Starting a neon sign business offers a unique opportunity to blend creativity with entrepreneurship.
Whether you’re captivated by the vibrant glow of neon or intrigued by the customizability of LED signs, this guide will navigate you through the essential steps.
From understanding how to make LED signs to mastering the art of neon light making, we’ll cover all the bases, including neon sign making equipment, costs, and more.
Our Verdict
- Understand your target audience, competitor landscape, and pricing trends.
- Equip yourself with glass benders, transformers, vacuum pumps, high-borosilicate glass, and energy-efficient transformers.
- Cater to diverse preferences with custom fonts, colors, sizes, dimming/flashing features, and even unique designs.
- Ensure there are no leaks, electrical issues, or improper gas filling by conducting thorough inspections.
- Offer warranties or guarantees to instill confidence in your products.
- Rush the Process: Prioritize clear communication and meticulous design/production.
- Neglect Customers: Address inquiries promptly, offer solutions, and maintain professionalism.
- Overlook Safety: Prioritize ventilation, protective gear, and electrical safety protocols.
- Neglect Sustainability: Minimize your business's impact by using recycled glass whenever possible and consider offering LED neon signs for lower energy consumption.
1. Grasp the Basics of Neon and LED Sign Making
Before diving into the business, it’s crucial to differentiate between traditional neon signs and their LED counterparts.
While traditional neon signs are crafted using glass tubes filled with gas, LED neon signs utilize light-emitting diodes.
Learning how to make neon signs with LEDs can offer a more versatile and energy-efficient alternative to classic neon.
Required Equipment and Average Cost
- Neon Glass Bending Equipment:
- Glass tubing bender: $2,000 – $5,000
- Ribbon burner: $500 – $1,500
- Vacuum pump: $500 – $1,000
- Tube cutter: $50 – $200
- Gas manifold system: $500 – $1,000
- Neon gas filling system: $500 – $1,500
- Neon Sign Making Tools:
- Electrodes and electrode holders: $100 – $300
- Neon sign transformer: $200 – $500
- Neon sign power supply: $200 – $500
- Neon sign housing and mounting materials: $100 – $300
- Insulation and protective coatings: $50 – $200
- Neon sign making table: $200 – $500
- Neon Sign Assembly and Installation Equipment:
- Soldering iron and soldering supplies: $50 – $200
- Neon sign assembly jigs: $100 – $300
- Ladder or scaffolding for installation: $100 – $500
- Drill and mounting hardware: $50 – $200
- Design and Production Software:
- Graphic design software (e.g., Adobe Illustrator): $20 – $50/month subscription
- Neon sign pattern and layout software: $100 – $500 (one-time purchase)
- Safety Equipment:
- Protective eyewear: $20 – $50
- Gloves: $10 – $30
- Ventilation system for working with gasses: $500 – $1,500
- Business Setup and Miscellaneous:
- Business registration and licenses: Varies by location
- Workspace rental or purchase: Varies significantly by location
- Marketing materials and website: $500 – $2,000 (initial setup)
- Initial inventory of neon tubing and supplies: $1,000 – $3,000
Remember, these costs are approximate and can vary based on factors such as location, quality of equipment, and whether you’re buying new or used items. It’s also important to consider ongoing expenses such as electricity, maintenance, and replacement parts.
Types of Neon Signs
Neon signs vary widely in style and functionality, each catering to different aesthetic and practical applications:
- Traditional Neon Signs: Made with glass tubes filled with neon or argon gas. These signs are known for their warm glow and are commonly used for vintage or classic designs.
- LED Neon Signs: Utilize flexible LED lights to mimic the look of traditional neon but with lower energy consumption and greater durability. They’re versatile and safer to use in various settings.
- Open Neon Signs: Popular for businesses, these signs typically display the word “Open” to attract customers, available in both traditional and LED neon.
- Artistic Neon Signs: Custom-designed for decorative purposes, these signs can depict anything from abstract shapes to detailed images, showcasing the creative potential of neon lighting.
