Do you want to start a crayon manufacturing business? If YES, here’s a complete guide to starting a crayon manufacturing business with NO money and no experience.
Starting a manufacturing business needs a lot of dedication and commitment. You have to be clear about your product’s market demand and know the market share of your competitors with a similar product. It’s very necessary that you research in advance and plan your business.
Will you need financiers for your business or can you do it with your invested capital? You also have to choose a suitable location for your business. You might want to go for a cheap area, but understand that a manufacturing business needs a good location. The location you choose must have a link to your potential customers.
Another thing you should consider is the kind of product you are going to manufacture and if that product needs your manufacturing business unit to be built in a certain area as per government policy.
Starting a crayon manufacturing business is as daunting as starting any other manufacturing business. Electricity and power resources are a must have in your factory, space for the storage of raw materials, quality assurance and quality control checks are also very important.
A storage area for finished products after quality assurance is also needed. Also note that for you to succeed in this business, your team has to be loyal and trustworthy. Have it in mind that a great team also needs good salaries. If you offer good salaries, your employees will work happily.
Take a look at other crayon manufacturing business models, perhaps you can learn from their experiences and their mistakes so that you don’t repeat the same mistakes in your business. Read on to understand the basis of starting and running a successful crayon manufacturing business.
19 Steps to Starting a Crayon Manufacturing Business in the US
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss With an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
- 17. Develop Iron-clad Competitive Strategies to Help You Win
- 18. Brainstorm Possible Ways to Retain Clients & Customers
- 19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
Crayons are made from wax, and according to reports, the global wax market size was valued at USD 9.32 billion in 2016 and it is expected to register a CAGR of 3.7% from 2017 to 2025 because of its various properties, including excellent temperature performance, scuff resistance, and outstanding chemical and electrical resistance.
It’s very important to note that the demand in paint & coating industry is likely to augment the industry growth over the forecast period.
Also, the rising demand of cosmetics, printing inks, pharmaceuticals and adhesives especially in emerging nations of Asia Pacific is expected to propel the market growth. Paraffin wax has several characteristics such as colourlessness, non-reactive, clean-burning fuel, non-toxic and great water barrier.
This composition is used in several applications including crayons, detergents, rubber solutions, aerosol formulation, adhesives, household cleaners, tire manufacturing, and wood treatment applications.
Paraffin is gotten from crude oil while producing distillate (light lubricating oil). Volatility in raw material prices affects its pricing and acts as a restraint for the usage of the product in industrial, consumer and commercial applications.
Statistics has it that the growing acceptance of synthetic counterparts due to its resistance to chemicals and water, great stability against polishing, and resistance against scratch, scuff and metal marks is expected to drive the market growth over the next eight years.
The demand for the synthetic composites is likely to show a high growth on account of its application in textile, food packaging, coatings and inks sector.
Also the advent of new applications such as crayon, matches, fabric, electrical appliances, cosmetics and pharmaceuticals, rubber, food and agriculture is believed will make more room in the market for new avenues, thereby augmenting its demand over the next eight years.
Candles and crayons in this industry was valued at USD 3.36 billion in 2016 and they are likely to witness steady gains as a result of its wide product portfolio with respect to various shapes and sizes.
Also note that this market is characterized by availability and ease of purchase of distinguished varieties of candles and crayons, wherein the increasing number of distribution channels is helping the demand for the product through home décor and mass merchandise stores.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
We all can agree that colouring is a favourite childhood activity. Even adults are getting in on the action with the latest craze of adult colouring books. According to reports, the earliest form of recorded communication is graphic art, beginning with drawings scratched on the walls of caves by prehistoric peoples.
Cave dwellers had limited drawing tools, perhaps only pieces of carbon left over from a cooking fire. Today’s graphic communicator can purchase a variety of efficient tools, including the common crayon. But you need to understand that kids are not the target market for crayon. Instead, it’s parents, schools, and libraries, because they’re who actually buy crayons.
