A scrunchie business involves creating and selling fabric hair accessories that are popular for their soft, non-damaging qualities compared to traditional hair ties.

Scrunchies come in various fabrics, patterns, and sizes, catering to different styles and customer preferences.

The market for scrunchies has grown due to trends in fashion, comfort, and sustainability, with many consumers seeking eco-friendly and handmade options.

Scrunchies are commonly marketed through online platforms, local boutiques, and pop-up shops.

According to a report from Grand View Research, the global hair accessories market was valued at $8.4 billion in 2021, with projections showing steady growth.

Scrunchie businesses can profit by targeting niche markets like sustainable fashion enthusiasts or offering custom designs.

This relatively low-investment business can scale through e-commerce platforms and social media marketing.

Steps on How to Start a Scrunchie Business

1. Conduct Market Research

To conduct market research for a scrunchie business, start by identifying your target audience. This can include age groups, gender, and lifestyle preferences.

Use surveys, focus groups, or social media insights to gather information on customer preferences, such as fabric types, colors, and pricing.

Understanding the preferences of your potential customers will help tailor your products to meet demand.

Next, research the competitive landscape. Identify other scrunchie brands, both large and small, and analyze their product offerings, pricing strategies, and marketing tactics.

Look at customer reviews, social media engagement, and online sales to determine what works and what could be improved.

This will help you find gaps in the market where you can differentiate your products. Analyze market trends to understand the growth and popularity of scrunchies and related accessories.

Utilize resources like market research reports, fashion trend sites, and social media influencers to stay updated on styles and consumer behavior. This will allow you to stay relevant in a constantly evolving market.

Finally, evaluate distribution channels, including online platforms like Etsy, Instagram, or your own website, as well as physical retail locations.

Understanding where your target customers shop will help you decide whether to focus on e-commerce or expand into brick-and-mortar stores.

a. Who is the Target Market for Scrunchie Business?

• Craft Enthusiasts
• Parents and Gift Givers
• Fashionable Consumers
• Seasonal Shoppers
• Children and Parents
• Niche Markets
• Online Communities.

b. Is Scrunchie Business a Profitable Business?

Yes, a scrunchie business can be profitable due to the growing demand for hair accessories and the popularity of retro fashion.

The global hair accessories market was valued at $8.4 billion in 2021, with steady growth projected.

Scrunchies, being low-cost to produce and highly customizable, offer high-profit margins.

With strong online marketing and social media engagement, a scrunchie business can scale quickly, targeting niche markets like eco-friendly consumers or fashion enthusiasts.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to scrunchie business.

d. Who are the Major Competitors?

• Kitsch
• Scrunchie Co.
• Silk Solutions
• The Hair Edit
• Erickson
• Society6
• Loveshackfancy
• Olivia’s Little World
• Tassel Trends
• Hannah Hitchens
• The Scrunchie Project
• Scrunchies & Co.
• Baskin Robbins Scrunchies
• Scrunchy Bling
• Bella Bandz
• Sunflower Scrunchies
• Velvet Scrunchies
• Charmed Hair Accessories
• Pink Lily Boutique
• Happy Scrunchies.

e. Are There County or State Regulations or Zoning Laws for Scrunchie Business in the United States?

In the United States, there are generally no specific county or state regulations or zoning laws that apply exclusively to scrunchie businesses.

However, businesses operating in the fashion or accessory industry, including scrunchie makers, must adhere to general business regulations.

For those operating from home or a small workshop, it’s important to check local zoning regulations to confirm that running a business is permitted in the chosen location.

This may vary depending on whether the business is home-based or if you’re renting a commercial space.

Zoning laws will also determine if signage or storefront operations are allowed in residential areas.

Additionally, scrunchie businesses that sell products online or wholesale must comply with federal regulations, such as the Federal Trade Commission’s (FTC) rules on labeling, pricing, and advertising.

If the business is producing scrunchies for children, compliance with the Consumer Product Safety Commission (CPSC) regulations is necessary to ensure the product is safe for kids.

