Starting a laser engraving business could be a daunting task. But with the right business plan, materials, and laser engraving equipment, you can turn this business into a profitable venture.
So, what do you need to know and what are the things you need to do to start a laser engraving business? In this article, learn the easy steps to start your engraving business. You can interchange in doing the other steps but number 1 should come first before anything else.
Let’s start our discussion with the most basic one.
Step 1: Create Your Sound Business Plan
How do you start an engraving venture?
A laser engraving business is a service-based enterprise, which means you need to start with the most important document – your laser engraving business plan.
Research is the fundamental task in a business plan. Before committing your money and effort to this engraving business, make sure you’ve done extensive research. Creating a company is not just about profit. It’s also creating a sound business plan and make it work.
Why? Because this plan will be your ultimate guide as you finish one or two-step at a time. You can evaluate it or change a part of it.
Here are some things you should include in your laser engraving business plan:
Mission and Vision Statement
A mission statement is an introduction to what this laser engraving venture wants to do for society. It should describe how it can help people or businesses succeed through its laser services.
On the other hand, a vision statement is a one-sentence summary of the laser engraving company’s goals. It describes where this laser enterprise aspires to be in three years or less. This could include anything like becoming more profitable or expanding operations.
Marketing Plan and Sales Strategy
This plan should answer some basic questions such as:
- How will your laser company convey its message and what is the best way for you to reach potential customers?
- What are some ways in which this engraver can make sales leads?
- How do you plan on closing deals with their prospects?
Competitors Analysis
Who are these companies that offer laser services like yours and what makes them different from you? You should also include a SWOT analysis (strengths, weaknesses, opportunities, threats). This section gives readers an idea about where your laser engraving business is and where it’s headed.
Financial Projections
How much money will this laser engraver make? What are the expenses that you’re going to incur? This section should contain a profit and loss statement, balance sheet, cash flow analysis, budget forecast for the next five years or so.
Personnel Plan
Who do you plan on hiring in your laser enterprise? And how many people are expected to be working there at any given time? This also includes benefits packages such as health insurance premiums paid by employees as well as dental coverage, etc. You can even include job descriptions here!
With a concrete business plan, you know where you are going, what you still need to do, and when to hasten or slow things down. Your laser engraving business plan will have every detail about your company, from its mission and vision statements down to profits and losses projections.
Step 2: Determine Your Products and/or Services
In order to set up an engraving business, another important task is to identify the products and/or services you plan on offering. Here are some business ideas you might want to consider:
- Engrave Photos on Wood and Marble – etch memories beautifully with marking tools
- Season ornaments such as Christmas, July 4th, and Valentine’s
- Customized awards or tokens for every occasion
- Toy boxes with a theme
- Decorations with antique value
- Engrave dog tags or parts traceability (great for manufacturers)
- Laser annealing
You can offer turnkey solutions or just plain engraving solutions. Specialization could also be an excellent service you can offer to potential clients.
Although engraving is not as big as other industries, this is a profitable one. All you need is to create ways to generate revenue based on the capabilities of your marking technology.
Step 3: Identify Potential Customers and Market
Customers are the lifeblood of your engraving business. So, it’s imperative that you know who they are. If you identified your target market clearly, you can create an effective marketing plan. How do you identify your potential customers and target market?
Research Engraving and Marking Industry and Competitors
Get valuable insights into your target customers by looking at websites and case studies.
Case studies may help you better understand your prospect looking for engraving services. You can study the reasons a customer chooses a product. In addition, track the competition and keep an eye on industry analyst blogs and reports.
Gain Insights from Professional Social Platforms
Use the most important professional networks (such as LinkedIn and Quora). Look for other, niche-specific networks where your prospects may be hanging out.
Online and offline networks will help you better understand your prospects. These networks are also a wonderful method to expand on the data you have about people. Through these networks, you can see how the target customers link to others across their businesses.
Examine your product to figure out who would buy from you.
Another useful hint is to conduct a product or service analysis. Define the advantages of your goods and see who would be interested in such a product/service. Most probably, people interested in engraved products are businesses, companies, or organizations.
Build a Potential Customer List
Starting with people you know is typically the best option since it allows you to make a fast sale and obtain referrals. However, there are numerous alternative ways to build your potential client list. Here are some
- Personal Contacts: friends and family or the people they may know
- Existing customers: most probably, dissatisfied customers of competitors
- Trades Shows: an excellent way to widen your network
- Community Events: groups of your target market
- Purchase a Lead List: an expensive with low results when improperly executed.
Step 4: Classify Costs to Start an engraving business
The next step is to identify all costs of starting a business that focuses on engraving and cutting services. Depending on the type of machines and services you’re going to offer, you might spend most of your capital on laser machines, dot peen marking equipment, or other marking solutions. Continue reading to know more about startup costs.
