For those aspiring to start a laser engraving business, gaining a deep understanding of the industry should be the first step.

Begin by researching the market you want to sell to understand the demand for laser engraving services. Look into the types of products that are popular and identify potential customers. You can do this by attending industry trade shows, analyzing competitors, subscribing to industry-specific magazines, joining online forums, and following relevant blogs and social media pages. You don’t want to invest heavily in time, equipment, and other startup costs without assurance that there’s a customer base ready to buy from your business.

Next, consider taking courses or obtaining certifications relevant to the laser engraving industry. Many laser equipment manufacturers offer training programs that cover the technical aspects of operating engraving machines. These courses can provide in-depth knowledge about operating the machines, maintaining them, and troubleshooting common issues.

Community colleges and vocational schools may have courses related to manufacturing and design that can be applicable. Online platforms like Skillshare or Udemy offer specific courses on laser engraving technology and software.

Additionally, reach out to established laser engraving businesses (preferably those who you won’t be competing directly with). While not all may be willing to share their secrets, some might be open to mentoring or offering advice.

By taking these steps, you can gain a solid understanding of the laser engraving industry and be better prepared to start your own business.

Creating a business plan is often thought of as something that has to be done in order to get funding for a business. And while that is a common reason, writing a business plan gets the ideas out of your head and on paper, outlining your vision, goals, and strategies, turning those ideas into actionable steps and measurable objectives.

A few sections that I recommend focusing on include:

Financial projections: This section is a way to test your assumptions to get a detailed look at revenue and expenses to make sure you can turn a profit. While maybe not as important if this business is a side gig versus relying on it for a full-time income, you will be able to see if this business will be worth your time.

Marketing and sales strategy: Even with the best products, if nobody knows about your business, you won’t make any sales. This section should cover how you’ll attract customers. Highlight your unique selling points, marketing channels, and sales approach.

Related: How to write a business plan

Starting a laser engraving business, whether from a storefront or even on the side from your home, involves several steps to be properly registered and legal to operate.

Every state has different requirements, but here is a general overview:

Form a business structure: First, you will need to decide on a business structure. The four main types are sole proprietorship, partnership, Limited Liability Company (LLC), and corporation.

The two most common types for an engraving business include the sole proprietorship and LLC. A sole proprietorship is the easiest to start and has lower costs, but it offers no liability protection. An LLC provides liability protection, as it separates your personal assets from your business assets. It’s also relatively easy to set up compared to the corporation and has potential tax advantages over the sole proprietorship.

Related: Comparison of business structures

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming an engraving business

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: Depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a business license, seller’s permit, and Employer Identification Number (EIN).

Related: State guides for general business licensing

Purchasing equipment for your laser engraving business is an exciting step in setting up your operations. The kind of equipment you need will largely depend on the scale of your business and the specific services you plan to offer.

Determine what types of products you’ll be engraving, as this will guide your equipment selection. Will you be working with metal, wood, glass, or a combination of materials? The answers to these questions will influence the type of laser engraver you’ll need.

For a laser engraving business just starting out, you might consider starting with a diode laser or CO2 laser machine. These machines are recommended for beginners due to their affordability and ease of use. However, while consumer-grade equipment may be adequate when starting, they aren’t built for the demands of frequent use.

When it comes to purchasing equipment, there are several popular suppliers you could consider:
Epilog Laser: Known for their versatile machines, they offer options for different materials and scales of business.
Gravograph: With a history in engraving, Gravograph supplies a range of engraving tools and lasers suitable for various materials.
OMTech Laser: Provides laser engravers that are particularly well-suited for small businesses or home-based operations due to their compact size and affordable pricing.
Thunder Laser USA: A supplier that offers a range of laser engraving machines suitable for different business sizes and needs.

Before making a purchase, it’s important to do your research. Look into the specific features and capabilities of different machines, and consider how they align with your business goals. Also, take into account any additional costs such as maintenance, parts replacement, and materials for engraving.

Depending on your budget and business goals, you may opt for either new or used laser engraving machines. While new equipment often comes with warranties and customer support, used or refurbished machines can be a cost-effective way to get started.

With the equipment on the way, the next step is to set up the workspace.

