Do you want to start a teddy bear production business? If YES, here is a complete guide to starting a teddy bear production business with NO money and no experience.
A teddy bear manufacturing business is a kind of business that allows you to earn substantial profit while making others happy. Teddy bears are loved by people of all ages. This business can be started and managed from a fixed location such as a storefront, a mall kiosk or even a trailer that allows you to travel with your equipment.
But you have to understand that you will need significant startup investment to start this business. When planning to start this business, you have to decide if you will buy a teddy bear manufacturing franchise opportunity or start this business from scratch.
Although franchises can be costly, but they provide equipment and business guides as well as the advantage of a known brand. You might decide to start from the scratch because you want to enjoy more flexibility and the chance to add your unique touch to your business. Also have it in mind that you will need to apply for a business license. You can usually apply through your local county clerk, the department of licenses and inspections or a similar agency in your jurisdiction.
Do not forget to pick a unique name for your business and register the fictitious name. You can learn how to register a name by contacting your secretary of state’s office. Note that a business name that includes the words bear making, stuffed bears, teddy bears or bears in it will give potential customers an idea of what you’re offering.
One other important factor to consider when starting this business is the issue of location. You can go for a storefront in a high foot traffic area or opt to start this business from a mall kiosk. You may alternatively purchase a truck, van or trailer and sell your bears at festivals, fairs and carnivals. You might even travel to birthday parties and other special events to sell your bears and accessories.
You will also need to get the basic equipment to manufacture your bears. You will need boxes for the bears, a computer, printer and software for creating bear birth certificates. You will also need unstuffed bear skins, bear stuffing, bear clothing and a range of accessories for the bears.
In addition, you may want to get other types of unstuffed animal skins to give your customers more choices. It’s very necessary that you create and market a website for your bear manufacturing business. You should use your website to describe your services and provide contact information. You can also market your business by placing ads online, in newspapers and in telephone directories. You can also have your business listed in party and event-planning directories.
18 Steps on How to Start a Teddy Bear Production Business
Table of Content
- 1. Understand the Industry
- 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
- 6. Know the Possible Threats and Challenges You Will Face
- 8. Choose a Catchy Business Name from the ideas Below
- 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 Legal Documents You Need to Operate
- 12. Raise the Needed Startup Capital
- 13. Choose a Suitable Location for your Business
- 14. Hire Employees for your Technical and Manpower Needs
- 15. Write a Marketing Plan Packed With ideas & Strategies
- 16. Develop Iron-clad Competitive Strategies to Help You Win
- 17. Brainstorm Possible Ways to Retain Clients & Customers
- 18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
According to statistics, the demand for the stuffed & plush toys will continue to rise in the global market due to the growing population of children. Note that the growing demand for comfort and soft creature toys has moved manufacturers to opt for sponge, fur clothing and cotton for the manufacturing of stuffed toys. Experts believe that the emergence of various disease and illness will further impact growth of the global stuffed & plush market positively. Have it in mind that manufacturing companies are solely focusing on product development and innovation in synch with the imposed regulations in order to gain a competitive edge over other market players.
Reports have it that the global stuffed & plush toys market is expected to represent a value of over US$ 11,000 MN by the end of 2026. Also note that the demand for the stuffed & plush toys is majorly bound to surge in the number of occasions and events globally. Birthdays, Valentine’s Day, Christmas and New Year are some of the occasions that will continue to boost sales of the stuffed & plush toys in the global market.
With the growing number of traditional occasions, manufacturers in this industry are hoping to totally offer festive toys in the global market. You need to note that stuffed toys that are manufactured with fur have the tendency to capture germs and bacteria. With stuffed toys becoming a breeding ground for bacteria and germs, demand for toys manufactured with fabric material is expected to heighten sales significantly.
But companies in the industry are increasingly focusing on offering toy products manufactured with natural filling. With these factors, experts expect the demand for the stuffed & plush toys market to remain high from 2018-2026.
