Question

Please submit a draft Opportunity Analysis Plan for a scented candle business.

Answer 1

First understand reasons as why/how scented candles are big business opportunity:

It always high in demand: Ideally 7 out of 10 households use candles (considering US market). Nowadays people prefer quality handmade products and they love supporting local business owners. And uniquely branded candles are some of the most popular home decor items on the market.

Easy to start in early phase: We don’t need a lot of money, equipment or space to hit the ground running—just basic supplies, tools, and a workspace— and on top of it that the learning the entire process is quick and easy.

It’s simple to price and sell: What might cost you $5 to make you can sell for $10-15 approx. You can also apply market your candles through gift stores, craft malls, and farmers markets;

Entrepreneurial Journey: When you launch a scented candle business, you’ve joined a community of fellow crafters and entrepreneurs where you can share resources and knowledge with you in the backend..

It does not matter how big or small your business is going to be. The most important thing here is to create a draft business plan about your business.

Here are some comprehensive lists of activities you need to plan before you get into the starting a scented candle business;

Let’s create a draft opportunity analysis plan for scented candle business:

Step1. Developing Business Pitch

Always start by writing one sentence that should describes the core of your business (i.e. who you are) and the value which business is bringing to customers (i.e. what is the product).

Step2. Target market

The first step in building your scented candle brand is deciding where your business fits in the broader candle marketplace. You can consider developing your scented candle line around one of these three target markets:

1. Mass-market strategy: Here we can try targeting lower section of consumers having very small household income. Make candles available in economical containers and packaging, and feature traditional scents like pine and vanilla. We can try to keep $3-$5 pricing range.

1. Mid-market strategy: Candles with broad appeal commonly found in locally owned boutiques and gift shops. Here candles will have higher quality packaging, unique scent combinations and a little high Price range as compared to mass market i.e. $6 to $12

1. High-end market strategy: Ideally luxury stores that command a premium price comes in this segment. Here candles are typically prestige-level products that too with premium packaging, and fragrance. Where Price range could be somewhere between $13- $20 or more.

The above analysis will help you to identify which market to target first, who will buy your candles, how much they’re willing to pay. Then you can decide what materials to be uses and how to design your packaging and selecting your brand name.

Step 3. Find your niche segment

Till now as you understood where your candles fit in the marketplace, so it’s time to identify your brand’s individual “niche”—what makes your scented candles unique and separates them from the competition. Here are a few common ways to find the perfect niche:

Create some unique scent combinations

Apply special packaging

Try to have catchy names for your scented candles

Step 4. Create a distinct brand identity

Give your business a brand name and design a logo for your brand, focus on color scheme and brand identity. Once you’ve landed on something catchy and memorable, double check that a domain is available for a website and run a trademark search. You don’t have to register a trademark right away, but you’ll want to have the option available as your business grows further.

When brainstorming names, focus on what makes your brand unique, what you’re passionate about, and what resonates with customers. Don’t get too elaborate with your branding. Instead, focus on being personal and authentic.

Step 5. Set a basic starting budget for business

It is always a better practice to have a budget for your initial few months in business. Try estimating cost of supplies, or equipment, and overhead expenses. Never forget to pay yourself salary too.

Step 6. Starting with initial product line and pricing

It is always advisable to keep your product line small and manageable in order to sustain well in initial phase. Think about the commonly most popular scented candles among your friends and family, and if they are fitting in your target market. You’ll also need to determine how much each item costs to produce the required supplies in given time, and set a reasonable price. Don’t shy in pricing your candles based on time and effort you put.

Step 7. Decide places to sell

Find ways to sell your scented candles. You can consider below markets places:

Local crafts events, Gifting shops, Farmers market place

Online marketplaces like Amazon, eBay etc.

Through your own website e-commerce portal

Use your personal network your family, friends, and co-workers to increase mouth publicity. They too can provide invaluable feedback on your product line and can be some of your best brand ambassadors.

Step 8. Focus on Legalities say., Incorporate, insurance, permits and licensure

It depends upon your individual business needs and location you are operating from. Try to contact/connect with legal professionals for guidance on incorporating and liability insurance. You have lots of options for business structures, including sole proprietorships, Private limited, limited liability companies (LLCs), C corporations etc.

This concludes answer.