Finally, businesses may also need to comply with tax laws, register for sales tax collection, and file taxes based on their location and revenue. Keeping up with these regulations ensures a smooth and legal operation of the business.

f. Is There a Franchise for Scrunchie Business?

No, there are no franchise opportunities for the scrunchie business.

g. What Do You Need to Start a Scrunchie Business?

• Business plan
• Legal structure (LLC, Sole Proprietorship, etc.)
• Business license and permits
• Tax identification number (EIN)
• Fabric and materials (elastic bands, fabrics, threads)
• Sewing machine and tools
• Packaging materials (boxes, tissue paper, labels)
• Website or e-commerce platform (Shopify, Etsy)
• Social media accounts (Instagram, Pinterest)
• Marketing strategy and promotional materials
• Photography equipment for product images
• Inventory management system.

2. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with.

It is essential that the name you come up with can easily be pronounced, is unique and easily memorable. Some of the catchy business name ideas suitable for a scrunchie business are;

Creative Scrunchie Business Name ideas

• Elsie Morgan™ Scrunchie Company, LLC
• Rose Peters© Scrunchie Company, Inc.
• Shannel Usborne™ Scrunchie Company, Inc.
• Dover Dickson© Scrunchie Company, Inc.
• Sharon John® Scrunchie Company, Inc.
• Kensington Grande™ Scrunchie Company, Inc.
• Diana Fischer© Scrunchie Company, LLC
• Jennings Parkson© Scrunchie Company, LLC
• Marrion McDonnel™ Scrunchie Company, Inc.
• Jamie McDaris© Scrunchie Company, Inc.
• Shavonne Wallace® Scrunchie Company, Inc.
• Jacqueline Signature™ Scrunchie Company, Inc.
• Mason Whites© Scrunchie Company, LLC
• Shannon Showman™ Scrunchie Company, Inc.
• Wilkerson Signature™ Scrunchie Company, Inc.
• Rowey Iverson® Scrunchie Company, Inc.
• Jill McDonagh© Scrunchie Company, Inc.
• Hyacinthe Clinton® Scrunchie Company, LLC
• Ricky Jones™ Scrunchie Company, Inc.
• Bowler Fashion® Scrunchie Company, Inc.

3. Register Your Business

a. What Type of Business Structure is Best for Scrunchie Business?

The best type of business structure for a scrunchie business depends on several factors, including the size of the business, the number of owners, and the level of personal liability exposure the owners are willing to accept.

However, we usually recommend a limited liability company (LLC). An LLC is a popular choice for startup businesses because it offers personal liability protection for the owners while allowing them to be taxed as a pass-through entity.

This means that the profits and losses of the business are passed through to the owners’ tax returns, avoiding double taxation.

b. Steps to Form an LLC

• Choose a Name for Your LLC.
• File Articles of Organization.
• Choose a registered agent.
• Decide on member vs. manager management.
• Create an LLC operating agreement.
• Comply with other tax and regulatory requirements.
• File annual reports.

c. What Type of License is Needed to Open a Scrunchie Business?

• General Business License
• Sales Tax Permit
• Home Occupation Permit (if applicable)
• Health and Safety Permits
• Environmental Permits
• Zonal Permit
• Signage Permit

d. What Type of Certification is Needed to Open a Scrunchie Business?

You do not need any special certification to start a scrunchie business.

e. What Documents are Needed to Open a Scrunchie Business?

• Business plan
• Business License
• Employer Identification Number (EIN)
• Sales tax permit
• Zoning permit (if operating from a physical location)
• Resale certificate
• LLC formation documents (if applicable)
• DBA (Doing Business As) registration
• Home occupation permit (if working from home)
• Insurance policies (general liability, product liability)
• Trademark registration (optional)
• Product safety compliance documents (if selling to children)
• Financial records (bank statements, business credit)
• Supplier contracts or agreements
• Employee or contractor agreements (if hiring).

f. Do You Need a Trademark, Copyright, or Patent?

For a scrunchie business, obtaining a trademark is highly recommended to protect your brand name, logo, and unique designs.

