How Much Should You Pay Yourself in a Candle Business?

#040. We share a focused roadmap for starting and scaling a candle brand, from tight product lines and niche research to fragrance load testing, wholesale, markets, and smart payroll. Along the way we explain what “luxury” really means, which waxes perform, and how we replaced a salary.

• starting lean with one vessel and up to six scents
• defining a niche and target buyer for clarity
• mapping a 10-step launch plan with a free guide
• fragrance load testing at eight percent as a baseline
• troubleshooting seeping and wick adjustments
• the wick-centering tools we trust for volume
• choosing channels: wholesale, markets, and SEO
• setting a salary target and using profit-first thinking
• reinvesting in photography, website, and team
• luxury positioning vs performance and pricing
• coconut-soy benefits and when soy still wins

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Transcript

Welcome And Episode Focus

SPEAKER_00 0:01

So, how much did you be paying yourself in your candle business? This is one of the topics that we are going to cover in today's episode. If we've not met, I'm Sebastian Garznet, the founder here at Candle Business Pro and the co-founder at Garznet Beacon Candle Company. We have surpassed now$2 million in candle sales, and I started Candle Business Pro to help other candle makers go pro. So that is just one of the questions we are going to answer today. How much you should be paying yourself, along with some other fantastic questions. So stick around and we'll get into it. All right. So the first question we have here today is fantastic. It is from Eric Sprouse. And his question here is my wife is the creative one, and she is creating an excellent product. And my responsibility is to handle the business side and is feeling very overwhelmed and not knowing where to start. Wondering if there's a guide out there. In fact, we actually have a guide for you. You can download it completely free. If you visit candle businesspro.com forward slash guide, it goes to it's a 10-step guide of starting a candle business. I'll just give you a few of the steps here that the guide will give you more information on. And you can grab that in the links below or again at candle businesspro.com forward slash guide is where you can find them. It'll also be uh linked below. But one of the first steps that we're gonna want to do is define your business idea. Are you doing candles? Are you doing wax smelts, room sprays? What direction are you going? How robust of a collection of um initial products are you going to have? My recommendation is always gonna be to start small. Uh personally, if we were starting over again, we would just do candles and we'd have a maximum of six cents. We would take those products to market, see how the market reacts to those, and then build around those. You'll find that some of the stuff that you're putting out, nobody's gonna want. And then there's gonna be some other things that you put out that you might have been hesitant on that everybody wants. And so I would just start with the foundation of your home fragrance brand first, and then build around there. When we first initially started, we had candles in three different sizes. We had wax melts, we had rune sprays, and we were thinking about taking on uh rediffusers. Thankfully, we didn't do the rediffusers at the very beginning. We actually introduced those in year almost two and a half, three, but almost in year three when we introduced those. Uh, and they didn't do well. They did not go over well with our customers. We uh, but we were able to quickly remove those and keep moving forward with something else. So just things like that to keep in mind. So start small. So that's gonna be one of the steps. Um, and you will define your business idea inside of this guide on step one. Uh, step two is gonna be to do uh extensive market research. I talk often about what niche and what target audience you um want to put your products in front of. Define a niche, don't try to just say, I want to make candles for everybody. Um, you have to go to roll aid to a specific person. Uh, so that's gonna be what you're going to accomplish when you go through uh conducting market research. And I do a lot of talking about um your niche and your target audience, especially with our members inside of the inner circle. The ones that are successful, the most successful, are the ones that have a specific niche and target audience. And that's something that I would always recommend to people. In fact, if you go through our candle making course or our boot camp that we do, that is one of the initial homework assignments that you'll have is to define that so that while you're going through learning the process of making candles, you can still have that in mind. Uh, it's going to help drive a lot of the decisions that you make. Uh, the other steps that are in the guide here is gonna be to create a business plan. Uh, choose a business name, source the materials and equipment that's going to fit with the products that you are making. Uh, and try to minimize that as much as possible. How many suppliers you're using? Uh, develop your product align, design your packaging and your branding. Now you notice we'll talk about branding and packaging later on. Let's wait till we have a product first. So often when people get into, I want to start a business. We think, okay, what are we going to call it? And that's