Starting a Business: Dipped and Molded Candles

Candle Making Business 
The candle making business demand is still very much valuable in several places around the globe. Candle making is an ancient technique with significant uses, which still makes it a promising business venture.
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I. Investment Costs

Materials
Paraffin wax granules (P75.00/kg) x 10 kg = P750.00
Polyethylene wax* (P180.00/kg) x 10 kg = P1,800.00
Crystal wax (P192.00/kg) x 8 kg = P1,536.00
Gel wax (P270.00/kg) x 5 kg = P1,350.00
Dyes (P60.00/pack)  x 5 packs = P300.00
Separator (petroleum jelly, cooking oil, liquid soap, etc.) = P120.00
Nylon wick (P36.00/pack)  x 2 packs = P72.00
Bamboo sticks (P30.00/bundle) = P30.00
Scent (P85.00 to P360.00/bottle)  x 3 bottles  = P255.00

Subtotal = P6,2130.00

Tools and Equipment:
Heat source (P300.00/unit) x 2 = P600.00
Heating pans (P350.00/unit) x 2 = P700.00
Molders (P305.00/molder) x 5 = P1,750.00

Subtotal = P3,050.00
Total Cost = P9,263.00

II. General Procedure

1. Prepare the waxes. For every Kg of paraffin wax, add 100 grams of polyethylene wax and 30 to 50 grams of crystal wax. If the paraffin wax is in a slab form, break it first into small pieces.
2. Heat the wax in a container other than the dipping tube. The safest way is to use a double boiler. If without a double boiler, heat the wax slowly in pouring pot or saucepan.
3. Wax is completely melted if the liquid is clear and the bottom of the container is seen. DO NOT BURN WAX (indicated by smoky fumes and brown coloration).
4. Remove from heat source and transfer contents into another container either in dipping tube or metal cup with spout. Add dye and scent (optional). The wax is now ready for dipping and/or molding.

A. Dipped Candles (oldest and simplest means of making candles):

1. Cut wicks into several inches longer than the desired candle length.
2. If you wish to dip several candles at the same time, tie the wicks 2 to 3 inches apart on a rod or a hoop.
3. Dip the wick into the melted wax. Withdraw the wick and pull on the other end to make it taut. Dip the wick again after the first layer of wax hardens.
4. Continue dipping the candles until it reaches the desired thickness. Allow each layer of wax to cool and harden after every dipping.
5. To make the bottoms of the dipped candles flat and smooth, heat a metal spatula over a gas flame or electric burner. Rub the candle bottoms against hot metal surface, melting away until the bottoms are flat.

Estimated Costing and Pricing

a. Direct cost of materials (per 5000 pcs) = 0.94

b. Indirect cost
Particulars
Labor Cost (P382/day min. wage x 2 skilled workers/5000 pcs) – 0.15
Transportation cost (P75.00/5000 pcs) – 0.02
Water and electricity P60.00/5000 pcs) – 0.01
Contingency cost (10% of direct cost) – 0.09
Total Indirect Cost per piece - 0.27

Estimated Product Costing and Pricing
Particulars
Total Direct Cost - 0.94
Add: Total Indirect Cost - 0.27
Estimated Production Cost = 1.21
Add: 10-20% markup – 0.24
Estimated selling price per piece – 1.45
Market price – P2.50 to P3.00

Estimated Income per Day
Dipped candles Php5,000 x 1.45 – P7,250.00
Less: All expenses – 5,599.00
Raw materials (0.94 x 5000) – 4,700.00
Overhead – 135.00
Labor – 764.00
Estimated income per day = Php1,651.00

B. Molded Candles (molders can be purchased, made or found)

1. Prepare mold to release candle by applying the inside of the molder with a thin layer of separator.
2. Prepare the wick. The size of the wick depends on the size of the candle. The wick is usually place in the mold before the wax is poured. However, certain candles require that the wick be inserted after the candle is made. This is done by piercing a wick hole in the candle with a hot ice pick.
3. Hold mold in a slanting position. Pour hot wax from pot to the metal cup with spout, then, from cup slowly into the mold.
4. Cool mold by placing it in a pail with cold water. Hold down with a heavy object.
5. After cooling, notice that portion about the wick recedes. Puncture and pour wax into the cavity until filled.
6. Cool the mold again. After the wax has set, remove mold from water. Pull wick gently to release the candle. Trim excess wick.

Estimated Costing and Pricing

a. Direct cost of materials
Particulars
Paraffin wax 10Kg. - P750.00
Polyethylene wax - P1,800.00
Crystal Wax - P1,536.00
Wick - P36.00
Scent (optional) - P255.00
Dyes - P300.00
Total Direct Cost = P4,677.00 (you can produce 3 molded candles per kilogram of paraffin wax)

b. Indirect cost
Particulars
Labor Cost (P382/day min. wage) x 2 skilled workers /300 molded candles - 2.55
Transportation Cost (P75.00/300) - .25
Water and Electricity (P50.00/300) - .20
Contingency Cost (10% of direct cost) - 15.59
Total Indirect Cost = Php18.59

c. Product Cost
Particulars
Total direct cost (4,677/300) - 15.59
Add: Total Indirect Cost - 18.59
Estimated production cost = P34.18

d. Product Pricing
Particulars
Production cost per molded candle - 34.18
Add: 10-40% markup – 13.67
Estimated selling price per piece = P47.85
Market price – P50.00 to P100.00

Estimated Income per Day
Molded candles 300 pcs. x 47.85 – P14,355.00
Less: All expenses - 5,576.00
   Raw materials - 4,677.00
   Overhead (75.00 + 60.00) - 135.00
   Labor (382.00 x 2) - 764.00
Estimated income per day = P8,779.00

Safety Precautions
1. Always have a fire extinguisher within reach.
2. Never use water to extinguish a wax fire. Liquid wax behaves much the same way as oil, and therefore needs to be treated like an oil fire.
3. NEVER LEAVE MELTING WAX UNATTENDED.
4. Constantly monitor the temperature of the wax. If wax reaches the flash point, then the vapor’s produced are extremely flammable. The flash point of wax is typically above 300°F.
5. Always use a double boiler. A double boiler helps distribute heat and prevents dangerous temperatures. Never melt wax directly on your stove.
6. Use a electric heat source if possible. If, by accident, the wax reaches the flash point, vapors may find a flame and become ignited on an electric heat source. Any open flame such as that found on a gas stove, will ignite wax vapors.
7. Always use a thermometer to monitor the wax temperature. Put it on your list of things to get before you start making candles.

III. Registration Requirements

1. Business name registration
2. Mayor’s Permit/Residence Certificate and Sanitary Permit
3. Tax Identification Number (TIN)

IV. Financing (read Raising Capital for your Business)
  • SSS Special Financing Program
  • Small and Medium Enterprise Credit
  • People's Credit and Finance Corporation

3 comments:

  1. One of the major reasons a new business venture fails is undercapitalization for the first two years of operations but I think with this business you can already start small. Or if not relationship banking may help.

    ReplyDelete
  2. With all the raw matetials , where can we buy all of these to include tools and equipment? Thank you

    ReplyDelete
  3. Please give me an idea where to buy all of these raw materials to include tools and equipment?

    thank you very much

    ReplyDelete

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