How to Start a Cookie Business

How to Start a Cookie Business

Have you ever heard the saying? “Life is better with fresh baked cookies”. I know some of us most, probably have not heard the saying, but I am very sure that all of us, may have one time or the other tasted a cookie, whether greatly baked or not.

Cookies, fondly called “brownies” is a snack and or a dessert, which many people enjoy the varieties of it, not minding if they were baked on the hills or palatial homes of megacities, or in the huts in the valleys of remote villages. Cookies for many years to come will remain a delight of people around the world, in respective of race, creed or affiliations.

Our big question is, how have you profited from this treasure called cookie? Or how are you profiting from it? Have you ever thought about starting a cookie business? The cookies you bake at home, do you just want them to remain a family delicacy?

In this comprehensive guide, we will be providing detailed information on how you can start a cookie business and profit from it in 2021 and beyond. There is no point reminding you about the economic hardships that corona virus has brought about, but our duty is to open you up to opportunities and business ideas, which you can start quickly and easily, so as to enable you cushion the effects of the economic down-turn, and if you follow the outlined steps religiously, who knows, you may end up have cookie jars filled with dollars for the rest of your life.

Benefits of starting a Cookie Business

* It will allow you do something you enjoy.

* It will give you the opportunity to use your creativity.

* Cookie Business has a low startup cost.

* It has great flexibility, as you can bake whenever you want, either in the morning or at night.

So how do you start a Cookie Business?

A cookie business like every other businesses requires diligence and hard work to make it profitable and worthwhile, so we will be providing the detailed information that will make your cookie business journey worth every bit of baking time.

Here are the step by step guide on how to start and profit from cookie business.

Plan your Business

You may decide to start your cookie business as a side hustle or you may decide to do it professionally. But no matter the route you decide to take, you can never do away with planning your business. So writing a business plan is one of the keys to how successful or otherwise your cookie business will become. As writing a business plan will help you to identify your niche, write down your recipes and price your menu and also get a better understanding of the logistics required in running a cookie business.

Your business plan should take care of your business goals, financial projections, market information, marketing, logistics, resources and production processes. Your business plan might be slightly different if you are applying for funding for your cookie business, but if whether you are applying for funding or not, your business plan should be able to answer the following questions.

Who is your target demographic?

What are your major marketing channels?

Where will you sell your cookies?

How will your business differ from your competition?

Where will you source your equipment, packaging materials, and ingredients?

How much capital do you currently have, and how much do you need to launch and operate?

Where will you obtain startup funding, if needed?

How long will it take for you to break even, and how long to make a profit?

Register a Business Name

Everything worth doing is worth doing well. So it is very important that you start your cookie business the legal way. You have to come up with a name for your cookie business and get it registered in the company house of the state or country you will be operating from.

You have to be creative while coming up with the name as this will help in branding the business, also do a name search with the company house, to ensure no one else is bearing your new name before starting the process of registration. However, the business type you decide to register either as a sole proprietor, partnership or limited liability, with determine how you will be taxed and protections your business will get.

You may seek the advice of a lawyer for a better understanding of applicable laws in your state or country.

You may decide to take your business name further after registration by filling for a trademark, this may not be necessary, but it is absolutely up to you, how far you want to go with your cookie business.

After securing the availability of your name with the company house, or after the registration of the name, you can proceed to buy a domain name, so you can start building your website and creating social media accounts for your new cookie business, as this will be needed for your marketing.

Register for Taxes

Tax is a major source of revenue for governments all over the world. So your new business will not be spared or exempted from paying taxes, even though you are just starting out. It implies that you must register your new company with the revenue board for tax purposes. However, you can check if there are any tax holidays for your cookie business, so you can know how long you can operate before paying taxes, if there are such provisions in your state or country of operations.

More so, some states or countries may require you to apply for Employee Identification Number (EIN). The EIN is used basically for hiring and tax purposes. Your business can also use the EIN to open business account, apply for funding or even apply for a business credit card.

Obtain Permits, Licenses, and Insurance.

Some states or countries may require you to obtain special permits and licenses before you can start your cookie business. Your cookie business is a food related business, hence it has strict operational guidelines.

You have to find out for instance, if the law can allow you to do your cookie business at home or you must rent a shop before getting started. In most cases, you will have to get a food vendor license to enable you operate smoothly. You might also need to obtain a seller’s permit from your state’s occupational or health agency to sell your items and charge a sales tax.