fun. It's fun to kick around some ideas, but you may also be guided in a different direction as you're developing your product. So just keep that in mind. Uh, so let that naming up front kind of be flexible and not set in stone. I wouldn't start ordering business cards and stamps and going out and getting all the social uh media handles until once you are pretty solidified on what your business is going to be. Step eight is here is going to be to set up your business. That's gonna be to register it uh in all the appropriate places. Uh step nine is gonna be to create your marketing plan. And then step 10 is going to be to launch your business. So again, you can grab this guide out of candlebusinesspro.com slash guide or just in the notes below. So that is Eric's question here. Next question here is uh from Sabrina uh Sortino. Hopefully I'm saying that right, Sabrina. Your question here is what is your preferred scent to wax ratio? So our oil to wax ratio is generally what I'm gonna call that. Uh, it's gonna be the wax wax to oil or oil to wax ratio. We are generally going to do eight percent. That's where we're gonna start at. I like a stronger candle, but Chad is the creative force behind Garrison Beacons. So Chad gets the ultimate decision um in that. And he always likes to start at 8%. We'll test it. If it gives us a good hot throw, then we're done. Uh, if it doesn't, then we will adjust accordingly, um, whether it is, you know, switching out a wick or if it's just going out as simple as it's going up in percentage of um oil. But eight percent is what we're gonna start out with um with ours. Uh, you're of course gonna want to check with the manufacturer of your wax or your suppliers to be able to give you the information of how much your wax can hold. Some waxes can hold 10%, some can hold 12%, some can hold 15%. So, based on the type of wax you're using, you can have a different fragrance load capacity. And those are just guidelines. So let me just be clear on that. Those are just guidelines that they believe is for the majority of oils out there. Every oil is going to have different characteristics to it. And so, for as an example, we have our peace of mind candle. It is a mint verbanum eucalyptus blend that we do. Uh, think of kind of like the green products at the Bath Body Works, right? It's that thing that's been around for 20 years or so. We all know that minty scent. So we recreated that for our brand. Um, and we blend it with three different oils. And the maximum that we can go on that is 8%. I tried to make a stronger one. We've tried a couple of times. And the wax, it will seep through. The oil will seep through. Um, so it's just too much. It's too much oil for what that wax can hold. Even though that wax says it can hold up to, say, 12%, we've noticed at 8%, it starts to seep through. And we tested that so many different times just to make sure that we weren't doing something wrong with our formula or in our actually making. And that is just what it can hold. So that combination of oils, or probably one of those specific ones most likely is going to be that eucalyptus, is just seeping through the top. So even though the wax says it can hold 12, it's not going to be for every single oil possible out there. So just keep that in mind. You're going to want to test, uh, of course, everything uh to make sure that it's going to work for you. Um, but 8% is where we start. Uh, the next question here is from Danielle Wilson. And it says, What method do you employ to maintain the Wix upright position? Uh, sure. So we have actually three different types of Wix setters. And I'll um put the link in the notes here below as well for our supply list. We have a supply list that has all of the supplies that we use in our business from three different types of wax setters to uh the suppliers we use to uh thermometers, pitchers, anything that we use in our store, um, we I have a checklist for you and it's it's free for you to get. And so we have three zero ones on there. Well we have found actually, so we have the ones that are the the least expensive ones I had there's it's a metal bar that has a little divot in the middle of it. I don't love those because when I'm pushing, when we're doing a big production, talking a hundred candles, 200 candles uh minimum. Uh, you know, you're pushing your thumb into that, and it's not great to do that repetitive on your on your thumbs and your fingers, but they also work the best too. The other ones that have uh on top of the candle, they have the wick setters that just have little circle holes. Those are okay, but they're not as tight, right? Because the the the wick isn't super firm uh standing up. So I don't like to use those at all. And then the third ones that we do use is um they're just chip clips that we they're they're short. We they're six-inch long chip clips that are in a rainbow of colors, and we just get those off of Amazon. I again, this will all be on that checklist. You can check it, you can check those out on that checklist and see them. Now, the only time we use those is if we're doing a small batch, you know, because we we don't have hundreds of those and the the storage capacity, we we wouldn't have that either. And they take a little bit longer. Um, you got to lift the wick up and center it just right and clip it, but it holds a wick very, very firm. What we do use those for is anytime we're using a larger candle vessel, something with a where those little metal ones