked or copyrighted works, like Disney characters, can also land you in legal hot water. It’s safest, and sometimes most appealing, to create your own designs. When you create unique designs, you can build your business’ own style and won’t have to worry about selling the same products that your competitors are creating.