It’s also very important to state that the prevalence of neurological diseases will continue to affect growth of the global stuffed & plush toys market significantly. Industry products help the patients of neurological diseases such as dementia and Alzheimer’s disease to regain childlike behaviour, which helps in improving their memory. Also, stuffed & plush toys also help the neurological patients to feel relaxed and happy, which in turn improves their chances of recovering. Note that the growing demand for stuffed & plush toys among the neurological patients will continue to ginger up the growth of the global market. Reports also have it that increased collaborations and product launches will continue to affect the growth of the global stuffed & plush toys market positively.
There is a growing availability of stuffed toys that are equipped with advanced features such as GPS trackers and sensors. Through these features guardians or parents can conveniently monitor their children and infants. This is why to gain a competitive edge over other market players, manufacturing companies are entering into collaborations to offer innovative products.
Have it in mind that the rising need to comply with industry rules will impact growth of the global market significantly. A lot of federal and state regulations imposed have led to stringent checking of the stuffed toys before they are launched. But the imposition of safety regulations by the Federal Trade Commission regarding manufacturing of the stuffed toy products is most likely to boost sales globally.
2. Conduct Market Research and Feasibility Studies
Demographics and Psychographics
It is very advisable that you perform a thorough research when planning to start this business. From our own research, we were able to note that there is a huge market for teddy bears in the United States. People from kids to adult all love teddy bears especially the feminine group. Small kids are known to love soft toys especially the teddy bear. The United States being a highly populated country, the need for soft toys especially teddy bears will always remain very high and they are not as expensive as other electronic toys.
3. Decide What Niche to Concentrate On
According to reports, a Croatian startup won top honours at the 2013 Global Entrepreneurship Congress in Moscow for Teddy the Guardian, a plush stuffed bear that also monitors the bear owner’s vital signs. Although you don’t have to get quite so specialized, but as a new business, you need to start with a feature that sets your personalized bears apart from the rest. Note that by focusing your business on personalized teddy bears, you have already narrowed your niche, but you still have some fine-tuning to do. Start by finding out where in the overall personalized teddy bear space you want to be, whether as a mail-order business, delivery service or retail store. You should also decide what product lines you will carry, whether that is just teddy bears, teddy bear gift baskets, or assorted novelty products. It’s advisable that you hammer out the personalization features of your business, such as monogramming options, changeable bear attire and accessories, or talking bears that say a person’s name.
Level of Competition in the Teddy Bear Manufacturing Business
Three out of the five major players in the global toy industry are American companies. Led by the U.S., North America is one of the most lucrative and important regional markets for these companies. In the U.S. alone, the total retail sales of the toys and games market is estimated to be over 22 billion U.S. Dollars in 2015.
The toy industry’s annual total economic impact in the U.S. was 80.26 billion U.S. Dollars in 2015, while over 287 thousand jobs directly related to the American toy industry were generated that year. Have it in mind that the U.S. is by far the leading importer in the global toy industry. Reports have it that in 2015, the country imported toys, bears and sports requisites with a value of about 31 billion U.S. dollars, the highest figure since 2011. From this total, China accounted for about 80 percent of all imports of toys, games and sport requisites to the U.S. Note that China is also the leading exporter in the global toy industry, exporting nearly 43 billion U.S. dollars in 2015. In comparison, the U.S. exported toys with a customs value of about 6.2 billion U.S. dollars that year, of which goods worth approximately 2.1 billion U.S. dollars were exported to Canada, the most important export market for the U.S.
Even though the number of American consumers who shopped for toys at any toy store has been consistent over the years, consumers in this industry are turning to the internet to buy these types of products. Statistics has it that the number of consumers who shopped for toys or games on the internet in the U.S. has been constantly growing since 2008, reaching the highest figure in 2016. That year, nearly 44 million consumers in the U.S. shopped for toys or games online. Also note that the US toy and game manufacturing industry includes about 530 establishments (single-location companies and units of multi-location companies) and has annual revenue of about $1.7 billion. Revenue from toy manufacturing that takes place in the US represents only a portion of revenue recorded by US-based manufacturers, which commonly arrange to have toys produced at factories in countries where costs are lower.
