How to Start a Cactus Leather Business

Start a cactus leather business by following these 10 steps:

1. Plan your Cactus Leather Business
2. Form your Cactus Leather Business into a Legal Entity
3. Register your Cactus Leather Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Cactus Leather Business
6. Get the Necessary Permits & Licenses for your Cactus Leather Business
7. Get Cactus Leather Business Insurance
8. Define your Cactus Leather Business Brand
9. Create your Cactus Leather Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your cactus leather business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a cactus leather business?

There is only one viable cactus leather company right now, Desserto, and there is no information available about their startup costs. It is reasonable to assume that your startup costs would be significant just to develop and manufacture your vegan leather product, and that’s not including the costs of starting a cactus farm. Needless to say, you will need funding from lenders and/or grants to get your business started.

What are the ongoing expenses for a cactus leather business?

There are many ongoing expenses for a cactus leather business, including purchasing cactus, shipping cactus to the manufacturing facility, labor, and research and development. You can expect to spend a significant amount of the research and development of your product, as you are producing something virtually new. But even when you have a product you are satisfied with, you will likely still want to continue your research and development to improve your product and create new products.

Who is the target market?

Several industries are eager to incorporate vegan leather into their products, including the auto industry, the fashion industry, and the furniture industry. While you could potentially target one of these markets, if you have a quality product, there is no reason why you shouldn’t target all of them.

How does a cactus leather business make money?

A cactus leather business makes money by selling cactus leather to various customers, including apparel manufacturers, auto upholstery companies, shoe companies, and other businesses that have a use for vegan leather.

How much can you charge customers?

It’s difficult to get a clear price on cactus leather because as of now, there is only one company selling it. The company claims that the cost of their product is similar to the cost of animal leather. The cost of a full hide of leather ranges between $200-$500, although there can be a lot of variation in cost based on the product.

How much profit can a cactus leather business make?

With the vegan leather market projected to grow to $85 billion in just a few years, there is plenty of profit to be made in the industry. Cactus leather is so new, though, that there are no figures available to determine how much profit this type of business can make. Given that there are very few truly plant-based alternatives to leather – with most vegan leathers made out of petrochemicals – it is likely that a high-quality cactus leather will be very profitable.

How can you make your business more profitable?

You can make your business more profitable by generating more demand for your cactus leather. Right now, only a few niche industries even know that cactus leather is a possibility for their material needs. If you can increase awareness through savvy marketing, you could greatly expand your customer base. Imagine if you could create a plant-based leather and become the sole supplier for a major shoe manufacturer or auto upholstery manufacturer. Your profits would increase drastically.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your cactus leather business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Starting a cactus leather company is not for the faint of heart. Although the first company to produce this material is generating a lot of excitement in the apparel industry, it is still just getting off the ground. You need to have a passion for animal welfare, the environment, and textiles if you want to be successful. You will also need to be prepared for an uphill battle, as you will have to develop your own process to produce quality vegan leather out of cactus.

What happens during a typical day at a cactus leather business?

A typical day at a cactus leather business includes checking on your cactus farm and your cactus leather production facility. Depending on where your focus is at the time, you may be spending the majority of your time establishing your cactus farm. Or, you may be working with your team to develop and manufacture your cactus leather product.

What are some skills and experiences that will help you build a successful cactus leather business?

There are at least two key skills that are required to start a cactus leather business – farming and textile manufacturing. You may be able to source your cactus from a cactus farm, in which case you would not have to handle the farming yourself. Arguably the most important thing is your ability to produce a convincing leather substitute from cactus. Your product has to be close enough to leather to be attractive to your target markets.

What is the growth potential for a cactus leather business?

The growth potential for a cactus leather company is substantial. According to LiveKindly, the vegan leather market is expected to be worth $85 billion by 2025. Cactus leather is just one of several different types of biodegradable vegan leathers set to take over the vegan leather market. Currently, synthetics are the best option for new vegan leather – and synthetics are not biodegradable and bad for the environment. If you can establish a cactus leather business now, you will be getting in on the ground floor of the vegan leather movement.