Types of Engraving Machine
A laser engraver machine has different types. It ranges from low budget to expensive. If you’re just starting out and don’t have much money, it might be better to purchase a lower-end laser machine with fewer capabilities.
There are possibilities that your business venture might not work as expected. So, your investment isn’t that too high. It’s also important to keep in mind how often you will use the laser machine. Machines used frequently need higher quality parts than those only used occasionally.
If you aren’t sure what a laser engraving machine is, you can read our related article for more detail. In that article, you can learn the different types of marking solutions.
How much does it cost to start a laser business?
The price ranges from a few hundred dollars to over $5000 for a low-budget machine. It is best that you start with laser engraving machines at the lower end. Then, upgrade as your business grows if necessary!
More expensive laser systems are available. This marking equipment ranges from $8,000 to around $45,000, depending on the engraving area and the wattage of the laser system.
What laser engraver to start with?
If you are on a tight budget, there are portable laser engravers that are perfect for someone starting out! It has a fairly low cost and can engrave through materials like wood, leather, or acrylic.
A hand-held electric portable dot peen marking machine is also a great entry-level machine if you choose a metal engraving service. These machines will get your business started in the laser engraving and cutting world.
If you’re looking for more advanced laser engraving machines then there are many different models available. But be sure to compare features before making any final decision.
Some of these devices have very high prices at over $5000. This means they come with lots of useful features though which might make them worth investing in if needed!
What are some potential challenges in starting a laser engraving service?
One challenge a laser engraver can face is the lack of demand for its services. Do not forget about marketing when starting out on laser engraving projects!
Another concern might be running costs. These costs depend on the type of laser marking machines you buy. CO2 lasers require consumables such as ribbon or gas tanks.
These accessories are additional costs you need to account for. It’s important to factor in these costs before making any final decisions.
Some other issues include noise levels and maintenance requirements. You should account for everything before investing in one of these devices.
Where to Buy a Good Laser Engraver
You have two ways to buy a good laser engraver. First, visit a brick-and-mortar supplier. Through a personal visit, you can assess the condition of the laser machine. But, you might have difficulty finding the best one for your engraving and cutting venture.
The second option is to buy online. Nowadays, it’s easier to find suppliers through e-commerce sites. It’s even more convenient because these suppliers provide the technical support necessary for troubleshooting.
Often, these suppliers sell quality engravers perfect for the mass production of engraved materials such as glass, acrylic, jewelry, metal, and plastic.
Other Accessories
Aside from the main engraving system, you will need several accessories. Ask your supplier if the equipment includes them or if you need to buy a few separately. Some of the accessories you might need are as follows:
Air assist
A laser machine marks a material using a high heat beam. With air assist, you can reduce flare-ups of fire-hazard materials during the engraving process.
Vector cutting grid
This grid is important if you offer laser-cut services. It can cut through materials.
Rotary attachment
If your services include etching on glass, mug, wine bottle, and other cylindrical objects, you will need a rotary attachment.
Computer Software and Technology
You will need a computer to run a few applications and make the whole laser engraving system works. Aside from a computer system, graphic software is necessary.
Some manufacturers will include the laser engraving program as part of the machine. Ask this particular detail, so you would know if you need to buy or download software for editing image files.
Step 5: Enumerate Ways to Generate Revenue
Generating sales and revenue is as important as creating a good business plan.
Pricing
First, you should determine the pricing for your service. Pricing varies depending on the size and number of images engraved.
For example, the first image is $80/hour. Each additional image after that ranges from $0.50-$75 for large format pieces. The average fee is around $40/hour.
The cost of materials varies based on their type, but they range from $0.50 -$75 per linear inch for large format pieces. It can be as low as $0-$35/linear inch for small items.
Art (either existing designs or custom jobs) also has an additional fee which ranges from $250-$2000 depending on how many images you have in your design.
Specialization vs. General Engraving
Another aspect you should consider is whether to specialize in the engraving business or to become a general engraver supplier.
Do you want to customize any goods a customer brings you? Would you rather offer a few customized products? Offering a restricted choice might be advantageous. It allows you to get really good at a certain material.
If you specialize in glass engraving, your results might be better than a supplier making generic products. Still, customers usually want to customize their purchase because that is the only way they can be 100% sure it will suit their needs. It’s a tough decision, but fortunately, there are ways of benefiting from both options.
A “standard” method is to offer products that can be customized, such as pens engraved with initials. You can also choose one or two materials and specialize in those.
Practical Ideas For Engraving Business
Let’s say you want to limit the number of customization options. So you only offer engraving on a small selection of materials. Titanium, brass, and silver would be good choices. But, you could also offer engraving on materials like wood and leather.