3. Decide What Niche to Concentrate On
The key to succeeding in any business is finding and choosing a niche. By doing that, you can avoid one of the most common mistakes entrepreneurs make: of going too broad with their products and market appeal. Although this business has no stated niche, it is still advisable that you try to focus on a particular target niche.
The market to target in this business is huge, as everyone has a seed of creativity on them. Some individuals are fortunate that their sprouting imagination was nurtured and grown into strong creative thinking abilities. Your crayon manufacturing business can do more, only if it’s channeled to the right target market.
The Level of Competition in the Industry
It’s very important to state that the global wax market is made up of prominent players, especially in the U.S., Malaysia, Thailand, Germany, UK, and Australia. The industry is dominated by various participants including BASF SE, The International Group, Inc. Baker Hughes Incorporated, Evonik Industries AG, Mitsui Chemicals and Sasol NA Limited.
Note that this industry has a high entry barrier due to forward and backward integration by key players to capture market share and to distribute wax, which will likely result in strong industry rivalry within the next few years. This industry market positioning is characterized by mergers, joint ventures, diversification of distribution channel and acquisitions to improve the market share of manufacturers.
Within the early 1990s, the Binney & Smith Company found great success marketing crayons with food scents that matched the colours and names of its crayons. The company also determined to produce only crayons that smelled like non-edible objects such as flowers. All crayons sold in the U.S. are nontoxic.
Although the ingestion of a large quantity of paraffin might result in a stomach ache, long-term effects are not likely to occur. U.S. law requires that all art materials sold in the U.S. be nontoxic. Most toxicology evaluations in the U.S. are performed under the auspices of the Arts and Crafts Materials Institute in Boston, Massachusetts.
In addition to the out-and-out toxicity of an ingredient, a broad range of possible effects are also investigated. Testing is sometimes required, for example, to evaluate the interactions of individual ingredients within a single product or to determine whether a product will cause skin irritation.
4. Know the Major Competitors in the Industry
- Box Of Crayons
- Ctc Fl
- Eco-Kids LLC
- Franckel Honorat
- High Plains Biochar LLC
- Magic Colors Cart
- Rainbow Cow Crayons
- Stanley L Easterwood
- Stones Crayons
- United States Crayon CO
- Walbuck Limited
- Yzarc Cray Products Inc.
According to industry reports, North America is expected to register substantial revenue gains, registering a CAGR of 3.5% from 2017 to 2025. North America paraffin composition market is likely to grow on account of existence of various personal care and cosmetics companies.
Canada wax industry is also expected to show high penetration for synthetic and natural counterparts, relatively high purchasing power, strong regulatory framework and a high scope for new applications industry.
It is believed that the demand for the product in cosmetics market owing to high disposable income, continuing research and an inclination to spend more on appearance will spur the Canada industry over the forecast period.
Note that the Asia Pacific accounted for 26.20% of the overall volume share in 2016 and is expected to witness significant growth over the forecast period. Emerging nations including Malaysia, Indonesia, and rest of Southeast Asia are likely to witness strong economic growth in the near future.
The growing demand for printing ink on account of the expanding packaging industry is expected to augment the market growth.
5. Decide Whether to Buy a Franchise or Start from Scratch
Buying a crayon manufacturing franchise affords you as a new entrant into the industry the opportunity to build a profitable business. But you have to understand that franchise opportunities also have their own pros and cons.
But if you have a creative mind coupled with an entrepreneurial spirit, then starting and running a crayon manufacturing business may be an option worth considering. Also note that there are a lot of franchising opportunities available, and with so many options available, chances are you can find something that fits perfectly with your favourite business.
Also note that buying a franchise involves a significant start up investment. The initial expense may range from a thousand to a few hundred thousand dollars, but a lot of entrepreneurs find that the investment is worthwhile. You should also know that a crayon manufacturing franchise offers brand recognition that can be very hard to acquire if you start from the scratch.
Buying a franchise also provides you with a turkey system to work with, that removes the need for costly trial and error. Deciding to go the franchise path means that you are going for a market which has already been tested, and if people were not buying the product, the company would not have grown to the point of offering franchises.
