Start a custom engraving business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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
- Material acquisition
- Office space costs
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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a custom engraving business
Since the target market for custom engraving is large, it's smart to utilize several methods of advertising, including:
- Social media and other web advertising
- Direct phone calls
- Print media
- Local television ads
How to keep customers coming back
High-quality, high-visibility jobs are key for attracting customers. As previously mentioned, it can be smart to offer services to large organizations at a discount in exchange for a positive review. When potential customers hear and see excellent engraving work, it's easy to get them on board.
When it comes to retaining customers, accuracy in engraving and excellent customer service is key. It's important to train employees to talk with customers to understand exactly what they want out of their custom engraving.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Custom Engraving Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a custom engraving business?
Getting things off the ground can be tough for any business. Custom engraving business owners may want to work with local businesses and organizations — including gift shops, jewelry stores, hospitals, and schools — to entice them to give their services a try. Many custom engraving business owners initially offer services to such organizations at a large discount in exchange for an endorsement or review. Offering convenience — such as free delivery within a reasonable area — can also help set a custom engraving business apart and jump-start your business.
How and when to build a team
Bringing on part-time employees as early as possible can help to lessen the load of starting a new custom engraving business. There's no need to build a full team from the start — it's normal to hire as the business grows.