- Bar and Restaurant Signs: Customized to fit the theme of a bar or restaurant, these signs often feature the establishment’s name, logo, or popular menu items
How to Make Neon Signs with LED
LED neon signs are made by shaping flexible LED strips to form letters or designs. This method is less hazardous than handling neon gas and allows for more intricate and customizable designs.
Invest in neon light making equipment, such as LED strips, soldering kits, and acrylic backings. This will be your toolkit for crafting bespoke signs that cater to a variety of client needs.
Familiarize yourself with basic electrical knowledge, soldering, and design skills. Online tutorials and courses can be invaluable in learning how to make custom LED signs and neon lights.
To make an LED neon sign, follow these steps:
- Design the Sign: Sketch your design, considering size and complexity.
- Gather Materials: You’ll need LED neon flex strips, a clear acrylic backing, adhesive, and a power supply.
- Prepare Backing: Cut the acrylic to your sign’s shape.
- Layout Your Design: Plot your design on the acrylic, bending the LED strip to follow the pattern.
- Attach LED Strips: Use adhesive to secure the LED strips to the acrylic.
- Connect Power: Attach the power supply to the LED strips, ensuring it matches the LED specifications.
- Test and Mount: Check the sign’s functionality before mounting it in the desired location.
This process combines creativity with some technical know-how, particularly in handling and shaping the LED strips and ensuring electrical safety.
2. Develop a Business Plan
A well-thought-out business plan is crucial. It should detail your market research, target audience, pricing strategy, and financial projections.
Consult with a professional advisor or hire a business formation service to make sure you don’t miss anything crucial in your plan.
Considering the cost aspect, it’s essential to research how much neon signs cost to manufacture, to appropriately price your creations.
- Define Your Business Goals: Outline your vision, mission, and objectives for the neon sign business.
- Identify Your Target Market: Determine who your ideal customers are and understand their needs and preferences.
- Develop Marketing Strategies: Define how you will promote your neon sign business and attract customers.
- Financial Projections: Estimate startup costs, revenue forecasts, and expenses to ensure financial viability.
- Set Up a Dedicated Bank Account: Open a separate business bank account to manage finances and track expenses accurately.
- Legal and Regulatory Compliance: Ensure your business complies with all relevant laws and regulations, including licensing and permits.
- Risk Management: Identify potential risks and develop strategies to mitigate them, such as insurance coverage.
- Operational Plan: Outline day-to-day operations, including production processes, staffing, and supply chain management.
Calculate your business expenses here:
Budget Calculator
3. Master the Art of Making Neon Signs
Whether you’re interested in making neon lights or LED signs, practice is key. Start with simpler projects like making a neon sign or a basic LED sign to refine your skills.
As you become more comfortable, experiment with complex designs and custom requests.
Types of Materials for Neon Signs
- Glass Tubing: Traditional neon signs are made from glass tubes, which can be bent into various shapes and filled with neon or argon gas.
- LED Flex: A modern alternative to glass neon, LED neon flex is made of flexible LED lights encased in a silicone or PVC jacket.
- Neon and Argon Gas: Used in traditional neon signs to create different colors when electrified.
- Electrodes: Required at both ends of the neon tube to conduct electricity and light up the gas inside.
- Acrylic Backing: Many neon and LED signs are mounted on acrylic backing for support and ease of installation.
- Transformers/Power Supplies: Convert electricity to the appropriate voltage for neon or LED lights.
- Wiring and Electrical Components: Essential for connecting and operating the signs.
4. Invest in Quality Neon Sign Making Equipment
Investing in high-quality neon lights making and LED sign making equipment is crucial.
This includes everything from the materials for the signs themselves to the tools needed for assembly and installation.
Quality equipment ensures durability and satisfaction, making your products more appealing to customers.
Sourcing materials and finding reliable suppliers are critical steps in establishing and operating a successful neon sign business.