6. Know the Possible Threats and Challenges You Will Face
Not just kids, but adults also enjoy painting or colouring things with crayons. This has created a huge demand which doesn’t seem like dying down anytime soon. Here are few threats you might face when starting your Crayon manufacturing business…
- Doing your feasibility research
- Choosing your work area
- Registering your business
- Choosing a price model
- Simplifying your marketing plans
- Learning how to make crayons or about crayons
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When starting a manufacturing business that produces crayons, you have two key options to choose from – sole proprietorship and the LLC. But for you to understand the tax liabilities for each, you have to first know what they mean. The sole proprietor business structure is a company with a single owner.
Reports have it that this structure is used by three-quarters of all businesses. This legal structure keeps the owner in control of the company and has the simplest initial setup. The limited liability corporation, or LLC, is often formed for partnerships when the business has grown significantly. The advantage of an LLC is more options for growth and tax advantages.
A lot of business owners would rather create an LLC than a sole proprietorship because of liability issues. But payment options need to be considered and a bookkeeping system has to be in place, and all this takes additional money that takes away from the funding necessary to purchase the materials to make the products.
8. Choose a Catchy Business Name from the ideas Below
- Crayon Castle
- Crayon Unlimited
- Zionsville crayon
- Beautiful crayons
- Crayon Express
- Wax World
- Paint addict
- Halo Crayons
- Crayon king
- Telco Crayon
- Manny Crayons
- Lyon Crayons
- Scented crayon
- Acura crayons
- Savvy Crayons
- Luther Crayons
9. Discuss With an Agent to Know the Best Insurance Policies for You
In any manufacturing business you start in the United States, you need proper insurance coverage. Insurance provides protection for a number of risks within a manufacturing business. Most common areas of coverage for manufacturers insurance include Commercial Auto Insurance, Workers Compensation, and General Liability.
Note that one of the key reasons you need insurance is to protect the business from things like lawsuits, loss of personal and commercial property, and even damage to buildings. Things you will need may include;
- Public and Products Liability
- Stock and Contents for Fire, Burglary and Business Interruption.
- Professional Indemnity (if advice is given for a fee)
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
Intellectual Property in the United States has grown increasingly important. With technology making every aspect of the world competitive, it has become much harder to remain in control of one’s intellectual property. Intellectual property is not just about protecting one’s new invention but also one’s business slogan or a colour.
Creating and designing a product is hard work – the achievements of training, experience and the creative process, the more reason it should be protected at all costs. Always seek the help of a lawyer who is experienced in this field to help you understand the necessary ways to protect yourself.
11. Get the Necessary Professional Certification
You do not need any specific certification to run your crayon manufacturing business. Meanwhile, obtaining a professional certification helps you stay up to date on industry trends, enhance education and boost careers.
Professional certification shows your customers, employees and even prospective customers how serious you are with your high standards. Although this industry lacks a specified professional certification, you can gain general manufacturers professional certification to set yourself apart in this industry.
- Quality Engineer certification
- Certified automation personnel
- Certified production technician
- Certified Manufacturing Engineering Certification
12. Get the Necessary Legal Documents You Need to Operate
In the United States, you are required to get the needed permits and licenses from both your state and local government to run your business without issues. This is because you wouldn’t want the government closing you down for illegal business operations. You need to consider speaking to an attorney before you start your crayon manufacturing business; you need to get advice on tax structures and insurance.
You will need it for future purposes. To start a crayon manufacturing business legally in the United States, you will need business documentation; exactly what permits and licenses you need will vary depending on where you live.
For example, in Harris County you can start a crayon manufacturing business with an assumed name certificate (DBA), sales tax permit and a tax resale certificate if you want to buy crayon manufacturing supplies or wholesale crayons without paying taxes. To find out what you need to get your crayon manufacturing business started, contact your local small business development centre or Small Business Administration office or you can speak to an attorney.
13. Raise the Needed Startup Capital
There are two types of finance needed in the crayon manufacturing business. Fixed cost including space and machines and working capital which includes raw material, wages, transportation etc. It is advisable that you take your time to prepare a project report or business plan before starting this business.