Another common method is to offer products with two or more laser engraving options. For example, a customer can customize a pen with laser engraving or manually engrave the image. That way the customer benefits from your expertise in both materials.
As a rule of thumb, laser-cut products can be customized while laser-engraved products can’t. But if you offer engraving on materials that are only engraved by hand, you’ll enjoy the best of both worlds!
Customizing your customer’s purchase with their initials is definitely an option worth considering. This solution allows customers to customize your product without significantly altering your workflow.
The most common method involves offering several sizes of the same product. For example, your customers might not all need a huge mug engraved with their initials. Maybe they don’t even want one.
In this case, you might offer a set of small-sized mugs with hands engraving or laser engraving. These customers will benefit from your expertise. As a result, they make their buy unique with the customization options you offer them!
Other Brilliant Ideas
- Metal tag engraving
- Personalized ID Plate
- Marking solutions for medical instruments
- Pin Marking for parts
- Gift items created in batches
Step 6: Secure Financing and Register Your Business
Now, you have a concrete business plan for an engraving business. You’re done identifying your target market and determine how much costs you need. Projections and financial forecasts on how to generate sales are done.
Your next step is to raise the startup capital by finding a financing source and register your business.
Find Source of Startup Capital
Finance is crucial in your engraving business operations. It’s important that you look for reliable funding options. There are various options available.
You can apply for a loan or find an angel investor. Crowdfunding is also a viable option.
In this option, you rely on the financing support of target customers and other supporters. Often, it is via web platforms.
Crowdfunding is set up for people who would like to raise capital from investors with lower incomes. These investors do not have access to capital markets or they don’t want to create a business.
There are three types of equity crowdfunding:
1. Rewards-based
This is the most popular form of crowdfunding. You can use this for your venture and look for investors or supporters. The supporters get rewards in return for their contribution.
If you have an invention and need capital for its production, you may use equity crowdfunding. Ask your family and friends to support you.
You can also look for investors who will get perks or rewards in return for their investment. For example, you can give out a free sample of the product they invested in.
2. Debt-based
This type is useful if you are looking for investors to finance your company, business, or project’s future operations. The investors will give capital in return for interest while the loan given by equity crowdfunding platforms remains unsecured. But, this may be risky because there are cases when companies do not pay their loans.
3. Hybrid-based
This type is a combination of both rewards and debt crowdfunding. The company gives its supporters the chance to use their funds in exchange for purchases or discounts on products, services, or perks. You can also look into equity crowdfunding if you are planning to start your own business or need capital for expansion purposes.
Register your Business
Registering your laser engraving business is an often-overlooked procedure, but is a critical one. If you miss this step, you may find yourself hounded by IRS. You may also fulfill other important statutory criteria such as submitting your taxes by registering your company.
There are many different business structures to select from, but the most prevalent is the Limited Liability Company (LLC). It’s critical to have a properly authorized representative. The agent will assist you in selecting the best structure for your company include business registration.
If you’re not familiar with the EIN, it’s a nine-digit number that identifies individual and business enterprises. It is also used to identify partnerships inside manufacturing companies. An additional perk of registering your laser engraving company on the IRS website is that you can get an account opened for it.
Step 7: Get Started with Your Engraving Business
Businesses that thrive in this field are creative, sales-focused, and outside-the-box thinkers, according to our study. Take a close look at your personality and see whether you fit the bill. If you’re laying down the initial piece of ground yourself, you might just stop there. If you’re starting on a medium or larger note, you’ll need to produce a whole lot more materials.
You could pay lower costs by hiring personnel that you may train. Make sure you learn how much it costs to hire and retain laser engravers from those who already have them. Engraving is a very affordable way to start a business for individuals who wish to pursue this line of work.
Step 8: Promote and Grow your Laser Engraving Business
Promotion is important in creating awareness about your engraving product and services. To do this, you need to create a website for your business. Use social media networks and other platforms to reach a wider audience.
Think also of your branding strategy. Your logo should represent your profitable laser business. Using your marketing plan, grow your laser marking business. From time to time, evaluate the effectiveness of this plan. If you need to change or update it, you can do so.
Starting a Laser Engraving Business: a Conclusion
So, you’ve decided that starting an engraving business. Congratulations! Now it’s time to get started with your laser engraving company by creating a sound business plan. Identify potential customers and markets.
From there, it will be easier to classify costs associated with starting up this enterprise as well as enumerate ways to generate revenue. You can also secure financing and register your new venture before getting going on your marketing campaign.
If all goes according to plan, then promote and grow your laser engraving company until it becomes a sustainable endeavor—and enjoy taking pride in knowing that you created something from your own money.
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