The choice of materials not only affects the quality and appearance of the final product but also impacts production costs and pricing
Finding Suppliers
- Industry Trade Shows: Attending trade shows specific to signage or lighting industries is a great way to meet suppliers, see product quality firsthand, and negotiate deals.
- Online Marketplaces: Websites like Alibaba, ThomasNet, and others can connect you with manufacturers and wholesalers worldwide. Be cautious and conduct due diligence to ensure quality and reliability.
- Local Wholesale Suppliers: Working with local suppliers reduces shipping times and costs and often simplifies resolving any issues with orders.
- Manufacturer Direct: Contacting manufacturers directly can lead to better pricing, especially for bulk orders, and opportunities for customization.
Sourcing Strategy
Developing a robust sourcing strategy is essential. It should include maintaining relationships with multiple suppliers to avoid supply chain disruptions and negotiating contracts that balance cost, quality, and delivery times.
Regularly reviewing and adjusting your sourcing strategy can help you adapt to changes in the market or your business needs.
5. Market Analysis of Neon Sign Business
The global neon signs market, including LED neon lights, is experiencing substantial growth due to increasing demand across various sectors. Here’s a consolidated overview based on the latest market analyses:
Market Size and Growth
Neon Signs Market: Projected to increase from USD 2 Billion in 2023 to USD 3.1 Billion by 2032, with a CAGR of 5% during the forecast period, according to a report by Data Intelo. This growth is largely attributed to rising e-commerce platforms and consumers’ interest in retro aesthetics.
LED Neon Lights Market: Valued at USD 1.26 billion in 2022, it’s anticipated to grow at a CAGR of over 6.5% from 2023 to 2032, as reported by Global Market Insights. The market’s expansion is driven by energy conservation and environmental sustainability concerns, making LED neon lights a popular eco-friendly lighting solution.
Market Segmentation and Trends
Segmentation by Application and Type: The neon signs market includes various segments based on application—advertising, commercial, traffic, construction, indoor & outdoor decoration, etc.—and type, such as custom neon signs, business neon signs, and others.
The LED segment is further divided by type (silicone, PVC) and application (household, commercial).
Trends: There’s a notable shift towards LED neon lights due to their customization options, durability, energy efficiency, and long lifespan. These factors are fostering their adoption in architectural lighting, signage, and decorative applications.
Regional Insights
North America is a significant market for neon signs, driven by urbanization and a growing advertising industry.
Asia Pacific dominates the LED neon lights market with a share of over 30% in 2022, propelled by rapid urbanization, infrastructure development, and booming entertainment industries.
Countries like China, Japan, and South Korea are leading contributors to this growth.
Competitive Landscape
Key players in the neon signs market include EGL, IVC Signs, JESCO LIGHTING GROUP LLC, Neo-Neon, and others, engaging in strategies like mergers, acquisitions, and product launches to expand their consumer base.
Similarly, the LED neon lights market features major participants such as Signify Holding, GE Lighting, Elemental LED Inc., among others, focusing on strategic partnerships and new product developments.
Challenges and Opportunities
While the markets show promising growth, they face challenges such as higher initial costs and competition from alternative lighting technologies.
Nonetheless, the ongoing innovation, coupled with increasing disposable incomes and urbanization, presents substantial opportunities for expansion and adoption of neon and LED neon lights globally.
6. Legal Requirements and Regulations
Starting a neon sign business involves several legal steps, including obtaining various licenses and permits.
The first step would be registering your business and getting an EIN. This number is issued by the IRS and is necessary for tax-purposes. You can easily order an EIN online.
The requirements can vary significantly depending on your location, but generally, here’s a breakdown of what you might need and where to find more information:
1. Business License
Nearly all businesses need a basic business license to operate legally in their city or county. This license is sometimes called a “business tax certificate.”
Where to Get It: Your city or county government office is responsible for issuing business licenses. The specific department can vary, but it’s often the City Clerk’s office or the Department of Revenue.
Online Resources: Many local government websites provide information and allow you to apply for a business license online. Start by visiting the official website of your city or county.
