Start a packaging design business by following these 9 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 packaging design 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 packaging design business?
Packaging design businesses typically cost between $2,000 and $10,000 to start. Because they can technically be operated from home, their operation requirements are pretty small. Startup expenses include rent, which can be between $2,000 and $4,000 for a small workshop, networking, professional connections, design training, and start-up materials.
What are the ongoing expenses for a packaging design business?
Ongoing expenses include designer payments. Over time, you could pay a designer between $20 and $50 per hour to create great packaging designs. Prototype materials, too, are likely expenses. If you end up mass producing packages, expect to pay between 50 cents and $3 per package—depending on the size. You will, of course, sell the packages for more to make a profit.
Who is the target market?
A package design business’ customers are different depending on the industry. For this reason, it’s important to focus on your business’s market segment. Getting into the market, for most package design businesses, is difficult. Luxury markets may require minimalistic designs, whereas accessible markets—mostly run by Neiman Marcus and Wal-Mart—are far more flexible. High-end department stores, meanwhile, can have a variety of markets. The ideal consumer-base is a stable one, and it exists in a stable market.
How does a packaging design business make money?
Primarily, a packaging design business profits from positioning its package designs effectively. If it can represent a product truly—and in an attractive way—it can expect long-term partnerships with a variety of brands. While a packaging design business can make money by protecting products alone, its long-term success will rely on a firm understanding of appeal.
How much can you charge customers?
You can charge businesses between $80 and $100 for creative package designs. This price can vary greatly, however, depending on the materials used to create the products. At the end of the day, an average package can sell for about $1.25, per product, to a business. Find a business which sells in bulk, and produce a large line of packages to send them.
How much profit can a packaging design business make?
Package design businesses are incredibly profitable, assuming they’re successful. A solid packaging design business can make $500,000 per year, if it’s a trusted provider in a massive business network. That said, individual packaging design businesses make about $70,000 per year while serving a local network.
How can you make your business more profitable?
Brainstorm constantly. Convey your target market’s direction before it gets there. Successful packaging design businesses aren’t only trendy- they’re also predictive. If your packaging design business strikes gold, creatively, other brands will flock to your services.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Packaging Design Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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 packaging design 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?.
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.
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.
State & Local Business Licensing Requirements
In most states, it is necessary to obtain a packaging design license. Certain state permits and licenses may be needed to operate a packaging design business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
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.
How to promote & market a packaging design business
Where promotion and marketing are considered, a packaging design business needs to cater to industry niches. Use tactile, material, or structural elements to tell a story. Then, use your prototypes to grab the attention of local business owners. Once you’ve succeeded in the local realm, expand your opportunities by creating more retail-ready packaging.
How to keep customers coming back
Business clients will be retained if your packages effectively market their products. Make sure you’re focusing on their market, and make sure their customers are buying more of their products when your branding is introduced.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Packaging Design 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?
The package design business is great for creative individuals. Products need both physical protection and visual representation, and a package can do both. A successful package design business owner will have a good perspective for branding, packaging, and forward-thinking designs. Typically, package design business owners are imaginative and hard-working. They also have a good eye for environmentally friendly designs. Package design business owners need to pay attention to regional packaging federations and they must similarly pay attention to the many packaging associations and institutes at play.
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 packaging design business?
A package design business owner doesn’t only package products. They drive workers through a variety of structural design lessons, maximizing their potential while ensuring they uphold a package’s aesthetic value. A package design business owner must constantly check designs for clarity and simplicity. They must also reflect a product’s features and safety needs. Authenticity is a must, and a keen eye for modern marketing trends certainly helps. Administrative tasks are completed, too, ranging across management, finance, and marketing.
What are some skills and experiences that will help you build a successful packaging design business?
Innovation and design experience are must-have qualities. As a start-up, you’ll need to get in touch with local providers. Recognize the prototyping stage for what it is. Additionally, make sure any packages represent the product’s needs effectively. By understanding a product’s price point, you can create memorable packages which serve multiple purposes.
What is the growth potential for a packaging design business?
If a packaging design business has a slew of prototypes, markets effectively, strikes solid partnerships, and creates memorable packages, it can grow wildly. The world’s most successful packaging design businesses are international, using massive marketing campaigns, sales kits, and partnership networks to grow exponentially.
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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.
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 packaging design business?
The road to package design business success is a long one. Run through your design process endlessly, and revise constantly. If your clients aren’t interested in your designs, find out why. To compete in the packaging design business, you’ll need to have a good handle on customer mindsets. You’ll also need to develop compelling packages which represent products effectively.
How and when to build a team
Once you succeed in the local realm, you should build your team with marketing and design experts. Additionally, invest in researchers. Create a creative board, and maximize your business’s outreach.