How to Start a Candle Business: Step-by-Step Guide

By Julija A.

June 19, 2023

The popularity of candles is arguably greater than ever, and most consumers are now open to supporting independent brands in this field. So, if you’ve been thinking about how to start a candle business over the past few years, this may be the perfect time to finally do it.

A quick look at the industry supports this idea; it was worth $3.54 billion in 2019 and is forecast to hit $6.64 billion by 2027. Moreover, it’s a surprisingly accessible sector to join, as long as you have passion, talent, and a winning strategy. 

That’s exactly what this guide to starting a candle business in 2022 aims to do. The road to turning your burning passion into a reality starts here. 

Why Choose a Candle Making Business?

Like any other business idea, starting a candle company requires a significant investment of time, money, and passion, so you need to be sure that it’s the right venture for you. This means analyzing the prospect of selling candles rather than just the benefits of being your own boss.

There are many reasons why you may wish to work in this business sector, starting with the growth that it’s currently experiencing. Other factors include;

• Earning potential – as far as the business model is concerned, a candle supply business is quite impressive. The products are cheap to make (and send), while the markups are also healthy.
• Mass appeal – candles are used in 7 out of 10 US households. This makes them one of the most commonly used home products of all, not least because most people use multiple candles each year.
• Stability – candles are inexpensive yet make a difference to our lives. As such, their sales don’t typically get affected by economic downturns, which is very important in the current situation.
• Year-long appeal – while there is a spike in sales during the festive period (unsurprisingly given that both men and women like them as gifts), two-thirds of candle sales are non-seasonal.
• Easy start – once you know how to make DIY candles, the process is quite simple and doesn’t require large volumes of equipment. In fact, many startups in this field begin as home-based ventures.

Furthermore, the candlemaker community is quite supportive. There are more than enough customers to go around and small business owners can often connect with each other in mutually beneficial business relationships.

If you already love candles as a consumer, you already know the type of products that you’ll love – it’s likely that others will too. When combined with the right business methods, you can’t go too far wrong.

What Does it Cost to Start a Candle Making Business at Home?

The opportunity to start the company at home is one of the most attractive options for many reasons, such as the opportunity to establish a healthier work-life balance or even launch the venture as a side hustle before eventually leaving your day job to go full-time. Crucially, it also removes one of the largest costs. Since 64% of businesses start with only $10,000 in capital, it’s obvious that you don’t need an obscene amount of money to get going.

Low costs are an attractive feature of running a small candle business, yet you’ll still need to consider the following overheads:

• The costs of registering your business for tax purposes.
• Candle supplies like wax, wicks, and molds.
• Double boilers and other candle production equipment.
• Increased energy bills at home.
• Branding and marketing costs, which should ideally scale up with your success.

Overall, most home candle businesses will look at somewhere between $1K and $5K to get started. However, those who want to work from a commercial setting will need to factor in rent, insurance, and potential staffing fees. The most common estimate of the cost of starting such a business is $44,000.

How to Start a Candle Business in 10 Steps

If you’ve been searching for “how to start my own candle company in America,” the great news is that it’s probably a lot simpler than you think, although it will require a lot of effort, as is the case with any venture.

Whether you have experience making candles for friends or are completely new to the field, the following tips will serve you well. 

#1. Fund Your Candle Making

Before even launching the business, you’ll need to buy yourself the essential candle making equipment. This includes products like wicks, as well as the necessary tools. Most people can fund this through personal investments or by selling a few unwanted items first.

If you plan on making candles to sell, you may eventually face some additional costs. Even if the venture becomes profitable at an early stage, you’ll need to maintain your cash flow. Some of the options include:

• Bank loans, including business loans for bad credit.
• Private investors.
• Crowdfunding from friends, family, and online supporters.
• SBA loans and business grants.

While you may not need to access funding until some of the subsequent steps have been completed, it’s important to understand the situation in advance.