2. Zoning and Land Use Permits
If you’re planning to operate your business from a physical location, you’ll need to ensure that your business complies with local zoning laws. Another option would be to get virtual office services. This is a good choice for startups that don’t have large scale operations and staff.
Where to Get It: Your local zoning or planning department will provide information on zoning permits.
Online Resources: Check your local government’s website for zoning information. Some jurisdictions offer maps and tools to help you determine if your location is zoned for your type of business.
3. Environmental Permits
Depending on the chemicals and processes you use to create neon signs, you might need environmental permits, especially if your work involves emissions of hazardous waste.
Where to Get It: State or local environmental protection agencies are responsible for environmental permits.
Online Resources: The Environmental Protection Agency (EPA) website offers guidance, but you should also check your state’s environmental agency’s website for specific requirements.
4. Sign Permit
Many localities require a permit before you can erect a sign for your business.
Where to Get It: This is usually handled by your city or county’s building department or planning department.
Online Resources: Information is often available on your local government’s official website, under the building or planning department section.
5. Seller's Permit
Many localities require a permit before you can erect a sign for your business.
Where to Get It: This is usually handled by your city or county’s building department or planning department.
Online Resources: Information is often available on your local government’s official website, under the building or planning department section.
5. Seller's Permit
If you’re selling goods, including neon signs, you might need a seller’s permit to collect sales tax.
Where to Get It: This permit is usually issued by your state’s department of revenue.
Online Resources: Visit your state’s department of revenue website for information on how to apply for a seller’s permit.
6. Health and Safety Permits
If your business requires the use of chemicals or materials that could pose health risks, you may need specific permits related to health and safety.
Where to Get It: Local health departments or state agencies overseeing workplace safety.
Online Resources: The Occupational Safety and Health Administration (OSHA) offers resources. Check your state’s website for specific health and safety permit requirements.
7. Market Your Business
Marketing is vital to attract clients. Utilize social media, SEO strategies, and local advertising to showcase your portfolio.
Keywords like “how to make custom neon signs,” “make LED sign,” and “how to make lighted signs” can help your business appear in relevant search results, drawing in potential customers.
Here are some ways to plan your marketing strategy:
- Optimize Your Website for search engines using relevant keywords.
- Utilize Social Media to showcase your work and engage with potential customers.
- Partner with Local Businesses for visibility and referrals.
- Attend Trade Shows to network and display your products.
- Gather Customer Reviews to build credibility and attract new clients.
- Email Marketing to keep your audience engaged with updates and offers.
- Run Promotions to encourage purchases and reward loyalty.
8. Pricing Your Signs
Understanding the cost of making neon and LED signs is essential for setting competitive prices.
While you’re working on forming a new company, make sure you have your finances figured out. Getting professional help or advise might prove to be useful if you aren’t sure about something.
Consider material, labor, and overhead costs when determining how much to charge for your signs.
Offering a range of options can cater to various budgets, from simple designs to elaborate custom pieces.
Startup Costs
Startup costs for a neon sign business can vary widely based on location, scale, and business model but typically include:
- Equipment: $10,000 to $30,000. This includes the basic equipment needed to manufacture neon signs, such as glass tubes, gas, vacuum pumps, and electrode splicers for neon, as well as LED strips, controllers, and soldering equipment for LED signs.
- Lease and Utilities: $2,000 to $5,000/month. This greatly depends on your location and the size of the space you need.
- Insurance: $1,000 to $3,000/year for general liability insurance, with costs varying by provider and specific business needs.
- Licensing and Permits: $100 to $1,000. The cost varies widely depending on your location and the specific permits required.
- Marketing and Website: $2,000 to $5,000 for initial setup and design, plus ongoing marketing costs.
- Inventory: $3,000 to $10,000 for initial materials and supplies.
- Tools and Safety Gear: $500 to $2,000 for basic manufacturing and installation tools, as well as safety equipment.
Assuming a moderate approach, an estimated initial investment might be in the range of $18,600 to $56,000.
