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Candle businesses are thriving in the market. If you want to start your very own, you’ve come to the right place!
Just like any other business, a candle business should consider legal documents, business registration, intellectual property protections and liability limitations. After all, you’re creating and designing your very own candles, so you need to think about how you can protect these unique designs in a competitive market.
In this article, we’ll discuss the process for these considerations and the best way you can start a candle business in Australia.
How To Start A Candle Making Business At Home
Starting your own candle business from home is exciting stuff, but it also means you need to think about how this set up will affect your business activities and legals.
Firstly, you’ll need a good business plan. A business plan is like the blueprint of your business. It should set out your goals, strategies, resources and financial capacity. In other words, it should reflect how your business expects to perform in the long term.
Which Business Structure Should I Choose For My Candle Business?
Next, you want to think about which business structure is best for you. This step is crucial as your structure will complement your goals and strategies.
For example, if you plan on staying small and local, a sole trader or partnership is more suitable for you. This is because it’s not as expensive and it’s pretty simple to set up. However, it also means that you’ll be personally liable if the business runs into trouble.
If you want limited liability, this is where a Company Structure would look more appealing. However, it also means you’d need to prepare to spend a little more on the set up process.
Register Your Candle Business
You also need to register your candle business. Through this process, you’ll also apply for an Australian Business Number (ABN).
However, if you’re under a company structure, you’ll need an Australian Company Number (ACN).
Another requirement is to register your business name. It’s also worth noting that your business name is not automatically protected, so if you want to secure your business’ identity, you may want to trademark your business name.
Working From Home
If you’re hiring employees to help you with your candle business, you have certain duties towards them.
Australian law sets out that employers have Work Health and Safety obligations to employees, as well as anyone else that enters the premises.
This basically means employers are under an obligation to minimise physical harm or risks by maintaining a safe workplace.
These laws apply even if you’re running your business from home, and if your employees work from home.
How To Start An Online Candle Making Business
Running an online business is extremely common in this day and age. It helps your business expand their reach to customers and makes the shopping experience more convenient for consumers.
However, the online space carries a number of risks for businesses. After all, you’re allowing people from across the globe to access your website and engage with your business. With this in mind, you want to take steps to ensure your business is protected from online hazards.
What Documents Do I Need For A Candle Business?
Online Shop Terms And Conditions
If your business has a website, you’ll need to have good Online Shop Terms & Conditions. People who use your website need to agree to these terms before they can further engage with your business.
Your terms and conditions should cover some of the following things:
- Limitation of liability
- Payment
- Delivery or pick up options
- Disclaimers
- Privacy matters
Does My Candle Business Need A Privacy Policy?
As an online business, you also need to be aware of how you can comply with your privacy obligations. Lots of online businesses collect personal information from users (such as phone numbers and emails when they make accounts on your website).
If you collect personal information, you’ll need to have a Privacy Policy in place that discloses how and why you collect that data from your customers. This is also a great way to remain transparent with users, and helps keep that trust in your business relationship.
How Do I Protect My Candle Business’ Brand?
Designing and selling candles means you probably have unique logos and slogans that identify your business in the market. There are lots of competitors out there, so the last thing you want is for someone to steal these ideas from you.
The best way to do this is by trademarking your IP. You can trademark a slogan, a logo, a specific colour or a certain scent of one of your candles!
How Can I Limit Liability For Any Injuries?
Candles can be cute and uniquely designed gifts, but they can also pose a serious threat if not handled with care.
As a business that’s selling potentially harmful goods, you want to protect yourself from any legal responsibility or liability if something goes wrong. For example, if a customer mishandles one of their candles that they’ve purchased from you, they may try to sue you.
So, your safest bet is to have a limitation of liability clause in your contracts.
When dealing with customers, you may want to do this through a disclaimer on your website when they make an order. You can disclose that you will only be liable for damage that is caused from a faulty item sold by you.
If the damage or loss was caused by something else, or the item was not faulty, then you can limit your liability here.
You may also choose to include warnings on your packaging – we’ll discuss how you can approach this below.
Candle Labelling Requirements Australia
In Australia, labelling requirements are extremely important for certain types of goods.
You may notice that food products will have ingredients listed, and cosmetics may have certain disclaimers. When it comes to candles, it’s important to have disclaimers on your packaging about the use of candles as it can be a hazard if not used correctly.
For example, you may choose to say something like “Do not leave unattended” or “Keep away from children”. This will further protect your business in case a customer is harmed and proceeds to take legal action against you.
You also need to ensure you do not mislead or deceive customers about your product. So, any statements you put on your packaging need to be true, otherwise you may be in breach of the Australian Consumer Law (ACL).
For example, if your candle says “made in France” but it has the Italian flag on the front, this counts as misleading conduct. This is because you’re deceiving customers into thinking they are about to purchase an authentic Italian candle, when in actual fact, it was made in France.
Can I Sell White-Labelled Candles?
White labelling is when a business sells another business’ products, but under their own name and brand. You may have seen this kind of arrangement exist between retailers and manufacturers, as manufacturers create the product but the reseller sells it under their own brand.
Since there are two parties involved here, it’s important that both agree on how the packaging will work. It needs to accurately reflect ingredients, hazards, relevant warnings and which logos will be displayed.
It should also accurately show the country of origin.
Do I Need A White Label Agreement For My Candle Business?
If you’re selling white labelled candles, you’ll need to have a White Label Agreement in place. This way, the details of your arrangement can be secured in writing in case anything goes wrong.
It should govern the provision of the candles to customers and cover the terms under which the candle can be branded. It should also cover matters such as how intellectual property will be used (such as your candle business’ logo), how trade marks will work and who will be liable for any losses or damage caused by the product.
For example, if a candle is faulty and causes harm to a customer, will the seller be liable or the manufacturer who made the candles?
This is the kind of matter that would be specified and set out in your White Label Agreement.
What Should I Know About Exchanges And Refunds?
If one of your candles turns out to be faulty or incorrect, customers can come in and request an exchange or a refund under the Australian Consumer Law.
For example, if they purchased a candle with the packaging “Sweet Azalea Scent”, but they go home and unpack the box to reveal a “Lavender Scent” candle instead, this would be an error on your end. As such, they are entitled to a refund or exchange.
There are strict laws around consumer guarantees and the protection of consumer rights. This is designed to protect consumers from unfair trading practices – it’s important to familiarise yourself with these to avoid any legal consequences or disputes.
Key Takeaways
Starting your own candle business can be a handful, but don’t let the complexity of these legals get in your way! Our lawyers can help you draft your legal documents to protect your online business, secure your business relationships and keep you on the right track to a smooth business journey.
So, you can focus on maximising your profits and your business’ overall performance with minimal legal stresses.
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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