4. Know the Major Competitors in the Industry
- Simba-Dickie Group
- Spin Master Ltd
- Build-A-Bear Workshop, Inc.
- Ty Inc.
It’s important to state that even though teddy bears are mass produced, their design and manufacturing requires hands-on attention throughout the manufacturing process. Fabric cutters, assemblers, stuffing machine operators, and bear surgeons, groomers, and dressers all share great pride in knowing their product will give and receive much love over the years of its life. Note that hand-manufacturing makes ensure the bears are inspected at every step in their manufacture, and that mistakes do not reach the packaging department.
You also need to understand there are no by-products from the manufacture of teddy bears, although there are co-products consisting of other types of stuffed animals and bears. Safety concerns are very crucial in the bear factory. The machinery is powered by electricity, requiring safety precautions; fabric cutters, sewing machines, wire brushes, and other machines are equipped with emergency shutoffs and other safety devices. Employees in the factories are mandated to wear masks over their mouths and noses to prevent them from inhaling the airborne fluff. Safety glasses are also worn during some operations.
The future for teddy bears can only be a picnic. Experts believe that new interpretations of this much-loved creature follow trends in movies, television, and toy fashion from character bears to miniature, beanbag-like versions that are inexpensive and collectible. A teddy bear has even flown on the Space Shuttle when, in February 1995, Magellan T. Bear from the Elk Creek Elementary School in Pine, Colorado, joined a NASA mission as the school’s ambassador. These toys are popular with children, obviously, but also with adult collectors who often invest in limited editions or bears made from prized designs and rare materials. In a world with growing emphasis on technology, teddy bears remind us of our childhood and provide an unlimited supply of fuzzy hugs.
5. Decide Whether to Buy a Franchise or Start from Scratch
Note that it is almost always better to buy a teddy bear business than to start one from the scratch. But it is also advisable that you always perform thorough research, there at least three reasons you should consider a teddy bear manufacturing business franchise;
- With several years of operations under its belt, a franchise is much more appealing to lenders and investors interested in avoiding the risk of an unproven start up.
- Early Revenue. Businesses struggle to bring in revenue right out of the gate when starting from the scratch but franchise businesses usually have a steady stream of income.
- Business Efficiency. When planning to buy a teddy bear manufacturing franchise, make sure you go for ones that have all of the necessary processes and systems to ensure seamless operations from your first day of ownership.
6. Know the Possible Threats and Challenges You Will Face
Running a teddy bear manufacturing business can be a very interesting venture. Teddy bears are loved by all, which creates a huge demand in this business. Here are few threats you might face when starting your Teddy bear manufacturing business…
- Registering your business
- Choosing a price model
- Simplifying your marketing plans
- Learning how to make teddy bears or about teddy bears
- Deciding on the type of teddy bear you would be making
- Doing your feasibility research
- Choosing your work area
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Best Legal Entity for a Teddy bear manufacturing Business
Have it in mind when starting this business that you have just two legal entities that fit a manufacturing business – sole proprietorship and the LLC. Also note that the scale or size you plan to start with can also impact your decision. If your business is all about the income and interest of your clients, the LLC is the best legal entity for your business be it small, medium or large. No matter how you see it, the benefits of an LLC clearly outweighs any perceived disadvantages.
