Do you also enjoy eating candy and chocolate? You will be surprised that you can turn the hobby into a huge money-making venture. Yes, you can start a chocolate business. One of the fastest-growing sectors of the global food industry is the chocolate business. More than $21 billion was realized from the industry in the U.S in 2015 alone. That figure has increased since then.
Although the industry seems to be one that is parked with competition, knowing your onions when it comes to production and marketing will surely set you apart. In this post, we have talked about some useful tips that can walk you through the of creating a successful chocolate business.
Table of Contents
How to Start a Chocolate Business
Let’s learn about “How To Start A Chocolate Business” in detail:
#1: Plan Your Business
The first thing any entrepreneur going into a business should do is to properly plan the business. Some people call this business plan and it often involves all the essential steps and points in the business. It will require you to answer critical questions and put a strategy in place to make sure the business grows and be successful. So in planning a chocolate business, here are the likely questions you will need to answer.
How much do you need to start a chocolate business?
This depends on the model you want the business to take. Do you want to run it from home or you want to go full scale? If you are starting a chocolate business from home, you will need anywhere from $5000 to $10,000 to start it. But if you want to take it as a full-scale business, you will need a lot of money to start and run the business. You may need up to $200,000 to make that happen, depending on the location and targeted clientele.
Who is the target market for a chocolate business?
If you will be running the business from your small kitchen, your likely customers are going to be individuals who have a sweet tooth for chocolate and are willing to pay you for a treat. However, if you will be starting the business as a big candy kitchen, your customers are likely going to be grocery stores, gift shops, and other local retailers who are willing to sell your product on their shelves.
How much money can you make from a chocolate business?
The amount you are able to make from a chocolate business will depend entirely on how much you are able to produce and sell. If you are running a small candy kitchen from home, you should expect an annual profit that is enough to cover your vacation. But if it is on a large scale, you should be looking at earning up to one million dollars in profits annually.
#2: Select a Unique Niche
Start by crafting a niche for yourself in the industry. You don’t have to compete with the big fish in the game, that may not bring out the best results. But choose a specialty niche like sugar-free, organic, or fair-trade chocolate to increase your odds of survival. Strive to come out with a really fresh approach that has a broad appeal.
#3: Decide How You Will Run Your Chocolate Business
After having settled for a niche, you will now have to determine how the business is going to be run. Will you prefer to go with a direct sales model or just offload your chocolates to a third-party distributor? Will you be selling from a storefront or solely from the internet? Just decide what model you want the business to take and research what it takes to make it happen.
#4: Form a Business Entity
The next thing on the list is to take care of a little paperwork, and that should start with forming a business entity. Forming a corporate entity of an LLC is the best way to go for a chocolate business. They will protect you from tax and legal liabilities while starting out with the business.
Create a brand name and logo for your chocolate business, and get it registered straight away.
#5: Understand Your State’s Cottage Food Laws
The law governing opening up a business, especially sales of products manufactured in the kitchen, varies from state to state. While some states will allow you to operate from home and place you on some restrictions, some won’t allow you to do that at all. So conduct your state’s secretariat office to know what the law in your state says about starting a chocolate business from home.
#6: Register the Business
Make your business legal so you won’t run into any troubles down the line. Just like every other business, you will be required to get some licenses and permits before you can create a chocolate business. You will also likely have to become part of a professional body, and that will mean taking some extra courses. Your facilities will also have to pass through some tests to ascertain you are up to the task of producing healthy and safe chocolate for the general public.
#7: Acquire the Right Skills
We will always recommend that you hone your skills before opening up your business because that is what will set you apart. Consider learning from the pros in the industry. Take several courses, both online and offline, to help you develop your skills. You can also join some relevant organizations that can help you achieve the best in your chocolate-making business.
#8: Get the Necessary Equipment
You can’t survive this industry without having the required equipment in your arsenal. You will need to buy commercial chocolate-making equipment that will make your cooking, mixing, and cooling very easy. Choose the right equipment based on the scale of your business. If you are operating on a shoestring budget, you can consider getting used equipment for now and then upgrade them when it is more comfortable for you.
#9: Take a Practice Run
Test the quality of your chocolate by producing a test batch and offer them to your friends, family, and professional colleagues. This will not only help publicize the business but will also provide you with some useful feedback you can work on to improve your chocolate business.
#10: Keep the Packaging Supplies Ready
The success of the business does not only depend on the quality of your chocolate but also on the packaging. You will need unique packaging that gives your brand a hand over the competition.
#11: Market the Business Like Crazy
Yes, go crazy about letting people know about your chocolate business. So consider using both digital and traditional marketing campaigns to achieve this goal. Start by mailing out small samples of your chocolate to potential clients and request that they share the feedback on their social media.
You should also leverage such platforms as Instagram and Flickr to market the business. You can also use other social platforms, including Facebook, Twitter, and YouTube to make more people know about the business. The more skillful you are with marketing your products, the more money you will be able to make from the business. So give your very all to this!