People in the US consume 14 billion quarts of popcorn kernels annually. With this in mind, it’s easy to consider that a gourmet popcorn business would be a lucrative venture.
Starting a gourmet popcorn business requires a lot of planning beforehand, including creating a business plan, making recipes, creating a business brand, and gaining the needed licenses and insurance. Once the planning is finished, the necessary equipment and ingredients must be gathered.
Even if you start your business as a simple side-hustle, it can grow into a legitimate, highly profitable business, provided you manage your operations correctly.
Initial Planning for Your Business
A clear, concise business plan is essential for success when it comes to opening your own business.
Carefully consider the following: what will the startup and ongoing costs be? Who will your target customer be? How much will you charge customers? How much will you need to charge to cover expenses? What will you name your business, and where will you be located?
These are all important questions to start with. Answering them will help you shape the form of your business and help you make early decisions.
When drafting your business plan, include sections on strategy and implementation to summarize your marketing and sales strategies. This section should include how you plan to enter the gourmet business market and how you plan to expand your business.
It should also contain the details regarding your pricing and cost strategies, including your expected profit margins, as well as any relevant information about the logistics of selling a popcorn business.
Don’t worry about following your business plan to the exact letter—most of your plan will end up changing as you begin to build your business. But having a business plan to refer to is a great place to start.
The costs involved in opening a gourmet popcorn shop are significant, but manageable with proper budgeting. You may choose to join a pre-existing franchise to cut down on costs.
Joining a franchise like Doc Popcorn costs between $39,000 and $355,050, and joining the Shirley’s Gourmet Popcorn Company franchise costs between $158,500 and $399,000.
If you decide to build your own business instead of joining a franchise, expect higher costs. The biggest variable when considering costs will be your business’ location and size.
For example, a simple mobile cart costs much less than a physical store, and you’ll likely be paying more rent the more square footage you have.
In addition to rent or lease costs, other startup expenses will include the cost of equipment, such as popcorn popping machines; ingredients such as cooking oil, popcorn kernels, and flavoring; and packaging and storage supplies, such as tins and bags of multiple sizes.
You may also have to account for shipping costs if you want to deliver your popcorn to others.
When considering these expenses, you can also plan for ongoing expenses—rent, utilities, and the cost of ingredients and supplies.
Popcorn kernels range from $20 to $40 per 50lbs; other ingredient and supply costs are minimal, but they will range depending on the quantity and quality you need.
If you’re working on a tight budget, you might consider the benefits of getting a license to prepare commercial food in your home kitchen. This way, you can make your product at home—saving money on location costs—and then sell it at farmer’s markets or festivals.
By doing this, you’ll reduce the cost of a storefront down to the price of a folding table, booth, and the price of getting the license.
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Next, consider your target market. For most gourmet popcorn businesses, the ideal customer is someone who likes flavored popcorn and can afford to spend some money.
Knowing your target market will also help you plan for your location; you’re not going to get a lot of customers if no one can find your store’s location. If your target market is mostly tourists, you’ll want to set up somewhere near a tourist trap.
Gourmet popcorn shops make money by selling popcorn in bags or tins, fresh or wrapped up to be given as a gift later on. Some popcorn shops have begun to experiment with offering subscription options and shipping different flavors to their customers on a monthly or weekly basis.
Speaking of making money, it’s vital that you decide on your pricing. Do some research on similar businesses and compare their pricing—this will give you some idea of what the going rate is.
Gourmet popcorn usually sells in one-pound sacks or one-gallon tins. Caja Popcorn sells one-gallon tins for $23.95, two-gallon tins for $43.94, and three-and-a-half gallon tins for $69.95. Garret Popcorn Shops sells some varieties of their popcorn for $34 per one-gallon tin and has options for six-gallon tins that cost over $100.
Keep in mind, your prices can’t be too high or no one will buy your product. But, on the other hand, if your prices are too low, you won’t make enough of a profit to cover business costs.
How much profit can you expect? When correctly managed, some gourmet popcorn businesses can be extremely profitable! Angie’s Popcorn business, for example, has grown to be worth around $50 million.
So, just how can you make your business more profitable? Some shops increase profits by offering limited-edition tins with special designs, including city skylines, famous artwork, holiday scenes, local landmarks.
People will pay more for these limited tins. Many businesses also offer limited-time flavors, including holiday flavors only sold during the holiday season.
Creating Your Brand
A key part of opening a business is naming that business. Choosing a name can take some time, but it’s also a lot of fun. Try not to choose a name that’s too long, too hard to pronounce, or too hard to remember.
A simple name that rolls off the tongue will make your business much more popular for your target market—if the customer remembers your name, they’ll continue to buy your product.
Brainstorm a list of names you like, then choose a handful of the very best names. Check your state’s business records, federal and state trademark records, social media platforms, and web domain availability.
This way, you’ll avoid naming your business the same thing as someone else. This will help you to avoid the confusion and possible legal problems that may ensue. It’s very important to secure your domain name before someone else does—this way, you’ll be able to create a website for your business, which will help advertise your business.
