Candle Making Business Plan Template
Whether you want to start your own candle business or expand an existing one, you need a business plan. The following candle business plan template lets you know which elements you need to include in a successful candle making business plan.
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To ensure your candle business success in this highly competitive market, you need a properly structured candle business plan. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their candle making businesses. Using the following candle business plan template, you can put together an effective business plan.
Things to Know Before Writing a Candle Making Business Plan
Candle-making is heavily influenced by consumer spending power. Scented and unscented candles are produced in this industry. The candle has almost entirely lost its function as a source of light, but it has re-emerged as a popular home decor item.
As a result, they are highly discretionary purchases that compete with other home decor products and air fresheners.
In the coming year, the industry is expected to enjoy continued growth in disposable income, consumer expenditures, and trade conditions.
According to IBISWorld, revenue growth over the five years to 2025 is expected to be 2.9% annually, reaching $1.9 billion.
Among the major products and services in this industry are
- Votive candles
- Pillar candles
- Decorative candles in jars or containers
- Tumbler candles
- Other types of candles
Key Success Factors for the Candle Making Business
Despite the challenges of the Candle Making industry, we have identified 4 factors that can help you boost profitability, efficiency, and ultimately success.
- The ability to modify product offerings based on market conditions: Candle industry operators need to consistently offer new waxes, wicks, fragrances, and colorants to meet the changing preferences of consumers.
- Economies of scale: Economies of scale permit companies to minimize marginal costs, thereby making them more profitable.
- Creating premium goods: Customers in this industry are often willing to purchase premium products if they perceive them as being quality.
- Knowledge of the market: Gaining market share is very difficult in this highly competitive industry without marketing and brand awareness. These factors, however, are less influential in niche and ultra-niche markets.
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What is a Candle Business Plan?
A candle making business plan is a road-map for starting and growing your candle making business. Your business plan outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.
Any bank or investor you approach will require a candle making business plan, so putting one together will be critical to securing funding.
In short, writing a business plan can help you succeed if you’re thinking of starting a candle making business or pitching to investors or venture capitalists.
Why You Need a Candle Making Business Plan
Candle making business plans can be used to gain interest from potential investors or to secure loans from banks. They are also helpful to you as the owner. A candle business plan allows you to thoroughly analyze every aspect of your potential business.
A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a candle business idea, and may help you better understand your company’s finances and competition.
Candle making business owners who have a business plan grow 36% faster than those who don’t, and 75% of fast-growing businesses have one.
A candle business plan is a living document that should be updated annually as your company grows and changes.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
Funding Sources for Candle Making Business
No matter how large or how small your candle making business is, you should think about your financing options. Starting a candle business is no exception to the rule that it takes money to make money. You may require business funding to pay for supplies, marketing, production, insurance, legal counsel, and other expenses.
Consider the following funding options first:
Business lines of credit
A business line of credit is a more flexible form of credit than a traditional business loan because it gives you a set amount of money that you can draw from only when you need it.
Business credit cards
For newer business owners, a business credit card may be a better option than a loan because they require less credit history. In general, you can find a credit card with a 0% intro APR, which works out to an interest-free loan if you pay off your balance before the introductory period ends and the variable APR kicks in.
Finance for equipment
Equipment financing may be your best option if your business requires expensive equipment. A lender typically lends money specifically for the purchase of equipment in this type of financing. The equipment is then used as collateral for the loan.
Startup financing
A new business owner should consider SBA microloans or a business grant as options for startup financing. Crowdfunding has also become a popular method of obtaining quick startup capital.
When you get your funding, start accruing expenses, or start earning money, you should take steps to keep your business and personal finances separate. Then look for an accounting software program to help you manage your company’s finances.
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How to Write a Candle Making Business Plan
To write a candle business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a candle making business plan, or you can just download our proven sample business plan pdf to get a better idea.
Executive Summary
The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.
It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.
Tell them what kind of candle making business you have and what stage you’re in; for example, are you a startup, do you have a candle making business that you want to expand, or do you have a lot of candle making businesses?
Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.