- Heightened credibility
- Limited compliance requirements
- Few restrictions
- Protected assets
- Flexible management structure
8. Choose a Catchy Business Name from the ideas Below
- Super Teddy bear
- King bears
- Fresh teddy bear
- First choice
- Main gate
- Sole comfort
- Mantle Teddy bear
- CC teddy bears
9. Discuss With an Agent to Know the Best Insurance Policies for You
When planning to start a teddy bear Manufacturing company, you need to consider insurance to safeguard your workers and protect yourself. Starting and managing this business comes with many challenges, and one can never be too careful. This is why as a focused entrepreneur you need to protect your business, supplies, customers and employees by ensuring you have the best business insurance to suit your particular business needs. Insurance you might need to run a teddy bear manufacturing business may include;
- Teddy bear manufacturing General Liability Insurance
- Teddy bear manufacturing property insurance
- Teddy bear manufacturing Equipment Breakdown Insurance
- Teddy bear manufacturing umbrella insurance
- Teddy bear manufacturing Workers’ Compensation
- Teddy bear manufacturing crime insurance
- Teddy bear manufacturing commercial auto insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
There are over 500 teddy bear manufacturing establishments in the United States, and due to the need to satisfy customers and stay on top the industry, there is a constant fight for innovation and new ideas which has made this industry anything less than overly competitive. It is for that reason that you have to come up with a brand name for your teddy bear. It is your sole duty to make it easy for customers to differentiate your brand from other brands. You will also have to patent a name for your brand by visiting the patenting office which is under the library board in your county.
Do not make the mistake of thinking that this business doesn’t need IP protection. Filing for intellectual property protection for your Teddy bear manufacturing business goes beyond protecting your company’s logo and other documents, but also protecting your investments, ideas, style, and of course the name of your company. If you really decide to protect your intellectual properties and also register your trademark in the United States, you have to start by filing an application with the USPTO.
11. Get the Necessary Legal Documents You Need to Operate
It is important that you take issues concerning permits and licenses very serious. Licenses and permits that give you the right to make your product or render your services is not something you would want to joke with when starting a business/company. If you have visions for your business and you want people to take you serious, then you have to research and get all necessary documents to run your business. Documents you will need to run a Teddy bear manufacturing business in the United States may include:
- Articles of Organization
- LLC operating agreement
- Business license
- Business plan
12. Raise the Needed Startup Capital
To start up this business and also run it successfully you need adequate funding. If you can get the necessary capital/resources on your own then much better. But if you can’t do not beat up yourself. If you can convince and woo them, there are always individuals, companies, investors who are ever ready to invest in or go into partnership with you. You should investigate reliable sources of funds where could be accessed. Possible sources include:
- Bank overdraft
- Venture Capital
- Loans forms family and friends
- Loans and grants
- Personal savings
- Angel investor
13. Choose a Suitable Location for your Business
The issue of location is one aspect of business planning which can’t be overlooked, especially for a manufacturing business. Most manufacturing sites are on the outskirts of town, so you have to ensure that you get a good warehouse that will accommodate all your equipment. Also note that you can look out for an industrial estate that is away from a residential area. You can employ the services of realtor to help get you a place that can accommodate all the equipment that you purchase and do not forget that you would need space that can serve as a lounge for your factory workers. Other things to consider may include;
- Security and protection
- Demographics and Psychographics
14. Hire Employees for your Technical and Manpower Needs
Reports have it that the original teddy bears were made (on both sides of the Atlantic) with mohair fabric “fur” that was commonly used for upholstery, black leather shoe-button eyes, and excelsior packing as stuffing. In the 1920s, glass eyes were used, but both the glass and button eyes pulled off easily. In 1948, Wendy Boston patented a screw-in eye made of moulded nylon. These were supplanted in the 1950s by plastic eyes mounted on stems and fastened securely to the inside of the fabric with grommets or washers. These safety eyes became standard by the 1960s. Within these years changes have occurred in the construction of articulated bears. Materials for the original designs included disks and cotter pins (twistable fasteners) that attached separately made arms, legs, and heads to a body that had to be strongly stuffed to help the pins. The early disks were made of wood with leather coverings to protect the outer fur. Companies using this process today have substituted the plastic disks.
