The pandemic created a lasting shift towards grocery delivery and pickup for households across America. This new convenience has caused a ripple effect across many niche markets in the grocery sector, including a decrease in impulse buying candy in checkout lines. With fewer people getting their fix from the usual big confectionary brands, a space has opened in the confectionary segment for small brands to make their mark.
This is the perfect time to capitalize on the confectionery market gap. Below are the steps on how to open a candy store:
How to Open a Candy Store
From the early stages of ideating to marketing your opening day, read the steps below on how to start a candy business:
1. Create a Business Plan
When opening any business, writing an effective business plan is essential. With a business plan, you can outline your candy shop’s goals and projections. This document will be vital in the future, as it will provide banks and investors with all the information they need before they decide to fund your candy shop. If you want to create an effective, in-depth candy shop business plan, you should include these sections:
- Executive Summary - A summary of the information included in your business plan that highlights your goals and why your candy shop is worth investing in.
- Company Description - Provide an overview of your company that is similar to your executive summary, but go more in-depth when it comes to projections and strategies.
- Concept and Menu - Describe what concept you have chosen for your candy shop and what confections you will serve.
- Management and Ownership Structure - Go into detail about what type of ownership structure your candy business will have and discuss the shop’s management hierarchy.
- Employees and Staffing Needs - This section outlines the employees and staff that are required to run your candy shop.
- Marketing and Competitor Analysis - In this section, identify target demographics and markets and analyze potential competitors to your business.
- Advertising and Marketing Strategies - This section should outline potential marketing and advertising strategies that could be used to reach your target demographics.
- Financials - Use this section to analyze financial projections, list expenses and costs, and discuss how long until the business becomes profitable.
2. Determine the Cost of Opening a Candy Store
When gathering cost estimates for your candy store, consider the below instances:
- Candy Equipment and Ingredient Cost - If you’re going the made-in-house route, you will need to set aside funds for candy-making equipment, ingredients, and paying your confectioners and/or chocolatiers for their labor. If you’re going the wholesale route, you’ll only need to consider the costs of selling pre-made candy.
- Candy Packaging and Candy Displays - Beautifully displaying your confections plays into the whimsical, kid-in-a-candy-store feeling that makes candy so easy to sell. For this, you will need bakery cases and wall-to-wall shelving filled to the brim with confections. To further extend the feeling of quality for your products, wrap them nicely in candy packaging for a lasting touch.
- Storefront Payments - If you decide on renting a brick and mortar candy business, take into account how much space you’ll need. It’s essential to have enough space for your candy equipment and ready-to-sell products. Additionally, if you plan on operating an ice cream station in your candy shop, make sure there is enough space for guests to comfortably dine. Regardless, the cost of retail rent is determined by square foot and can range from anywhere from $10/square foot to as high as $30/square foot.
How Much Does It Cost to Open a Candy Store?
The cost to open a candy store can start at a few thousand dollars if you’re only operating online. If you want to open a brick and mortar candy business, starting costs can range anywhere from $50,000 to $150,000 depending on the size and scale of your operation.
Back to Top3. Secure Funding for Your Candy Store
While selling candy may seem cheap and easy, the sum of finished product costs can actually be very expensive. Consider the following options as ways to acquire extra capital and continue the process of opening your candy business:
- Loans: Popular among small business owners, there are a variety of loans that exist for people interested in opening a business. Among them are traditional bank loans, small business loans, and equipment loans.
- Investors: Another popular option for business owners is obtaining funding through investors. This is where your strong business plan in Step 1 comes into play: pitch your candy shop business plan to an investor or group of investors so they can consider helping fund your candy store. Keep in mind, whether you like it or not, the investors will want to stay informed on the status of your business.
- Crowdfunding: Utilize websites such as GoFundMe to create a place for people to donate to your candy business. Your page should tell your story so genuine supporters can donate their money in a no-strings-attached manner. To keep engagement and create a community, continuously update your page with updates until your opening day.
- Self-Funding: If you can afford to do so, self-funding your own business is the easiest way to secure funding for your candy store. You would not have to ask banks, investors, or friends and family for money, and you can run your business exactly how you see fit. However, do not be discouraged if you cannot meet the high costs of everything in the end. Stay open-minded and try one of the other ways of securing funding mentioned above.
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4. Acquire Candy Store Permits and Licenses
Whether you’re opening up a candy store or starting a candy business online, you will need permits and licenses to legally produce and sell any confections. The licenses you need to open a candy shop are as follows:
- Sellers Permit - A seller’s permit authorizes a business to collect sales tax. Requirements for seller’s permits vary based on local and state laws, so be sure to research relevant laws.