A trademark ensures that no one else can use your brand’s identity, providing legal protection for your business name and logo.

Copyrights are typically not necessary for scrunchie businesses unless you are creating original, artistic designs, like custom prints or patterns.

Patents are generally not relevant for scrunchie businesses because scrunchies are simple, functional accessories that do not meet the criteria for patent protection.

4. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Scrunchie Business?

The cost to start a scrunchie business can vary widely depending on factors such as the size of the business, location, equipment, and supplies needed, staffing costs, marketing expenses, and more.

However, a rough estimate could range from $15,000 to $150,000 or more, depending on the size and scope of the business.

b. What are the Costs Involved in Starting a Scrunchie Business?

• Legal and administrative costs (the cost of obtaining business licenses and permits, registering the business, and consulting with attorneys and accountants): $4,500
• Equipment and supplies: $25,000
• Staffing costs: $25,000
• Rent/lease: $15,000
• Marketing and advertising costs: $4,000
• Insurance costs: $2,800
• Miscellaneous Expenses: $5,000.

c. What Factors Determine the Cost of Opening a Scrunchie Business?

• The type of scrunchie business (production, distribution, or retail store outlets)
• The size of the scrunchie business
• The choice of location
• The required licenses and permits
• The cost of hiring and paying a business consultant and attorney
• The cost of branding, promotion, and marketing of the scrunchie business
• The cost of furnishing and equipping the scrunchie business
• The cost of the insurance policy covers
• The cost of registering the business
• Source of your supplies and ongoing expenses
• Cost of recruiting and training your staff

d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not mandatory to build a new facility for your scrunchie business, but if you have the required finance, it will pay you to build your own facility.

The truth is that building or reconstructing a facility for your scrunchie business will allow you to come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Scrunchie Business?

• The cost of fabric, elastic bands, thread, and other materials needed for creating your scrunchie products is a significant ongoing expense.
• Packaging materials, such as boxes, envelopes, labels, and wrapping, as well as shipping costs for sending your products to customers, both domestically and internationally.
• Marketing and Advertising
• Utilities and Workspace Costs
• Business Insurance
• Expenses related to maintaining and hosting your website, as well as fees associated with using e-commerce platforms like Etsy or Shopify.
• Photography and Graphic Design
• If you attend craft fairs, trade shows, or other events, expenses might include booth rental fees, travel costs, lodging, and meals.
• Income taxes, sales taxes, and any other applicable taxes based on your business income and location.
• Costs for software tools, apps, and platforms that help you manage your business operations, such as accounting software or project management tools.
• Expenses for office supplies like paper, pens, printer ink, and other materials needed for administrative tasks.
• Fees associated with accepting payments online, such as credit card processing fees or platform transaction fees.

f. What is the Average Salary of your Staff?

• General Manager – $55,000 per year
• Production Manager – $40,000 per year
• Administrative Assistant (Cashier) – $35,000 per year
• Quality Control Officer – $33,000 per year
• Scrunchie Makers – $33,000 per year
• Customer Service Executive -$30,000 per year

g. How Do You Get Funding to Start a Scrunchie Business?

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
• Source for soft loans from your family members and friends.

5. Write a Business Plan

a. Executive Summary

Jill McDonough® Scrunchie Company, Inc., based in Nashville, Tennessee, is a boutique business specializing in stylish, high-quality, and eco-friendly scrunchies.

The company is committed to offering a diverse range of scrunchies made from sustainable materials such as organic cotton, silk, and recycled fabrics, catering to fashion-forward customers who value both style and environmental impact.

Our products are designed to meet the needs of young adults, fashion enthusiasts, and eco-conscious consumers.

The company will primarily operate through an e-commerce platform, leveraging social media and influencer marketing to build brand awareness and customer engagement.

With a strong focus on quality craftsmanship and customization options, Jill McDonough® aims to establish itself as a unique brand in the competitive scrunchie market.

The goal is to achieve steady growth by tapping into the rising demand for sustainable fashion accessories.