In this modern age, materials are most varied in fabric. Reports have it that Plushes made of many fibres are popular because they are fur-like. Early bears were made of mohair that consisted of Angora (goat’s wool), sheep’s wool, rayon, or silk. Today’s plush may be wool, silk, rayon, nylon, other synthetics, or combinations of fibres. Velvet or velveteen (velvet made of cotton instead of silk or synthetics) is also popular for its softness and colour varieties. Fake fur fabrics are classics for modern bears. This fur is different from plush because it has a knitted instead of woven backing that is lightweight and flexible; the shaping of the fibre can remove sheen and closely resemble real fur with blended colours. Although real fur can also be used for teddy bears, but fur bears are delicate and always need extra special care. It’s very necessary to state that other fabrics like corduroy, denim, calico, terry cloth, and velour are also bear basics.
Also note that you will need an experienced workforce to succeed in this business. You need to employ those that understand the processes of teddy bear making. If you plan to start a retail venture, consider getting display cases, lighting, cash registers, shelving units, computers, phones, gift wrapping and supplies to get started. But if you plan to sell online, your overhead may be lower, but you’ll also be paying for e-commerce hosting fees and shipping services. While for delivery service, you must recruit talent to perform and deliver the goods to the customer.
You need to understand that the design for a new model of teddy bear is first sketched by an artist experienced in toy design. Then based on a sketch or conception of the planned bear, some pieces of the bear are also drawn to be used in making a pattern. At this point, the pattern is cut out and assembled, and the prototype bear is examined for “character flaws.” Have it in mind that if the design stops the bear from sitting properly, for example, or if the prototype is not appropriately cuddly or distinguished, the design will have to be redrawn and shapes of pieces are adjusted. It might take a handful of trials and failures to perfect the design before it is ready for large-scale manufacture.
Don’t forget that factors such as popular interests and headlines may be considered in planning new designs. After the prototype has been accepted, it is then transferred to a blueprint where the paper patterns are made. Here the shapes are cut out and pinned to fabric. A lot of layers of plush may be stacked with the pattern pinned on the top, and a cutter with a blade much like a band saw is used to cut out many pieces at one time. Workers sit behind industrial sewing machines, with each person responsible for one style of bear. He or she will assemble the small pieces first, add the eyes and grommet attachments to the face, and then stitch the parts together. The bears are inside out with their seams exposed and openings down the long seam in the back. Finally, they are pulled right side out and dispatched to be stuffed. The volume a worker produces depends on the type of bear; one may produce 35 to 45 baby bears in one day or eight or nine larger species.
At this point, the manufacturer will have to get polyester fibre in 500 lb (227 kg) bales in which the fibre is tightly packed. This fibre is dual density with a very fine fibre and a thicker, slightly wavy fibre; together, these fibres have the most desirable packing quality for stuffing animals. Due to the fact that the polyester comes so tightly packed, batches of it are tossed into a picker, which is a barrel lined with spikes that fluffs the stuffing. The fluffed material is blown by air into a stuffing machine. Air pressure blows the stuffing into the bear through a small diameter tube.
The machine operator can adjust the bear to direct the stuffing to various parts of the toy. Have it in mind that a pedal release on the stuffing machine controls the puffs of stuffing. Two pushes on the pedal, for example, may be needed to pump enough stuffing from the machine’s nozzle into the nose of the bear, which needs to be firm. The head, feet, and paws also need to be firm, but the body should be squeezable soft. After the stuffing, the bear is then passed to another worker, a “bear surgeon,” who stitches up the opening in the back of the bear. Then the whole bear is then groomed.
Due to the plush fabric was stitched inside out, “fur” is caught in the seams and must be pulled out so the seams do not show. Most companies use electrically powered wire brush to fluff the seams, and the bear is then blown through an array of air jets to remove the loose fuzz and brush the fur. Final details like costumes, ribbons, and accessories are added before the bear is packaged for transport and sale.
15. Write a Marketing Plan Packed With ideas & Strategies
Marketing Strategies for a Teddy bear manufacturing Business
You have to understand that small and medium size teddy bear manufacturing businesses can compete favourably and even outperform bigger competitors. All it takes is the right marketing plan. It’s very important to state that lack of marketing experience can sometimes be overcome through persistence and innovation. When putting together your marketing plan in this business, it’s very advisable that you see branding as a consumer shortcut.