- Health Permit - A health permit is required for any business that sells cooked or prepared foods to customers and outlines standards of safety and sanitation for your business. Health permits are under the domain of county health departments, meaning laws regarding health permits can vary depending on your location.
- Employer Identification Number - An employee identification number is required for every business in the United States. Your EIN is unique to your business and is used for identification purposes with the IRS.
- Business License - A business license is a permit that is issued by the government that authorizes you to operate your business. Business licenses can vary based on location and industry, meaning you may have to obtain multiple business licenses at the local, state, and federal levels.
- Resale Certificate - Also known as a tax exemption certificate, a resale certificate allows a business to purchase wholesale goods without having to pay the local sales tax. However, keep in mind you will have to collect the tax from customers when they buy your products. Without this certificate, you will have to pay sales tax on all purchases.
- Sign Permit - If you decide to open a storefront candy shop and want to put out a sign indicating information about your business to passersby, you will need to obtain a sign permit.
- Certificate of Occupancy - A certificate of occupancy proves that your building is safe to inhabit. You will only need this document if you decide to open a brick and mortar candy store.
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5. Invest in Candy Making Supplies
If you are making your confections in-house, you will need to gather all of the candy-making supplies and ingredients. Below are a few different pieces of equipment and specialty wares you’ll want to invest in:
- Candy Equipment - It all depends on what you actually decide to make for your candy business, but candy equipment items can include copper kettles, scales, batch rollers, candy wrapping machines, candy cutters, cotton gloves, rotating stretchers or hooks for pulling candy, candy molds, and thermometers for recording candy temperatures.
- Ingredients - Your candy store ingredient inventory should include items like sweeteners, extracts and flavorings, specialty food coloring, and bulk chocolate if you decide to add chocolates to your menu as well.
- Hard candy
- Soft candy
- Salt water taffy
- Lollipops
- Chewing gum
- Gummies
- Rock candy
- Cotton candy
- Candy buttons
- Bonbons
- Brittles
- Gourmet popcorn
- Toffee
- Chocolate bars
- Truffles
- Fudge
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6. Create a Menu of Different Types of Candy
People love innovative candy as much as they love nostalgic candy, so don’t be afraid to be creative with your flavors, as long as you also offer the classics. Here are a few different types of candy to add to your candy business:
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7. Market Your Candy Store
Hit the ground running with sales by marketing your candy store. Build hype before the big day by making social media accounts that feature pictures and videos of your confections, videos on how the candies are made, and any themed candy or special orders you’ve put together to profile your product range.
If you will have a storefront candy shop, place signs in the windows during remodeling. Include your business’s name, the tentative grand opening date, and anything else that will entice customers to look forward to the day your shop opens.
If you don’t have a storefront candy shop and will be exclusively selling your candy online, marketing on social media is a great place to start. Other sales avenues can be selling to and supplying local movie theaters, independent convenience or grocery stores, bakeries that do not have the space to make housemade candies, and locals who rent out vacation homes that want to add a parting gift for their guests.
Back to Top8. Hire and Train Your Staff
For those that are making candies and chocolates in-house, you’ll probably need to hire a confectioner and/or chocolatier or two when you first start out. Candy and chocolate making is a very laborious and skilled job. Make sure to hire back-of-house staff that can not only have a great experience but ones that you can afford to pay fairly for their labor. Your pay rate should match their skill level as well as their job description.
If you will be operating a physical candy store, hire front-of-house employees to package, display, and sell products. This job does not require too much skill, so look to hire teenagers or college students for part-time work, while you have at least one full-time staff manager on the floor as well.
Back to Top9. Opening Your Candy Store
Once all of your planning is done, funding is set, equipment is bought, and staff is hired, it’s time to start thinking of your candy business’s launch. We recommend a soft opening first and then a grand opening:
Soft Opening
A soft opening is the launch of a business for a limited number of people at first to test its services, acclimate staff, and make improvements. Hosting a soft opening also helps build anticipation and allows a space for your guests to give you valuable feedback.
Grand Opening
A grand opening should be saved for when your candy business is well and truly open to the public. Grand openings are events that involve exclusive deals, special events, and large crowds. Having a grand opening is an effective way to generate hype and introduce your candy shop to the neighborhood and prospective customers.
Back to TopThe world’s infatuation with sweets is present in almost every culture, and a candy business creates a one-stop-shop to capitalize on the sweets craving that every human experiences. Whether your candy business is online or being made and sold in a store, follow our guide to help start a successful candy business.