For a better result, calculate your business expenses here:
Budget Calculator
Pricing Strategy
Pricing should cover materials, labor, overhead, and include a profit margin. Factors affecting pricing include the complexity of the design, size of the sign, materials used, and competitive pricing.
- Materials and Labor: Mark-up materials by 2-3x and labor by $50 $100/hour.
- Overhead: Include rent, utilities, marketing, insurance, and other fixed costs in your pricing model.
- Profit Margin: Aim for a profit margin of 20-40% on top of your costs.
Offering a range of products at different price points can cater to a wider audience.
Funding Options
Funding options might include:
- Personal Savings: Using your own funds to start the business.
- Bank Loans: Traditional bank loans or lines of credit.
- Investors: Finding investors willing to provide capital in exchange for equity.
- Crowdfunding: Online platforms can be used to raise funds from a larger audience.
- Grants: Some governments and organizations offer grants to small businesses.
The choice between personal savings, bank loans, investors, crowdfunding, and grants will depend on your capacity and preference. Bank loans, for instance, could range from $10,000 to $50,000 or more, with interest rates and terms varying by lender.
Insurance
Important types of insurance for a neon sign business include:
- General Liability Insurance: Protects against injuries and accidents.
- Property Insurance: Covers damage to your business property and equipment.
- Professional Liability Insurance: Protects against claims of negligence or harm from your services.
Insurance costs will vary based on your business’s specific needs and risks.
Below are rough estimates for monthly operating costs. These vary based on the scale of your operations and the level of coverage you choose.
- Rent and Utilities: $2,000 $5,000
- Materials and Supplies: $1,000 $3,000, depending on the volume of production
- Salaries: Varies with the number of employees
- Marketing: $500 $2,000
- Miscellaneous: $1,000 $2,000 as contingency funds
Other Financial Considerations
- Operating Costs: Monthly expenses such as rent, utilities, salaries, marketing, and raw materials.
- Emergency Fund: It’s wise to set aside funds for unexpected expenses.
- Tax Planning: Understanding your tax obligations and planning accordingly can save money and avoid legal issues.
- Reinvestment: Allocating profits towards growing the business, such as expanding your product line, marketing efforts, or upgrading equipment.
9. Diversify Your Products and Services
Product and service diversification is a strategic approach that can significantly benefit your neon sign business, enhancing its resilience, reaching a broader customer base, and increasing revenue streams.
By expanding the range of products and services offered, your business can cater to a wider variety of client needs and preferences, adapt to market changes more effectively, and differentiate itself from competitors.
Product Diversification
- Variety of Sign Types: Beyond traditional and LED neon signs, offering a range of products such as indoor signs for decor, outdoor signs for businesses, custom event signs, and ready-made designs can cater to different market segments.
- Technological Innovations: Incorporating new technologies, like RGB LED neon flex that allows colors to change via remote control, can appeal to clients looking for customizable and dynamic signage solutions.
- Themed Collections: Developing themed collections, for example, for holidays, specific industries (like bars, restaurants, or retail), or events (weddings, parties), can attract niche markets looking for specialized designs.
- Merchandise: Expanding into related merchandise, such as neon-inspired apparel, home decor, or accessories, can leverage the brand’s aesthetic appeal in new product categories.
Service Diversification
- Custom Design Services: Offering bespoke design services for clients wanting unique, personalized neon signs can significantly enhance value and attract a clientele willing to pay a premium for customization.
- Installation Services: Providing professional installation services, especially for large or complex setups, can be an added value for clients who prefer a full-service solution.
- Maintenance and Repair: Offering maintenance and repair services for neon signs, including traditional glass neon, can create long-term customer relationships and recurring revenue.
- Consultation and Project Management: For clients who require extensive signage solutions, offering consultation and project management services can ensure a seamless process from design to installation.
- Workshops and DIY Kits: Hosting workshops for individuals interested in learning about neon sign making or selling DIY neon sign kits can tap into the maker movement and attract hobbyists.
