How to Start a Vinyl Business

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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 decal business all your own.

Business Overview

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 that 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 even incorporate their names into designs.

Industry Summary

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.

Industry Trends

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. At the same time, 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.

 

Target Market

A vinyl business’s 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 specializing in more craft-related products may market to the general public or have a more refined target market by focusing on consumers who share a common interest, like pets, and looking for customized goods. Other potential customers include creating vinyl wall decals for interior designers, event organizers, wedding planners, or signs and vinyl stickers for local businesses.

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. They 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 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 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 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 keep the cost of the 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:

  • Cutting machine, cutting mat, blades, heat press, squeegee, Cricut maker
  • Software
  • Computer, printer, and graphics design software (Photoshop, Adobe Illustrator, or CorelDraw), and cutting software (Sure Cuts and Make the Cut)
  • Supplies
  • Inventory of vinyl rolls, t-shirts, and labels
  • Signage

 

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.

Related:
How to write a business plan
Free sample business plans

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 Limited Liability Company (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: Name the Business

Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Step 4: 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 size, location, and amenities of the space.

Related: Choosing a business location

Step 5: Register for Business Licenses and Permits

There are no specific licenses for vinyl businesses; however, there are some general local, state, and federal registrations a business may need depending on its location. Some of these include a sales tax permit and Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Step 6: Open a Business Bank Account

Keeping your business and personal finances in separate small business bank and credit card accounts makes it easier to track the business’s income and expenses.

Step 7: 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 creating social media profiles on Facebook, Instagram and Pinterest, online advertising, print advertising, and more. Marketing costs vary depending on the type and volume of marketing performed.

If you intend to sell at craft shows, you may want to invest in business cards and flyers too.

Related: Low-cost ideas to market a new business

Step 8: Get Business 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 cover expenses if the business’s equipment or inventory are ever damaged or destroyed in an event like a fire.
  • Worker’s compensation insurance can 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.

Related: Types of insurance your business may need

Step 9: Hire Employees

Specific data on salary rates for vinyl cutters aren’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

Step 10: Set up an Accounting System

Setting up an accounting system is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

 

How much can you potentially make owning a vinyl business?

While the 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’s chances of bringing in higher profits, it’s important to find a way to specialize or 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 number of customers in a short period of time. While this business model requires a greater investment than other, non-mobile business models, it could be an effective way to boost a business.

According to Foam Core Print, you need to be aware of copyrights that surround designs. If you download a design and then sell the product 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. In some cases, you can purchase a commercial license, while sometimes you can’t. It’s safest, and sometimes most appealing, to create your own designs as you may also be able to get people to pay to use your design. 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.

 

Resources:
American Craft Council
Association for Creative Industries
Craft Industry Alliance

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