In the first year, we plan to target local Nashville consumers, while expanding nationwide in subsequent years.

The business will prioritize excellent customer service, fast shipping, and a seamless online shopping experience.

Jill McDonough® Scrunchie Company, Inc. aims to become a leading brand in the scrunchie industry, offering products that blend practicality, comfort, and fashion.

b. Products and Service

Jill McDonough® Scrunchie Company, Inc. offers a wide range of stylish, eco-friendly scrunchies made from sustainable materials like organic cotton, silk, and recycled fabrics.

Our products cater to fashion-conscious individuals who prioritize both style and sustainability.

We provide custom design options, ensuring each scrunchie is unique and tailored to customer preferences.

Additionally, we offer fast, reliable shipping and excellent customer service through our e-commerce platform, aiming to create a seamless shopping experience.

c. Mission Statement:

At Jill McDonough® Scrunchie Company, Inc., our mission is to create stylish, high-quality, and eco-friendly scrunchies that cater to fashion-forward individuals who value sustainability.

We are committed to offering products made from sustainable materials while providing exceptional customer service and promoting a positive impact on the environment.

Vision Statement:

Our vision is to become a leading brand in the scrunchie industry, known for our innovative designs, commitment to sustainability, and dedication to empowering our customers with fashion accessories that are both trendy and environmentally conscious.

d. Goals and Objectives

At Jill McDonough® Scrunchie Company, Inc., our goals are to become a leading provider of eco-friendly scrunchies, expand our customer base, and promote sustainable fashion.

Our objectives include offering high-quality, unique scrunchies made from sustainable materials, establishing a strong online presence through e-commerce and social media, ensuring exceptional customer service, and growing our business locally in Nashville before expanding nationwide.

We aim to inspire consumers to choose sustainable, stylish accessories that make a positive environmental impact.

e. Organizational Structure

• General Manager
• Production Manager
• Administrative Assistant (Cashier)
• Quality Control Officer
• Scrunchie Makers
• Customer Service Executive

Marketing Plan

a. SWOT Analysis

Strength

• Eco-friendly Product Line: Jill McDonough® focuses on sustainable materials like organic cotton, silk, and recycled fabrics, which align with growing consumer demand for environmentally conscious products.
• Customization Options: Offering unique and customizable scrunchie designs allows the company to differentiate itself in a competitive market.
• E-commerce Focus: A strong online presence and e-commerce platform provide flexibility and convenience, reaching a broad customer base.
• Brand Identity: The company’s focus on fashion-forward, high-quality accessories helps build a unique and recognizable brand.

Weakness

• Initial Capital Investment: Starting a scrunchie business with an emphasis on sustainable materials can lead to higher upfront costs for sourcing eco-friendly fabrics and establishing production processes.
• Limited Physical Presence: The reliance on online sales may limit visibility for customers who prefer in-person shopping experiences.
• Scaling Challenges: As the business grows, scaling production while maintaining product quality and sustainability can be challenging.

Opportunities

• Sustainability Trend: The increasing trend towards sustainable fashion presents an opportunity to attract eco-conscious consumers who are willing to pay a premium for eco-friendly accessories.
• Partnerships and Collaborations: Collaborating with influencers or sustainable fashion brands can boost brand awareness and expand the company’s reach.
• Expansion into New Markets: After establishing a strong presence in Nashville, the company can explore national and international markets, expanding its customer base.

Threats

• Market Competition: The scrunchie market is highly competitive, with both established and new players offering similar products, which could lead to price wars and margin compression.
• Economic Downturns: Economic challenges may affect consumer spending on non-essential items like fashion accessories, potentially reducing sales.
• Supply Chain Disruptions: Fluctuations in the availability of sustainable materials or rising production costs could disrupt the supply chain and increase operational costs.

b. How Does Scrunchie Business Make Money?

Scrunchie businesses make money by selling scrunchies through various channels, primarily online platforms like e-commerce websites, Etsy, or social media.

Revenue is generated through direct sales of individual products or bulk orders. Businesses can also increase profits by offering custom designs, seasonal collections, or subscription boxes.

