For all things candle and home fragrance making!
Business Start-up Plan
With 24/7 access to content and media, which enables us to buy almost anything from the comfort of our own home, it’s no wonder online businesses have become a key part of the retail world, and starting your own online business at home couldn’t be easier.
The home fragrance market is more popular than ever. With the market size valued at $5,628.9 million in 2018, and is expected to reach $9,122.6 million by 2026, registering a CAGR of 6.3% from 2019 to 2026, now is the perfect time to start your business. (Especially as you can make your own candles and wax melts easily at home in your own kitchen!)
We know starting your own business can be pretty daunting, but no need to stress about getting everything right straight away. As time goes on you’ll learn what works for you and your business, so view this as a flexible guide to get you started.
Check out our Business Plan Template and Small Business Checklist after reading this guide!
Choose Your Platform
So you’ve decided to start your own online business, now it’s time to choose your selling platform. Traditionally setting up an e-commerce website is the standard way of running an online store (See our Want to go further with your business? section for more detail). However, if you want to keep it simple and don’t want to deal with the hassle of building your own website then there are other options available. Ebay and Etsy are perfect examples, all you have to do is set up an account and create your shop and you’re ready to go. Plus, as already established shopping platforms they have a constant influx of customers, so you won’t have to worry about advertising.
Alternatively, you could set up a store on Facebook or Instagram (or both).
You heard right, social media is not only for promoting your store and products! Both platforms have the option to add a ‘shop section’ where you can list all your products and people can purchase them directly through the platform. Facebook has clear instructions that walk you through every step, including how to connect payment providers (see our Marketing your products section for instructions on how to create a social media business page).
The difference between Facebook Shop and Facebook Market Place
Facebook Shop is a section included within your Facebook Business page where customers can browse your catalogue and purchase products. Facebook Marketplace is meant for individuals as a virtual tag sale to sell used items. With Facebook Marketplace, you have to upload each item for sale individually.
With Facebook Shop, you can connect with an e-commerce platform that makes it easier to sell multiples of the same item and integrate with your other sales channels. You can also run ads to have your products from your Facebook Shop appear within the Facebook Marketplace.
Setting up your Instagram shop
To set up your Instagram shop you need to make sure you have the latest version of the Instagram app and have converted your account to a business profile. Next, make sure your Instagram and Facebook page are linked (your Facebook page should have a catalogue as mentioned above). Once you have completed these steps, Instagram will automatically review your account for approval. Approval might take a few days, but be patient—you’ll get a notification when you’re officially approved.
Choosing Your Online Payment Service
After you have set up your platform you need to choose how you will accept payments. The most popular online payment service is Paypal as it can be added to multiple platforms and also used alone through its independent app and site.
There are many other online payment services to choose from such as Google Pay, World Pay, and Stripe etc. However, if you are solely accepting payments through social media PayPal is the most recommended form of payment.
Setting A Starter Budget
We suggest creating a budget for your first two months in business, so you have a basic idea of what to expect and don’t have any nasty scares. You’ll need to estimate the cost of supplies, equipment, and overhead. You should also budget in a wage for your time and effort as a business owner as well; after all, this if for you. Check out our Start-up budget template included with this guide.
Creating Your Brand
Now for the fun part. It’s time to decide what to call your business, design a logo, colour scheme, aesthetic, and brand identity. Make sure you’re original and as different as possible to potential competitors. Focus on what makes your brand unique and what you’re passionate about. It’s okay to look at other businesses for inspiration and to see what resonates with customers, just make sure you focus on being personal and authentic. (You want to make yourself noticed and stand out from the crowd!)
Pro Tip: If you’re thinking of starting a website, it is important to check that a website domain is available to use for your business, as well as running a trademark search (a UK URL such as .co.uk is essential). You don’t have to register a trademark right away, but you’ll want to have the option available as your business grows and it is very important to check there are no other products within the same industry with registered trademarks similar to your brand.
You can search for trademarks at: https://www.gov.uk/search-for-trademark
Find your niche
So, you’ve come up with an amazing brand identity, the next step is finding your brand’s individual “niche”. You need to decide what makes your candles unique and separates them from the competition. Here are a few common ways candle makers find the perfect niche:
• Special Packaging
• Unusual or ‘funky’ names for your candles
• Unique scent combinations
• Vegan/cruelty-free made
• All-natural products
• Profit donations to charities to support a good cause
• Add on products such as:
Car air fresheners
Electric plug-in air fresheners
Wax melt snap bars
In the end, your niche should distinguish your candles and make them so unique customers won’t be able to find them anywhere else.