aren't gonna quite get across the um the opening on your candle. So we need something longer. And so we use these six-inch uh chip clips, and it they work fantastic. So uh, but you know, our our main line of candles is going to be these that are gonna have like a three-inch uh or you know, diameter of the top. Uh, we'll only do something larger than that for like special uh limited editions. Uh shout out to one of our members of the Inner Circle. This is actually her candle. Uh we bought to support her brand um when she launched, and it is a fantastic brand. And they have like a secret message behind here. It's uh fantastic. So um I may uh even link her out in the in the show notes below. If you're watching this on YouTube instead of listening to it, uh then you would know the candle that I'm um referring to. But it's a Nora candle brand. Uh she's fantastic. Next question here is from Brandy Page. And her question is, how much do I be paying myself? So great question. It's a great question, and it's one that we when we're starting a candle business, we want to think about because what is it that we're starting a candle business for? Generally, it's to bring in revenue. And for a lot of us, we want to do that to take over another um role or another job that we were doing, right? So when uh Chad and myself started Garznet Beacon, we were both working our you know nine to five jobs from we were working from home, which we were fortunate enough because then on breaks, uh, and right before and after work, we could fiddle around with our uh candles and we could be doing testing throughout the day. So we had an advantage there uh when it came to launching for us, just uh give a timeline. We we said, hey, we're gonna do this, we're gonna be serious about this. And it was only just to replace Chad's role. My role, I loved my role. My role was fine. I enjoyed the company I worked for. That was all great. Uh, but we wanted to get Chad's um job replaced, um, his career replaced. That was in November. And when we said, okay, we're gonna do this. Uh, and so we got serious about it in November. November, I believe, 19th is when we had filed our LLC and said, we're gonna do this. And we tested for a couple months, and then we had to put our all of our branding and everything together, and we launched our business uh on February 25th. Um, so it took us a little over three months, uh, November, December, January 5th, yeah. Just over three months to launch from saying, I'm gonna do this to actually doing it, having all of our products tested, um, and all of that. So one of the things that we had in mind was at what point could we replace his salary? And so we look at that number, and I believe that number was, I think, that we wanted to be comfortable at. We were gonna say, okay, we need to replace$55,000. If we can replace$55,000, then he could go full-time with this. So now, how much work it takes to put into our candle business is gonna be dependent on every individual person. For us, I feel like I put in$100,000 salary, job, work, effort into our business every single year. Uh, same thing with chat. I mean, we live and breathe our candle business, right? We have to. Uh, and it's not just us. We know we have operations managers, we have store manager, we have production managers. So we have a team that we have to support as well. The first couple of years in our candle business, I was putting in a hundred thousand dollar effort, but definitely not getting a hundred thousand dollars out of it. Um, because we weren't we weren't big enough, we weren't, we weren't selling enough to do that. Uh, we put Chad on minimum payroll when we possibly could of, I believe, like thirty thousand or thirty-five thousand just to start having a W-2 um income. And so he could quit his other job, he'd have his W-2 income from the business because the way it's set up, you have to, you, you have to at some point have like you have to be on payroll, right? You can't just like keep taking cash out of the business forever uh if it's your only income, uh if you are set up as a business. So talk to a CPA about all of that. So I'm getting a little bit in the weeds here, but I always put in$100,000, a six-figure effort into our job, because I'm talking, you know, we're working 78 hours, 80 hours a week the first couple of years when we opened up, putting a lot of work into it, but we definitely weren't taking that out as a salary. Now, the last couple of years, uh Chad's salary has definitely increased, uh, and so has mine within the business, uh, to get more in line with the role that we are taking on in our business. But keep in mind we also still have to uh pay our staff and and the team and making sure that uh they are taken care of. Uh I'll tell you that our operations manager and our store managers, um, they make more than I do that I pull from the business. Um, I I do other stuff with with you know myself. Uh, but I'm also this chat is also getting a salary out of the business. So to answer your question, Brandy, uh, how much should I pay myself? Pay yourself a meaningful wage for sure, to make sure that you want to keep doing this. But you have to you have to be sure that you're bringing in that revenue, right? Um, you you can be doing like I would be doing of doing$100,000 worth of work and effort and energy into the business, but you're only making enough to pay yourself$10,000, right? So keep that in mind. There is the philosophy of profit first, and