10. Make Your Neon Sign Business Eco-Friendly
In the neon sign industry, environmental considerations are increasingly important, both from a regulatory perspective and due to growing consumer demand for sustainable products. A neon sign business can address these considerations in several key areas:
Use of Eco-Friendly Materials
- LED Technology: Emphasizing LED neon signs over traditional neon can significantly reduce energy consumption. LEDs are more energy-efficient, have a longer lifespan, and do not contain harmful gases.
- Recyclable Materials: Opting for materials that are either recyclable or have been recycled for the construction of signs, such as certain plastics or metals, can lessen the environmental impact.
Sustainable Manufacturing Processes
- Reducing Waste: Implementing manufacturing processes that minimize waste production. This can involve optimizing the use of materials and recycling scraps.
- Energy Efficiency: Utilizing energy-efficient machinery and lighting in the production facilities can lower the carbon footprint of manufacturing neon signs.
Safe Disposal and Recycling
- Recycling Programs: Offering recycling programs for old or broken neon signs, especially those that contain hazardous materials like mercury (found in some traditional neon signs), can prevent these materials from ending up in landfills.
- Safe Disposal: Educating customers on the safe disposal of neon signs, providing information on local disposal resources or services that specialize in handling electronic waste.
Compliance with Environmental Regulations
- Adherence to Regulations: Ensuring compliance with local, national, and international environmental regulations is crucial. This includes regulations on the use of certain materials, energy efficiency standards, and waste disposal.
- Certifications: Obtaining environmental certifications can not only ensure compliance but also serve as a marketing tool, demonstrating the company’s commitment to sustainability.
Consumer Education
- Promoting Awareness: Educating customers on the environmental benefits of choosing LED neon signs over traditional neon signs can influence purchasing decisions.
- Transparency: Being transparent about the environmental impact of your products and what steps your business is taking to mitigate this can build trust with eco-conscious consumers.
11. Customer Satisfaction and Aftercare
Providing excellent customer service and aftercare is crucial for business success. Offer warranties for your signs and provide guidance on care and maintenance.
Satisfied customers are likely to return and recommend your business to others.
Customer satisfaction and aftercare are pivotal for the longevity and reputation of a neon sign business. To ensure high levels of customer satisfaction, consider the following strategies:
- Quality Assurance: Ensure every sign meets a high standard of quality before delivery. This reduces the likelihood of defects and customer complaints.
- Clear Communication: Maintain open lines of communication throughout the design and manufacturing process. Keeping customers informed and involved can enhance satisfaction.
- Warranty and Guarantees: Offer warranties for your products to assure customers of their durability and quality. A guarantee can significantly increase buyer confidence.
- Responsive Customer Service: Provide prompt, helpful customer service for inquiries, complaints, or assistance. A quick and positive response to any issue can turn a potentially negative experience into a positive one.
- Aftercare Services: Offer aftercare services such as installation guidance, maintenance tips, and repair services. Educating customers on how to care for their neon signs can prolong the sign’s life and reduce the need for repairs.
FAQs
- How much do neon signs cost?
The cost of neon signs varies depending on factors like size, design complexity, and materials used. LED neon signs are generally more affordable than traditional neon signs, with prices starting from a few hundred dollars. - How do you make neon signs with LED lights that change colors?
RGB LED neon flex strips allow you to create neon signs with color-changing capabilities. These strips contain red, green, and blue LEDs that can be mixed to produce a wide range of colors. Control is typically done via a remote or smartphone app. - How do you make lighted signs?
Lighted signs, including neon signs, can be made by mounting light sources, such as LED neon flex strips or traditional neon tubes, onto a backing material like acrylic. Proper wiring and power supply are essential to ensure the lights illuminate correctly. - Where can I find suppliers for neon sign making equipment?
Suppliers for neon sign making equipment can be found online through platforms like Alibaba or specialized signage supply companies. Local hardware stores may also carry some basic tools and materials needed for neon sign making.