Once you’ve found an available name, create a logo and graphics—if you’re not artistically talented, it’s best to hire an artist who specializes in business graphics. Your business logo will be the first thing your customers see, so make it fun and eye-catching to invite them in.
You might consider printing business cards or advertisements; you might also want to print stickers to place on your packaging. Your logo defines your brand and how your customers perceive your business. A strong brand will help your business stand out from your competitors.
Creating and Opening Your Business Accounts
Next comes the paperwork and logistics. Before you open your business, you’ll need funding. If you have enough money, you can go ahead with your business plans.
However, opening a business can be pricey, and most entrepreneurs don’t have that kind of cash lying around. Instead, hopeful business owners can take out a loan or find investors to fund their operation.
Others choose to crowdfund and save money until they have enough money to begin their business.
Creating the Legal Business Entity
You will also want to form a legal entity, such as an LLC or a corporation—this protects you from being held personally liable if your gourmet popcorn shop is sued.
You can start an LLC yourself and pay only the minimal LLC costs your state requires, or, if you want to pay a bit more, you can hire an LLC service for an additional fee. You’ll need to select a registered agent for your LLC. LLC formation packages usually include a free year of agent services. You can choose to hire an agent or act on your own.
Set Your Business for Tax Purposes
Before you can open your business, you’ll need to register for state and federal taxes. And to register for taxes, you will need to apply for an EIN or an employer identification number.
The process of getting an EIN is free and pretty easy. The quickest way to get a free EIN is to apply online via the IRS website. Once you’ve filled out their form, you will immediately get an EIN. However, you can also apply for an EIN via mail or fax.
Open Your Business Bank Accounts
Open a business bank account and credit card—this is essential for personal asset protection. If your personal and business accounts are mixed, your personal assets such as your home, car, and other valuables are at risk if your business is sued.
By building business credit, you can get credit cards and other forms of financing at better interest rates and higher lines of credit. You can also make accounting and tax filing easier.
Keep an in-depth record of various expenses and sources of income because this is critical to understand your finances. It can help you manage your costs and profit and simplify your annual tax filing.
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Apply for Your Business Licenses
Next, you’ll have to obtain the necessary permits and licenses. If you don’t have the necessary paperwork, you can get hefty fines and can even end up with your business being shut down.
If your business is operating out of a physical location, you’ll need to acquire a Certificate of Occupancy; this confirms that all building codes, zoning laws, and government regulations have been met.
Because you’re selling food, you’ll also need licensing from a local health department and will be required to pass a health inspection.
Get Business Insurance
To operate safely, your business will need insurance. Business insurance will protect your company’s finances in case of a loss. There are several types of insurance policies created for different types of businesses with different risks.
If you’re not sure of the types of risks you’ll need coverage for, you can begin with General Liability Insurance. As your business grows and the workload increases, you can begin to hire additional employees.
Once you hire employees, you’ll also need Workers’ Compensation Insurance in case your employees are hurt while on the job.
Set Up Your Business Phone Number
Set up a phone system for your business. Having a phone line specific to your business will keep your personal life and business life separate. It will also make your business more automated, which gives you legitimacy and makes it easier for customers to find and contact you.
Operating Your Business and Getting Customers
Once you’re ready to open your business, do it with fanfare! Hold a grand opening and advertise it well in advance. Offer coupons and steep discounts to attract your first customers; hand out business cards and flyers everywhere you can. Use social media and a business website to virally advertise your business.
Promote Your Business
Set up booths at local farmers’ markets, county and state fairs, and sports fields and stadiums. Offer free samples, and reach out to local schools and other businesses to offer discounts.
Offering your services to wedding and event planners is always a good move because there will almost always be a need for a steady supply. Reach out to local schools and sports teams to offer your services for their concessions needs.
Your business may only be a small, one or two-person operation, but it can grow to be a regional or even nationwide franchise. Gourmet popcorn businesses can grow by opening new locations or selling through retail outlets, such as selling through grocery stores, sporting venues, Costco, and Target.
Operating Your Business
During a typical day at a gourmet popcorn shop, most of your time will be spent making and selling popcorn. When you’re not doing this, you can expect to spend time ordering more ingredients and supplies, cleaning equipment and the facility, and packaging popcorn to be sold at a later time.
In order to run a gourmet popcorn shop business, business owners must know how to make gourmet popcorn and how to run a business in this industry.
Several gourmet popcorn businesses offer help on how to make popcorn. Popcorn Papa, for example, offers consulting services. Badger Popcorn and Concessions Supply Co. has a training center as well. Most gourmet popcorn franchises usually provide training materials and resources, as long as you’re willing to pay for it.
If you don’t want to pay an outside company for training, you can research what you need to know in recipe books or gain experience by working in a gourmet popcorn business for a while.
And while making regular popcorn is pretty straightforward, creating and executing original flavors requires experience and creativity.
If you have that creativity and drive, and a passion for gourmet popcorn, opening a gourmet popcorn business will be an exciting, fulfilling adventure which could bloom into a highly profitable business franchise.