After securing all the necessary permits, you will need insurance cover to help protect your business from legal claims in the future when the need arises. It is advised you get a general liability insurance, as this will cover every aspect of the business.

Create a routine for Baking

The system you adopt to operate your cookie business will determine how professionally you are willing to take the business. One of the ways to achieve this is for you to create a system and a routine for baking, delivering, and marketing your cookies. For example, your system can be that you will bake early in the morning and deliver fresh cookies to local cafes. Then spend the afternoon on business aspects such as marketing and managing.

Marketing and Selling/Packaging

No matter how beautifully baked or tasteful your cookies are, you still have to sell them. If you have followed this guide up to this point, it means you are not just looking at cookie business as a hobby. So as long as your cookie business is not a hobby, as customers will be paying for them, you must then figure out a way to get the cookies across to the customers.

You can jump start your cookie business by starting your marketing on social media, even before you finally bake the first cookie, as the marketing effort would have built up expectations, as you will have many customers, eagerly waiting for the day you will finally launch your business. So take advantage of Facebook, Twitter and Instagram to create a buzz for your cookie business, while putting the final touches towards baking your first cookie.

Your pre-launch marketing or early launch activities will give you a better understanding of where the bulk of the traffic is coming from, so you can concentrate on those traffic sources.

Aside the social media marketing, setting up a website and email marketing, will also be a good investment for your cookie business.

Part of your marketing efforts will be the packaging your cookies will come in. so to make your business stand out, you can order packaging materials to deliver your cookies in, including your business name on the packaging, and this might be expensive. Another available option is to order sticker labels with your business name. This option is cheaper and you can use the stickers to close the package.

You can include special information such as dietary considerations (i.e. gluten-free cookies) and ingredients in the stickers.

When you have your cookies nicely packaged, take some to your local coffee shops and other stores to see if you can sell them there. You can give samples to the owners along with your brochure, don’t forget to sign an agreement with them, so you will know how much they will sell them and the percentage the shop will keep.

But in all you do with regards to marketing, don’t underestimate the power of word-of-mouth marketing, as you must be willing to tell everyone about your new business, which they will in turn help you spread the word.

The other materials or marketing activities or tools you will need to sell will require you designing a logo, getting label and packaging materials, POS, shipping labels, etc.

Pricing your Cookies

Don’t guess what a good price will be for your cookies. It will be very important to arrive at your selling price by calculating the expense of your ingredients, time, and overhead costs (i.e. advertising) to make sure you cover your expenses. Don’t forget to add a little profit as well.

Now that you know the selling price for your cookies, the question now is, how will you accept payments from your customers? A PayPal account can be used for online payments. But if you are selling in person, you will probably need a POS or card reader connected to your phone.

Delivery and Shipping

You may decide to sell to local shops or take orders online. If you are selling to local shops, you will have to deliver them probably with your car or use pick up taxis. But if you take orders online, you might likely be shipping them by using DHL, FedEx or any of the local logistics companies. Check out with each of them, find out which offers best suits your business at a good price.

You must understand what it takes to make a profit

Before you make and sell your first cookie, you need to understand how many you will need to sell and at what price in order to at least break even and then make a profit.

The simplest way to go about this is to for instance make a spreadsheet in Excel or google sheets to identify all of your costs (whether they are one-time costs, like purchase of a KitchenAid mixer, or recurring costs, like annual licenses; and all ongoing costs, like flour, postage, raw materials, hiring additional helpers, etc.)

At the end of the day, as much as you are enjoying making cookies, remember, it is a business. If you are not covering your cost and earning a reasonable wage in the process, the question becomes, is it worth doing? So keep up with the accounting, and be sure to include all costs, including your time, as this will help you determine profit.

Final thoughts

In starting a cookie business like any other business, expect to make some mistakes and have some setbacks from time to time, in the beginning. You must be willing to learn from each mistake, and improve. But it will always be better if you just don’t only fix the mistakes; but also fix the cause of the mistakes.

Doing this will help you to continually evolve and learn from the competition, even as you try out new flavors and combinations with your cookies.

Finally, continue to innovate and improve.

As we will always say, this guide will not make any meaning if you are not willing to take action. So are you willing to take action and profit from cookie business? Action is cure! Let’s go.

What are your thoughts about this guide and do you have any business idea you want us to write about? Let us know in the comment section.

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