Define your market
The next step is deciding where your business fits in the candle marketplace. Is your aim to stay small and local? Sell to friends and family? Perhaps the local boutique shop in your town? Or are you planning on conquering the whole of the country (why not?) Either way you should consider developing your product line around one of these three areas:
Mass-market: Your standard affordable candles found at many retail stores. These candles often use economical containers and packaging and feature traditional scents like vanilla with prices ranging from £1-£5. (As a start-up business it would be very difficult to compete in the mass market.)
Mid-market: Candles with broad appeal like Yankee candles. They are usually a little higher in price ranging from £10- £23 however you can expect slightly higher quality packaging, and a lot more scent combinations like lemon and lavender, clean cotton etc.
High-end or “prestige”: A great example here would be “Jo Malone “ candles where luxury stores command a premium price. Candles in the high-end market are typically prestige-level products that place a premium on packaging, fragrance, and the story behind the brand. Price range: starting from £23 all the way up to £120!
To help identify which market suits you best, think about the people you will be selling to, how they will buy your candles (what’s your platform), and how much they’re willing to pay. You will then have a better idea of what materials you want to use, and it might help craft your brand and niche in the process!
Develop an initial product line and prices
Now you have your brand, niche, and market you can start developing your products. In the beginning, it’s best to keep your product line small and manageable. Think about the candles and scents you like, what’s most popular with your friends and family, and also what fits your chosen target market.
When pricing your products there are a variety of different types of pricing strategies you could use. However, there's no one guaranteed formula-based approach that suits candles and other home fragrance products. Usually, pricing your products involves considering certain key factors, including pinpointing your target market, tracking how much competitors are charging, and understanding the relationship between quality and price.
This may sound a little daunting in the beginning but don’t worry. To simply put it, when setting up your initial pricing you need to add up all of the costs involved in bringing your product to market and set your profit margin on top of those expenses, that’s it.
A good starting point is the below formula which has been tried and tested over the years:
Cost of Raw Materials (inc. packaging) + Your time / Labour x 2-2.5
ie: Materials £2 + Your time £2 = Selling Price £8 - £10
Why this pricing approach works
The most important element of your price is that it needs to sustain your business. If you price your products at a loss, or an unsustainable profit margin, you’re going to find it challenging to grow and scale.
There are also other important factors that your pricing needs to account for, like how you’re priced compared to your competitors, and what your pricing policy mean for your business and your customers’ expectations.
Pricing isn't a decision you only get to make once. In the early days testing the market with different price points is critical and will be very helpful in guiding you as to where your products fit into the market.
Marketing Your Products
Whether you’ve decided to sell your products on eBay, Esty, Social media, or a website, you still need to market your products. The best way to do it (for free) is social media. It is such a brilliant modern-day tool where potential customers can sit scrolling, looking for something new. So, even if you’ve created a store on platforms such as eBay and Esty, you still need to launch social media channels.
One of the most popular social media sites, and with over 1.2 billion users each day there’s no wonder Facebook has 60 million active business pages!
Having a Facebook business page allows your small business to dip into a huge pool of potential customers in a familiar way– through one of the most influential social media platforms in the world. Brilliant right?
To create a Facebook business page, you must also have a personal profile:
• Create a page – select the type based on what your business does
• Fill in the additional details – input your business address, contact information and the category which suits your business.
• Click ‘get started’ – read the terms
• Choose the right profile and cover photo – profile picture should be your logo or something that’s associated with your brand (like your candles)
• Discover your page – be guided around your new page
• Complete the short description – add a few sentences about your business
• Create a username – type an address for your page; like a URL
• Update the ‘about’ section – include essential information for customers
The other most influential social media platform is Instagram with over 500 million active users a day, Instagram is definitely another channel you should utilise for your business!
Follow the below steps to set up your Instagram Business page:
• Create an account- Sign up with your email address or phone number, and then enter a username. You can log in with your Facebook account details however we suggest NOT doing this as it will create an account based on your personal Facebook page. Since this is for your business, you should use your business email address.
• Create a username and password- If you’re setting up Instagram for your business, the username should be the business name, or as close as you can get it.
• Picking the right profile photo- profile picture should be your logo or something that’s associated with your brand (like your candles) if you don’t have a logo. No selfies please!
• Complete your profile- Fill out bio and contact information fields. This is the only place on Instagram that allows you to use a clickable URL so you can add a link to your eBay/Esty shop or website if you have one.
• Instagram for Business- Click “Try Instagram for Business Tools” and follow the instructions to complete your profile and take advantage of the tools offered. Here is a walkthrough from Instagram about getting started with their business tools.
• Link your account to Facebook- Instagram will ask you to link your business Facebook page or create one. Why? Facebook acquired Instagram a few years ago so the platforms are more integrated than ever! (to get the most out of Instagram business we recommend you do this).
And that’s it, you’re ready to start sharing your work on social media!
