How to Start a Custom Engraving Business

Start a custom engraving business by following these 10 steps:

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

We have put together this simple guide to starting your custom engraving 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 custom engraving business?

In addition to basic business startup costs (e.g., paying an accountant to set up books, licensing fees, office space and supplies, IT support, etc.), the most expensive part of starting a custom engraving business is purchasing a laser engraving machine. These machines can be expensive and are the cornerstone of your business.

What are the ongoing expenses for a custom engraving business?

Ongoing expenses for a laser engraving business include:

• Equipment repair and maintenance
• Advertising
• Material acquisition
• Office space costs
• Payroll

Who is the target market?

There are several target markets for custom engraving, including managers/supervisors (i.e., those in charge of presenting awards/honoring achievements), schools, nonprofit organizations, and everyday people who want to add a personal touch to both their own items and gifts for others. In essence, most people can benefit from a local custom engraving business.

How does a custom engraving business make money?

A custom engraving business makes money by charging a price that's fair for customers while still allowing the business to profit. Custom engraving businesses may cut a deal with materials suppliers, helping them to cut costs on raw materials. Money can also be made by working with organizations as their exclusive engraving company, as well as by running specials that attract new clients.

How much can you charge customers?

Pricing will depend on the quality of your engraving equipment, as well as your business strategy. Many custom engraving businesses charge a flat fee of $10 per item (which includes a set number of words) and more for extensive or more cumbersome projects. Of course, special pricing is often worked out on large orders.

How much profit can a custom engraving business make?

Like many things in the professional world, the profit made from laser engraving is closely related to how much you invest in the business. Laser quality, materials quality, reputation, accuracy, customer reviews, and speed of service all affect the profit margin of a laser engraving company. It's possible to quickly begin to turn a profit with a new laser custom engraving company.

How can you make your business more profitable?

Working closely with suppliers can lower costs, making business more profitable. Digitizing as much of the business as possible (encouraging customers to place orders online rather than over the phone) can also streamline the workload and increase accuracy.

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 custom engraving 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 custom engraving business is a smart move for those who enjoy art and love creating products designed to customer specifications. While many people who are drawn to custom engraving are artists, it's important to have some qualities in addition to artistic aptitude in order to be successful. While custom engraving was once done by hand, today's precision engraving is done digitally. It's important that people starting a custom engraving business are tech-savvy (or are willing to learn how to be).
Custom engraving business owners also need to have a keen eye for detail — and for hiring employees who won't let mistakes slip through the cracks. A simple typo can be the difference between a satisfied customer and a scathing review.
Custom engraving business owners also need to be willing to put up some capital in order to get their business started. Custom engraving lasers aren't cheap, and it's also vital to get high-quality engraving materials before a custom engraving business begins taking customer orders.

What happens during a typical day at a custom engraving business?

The owner of a custom engraving business may have a changing to-do list from day to day. Some common aspects of day-to-day life as the owner of a custom engraving business may include:

• Meeting with potential clients (such as schools and corporations) to bid on large-scale engraving products (such as commemorative bricks, plaques for award winners, etc.)
• Comparing bids from material suppliers to try to cut costs and increase profits
• Meetings with all employees to discuss deadlines and large jobs as well as troubleshoot any issues
• One-on-one meetings with employees to go over timelines and small-scale projects
• Troubleshooting with any customers who are unhappy with their custom engraving orders
• Reaching out directly to high-level clients who have provided unclear instructions for their custom engraving orders
• Working directly with technical support staff to ensure a customer-friendly website for custom engraving orders

What are some skills and experiences that will help you build a successful custom engraving business?

Some business know-how is ideal for the start of a custom engraving business, as the business owner needs to understand how to increase profits while cutting costs. Experience in supplier relations, management, and customer relations can all make it easier to start a custom engraving business.
In addition to basic business skills, experience creating custom engraving products can make it easier to start a custom engraving business. While it's possible to learn these skills on the job, knowing the ins and outs of digital engraving is important for business owners to ensure that their customers are getting the highest-quality products possible.

What is the growth potential for a custom engraving business?

Over the past decade, the laser engraving market has grown significantly.
There are several reasons why more people are using laser engraving services now than ever, including:

• Accessibility: Ordering online means that customers don't have to physically go to a shop or wait for a shop to be open to place their order.
• The desire for unique items: Today, gifts and other items are easy to order and send to someone's doorstep. Engraving adds a personal, thoughtful, and unique touch.
• Importance of branding: Startup companies depend on social media photos to make others aware of their presence, and it's important for these businesses to have custom items emblazoned with their logo. Custom engraving makes that possible at a fair price.