there's a book out called Profit First, and it's it's a fantastic read. And it's about you know making sure that you're pulling out something for yourself uh as you go through scaling your business. And I and I I agree with that. If you are going all in and it's just you know you and your salary, everyone's situation's gonna be different, right? When Chad first started, he didn't replace his$55,000 income with$55,000 in candle business. It didn't happen for like six or eight months before we started getting consistent revenue in that could could replace that. Um, so beforehand, it was our situation was okay, things are gonna be tight, but my steady income and salary is going to kind of support us while we're going out on this venture of him opening up a brick and mortar store. So we we moved very fast. We sold our first candle on February 25th. Uh because we're in Michigan and it's super cold in the at that time of year, there is no markets to do. So we went right into we launched our website, we got our friends and family to buy from us, and we had you know people that supported us when we first opened, but then that second week came and there's no one else to buy from us, right? So it was all about optimizing our website and SEO. And then it was really about I went all in with wholesale. And so we went in with wholesale, and that's what really helped us to get uh consistent sales in our business. And then we started doing markets. So we got that in front of people that test to make sure customers actually did like our product. And based on the confidence we got from doing those markets just for a few months, we opened up our brick and mortar store and that the door that we signed our lease in June. Uh, we renovated it all in July and we opened on August 1st. Um, and so we moved very quick from selling our first candle on February 25th to opening our brick and mortar on August 1st. And in between there, we got a foundation going with wholesale and with doing markets. And we continue to do markets for two years because again, Chad opened the brick and mortar store. I'm still doing my nine to five. And so when it comes to weekends, I could go out and do markets just to keep building that up. Markets are fantastic. So I'd highly recommend that. So, Brandy, pay yourself what you can within the business, but also leave enough to grow your business. So, because you're gonna need to invest a lot of the money in the business to just keep growing the business and that's and a lot of different things. That can be uh, I need to hire someone to do photography because my photography is horrible and I can't do that. Or I need someone to help me with um my social media content that I'm putting out there, or I need help with designing my website. Uh, if you're part of the inner circle or if you've thought about it, we do tons of workshops. We have a workshop just on how to build a Shopify store. You can join the inner circle, our community, for say$50, whatever it is right now. I think it's under$50. And we have an entire workshop we do on building a Shopify store. So you don't have to go out and spend$1,500,$2,000 to pay someone else to do it. I walk you through building out a brand new store because I actually built out a brand new store and you you see me do that. And we have workshops on all kinds of other things as well. So it might be something for you to check out. If you're looking at going into the business side, just come hang out in the inner circle. I think you would love it. We do, we have weekly office hours. Every single week we meet live as our group. And then we also do what we call family dinners, which is a really fun, candid monthly event that we do. Um, we do all kinds of uh things. And then we do our monthly workshops, of course, as well. So uh you can check out more information on Candle Business Pro's website about that. Um hopefully that gives you kind of an idea there. Brandy, if if I was making multi-million a year in revenue, my salary at my candle shop would probably be$150,000 just because of how much work and effort I put into it. Um, but also, you know, if I decided to go in another career and I only wanted to do it part-time, then I could pay myself$20,000 a year, right? Uh, but let the business kind of dictate what you can earn. Um, but at some point I would cap myself out, and then all the extra revenue would just keep going into scaling the business up. So that would be kind of the smart way of doing it, is only take out the minimum viable income that you need to live on and keep everything else in the business helping to grow the business. So hopefully that helps you there. Last question here um is from hopefully I'm pronouncing this correctly, um, Ethylene Abraham. And the question here is what wax is best for a luxury line of candles? So great question. Um you have to define what your luxury line actually means. Is it gonna be luxury because it's going to just cost a lot more than other candle brands out there? Or are you also putting high quality um by high quality I mean like scarcity clean uh type of products into that candle? Because you can create a luxury brand that is made with the exact same setup as uh my line of candles, right? You can use 464 wax, um, you can use uh fragrance oils that come from all the main suppliers, you can use a living jar, and you can use some good branding and labels. And you can consider a luxury. I personally never use the term luxury. I allow customers to decide