How Tara Used Economics to Turn Her Candle Business Around — A Small Business Strategy Story

From Passion to Profit: Tara discovered that a little economics can light the way to smarter business decisions

When Tara started her handmade candle business, she focused on all the right things — packaging, branding, Instagram, even launching a small website. Orders trickled in, and she felt excited. But three months later, she was confused.

Sales were up, but profits? Not so much. She was always running out of cash. Her raw material costs kept rising. Some products sold out quickly, while others barely moved. She’d discounted heavily during a slow week, but that didn’t help much either.

She was working non-stop… but getting nowhere.

That’s when she decided to pause and ask herself:

“What am I missing?”

Tara had never studied economics in school — she thought it was all about stock markets and government budgets. But when a friend suggested she learn a few basic economic concepts, something clicked.

What she discovered changed how she ran her business.

She realized she’d been making business decisions based on instinct rather than using proven small business strategy frameworks. She was spending hours on social media without really checking if it was helping her sales. At the same time, she often ran out of her best-selling products because she wasn’t planning her inventory well.

Once she learned about opportunity cost — a concept often discussed in economics for entrepreneurs — things started to change. She began asking herself:

“Should I spend ₹15,000 on influencer marketing, or use that money to restock items that are already in demand?”

“Should I spend an hour filming reels, or use that time to study my sales data?”

Every choice had a trade-off — and she started picking the ones that gave better results, not just what felt urgent.

She also came across marginal analysis, or marginal cost evaluation — a simple idea that helped her figure out when making more products was worth it. Earlier, she used to make large batches of slow-selling candles just to feel “stocked up.” But now, she only increased production when it made financial sense.

She had initially set her prices by looking at what other candle businesses were charging. But after learning about demand and price elasticity— key ideas in smart pricing strategies — she realized something surprising: her customers weren’t just buying candles — they were buying into her brand. They valued her product for its eco-friendliness and design. These buyers weren’t as sensitive to small price changes as she had assumed. So, she experimented. She raised prices slightly on bestsellers — and sales didn’t drop. In fact, revenue went up.

At the same time, she began to see the uniqueness of her business more clearly. She used to think she was just another candle maker in a crowded market. But reading about market structures made her realize she wasn’t competing in a mass-market space. Hers was a niche — artisan, handmade, consciously crafted. She stopped worrying so much about the big brands and focused more on telling her unique story.

There was one candle scent Tara loved, but no one else seemed to. She’d already spent on the jars, the labels, the fragrance oils. So, she kept trying to push it — bundling it into offers, running ads, even giving it away at pop-ups. It felt like such a waste to stop. Then she learned about the sunk cost fallacy : money already spent shouldn't dictate future decisions, a common trap in business decision making. She realized she was clinging to a past expense, not making space for better opportunities. She finally let the scent go — and with it, freed up time and resources for products her customers truly wanted.

Not long after, her wax supplier raised prices due to global shipping issues. It made her panic. But a quick look at articles on inflation and trade disruptions helped her stay calm. She started sourcing locally, negotiated better rates, and adjusted her pricing slightly to reflect costs.

Now, she watches economic news not with fear — but with curiosity and preparedness.

Tara didn’t go back to school for a degree in economics. She didn’t need to. All it took was a mindset shift — seeing her business through an economic lens.

Today, she makes decisions based on data, demand, and real opportunity — not guesswork or emotion. She still creates beautiful products, but now, every creative decision is supported by strategic reasoning.

Understanding basic economic principles like opportunity cost and price elasticity can turn business decisions into strategic moves

Your takeaway? You don’t have to master graphs and formulas. But understanding just a few key concepts — opportunity cost, price elasticity, marginal cost, sunk cost — can turn your business from a passion project into a profitable venture.

Want to explore more practical economics for entrepreneurs? Visit econmadeazy or check out Learn Economics with Anjuli on YouTube for more stories, tips, and tools to make better business decisions.