- Provide a high-level overview of the candle making industry
- The name, location, and mission of your candle making company
- A description of your candle making business, including management, advisors, and a brief history
- Discuss the type of candle making business you are operating, Give an overview of your target customers, and how your company differs from competitors in the industry
- Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
- And give an overview of your financial plan
Check out these executive summary examples to help you write a perfect one for your candle making business plan.
Free: Executive Summary Examples
An executive summary is the most important part of your business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.
Company Analysis
The company analysis follows the executive summary as the second section of a candle business plan. Your company overview will be short and clear, similar to the executive summary.
Even if they just have a few minutes, your reader has to understand what your company does and who your customers are.
The following sections will be included in your business plan’s Company Analysis:
- Company summary: Your company analysis will describe the type of candle making business you are running and its future goals. The type of candle making business you might be focused on (Scented candles, Decorative Candles, Pillar candles, Dinner candles, Votive candles, Tea lights and Specialty Wax Candles, etc)
- Company history: When and why did you start your candle making business?
- What milestones have you achieved so far? Your milestones could include served 100th customer, new fleet purchase, etc.
- Legal structure and ownership: Do you have S-Corp status? Is it an LLC? A sole proprietorship? Describe your legal structure.
- Mission statement: An overview of your candle making company’s guiding principles. Learn how to write a perfect mission statement.
Industry Analysis
The candle making business plan’s research section will most likely be the most time-consuming. Here, you will elaborate on how you will fit into the existing candle making market. Since your research findings should serve as a sound confirmation of the conclusions you have outlined thus far, they will demonstrate your understanding of the industry and market.
Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.
- Give a quick overview of the candle making industry. Define the candle making business in terms of size (in dollars), historical background, service region, and products.
- Examine previous trends and growth patterns in the candle making industry.
- Identify the market’s major competitors.
- Age, gender, and general lifestyle of the targeted market
- Determine the factors that have an impact on the candle making industry. These might include government regulatory rules and other businesses’ competitive activities.
- Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
- Describe how your candle making business intends to position itself in the industry. Concentrate on how your candle business can benefit from opportunities highlighted in the industry.
Customer Analysis
The customer analysis section is an important part of any candle business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how the your candle products will meet those requirements.
Customers can be categorized into the following segments:
- Churches
- Spa beauty salons
- Religious houses
Departmental Stores, Wholesalers, Churches, Spa Beauty Salons, Home Furnishing Stores, Religious groups, hotels and restaurants, families, couples, party planners, homeowners, etc.
Customer analysis may be divided into two parts: Psycho-social profiles and Demographic profiles
With regards to demographics, include information about: When moving residential, the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers are.
The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better your chances of attracting and retaining customers will be.
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Competitor Analysis
It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength and weakness of your candle making business competitors.
- Search for opportunities to distinguish your candle making business from competitors.
The first step is to determine who your direct and indirect competitors are.
The direct competitor consists of other candle making businesses that offer essentially the same candle products to the same people as you do.
Your indirect competitors are other options that customers have to purchase from you that aren’t direct competitors.
Among indirect competitors are big-box stores, craft stores, home decor stores, and general stores etc. You should also mention the competitors.
Once you’ve identified the competitors, concentrate on the direct, head-to-head competitors, since they are the most threatening to your candle making business— but keep an eye on the indirect competitors as well, just in case.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competitors research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offer cheaper candle products or more costly than you and other competitors, what value do buyers get for that price?
- Quality – Are they offer premium candle products, the perceived worth in the eyes of the customers
- Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. for example: Are you going to offer premium candle products? Will you have unique or specialty products? Will you offer better pricing or will you offer greater customer support?
Consider how you will outperform your competitors and include them in this portion of your candle making business plan.
Free: SWOT Analysis Examples
Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.
Marketing Plan
Creating a marketing plan for a candle making business involves identifying the target demographic and finding candle products that suit their preferences.
As part of your marketing plan for a candle making business, you should include:
Pricing and Product Strategy
Your candle making business must offer stylish and unique candle products that are different from those of your competitors. Research what your competitors offer and how they price their candle products. Unique candle products identifies your candle making business as the place to go for unique candle products and differentiates it from others.