You can apply for loan from banks and financial institutions. In that case, owners credibility and at least 25% investment as owners allocation on total project cost is required. Other ways of getting funding may include…
- Personal savings
- Bank overdraft
- Angel investor
14. Choose a Suitable Location for your Business
You need to choose a suitable location with easy availability of skilled labour, transportation, commercial electricity and water resources. The issue of location is not a decision you should take lightly. It is advisable to have space in the industrial zone.
Crayons are sold in a variety of places, and whatever venue you choose mainly depends on how much money you have to start your crayon manufacturing company. Have it in mind that the easiest crayon selling venues include markets, e-commerce stores, online websites, and online marketplaces.
Most crayon manufacturing companies started with a smaller venue, waited until their crayon manufacturing company is established and then branched out into a more organised business location. You should consider selling your crayons through different venues to earn more.
15. Hire Employees for your Technical and Manpower Needs
When considering starting a manufacturing business, you have to ensure you have the necessary skills and knowledge to produce your product. You can take classes and training to understand more in the field. You also need to have some managerial skills.
In a small scale business, you cannot appoint staff for every department like accounts, marketing, supervising and others. You may need to take the responsibility of different jobs, so you need to have adequate knowledge along with the drive to work hard. You will also need to hire both skilled and unskilled employees to kick start your business.
Indeed skilled workers will save you a great deal in the cost of training newbies. They will also bring in their experience which they must have gathered from previous employers and at the same time train your newbies on the job.
Crayons consist of paraffin wax and non-toxic colour pigments. The pigments typically come in a powdered form, with the specific colours and amounts determined by the final colour of the crayon being produced.
Crayons may also contain an additive to improve the strength of the crayon. This is the ingredient that helps keep the colour intact. No one likes a blunt crayon or crayons that break under the slightest pressure. Crayon manufacturers are known to have very specific formulas to create their products and avoid those threats.
The little differences in formulas and additives cause the small differences you notice in how particular crayon brands perform. Some brands might tend to break more easily, and others produce smoother lines. Also as businesses in this industry get more creative, they experiment with other add-ins to give the crayons a unique look or finished effect.
The Services Delivery Process of the Business
The first step of making crayons is to melt the paraffin wax. Some companies use steam generated by an oil boiler to begin melting the wax so that it can be easily pumped into outdoor storage silos, where it stays until it is pumped into the factory. The silos keep the wax at a temperature of 175 degrees Fahrenheit to keep it as a liquid.
Paraffin wax when melted is colourless. The paraffin wax goes through a pipe system that carries it from the silos into the manufacturing area of the plant. It then goes into large mixing kettles, which are typically on the smaller side for controlled production with a focus on quality. The mixing kettles are heated to 190 degrees where the wax is mixed with the pigments. Then, the wax is cooled to about 55 degrees to begin the cooling process.
Adding the Colour
A crayon manufacturer produces one colour at a time on a particular manufacturing line. Large companies like Crayola have multiple production lines running at one time, which means they can produce multiple colours on the same day. The colour comes in the form of a powdered pigment which is produced specifically for the crayon manufacturer.
Powdered pigment is used because paraffin wax won’t mix with water because of the petroleum or oil. Note that a powdered pigment may initially be made with water, but the pigment gets dried out and put through filters to remove any remaining water. This leaves behind chunks of pigment which are kiln-dried. Those chunks get combined with other pigment chunks to create a specific colour.
The way colours are mixed to make crayons differ depending on the specific manufacturer and crayon colour. With over 150 crayon colour options available, manufacturers come up with many different pigment combinations. The amount of powdered pigment that go into a particular crayon batch often vary by colour.
The needed colour gets added into the kettle with the melted paraffin wax. The mixing system integrated in the kettle combines the pigment and wax, dispersing the pigment powder evenly through the mixture. Any other additives also go into the melted wax.
Mixing the Materials
The mixing process of crayons is very important to the success of the finished product. For instance, if the pigments and additives don’t get mixed into the melted paraffin wax fully and consistently, the finished product may have bubbles or other blemishes that may make them look bad.