First, you’ll want to select a location that offers adequate space for the laser engraving machine and related equipment, such as ventilation systems and cooling units. The workspace should be well-ventilated to handle the fumes and dust produced by the engraving process. Proper lighting is also essential for precision work, so make sure the area is well-lit.

It’s a good idea to consult the guidelines provided by the equipment manufacturer to understand the specific requirements of the machines you’ll be using. Some may require specific power outlets or have other unique setup needs. A thoughtful workspace arrangement can enhance workflow; consider positioning equipment and worktables to minimize unnecessary movements.

For those setting up their first laser engraving business, a tip that can be particularly useful is to create designated areas within the workspace for different tasks such as design, engraving, assembly, and packaging. This organized approach can enhance efficiency and make daily operations smoother.

Last, safety should never be an afterthought. Implement safety measures such as properly grounding the equipment and accessible fire extinguishers. Always adhere to local regulations and guidelines related to safety and occupational health.

Determining pricing for a laser engraving business is a nuanced task that involves more than just calculating costs and adding a profit margin. Here are a few factors to consider:

Cost of materials and overhead: This includes the cost of the items you’re engraving and any other materials used in the process like masking materials or polishing compounds. Overhead like rent, utilities, credit card fees, and equipment maintenance should also be factored in.

Labor costs: Determine how much time it takes to complete an engraving job, including setup, engraving, cleaning, and packaging. Then decide on a reasonable hourly rate for your time. By calculating this now, if employees are needed later, an appropriate labor cost has already been factored into your pricing.

Machine depreciation: Laser engraving machines have a finite lifespan and will eventually need to be replaced. Divide the cost of the machine by its expected life in hours to get a per-hour machine cost. Add this to your pricing.

Profit margin: Once you’ve calculated your costs, add a profit margin. This could be a fixed amount or a percentage of the total cost.

A common method for pricing laser engraving services is to charge a setup fee (which covers the time spent preparing the design and setting up the machine) and then a per-item or per-minute fee for the actual engraving.

Depending on who you plan to sell to, marketing a laser engraving business may involve a combination of online and traditional strategies. Here are some common ways to market a laser engraving businesses:

Social media platforms: Utilizing platforms like Instagram and Facebook allows you to showcase your laser engraving work through visual content, connect with potential customers, and promote special offers.

Website sales platforms: Creating an online store through sources like Shopify, Wix, or WordPress allows you to sell products directly. Amazon Handmade and Etsy are also great platforms for showcasing and selling your unique laser-engraved items.

Trade shows and craft fairs: Participating in local trade shows and craft fairs can provide direct exposure to potential customers, offering opportunities to demonstrate your engraving skills.

Retail: You can also explore local boutiques, wedding planners, gift shops, or specialty shops that align with your product style to carry your laser-engraved items. Collaborating with other artists or businesses for exclusive collections can be another innovative way to market your products.

Promotional products: Create promotional goods and gifts with your laser engraving machine. Items like engraved pens or keychains can be given away at events or to customers as a form of advertising.

When selling through retail sources, especially as a new business, don’t be surprised if they require selling on consignment, where you place items in their store but don’t get paid until a customer makes a purchase.

Related: Low-cost ideas to market a new business

Starting a laser engraving business is a journey, and while you’ve taken significant steps toward making your dream a reality, there are still some essential loose ends to tie up. Every business will have different needs, but let’s take a look at some of the remaining steps that may be needed:

Business insurance: It’s a good idea to consult an insurance professional to determine the types of coverage appropriate for a laser engraving business, such as liability insurance and property insurance. These can protect against unforeseen circumstances like equipment failure or accidents and most personal home or renter insurance policies won’t cover losses due to a business loss.

Related: Types of insurance your business may need

Set up bookkeeping: Implement a reliable bookkeeping system to manage your finances, including expenses, income, taxes, and payroll. Consider using software like Wave Accounting (FREE) or Quickbooks which are tailored for small businesses.

Contracts: Establish clear contracts for your services. This might include specific agreements related to intellectual property for custom designs or bulk-order agreements.

RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Opening a bank account: Create a separate business bank account to keep personal and business finances distinct. This helps in tracking expenses and can make tax preparation easier.

Accept credit cards: Implement a credit card processing system to cater to customer preferences. Systems like Square or Stripe or PayPal can provide smooth payment processing.