Additionally, they may engage in wholesale deals with retailers or collaborate with influencers for marketing, boosting brand visibility and sales.

c. Payment Options

• Credit and debit cards
• PayPal
• Apple Pay and Google Wallet
• Gift cards and store credit
• Installment payments
• Cash on delivery.

d. Sales & Advertising Strategies

• Focus on targeting customers in the local area who are most likely to purchase scrunchies.
• Create a professional and user-friendly website that showcases your scrunchie products, services, and delivery options.
• Implement a referral program to incentivize existing customers to refer your scrunchies.
• Offer discounts, free bundles, or other rewards for successful referrals.
• Run seasonal promotions and discounts during periods of high demand, such as the start of winter or holiday seasons.
• Create attractive offers, bundle deals, or loyalty programs to encourage repeat purchases and customer loyalty.
• Advertise in local newspapers, community newsletters, and radio stations to reach a wide audience in your target market.
• Participate in local craft fairs, festivals, or trade shows to showcase your scrunchie products and engage directly with potential customers.
• Partner with local influencers, bloggers, or fashion stylists who have an audience interested in unique fashion trends.
• Collaborate on cross-promotional efforts, such as displaying each other’s marketing materials or offering joint discounts.

Financial Projection

a. How Much Should You Charge for Your Product/Service?

Basic Fabric Scrunchies:

Price range: $5 – $12

These are made from basic fabrics like cotton, polyester, or blends and usually come in standard sizes.

Silk Scrunchies:

Price range: $12 – $25

Silk scrunchies, known for being gentle on hair typically command higher prices.

Custom or Personalized Scrunchies:

Price range: $10 – $20

These scrunchies are tailored with specific colors, fabrics, or designs to meet customer requests, adding value.

Eco-Friendly Scrunchies (Organic Cotton, Recycled Fabrics):

Price range: $8 – $18

Scrunchies made from sustainable materials, such as organic cotton or recycled fabrics, are priced higher due to their environmentally-conscious production.

Scrunchie Sets (Multiple Scrunchies):

Price range: $15 – $35

Sets of 3-5 scrunchies often come with coordinated patterns or colors and are sold at a bundle discount.

Scrunchie Subscription Boxes:

Price range: $20 – $50 per month

Subscription services offering a new set of scrunchies each month can generate recurring revenue, often with themed designs or exclusive items.

b. How Much Profit Do Scrunchie Business Owners Make a Year?

The profit that scrunchie business owners can make in a year can vary significantly depending on various factors such as the scale of the business, sales volume, pricing strategy, overhead costs, market demand, and overall business management.

It is important to note that individual results may vary, and it is challenging to provide an exact figure as it depends on many variables.

c. What Factors Determine the Amount of Profit to Be Made?

• The capacity of the scrunchie business, and their sales volume
• The location the scrunchie business is covering
• The management style of the scrunchie business
• The business approach of the scrunchie business
• The advertising and marketing strategies adopted by the scrunchie business.

d. What is the Profit Margin of a Scrunchie Business?

Typically, the profit margin for a scrunchie can range from 10 percent to 30 percent.

e. What is the Sales Forecast?

• First Fiscal Year (FY1): $150,000
• Second Fiscal Year (FY2): $280,000
• Third Fiscal Year (FY3): $350,000

6. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for Scrunchie Business?

• Target Market Proximity: Choose a location where your target customers, such as fashion-forward individuals or eco-conscious consumers, are concentrated, such as trendy neighborhoods or college towns.
• Foot Traffic: If considering a physical store or pop-up shop, select a location with high foot traffic, such as shopping districts or malls, to increase visibility and customer reach.
• Access to Suppliers: Choose a location that provides easy access to suppliers of fabrics, materials, and packaging, minimizing shipping costs and lead times.
• E-commerce Focus: If operating online, prioritize a location with reliable internet infrastructure and low operating costs to maximize profitability, such as home-based or co-working spaces.
• Local Regulations and Zoning: Ensure that your chosen location complies with local zoning laws, business licensing requirements, and home-based business regulations if operating from your residence.

b. What State and City is Best to Open a Scrunchie Business?