It can also make the crayons break or chip more easily than normal, which can hurt the company’s reputation and frustrate the kids that use them. The mixing kettles use an integrated mixing system designed to keep the paraffin wax moving and to hydrate and integrate the powdered pigment thoroughly into the mix. Your mixing equipment should have the power and specialized operation capabilities to handle the viscosity of the melted wax.
Moulding the Crayons
After the pigment powders and strengthening additives have been mixed in, the melted paraffin wax is ready to go into the moulds. The rotary-style mould features several cavities shaped like crayons positioned around a circle. It allows a huge number of crayons to be produced at once.
The round mould continues rotating with cavities being refilled with more melted wax as older crayons finish hardening. Note that the steel mould makes use of a water-cooled system to quickly harden the newly moulded crayons. The cool water swirls around the mould from the bottom to quickly lower the temperature of the melted wax so it reaches a hardened state.
It only takes about four to seven minutes for the crayons to cool and harden fully inside the mould. Immediately it hardens, the crayons reach the ejection station, where they are pushed up and out of the moulds and retrieved by an automated arm. This arm then moves the crayons to the labelling station where the manufacturing process continues.
Labelling and Packaging the Finished crayon
Note that this process is highly automated in many crayon factories. A single colour of crayon goes into a hopper in the labelling machine. Labels on a large round metal drum go around one crayon at a time, sealing it in place with adhesive. A lot of companies make use of label large enough to go around the crayon twice as an extra bit of strength to prevent breakage.
Then the moulded and labeled crayons are expected to go through an inspection process to look for any broken tips, irregularities or blemishes that might cause them to be rejected. Once the crayons pass inspection, they go into stock boxes, where they stay until they are needed in the packaging department. When it get to the packaging unit, each color of crayon goes into its own section of the machine.
The colours used depend on the specific package size. Some packages may also have a special colour theme in which unique colours are combined. A machine automatically dispenses one of each colour onto the surface, where an automated arm picks them up and inserts them into the crayon packaging. The crayons are boxed and put into larger boxes for shipment or sent to wholesalers where they are then distributed.
16. Write a Marketing Plan Packed With ideas & Strategies
A marketing plan is a very unique document that explains what you want to achieve in your business at a given time. It also examines the current situation of the business, performs its analysis, studies the competition; create strategies and action programs to be implemented. A detailed promotional strategy could determine the success or failure of your business. Ways to market your crayon manufacturing business may include
- Using satisfied customers testimonies
- Creating an attractive website
- Using marketing materials
- Business networking and partnership
- Leveraging social media platforms and traditional advertising strategies
17. Develop Iron-clad Competitive Strategies to Help You Win
You need to understand that this industry is filled with tough competitions. It’s advisable that you get tutored by someone who has been in the industry and understands how it works for you to survive the competition. Have it in mind that no matter how competitive this industry is, you have the ability deduce a means of outshining your competitors. These means may include…
- Satisfy your customers
- Choice of Location
- Join professional organizations
- Maintain a good supply chain
- Have a detailed business plan
- Work with a graphic designer to create a website
- Knowing and identifing your competitors
18. Brainstorm Possible Ways to Retain Clients & Customers
Indeed this business can be started with a small budget and grown into a very large business. The ever rising demand for good crayons creates an opportunity for the innovative startup which even you without a degree can start.
A small scale crayon manufacturing business can be a great way for you to make extra money or even a full time income. So to start and run a Crayon manufacturing business successfully, there are a lot of things you should consider, which includes how to;
- Stay safe and legal
- Choose suitable vendors
- Simplify your marketing plans
- Target specific customers
- Surprise them
- Reward loyalty
- Let your creativity sell you
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
You need to understand that the very first step in branding your crayon manufacturing business is to make a name for yourself. You need to decide what you would like your business or your crayons to be known for, and you need to…
- Gain industry expertise
- Patronize local crayons
- Sell online
- Use keywords and hashtags to your advantage
- Let your name and logo be creative
- Print out business cards