This is true since the average consumer doesn’t have time to thoroughly evaluate every product they encounter; most times they make buying decisions based on the brands they trust. This is why some brands struggle to achieve recognition with consumers while others seem to be quickly embraced by the marketplace. Businesses that adopt brand positioning into their normal marketing routines gradually accumulate higher brand values and are rewarded by consumers.
Note that niche marketing approach is best for small businesses, especially teddy bear related businesses trying to create a larger footprint in a targeted market segment. You need to understand that niche marketing requires attention to the kinds of details many businesses overlook. You should possess a keen awareness of your company’s unique value proposition. Also, niche marketing means tailoring resource acquisitions to the needs of your market segment.
Make use of Print Ads
According to reports, print advertising has been a marketing staple for teddy bear businesses. For instance, Gutenberg’s invention has been used for a larger range of commercial and promotional applications. Indeed online advertising has very excellent benefits, but you shouldn’t stop advertising your teddy bears business in printed media. Experts believe that it’s more important than ever to make sure the publications you target reach the right people. Publications geared toward large, general readerships tend to be less productive than publications that are read by likely buyers of your products and services.
16. Develop Iron-clad Competitive Strategies to Help You Win
Have it in mind that the best way to gain a substantial market share in this industry is to bring something new to the table, coming to the market with a missing piece of the puzzle. This is why it is advisable that you embark on a detailed market Feasibility Research. In the course of this research, you will have to check out what your competitors are doing, then look for something else. You should keep an open mind and a keen eye to discover something that may have the potential to sell but has yet to be produced. Below are some ways to offer customers even more choices:
- Add customization services
- If you work from home, consider opening a storefront
- If you already own a successful shop, consider opening a second
- Diversify your product lines by adding bears, puppets, other animals or related toys
17. Brainstorm Possible Ways to Retain Clients & Customers
Indeed having customers who are loyal to your brand and tell how good your products are can go a long way to help your business achieve success. It takes more to acquire new customers than to retain old customers. These old customers will be the ones to improve the image of your business through referrals and ratings. If you don’t have a storefront or are trying to get people to come to your shop, printing advertising with high quality photos is essential. If you work out of your home, spend money on high quality print advertising. Create a portfolio of your teddy bear product line to show people. Think of unique ways to keep people buying..
- Offer a “Teddy Bear of the Month” package
- Give regular customers a free gift after buying a certain number of teddy bears
- Have customer appreciation sales where only previous buyers are invited
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
To grow the visibility of your company and generate more sales, invest in high-quality photography to prominently display your teddy bears in print and online media. Like we stated above, offer a bear-of-the-month program that encourages people to return and buy the latest version of must-have bear. You should also provide loyalty incentives to shoppers where they receive a free bear after purchasing a certain number of bears, or invite repeat customers to participate in exclusive savings.
A reseller is known to buy a batch of your products and sell them at a higher cost. But the benefit is that these partners often visit potential buyers in person and tell them about the product. But you will have to sell your models at a discount price to the reseller.
Note that this most times involves ads placed within videos, shows, online stories, or other types of media. Be it links, written words, video, or visuals, the way you use it depends on your objectives and budget. But this marketing technique is beneficial for the viewers as well.
Reports have shown that this technique also known as online advertising is one of the top ways a starting business can grow its brand and find new customers. You have a lot of options available in this particular strategy, such as pay-per-click, paid social media, display advertising, and in-app ads. Note that direct website advertising is also a good idea.
Use Social media
You need to understand that the success of your Teddy bear manufacturing business means making a name for yourself. Interestingly, the social media is a fast way to build up any brand. You can start by identifying influencers and engaging with them. In little time, those individuals will create some buzz around your service. You can also use social channels such as Facebook, Twitter, Instagram, LinkedIn, and Google+ to keep them and your customers up to date with your accomplishments.