• New York City, New York
• Los Angeles, California
• Dallas, Texas
• Miami, Florida
• San Francisco, California
• Chicago, Illinois
• Portland, Oregon
• Nashville, Tennessee
• Austin, Texas
• Seattle, Washington.

c. What Equipment is Needed to Operate a Scrunchie Business?

• Sewing Machine
• Fabric Cutting Tools (Scissors, Rotary Cutter)
• Measuring Tape or Ruler
• Iron and Ironing Board
• Sewing Needles and Threads
• Elastic Bands
• Fabric (Cotton, Silk, Velvet, Recycled Fabrics, etc.)
• Packaging Materials (Boxes, Tissue Paper, Labels)
• Thread Snips or Scissors
• Pins and Clips
• Label Printer
• E-commerce Platform (Website, Etsy, Shopify)
• Photography Equipment (Camera or Smartphone, Lighting)
• Shipping Supplies (Envelopes, Shipping Labels, Tape)
• Inventory Management Software.

7. Hire Employees

The decision to hire employees for a scrunchie business largely depends on the scale and complexity of operations.

For a small business or a sole proprietorship, the owner may manage most tasks, such as production, marketing, customer service, and sales, especially if the business is in its early stages.

However, as the business expands and sales increase, the workload can become overwhelming.

At this point, hiring employees or contract staff to handle specialized tasks like packaging, customer support, or inventory management may become necessary.

8. Launch the Business Proper

Organizing a launch party before officially opening your scrunchie business is a strategic move to create buzz and build excitement.

It offers a platform to introduce your brand, products, and mission to potential customers in your local community.

The event serves as a personal invitation for people to engage with your products firsthand, helping to establish initial connections and trust.

By showcasing your scrunchies and offering exclusive deals or giveaways, attendees may become loyal customers and even brand ambassadors, spreading the word and encouraging others to support your business.

a. What Makes a Scrunchie Business Successful?

• Quality and Unique Products: Offering high-quality, stylish, and unique scrunchies that stand out in the market.
• Effective Marketing and Branding: Consistent and creative marketing strategies, including social media engagement, influencer partnerships, and promotions.
• Strong Online Presence: A well-designed e-commerce website or presence on platforms like Etsy can facilitate easy shopping and help drive sales.
• Customer Satisfaction: Providing excellent customer service, fast shipping, and addressing customer concerns promptly can help build long-term relationships and generate positive word-of-mouth.
• Sustainability and Trend Awareness: Capitalizing on the demand for sustainable fashion and staying up-to-date with trends can differentiate your business and appeal to eco-conscious consumers.

b. What Happens During a Typical Day at a Scrunchie Business?

• Morning Review: Start the day by reviewing incoming orders, customer feedback, and any ongoing promotions.
• Inventory Management: Check stock levels of fabric, elastic, and other materials needed for production. Place orders for supplies if necessary.
• Product Production: Create new scrunchies, ensuring quality control on materials, stitching, and design. Package products for shipment.
• Website & Social Media Updates: Update product listings, post on social media platforms, engage with followers, and respond to customer inquiries.
• Packaging and Shipping: Pack orders, label them, and schedule shipments through a courier service.
• Marketing Tasks: Plan and execute marketing strategies, including influencer outreach, ad campaigns, or collaboration efforts.
• Customer Support: Respond to emails or messages, address any concerns, and process returns or exchanges if necessary.
• End-of-Day Review: Analyze sales data, and customer feedback, and set goals for the next day.

c. What Skills and Experience Do You Need to Build a Scrunchie Business?

• Sewing and Crafting Skills
• Product Design and Creativity
• E-commerce Management
• Marketing and Social Media Skills
• Customer Service Experience
• Inventory and Supply Chain Management
• Financial Management and Budgeting
• Sales and Negotiation Skills
• Time Management and Organization
• Knowledge of Sustainable Practices.