Getting to the Next Level
What is great about our industry is people make candles for many different reasons. For many it has become a holiday tradition where they make their friends, neighbors and co-workers candles for gifts. Others researched the subject and have found that selling candles are an excellent way to start their own business. Yet another is a candle enthusiast that may not find what they like in the market and wish to make it themselves.
For many the first time they make candles it can become such an obsession that the thought becomes, "how can I turn this passion into a business?" With the current business climate this thought process has become even more desirable. Starting a candle business is great for a number of reasons:
- It is very hard to find any other industry where a small crafter or small business can make a product as good if not better then some of the largest manufacturers in the world.
- The candle business lends itself very well to starting small and growing it at the pace you want and within your own desired budget. As you grow all of the supplies and equipment you purchase can and will be used no matter how big you get.
If you start in your kitchen (which many large manufacturers have done), the easiest starting point is with a pouring pot. Melt the wax directly in the pot (on a double boiler) and pour each of the candle directly from the pouring pot. This method is great to learn the process and the most economical way to start making candles. The biggest issue with the pouring pots is they do limit the capacity you can pour in a single day.
The first and most effective way to increase production is by getting a larger vessel to melt wax. This way you have a source with melted wax ready to go. This vessel can virtually be any size --like a turkey roaster which can hold up to 35 pounds -- up to and including industrial stainless steal tanks that can get close to 2,000 pounds. The commercial grade tanks generally start at around 95 pounds and cost about $1,060.00. With a tank this size you can pour any number of candles you desire from 1 candle up close to 100 larger candles (16 ounces or so) each day. If you are pouring 4 ounce containers you can pour closer to 400 candles. The 95 pound tank can definitely help you produce quite a few candles in a day.
When you purchase your first tank be sure to account for some reasonable growth potential. The one factor with tanks is in most instances you can’t have “over capacity” but you can limit yourself by having a tank that is to small. In most instances you should only count on 1 melting cycle per day. So if you purchase a tank which only melts 35 pounds you may only get to pour around 35 larger containers. For some this is the correct size. For others that have to pour a number of candles in a single day this size may be to small. The best thing about wax melters is no matter how large you get, an application can be found for your tank regardless of the size. These tanks can and will become your batching tank, samples or prototypes.
Once you have determined that you have “outgrown” your home based business and are ready to take a leap to a building, be sure it is right for your business. Be sure to calculate all cost you will incur when you move outside the home. This includes but not limited to rent, retro-fitting space, moving expenses, utilities, taxes and since you will be creating a commute be sure to make that part of the review process. With the current economic environment there are many favorable opportunities and landlords more than willing to negotiate favorable terms.
A lot can be said about owning a “Home Based Business” and before taking the next step be sure it is right for you. Before making this step thoroughly investigate all factors and resources available to you. Be sure you check out our June 2010 where we identified some organizations that can help you make the right decision.
In this issue we out lined what would be necessary if you wanted to “take the next step in your candle business. One of the important issues will be for some is learning a new language. Some of the important terms for dealing with retailers or a business consumer environment are identified below.
ROI (Return on Investment) - This is the percentage of return that you get from investing in advertising, equipment or anywhere you invest funds to help your business grow. This is a common term used these days when referring to paid click ads on the internet.
BOGO (Buy One Get One Free) - This is very common to drive sales for a particular product.
Planogram - A layout of the products that illustrates how and where retail products should be displayed, which is usually on a store shelf.
Margin - This is the percentage between what it costs to produce and sell your candle.
Target Market - The defined market the retailer or you are trying to capture.
Depending on the store it might be teenagers, might be housewives.
Loss Leader - When the retailer will sell an item below cost to drive traffic to their store in hopes that the higher margin items will get sold.