Placing and Promotions
This refers to the location of your candle-making business. Explain how the location will impact your success. Is your candle business located in a busy retail district, shopping mall, shopping center, etc? Discuss how your location may be perfect for your customers.
Promoting your candle making business is the final part of your marketing plan. In this step, you document how you will drive customers to purchase your candles. A few marketing methods you could consider are:
- Introduce candle-making business to religious houses, spas, and other businesses
- Advertise your candle-making business in relevant magazines, local newspapers, radio, and television stations.
- Make sure your business is listed in local and online directories
- Utilize your website and social media platforms to promote our products and services
- Direct marketing
- Encourage loyal customers to help us by making referrals
- Distributing business cards and handbills
- Creating a billboard and placing it in a strategic location.
Are they more durable than others? Smell better? Are they made with more environmentally friendly materials? Determine your main selling point and the best way to communicate it to potential customers.
Pro Tips: Learn how to write a marketing plan in business plan to create a winning candle making business plan.
Operations Plan
While the previous sections described your goals, your operational plan in a business plan discusses how you will achieve them.
An operations plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.
Your operations plan should be divided into two individual parts, as seen below.
All of the tasks involved in running your candle business, such as tracking inventory, marketing your business, researching new scent combinations or designing new novelty options, pouring candles for inventory, and preparing for upcoming orders, are included in daily short-term processes.
Long-term goals are milestones you hope to reach. they might be growing your business, such as introducing new items or retail outlets, meeting particular sales milestones, and meeting other essential business-oriented goals like recruiting more staff, opening additional locations, and so on.
Management Team
The management team section in a business plan‘ outlines your management team, staff, resources, and how your business ownership is structured.
This part may be easily organized by dividing it into the following points:
- Ownership Structure
- Internal Management Team
- External Management Resources
- Human Resources
Ownership Structure
This section outlines your candle making business’s legal structure. If your company is a sole proprietorship, it may simply be one phrase. It might be longer if your company is a partnership or a corporation. You should make it a point to clarify who owns what part of the business.
Internal Management Team
This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your candle making business. Ideally, you and/or your team members have direct expertise in the candle making business. If this is the case, highlight your experience and skills.
External Management Resources
Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with candle making business.
An advisory board would consist of 3 to 7 people who would serve as mentors to your candle making company. They would assist in answering queries and providing strategic direction.
If necessary, search for advisory board members with expertise running candle making business.
Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches.
Human Resources
The final topic to consider in the management area of your candle making business plan is your human resource needs.
Financial Plan
As part of your financial plan, you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.
Income Statement
A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.
As you develop your income statement, you need to develop assumptions. For example, will you serve 20 clients per day or 50? Will sales increase by 3% or 15% per year? As you can imagine, your assumptions have a significant impact on your financial forecast. Do your best to verify your assumptions by conducting research.
Free: Income Statement Template
Create a financial statement for your business by downloading our free income statement templates.
Balance Sheet
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.
The balance sheet shows your candle making business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:
- Assets: Tangible goods with the monetary worth that the company owns.
- Liabilities: Debt owing to a company’s creditor.
- Equity: The net difference when the total liabilities are subtracted from the total assets.
The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.
Create a pro forma balance sheet for your candle making business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.
Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.
For example, spending $500,000 to build out your candle making business will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.
Similarly, if a bank sends you a check for $200,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.
Cash Flow Statement:
Your cash flow statement will help you determine how much money you need to start or grow your candle making business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a candle making business:
- Fees for registering a candle making business
- Acquisition of POS machines and candle-making equipment
- Expenses for marketing promotion for at least six months
- Operating expenses for the first six months (employee salaries, bills)
- Taxes and licenses costs
- Business insurance
- Payroll or salaries paid to staff
- Facility rent and security deposits
- Construction / remodeling
- Start-up inventory cost (wax, wicks, fragrances, packaging materials)
Read Later: How to create a financial plan in a business plan.
Free: Balance Sheet Template
Create a financial statement for your business by downloading our free balance sheet templates.
Appendix
List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.
Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.
Pro Tip: Find out what to include in a business plan appendix when writing a candle making business plan.
Summary of the Candle Making Business Plan
A candle business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the candle making business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your candle making business.
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