#2. Become a Better Candle Maker

For a candle business to thrive, it will rely heavily on repeat customers. Spoiler alert; they’ll only continue to buy your products if you provide quality. Before selling, it’s essential that you learn to create the best possible products. If you wouldn’t be happy buying the product yourself, it’s not ready for the market. 

Research has shown that more than 10,000 scents are available in the US, while the vast majority of consumers state that fragrance is a very important factor in their selection. Some of the other key aspects to consider include:

• How long it burns for and whether that matches the stated duration.
• The price and the perceived value for money.
• How far the scent spreads across the room.
• The consistency of the candle and whether it stays in one piece.

Practice makes perfect, which is why you should have fun with different scents. There’s nothing quite like unlocking a new winner, and even the losers will help you perfect the craft of actively making candles. You may also consider candle making classes before transforming the hobby into a commercial venture.

#3. Research the Market

Over one billion pounds of wax are used to create candles in the US each year. However, that doesn’t mean all companies or consumers are the same. Even if you think you’re pretty good at making candles, you also need to understand the mechanics of the industry. Otherwise, you’ll be left with little more than an expensive hobby.

When considering how to sell candles, you must first define your target market. Generally speaking, your products will fall into one of three categories:

• Mass-market products, which can range from tealights to budget-friendly candles like those often seen in big retail stores. Traditional scents feature heavily.
• Mid-market, which may include combinations of scents while also featuring a higher quality of packaging. In some cases, they’ll promote eco-friendly or vegan aspects.
• High-end, which are premium products that are likely to be found in boutiques or prestigious homewares stores. The brand and the scents are luxurious.

The costs of making (and packaging) the candles will increase through the three markets. However, the selling prices will follow suit. You’ll need to weigh up the pros and cons of each, taking the local marketplace and any current gaps in the market into account.

#4. Create Your Candle Business Plan

Building a robust business plan is one of the most significant steps you’ll have to complete. This is true for every business ranging from food truck companies to candle companies. A business plan is a document that can help you when seeking funding. It also makes life a lot easier when it comes to hiring people. 

Most importantly, it turns your initial ideas into a vision and strategy. The business plan should:

• Outline your objectives and goals.
• Determine the strategy needed to reach those targets and overcome challenges.
• Review the ideas to see whether they are viable to make a profit.
• List the resources and equipment required.

Business plan templates are readily available. With a little research, you’ll find one that helps you consider the stages of how to start a candle business. If nothing else, the detailed plan gives a clear outline that you can follow with confidence.

#5. Register Your Candle Business 

When looking at how to sell candles, the great news is that you don’t require a license. This means that technically you could start making and selling your products immediately. If you’re only selling a handful over the course of a year, it’s more of a hobby. However, if you’re selling products with the aim of turning a profit, you’ll need to register the company.

Most people starting a business entity will choose to be a sole proprietor at this stage. However, there are some factors to take into account at this stage.

• Your state may have local insurance demands for all SMBs.
• Securing your Employer Identification Number if you plan to hire workers.
• Using the National Candle Association cautionary fire safety label.
• Setting up a business bank account.

Overall the legal requirements for selling homemade candles are fairly limited, especially when using non-hazardous wicks and waxes. In this case, you won’t even be required to list ingredients on the product packaging.

#6. Build Your Brand 

Building a brand that stands out from the crowd will be one of the most significant steps in getting your business started. Choosing candle company names is a great starting point; it’s something you probably would’ve considered during the business plan and registration elements. 

Your brand will also need to encapsulate why and how you’re making candles, as well as who they are for. Some of the issues you’ll have to consider are:

• Which fragrances you’ll produce and whether they could be broken into categories like “natural scents” or “fruit scents.”
• The brand’s standing on social responsibility, because two-thirds of customers want to stand with companies that share their views.
• A brand story that people can relate to – your backstory is vital as a small startup that’s focused on DIY candles.
• Visual elements such as the logo, packaging color schemes, web store layout, and related elements that make your candles instantly recognizable.

