You know how much people love cookies. If you are someone who excels in the kitchen, has a knack for baking and is always coming up with new recipes to try, why not start your own cookie business? You can make money from something you enjoy doing while also sharing your talents with others. But before you get started on how to start a cookie business, there are some things that you need to take into consideration. Read this post for 10 easy steps on how to break into the world of home-based cookie businesses!
10 Steps to Start a cookie business
Here are the steps you need to take to transform your passion for baking into a profitable business.
1. Check out what regulations regulate food sales in your state.
Occupational or public health agencies are in charge of regulating the food sector in several states. Inquire about the regulations for operating a cookie company from home. A separate kitchen may be required in certain places. Other states may simply demand that your ingredients and preparation equipment (such as bowls and spoons) be kept separate from your cooking things. So, make sure to check with the local authorities.
If you are required to have a separate kitchen, take appropriate steps by making it ready before launching your cookie company. For example, install commercial-grade appliances and keep the counters clean at all times. Check out how many home-based food businesses in your area were shut down due to not complying with the requirements.
2. Decide on the kinds of cookies you wish to bake.
Do you want to offer a variety of cookies or specialize in one type? Are the cookies made with organic ingredients, free-range eggs and grass-fed butter? Or are they simply tasty treats for your friends and family. Cookie businesses typically focus on staple flavours like chocolate chip, snickerdoodle or peanut butter.
Whichever one you choose always bear in mind that as a solo business, and you may have to prepare, package and sell your cookies all by yourself. You may get worked up if you have too many different kinds of cookies.
3. Choose a brand name for your cookie business.
You can use your name or a combination of your first and last names, but the best cookie business names are catchy. Also, register this name with any relevant trademarking websites to ensure that it’s not already in use by another company.
Consult the United States Patent and Trademark Office. Also, check with your state’s company registration office to be sure it’s not already taken.
After doing this, you can go ahead to register your brand’s name with the necessary authority.
4. Set up the business structure that fits your cookie business needs.
You can set up the business as a sole proprietorship, general partnership or limited liability company (LLC). If you do not have any employees and your home-based cookie business is an “at home” enterprise where kids help with baking for school fundraisers, it might be best to run the business as a sole proprietorship.
If you plan to hire employees, it might be best to set up the business as a limited liability company (LLC). If your cookie baking is more of an investment in someone else’s bakery or storefront, then you can choose either a sole proprietorship or general partnership.
If you are unsure how many partners will be involved with the home-based cookie business, then setting up as a general partnership is another option.
Incase you don’t have much time, here is a reliable video that can guide you through
5. Make sure you write a business plan.
Your business plan outlines what you offer, how it differs from the competitors, and how you intend to operate it. Your business plan should also include a marketing plan that describes how you will get your product or service in front of potential customers.
You can come up with some ideas by contacting local stores that sell baked goods. Find out how they are doing it and how you might be able to work with them or go directly to the customer yourself via an online store like Etsy, Facebook page, etc.
Prepare a business plan even if you are working with a partner. You may want to work alone or have someone else handle some of the baking but make sure everyone knows how they fit in and how finances will be handled.
6. Apply for licenses and permissions.
Some localities require a food preparation license or permit to operate a home-based cookie business. Other requirements may include; Conduct background checks and drug screenings for employees.
Obtain general liability insurance coverage and errors and omissions (E&O) insurance if you plan on accepting credit cards, as well as worker’s compensation insurance in some states.
Food products are also subject to an extra tax in certain states, so make sure you check with your state’s department of revenue for information on how to handle these taxes.
7. Set a price for your cookies.
Don’t take a chance on a fair offer. To make sure you cover your costs, calculate the pricing using the cost of your ingredients, time, and overhead charges (such as advertising). Don’t forget to include a profit margin. Also, take into consideration what your competitors offer, and for how much. If you’re just starting, consider how much you would be willing to pay for an equivalent cookie.
Setting a high price may seem like a good business sense, but if the quality of your cookies isn’t up to par or doesn’t justify the high cost then it will end up hurting your reputation and profits in the long run.
8. Order packing materials to distribute your cookies in.
You can purchase cookie boxes, bags and tissue paper from the baking supply store. If you are selling cookies to businesses or organizations, order plain white bakery boxes with clear cellophane windows so customers can see how delicious your treats look.
If at all possible, print your brand on them. Personalized packaging will cost a bit more, but it will seem more professional.
Another option is to use good quality stickers which carry your brand’s identity, this is way cheaper than the actual personalized packaging. However, you can enter details like food intolerances (for example, 100% gluten-free).
9. Distribute your cookies locally
Charity starts at home, sell your cookies to family, friends and neighbours. Ask them how much they would pay for your cookies to get an idea of how much you should charge.
If the market is good, sell online by creating a website or blog with pictures of your baked goods or listing them on social media sites like Facebook, Twitter and Pinterest.
Other options include selling at local markets or craft fairs. However, you can take your cookies to nearby coffee shops and other businesses to see if you can sell them. Go along with your brochure, package them beautifully and provide samples to the owners.
Once your home-based business is up and running, add delivery fees if the cookies are more than a few miles from where they’re made.
10. Have a routine for your cookie business
Bake, distribute, and promote your cookies according to a system and routine. For instance, make fresh cookies early in the morning and bring them to nearby cafés. After that, spend the afternoon working on business issues like marketing and management. Once the café customers have left, take a break and enjoy some of your tasty cookies.
Frequently Asked Questions about cookie business
Is Cookie Business Even Profitable?
One of the first things you’ll need to do before starting your cookie business is research how profitable it will be. If you don’t find out how much money you can make and how long it takes, setting up a home-based business may not be worth the time and effort. However, if cookie sales are on the profitable side, you’ll need to make sure how many cookies you can sell within a certain amount of time.
But that’s by the way if you ask me how profitable the cookie business is, I’ll tell you that it’s quite profitable and that there is a big market for this type of business. Everything comes down to your expenses and pricing.
So how do you price your cookies?
Well, that’s a tough question and it all comes down to how much money or resources (eggs) one cookie business owner is willing to invest into the business. The more invested means higher pricing because we’re trying to make a profit here! Pricing should cover our expenses and leave some room for profits.
But just in case you want to know how much do homemade cookies sell for, here’s what I discovered from my research:
A single handmade cookie costs around $3-4, while a dozen cookies may cost anywhere from $10 to $25.
The home-based cookie business is a great way to make money, but there are many things that you should be aware of before venturing into this endeavour.
You need to know the pros and cons as well as how much time it’ll take up in your life, what kind of ingredients work best with your kitchen setup (if you’re not using pre-made dough), etc.
Make sure you do thorough research about the pros and cons of the home-based cookie business. If you have gone through the above-mentioned process, and you are all set.
What you may need to do now is to develop marketing materials such as brochures and a website, bake a sample batch and photograph the cookies. Set the backdrop for your photos so that the cookies seem to be tasty. Make use of the best pictures you can.
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