There’s no incentive for people to follow you with an empty page, so start sharing! You could curate a feed of beautiful images related to your brand to get you started and once you’ve made your candles, stage photos of them to show off to customers and reach a larger audience. Make sure all your photos are high quality, no-one will like a photo they can barely see!
Don’t forget to add captions and hashtags to your posts. Hashtags are one of the best ways to get your posts seen by non-followers. The most popular hashtags (#love, #happy, #tbt) range in the hundreds of millions of times used and your posts will most likely be skipped over, so if you’re targeting a particular niche, consider using a more specific hashtag, such as #candles #candlemaker #handpouredwithlove.
Be consistent. People like to see constant new content, so keep posting. Try mixing up your feed every now and again by providing a behind-the-scenes peek at how you make your candles and maybe post a video every so often. You could also use some of your products as prizes in a series of giveaways and contests. (Not only can these contests help you gain followers and build brand awareness, but you also have the opportunity to show off how well your products work).
Pro tips: (1) add a little card in your packaging thanking people for purchasing your product and ask them to follow your branded social channels for new products, discounts, and giveaways.
(2) Don’t be afraid to follow fellow candle business makers. Following and meeting other merchants can inspire you with new ideas and help you come up with new solutions to shared problems.
Once you’ve got comfortable with your social media marketing you could consider using Facebook ads and Instagram ads to boost your following and get you in front of more potential customers, regardless of whether they are in your network or not.
Ensure compliant to General Public Safety Regulations
Under the General Product Safety Regulations 2005, it is required that all producers and distributors of any potentially dangerous product must be fully labelled with information and warnings relating to that product. Our candle safety label and wax melt safety label contains all the relevant information and warnings your customers need to know about safely using your candles and wax melts.
As well as a candle safety label your candles or melts must also be CLP compliant.
The CLP Regulation (for “Classification, Labelling, and Packaging”) is a European Union regulation from 2008, which aligns the European Union system of classification, labelling, and packaging of chemical substances and mixtures to the Globally Harmonised System (GHS).
This article explains CLP in great detail in how to be compliant: http://www.cirs-reach.com/CLP/Labelling_Packaging.html
This area of labelling can be very confusing, but we have made it easy for you. Fragrances contain a range of different chemicals which are classed as potentially harmful and need to be displayed on the packaging. The chemicals in each fragrance are all different. We have a data sheet available for every fragrance we supply.
A candle can hold generally 10% fragrance oil, so we provide a 10% datasheet for each fragrance. Simply go to the fragrance product page on our website, and click the data sheets tab. Under the datasheet tab, you will see ‘Download 10% MSDS.’
Once downloaded, open the datasheet and scroll to section 2.2 ‘Label Elements.
Everything in this area needs to be put directly onto your candle label.
For most fragrances, we have already created a CLP label template for you. Simply print off, add your company details, print using a label printer and stick to your candle or wax melt. You can use this CLP label for anything from 10% and under. It is also your responsibility to keep a copy of the 10% data-sheet if a customer or doctor ever requires it, in case of a medical emergency.
Register at HMRC with all earnings reported as self-employed
Once you’ve set up your business you will then need to register with HMRC as a sole trader by the end of the new tax year, this means you’re self-employed.
You can be both employed and self-employed at the same time.
Benefits of being a sold trader
• Be your own boss! Work hours that suit you.
• No need for formal accounts, all you need to do is keep all business-related receipts and a record of sales, and your accountant will do the rest!
• You will receive tax relief on all goods purchased for the business, such as pots, pans, scales and even claim office space from home as an expense, all of which increase profits!
How to set up as a sole trader
To set up as a sole trader, you need to tell HMRC that you pay tax through Self Assessment. You’ll need to file a tax return every year.
Register for Self Assessment.
For more details see https://www.gov.uk/set-up-sole-trader
Please note, once your turnover exceeds £85,000 in revenue, you must register for VAT. This means you no longer have to pay VAT on any purchases such as stock, equipment and any other business-related goods. But it does mean you must start charging VAT on the products you sell to the customer. You then pay the difference between the VAT not paid on supplies to the VAT received from sales to HMRC
More details about VAT and how to register can be found here: https://www.gov.uk/vat-registration
Want to go further with your business?
You may decide you want to host your store on your very own website, which can be great as your customer base grows and you get more and more orders. But how do you create a website?
You could build it yourself. However, this is extremely hard work, and you’ll need all the right coding knowledge – but you would have full control of your website and save you money.
You could use a website building tool. Simple to use, many of these tools will take you through the entire website building process, from registering a domain name to designing your site’s layout using templates or drag-and-drop tools.
You could hire a professional. The guidance of an expert to help you build the best website possible may be the solution for you. They are there to make sure everything is the way you want it, and if you have any issues or questions they are there to support you.