if something's luxury. I don't promote something's luxury. Um, and my candles aren't luxury. These are 26, 28, 30 bucks. That's not a luxury. Luxury to me is going to be something that I can't easily afford, or that the majority uh people can't easily afford to spend on goods that we don't actually need. That's what I would consider a luxury. Look at what's considered a luxury car, right? We're talking like Mercedes and above, Mercedes BMW and above. That's not typically attainable for the majority of people. It's gonna be attainable for uh people, but not the majority. And then you can get into like ultra luxury above that. Think of it also like as handbags, right? Are you making a Louis Vuitton bag? Are you making a Gucci bag, or are you? Making, let's say, a Michael Kors bag, which sure, Michael Kors, you know, people, some people, that's going to be a luxury. But for other people that are like, wait a minute, I could buy that at TJ Maxx now, it's not gonna be considered luxury. It's gonna be, it doesn't mean it's not of the same quality or it's not a good product. Um, but we all define a luxury a little bit different. So but for an elevated line of candles, I think that it's going to be it's it's it's marketed to all of us as makers that to have a luxury candle means having you know the coconut wax, the apricot wax, the olive oil wax, all the things when I call designer waxes. Ultimately it's gonna be about the performance of the wax. And there's some of those waxes that I don't think perform very well at all. I'm not a big fan of coconut apricot or apricot blended waxes at all. I don't think it's they're worth the hype. I do love coconut blends. Any of the coconut soys, uh, not any, but a lot of them are great. You're gonna get a better scent throw. For me, when I think of luxury or I think of elevated candles, they're gonna give a good quality scent throw. And so then I would probably lean towards doing a coconut blend. Now, 80% of our candles in our store are made with 464 soy wax. And I recommend everyone start with that. I think it's just fine. And we sell lots and lots of candles of 464 wax, but we did want to create a more elevated candle, and we wanted we liked the characteristics of that wax beyond just a hot throw. We liked the creamy color of the coconut wax as well. We also liked that when it was done burning and it solidified, uh, it looked smooth again. Where with 464, um, it's gonna have what I call like the cottage cheese look. It's all crumbly looking. Um, not a bad thing. Customers have never complained about it. It's us as candle makers that notice that stuff while we're doing our testing. But someone isn't going to, in my opinion, spend$75 for an elevator or a luxury candle, burn it, and then it have that like cottage cheese, that that rough look, and think that it's not a quality candle because of that. Because they don't care about that kind of stuff. They care about what the candle looks like, and they care about what that brand makes them feel when they are burning it. So to establish yourself as an elevator luxury brand, it goes far beyond the wax. It's gonna be in your design, your packaging, your presentation. And ultimately, it's also gonna come down to just your communication uh of how your brand is represented and represents itself to your potential customers. It's going to be in your imagery. You know, just think about the those brands that we considered elevated or luxury and see how they present themselves online on their websites. And really important is going to be through your email communication because that's that's such a main way that we're gonna communicate with people. I'm not a luxury brand. I'm not an elevator brand like that. We are a high quality brand that people come back to over and over again. But one thing that I do that luxury brands as you almost never see happen is I run sales. I will run buy three, get one free, uh, like at least a week and a month in my brand. I will run buy two, get one free. I'll do all kinds of different deals that create a lot of buzz and get to us a lot of sales. A luxury brand, as soon as something goes on sale, as soon as something's discounted, um, the perceived value on that changes really quickly. So just something to keep in mind. But if you're just asking me just the bike away question of what wax to use for a luxury line, I personally would go with a coconut soy. Um, that's what I would recommend doing. Um, you can reach out to me um in the comments below to ask what wax I'm using currently. That may change in the future. So I uh you know, unless it's something that I'm just completely stuck on and I would not ever switch, um, then just ask me in the comments um and I will let you know who I'm using currently. That's gonna do it for this episode. Hopefully you found some good answers to some of the questions that you may have had or some questions that you didn't realize that you had in this episode. If you could do me a huge favor if you are here on YouTube and just click the subscribe button. That helps us with engagement elsewhere so much. And I would greatly, greatly appreciate that. And also let you know as soon as we put out another video, which we try to do every week for you at a minimum. So, also if you comment below any questions you have, I will answer them in the comments, but also share that on an upcoming episode as well. So, thank you so much for tuning in. Have a fantastic rest of your week.

unknown 27:40

Bye.