The biggest candle company is Yankee Candle. While you cannot copy or emulate this famous brand, you can certainly gain some ideas about how to tell a brand story and how to sell candles in a way that users know will improve their lives.

#7. Work on Making Candles to Sell

Even at the start of your journey, you would have naturally thought about how to make candles that sell. The scents and the general branding elements are crucial. However, there are over 400 well-known candle manufacturers in the US. To secure your place in the market, it will be necessary to ensure quality in every aspect of the venture.

Some of the additional options you may wish to consider are:

• Making soy candles for profit. These are totally renewable and organic, and they also burn longer, which can appeal to eco-friendly users. A CAGR rate of 8.5% should not be overlooked either.
• Decorative candles. These can be created in a plethora of unique designs. While some users may burn them as usual, many will leave them as ornaments for the home. A wide range of shapes and colors can be created with care.
• Vegan candles. These are made without beeswax and use animal-free materials instead. The plant-based waxes are usually coupled with natural scents to fit in with the brand.

It should be noted that you could look at tea lights or other alternatives. When you’ve selected the type and material you want to work with, you’ll find tutorials with ease.

#8. Assemble a Winning Team or Network

As the owner of a homemade candles business, you’d be forgiven for thinking that you need to go it alone, at least until you’ve built a larger following. In reality, you may still need to work with others, even if you don’t hire them directly.

Candle making businesses aren’t just about crafting the candles and packaging them up nicely. You’ll also need to consider these people:

• Suppliers who provide the materials for creating candles, as well as the packaging materials.
• Branding experts and freelance marketers who can bring the business to life.
• Couriers or delivery services.
• Accountants or legal experts, particularly during the pre-launch phases.

Furthermore, your network of other small businesses and other candle companies can be very useful. Whether you’re working together, trading skills, or sharing resources isn’t important; what matters is that you don’t have to face the world of business alone.

#9. Market Your Candle Making Business

When you first open your doors, it’s unlikely that you’ll need an advanced online store. In fact, you can run your candle business on Etsy, where the number of active buyers nearly doubled between 2019 and 2020 and continues to grow at a rapid rate. While they won’t all be in the market for candles, it is a great way to open yourself up to a huge online audience.

Meanwhile, you’ll find that local sales can generate a lot of your business as a new candle seller. To make the most of this, you can;

• Use social media to the max by placing local ads and interacting with customers.
• Ask friends and family to spread the word – the power of recommendation is incredible.
• Attend local community and trade events.
• Ask to stock items in other local stores for a small fee.
• Introduce subscription boxes.

If you’ve already worked on your brand and done some market research, you’ll have a good idea of how to get your products in front of the right people. Assuming that the pricing model and product quality are up to standard, you should see stunning results.

#10. Grow

The above candle business tips should help you prepare to open your doors with either one or a few scented candles. However, you can’t afford to rest on the laurels of your initial success. Growing the company is the only way to make it a permanent business venture.

No two candle businesses will follow the same path. However, you could look at the following options:

• Creating new scents to increase your catalog.
• Trying different materials and wax types.
• Opening a brick-and-mortar store or a dedicated online store.
• Creating accessories and other items linked to candles. 

It may also be possible to turn the company into a franchise. This will help the brand grow, and you’ll also take extra profits through commissions or franchising fees. It’s a long-term ambition but one that you should at least consider when starting your homemade candles business. 

Further Reading

• Startup Failure Rate and and 80+ Startling Statistics About Startups
• The 45 Most Important Advertising Statistics
• Small Business Banking: Top Banks

The Final Word

By now you should feel quite confident about how to start a candle business in 2022. If you know your audience and can create products that smell and look the part, your hopes of success should be quite strong. Not least because a product that costs you $5 to make could easily sell for three or four times that value.

Build a solid audience and there’s nothing to stop you from earning thousands of dollars in year one, followed by significant growth in the years to follow.