A cookie-making business is a business that makes and sells different flavors of cookies, crackers, and dry pasta from purchased ingredients, such as flour, sugar, salt, seasoning, emulsifiers, flavorings, syrups, preservatives, food acids, and gluten.
Statistics have it that in the United States, the cookie, cracker, and pasta production industry generate over $27 billion annually from more than 2,408 cookie manufacturing companies. The industry is responsible for the employment of over 56,489 people. Experts project the cookie, cracker, and pasta production industry to grow at a 0.6 percent annual rate.
Steps on How to Start a Cookie Making Business
Table of Content
Conduct Market Research
Conducting market research before starting any business is key to the success of the business. This is because market research provides critical information about your market and your business landscape. It can tell you how your business is perceived by the customers and clients you want to reach.
It can help you determine who and where your customers are, and which customers are most likely to purchase cookies from you. In essence, thorough market research will help you understand how your target customers think to turn them into regular customers and brand advocates.
a. Who is the Target Market for Cookie Making Business?
- Event and Party Planners
- Retailers
- Schools
- Everyone who resides in the location where you intend to sell your cookies.
b. Is Cookie Making Business a Profitable Business?
Yes, the cookie-making business is very profitable. As a matter of fact, cookies remain one of the most profitable items in the retail bakery industry.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the cookie-making business because the cookie-making business is a niche idea in the cookie, cracker, and pasta production industry.
d. Who are the Major Competitors?
- Campbell Soup Company
- Kellogg companies
- Chips Ahoy
- Pepperidge Farm Food processing
- Keebler Food Processing Company
- Nestlé Food Processing Company
- Famous Amos
- Pillsbury Food Manufacturing, Food Processing Company
- Field
- Fig Newtons
- Quaker
- Trader Joe’s Retail
- Duncan Hines
- Russell Stover
- Lance Inc. Cookies and Crackers
- Kirkland’s Home
- Charleston Cookie Co
- Pacific Cookie Company
- Williams Sanoma
- Gamesa Manufacturing
e. Are There County or State Regulations or Zoning Laws for Cookie Making Business?
Yes, there are county and state regulations and zoning laws for cookie-making businesses in the United States. Please note that the Food and Drug Administration (FDA) sets the federal Food Code. However, the FDA doesn’t oversee individual cookie-making businesses.
Instead, the various states use the Food Code as a basis for their food codes. They may adopt its rules, interpret them differently or set their own rules. Please note that in the United States, you are required to follow your own state’s food service code. Visit the FDA website for a list of food service codes by state.
f. Is There a Franchise for Cookie Making Business?
Yes, there are franchise opportunities for cookie making business, and here are some of them;
- Nestle Tollhouse Café by Chip – Initial Investment: $149,450 – $554,800
- Cookies by Design – Total Investment: $117,500 to $207,000
- Crumb and Get It Cookie Company – Initial Investment: $128,700 – $178,500
- TCBY and Mrs. Fields – Initial Investment: $200,000 – $492,152
- Great American Cookies Franchise – Initial investments: $160,500 – $461,135
- Woops! – Initial Investment: $197,727
- Scooped Cookie Dough Bar – Total Investments: $60,000 – $150,000
- Le Macaron French Pastries – Initial Investment: $84,350 – $361,500
- Great Harvest – Initial investments: $107,000 – $476,350
- Einstein Bros. Bagels – Total Investment: $113,300 to $225,850.
g. What Do You Need to Start a Cookie Making Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Production facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Equipment
- Supplies
- Employees
- Startup Capital
- Sharon Hills© Cookie Company, Inc.
- Denzel Kingston® Cookie Company, LLC
- Glover Sean© Cookie Company, Inc.
- Yummy Cracks® Cookie Company, Inc.
- Teddy Bear™ Cookie Company, Inc.
- Reach Out™ Cookie Company, LLC.
- Brown Masteries© Cookie Company, LLC
- Cookie Delight® Cookie Company, Inc.
- Green Label© Cookie Company, Inc.
- Tandy Treats© Cookie Company, Inc.
- Regan Molly® Cookie Company, LLC
- Ryan Townsend® Cookie Company, LLC
- Anabel Williams™ Cookie Company, LLC
- Cookie Gang© Cookie Company, Inc.
- Venus Cape® Cookie Company, Inc.
- Pamela Signature™ Cookie Company, Inc.
- Glen Humphery™ Cookie Company, Inc.
- Dallas County© Cookie Company, Inc.
- Cookie House® Cookie Company, LLC
- Shannel Morgan™ Cookie Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for Cookie Making Business?
When it comes to starting a cookie-making business, you have several options when it comes to the business structure, but the one most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Cookie Making Business?
- General Business License
- Health and Safety Permit
- Food and Drinks Handlers’ License
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
Please note that there are two types of permits you need to make and sell cookies in the United States, Permit A, and Permit B. Permit A is for those who will sell their baked goods directly to consumers, including wedding cakes and sales at farmer’s markets, festivals, etc. Permit B is for those who will sell through local restaurants or grocery stores.
d. What Type of Certification is Needed to Open a Cookie Making Business?
You don’t need any certifications to open a cookie-making business.
e. What Documents are Needed to Open a Cookie Making Business?
- DBA
- EIN
- Business and Liability Insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering opening a cookie-making business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Cookie Making Business?
The cost required to open a cookie-making business may vary significantly. It could be high, moderate, or low. For example, you can start a homemade cookie business with less than $2,000 and at the same time, you can start a standard cookie-making business with a robust distribution network and over a dozen full-time employees with over $200,000.
b. What are the Costs Involved in Starting a Cookie Making Business
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease – $75,000.
- Other start-up expenses like stationery phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $30,000
- Start-up Inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Carts – $20,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Cookie Making Business?
- The size of cookie making business
- The choice of location
- The required licenses and permits
- The type of facility
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the cookie making business
- The cost for furnishing and equipping the cookie making facility
- The cost of insurance
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the cookie making business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
No, it is not compulsory to build a new facility for your cookie-making business, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Cookie Making Business?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees.
f. What is the Average Salary of your Staff?
- Production Manager – $45,000 Per Year
- Accountant – $35,630,000 Per Year
- Cookie Decorator – 28,000 Per Year
- Bakers – $27,100 Per Year
- Salesmen and Saleswomen – $26,000 Per Year
g. How Do You Get Funding to Start a Cookie Making Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Cookie House® Cookie Company, LLC is a neighborhood cookie-making business that will be located in a fast-growing community in New Haven, Connecticut. We have been able to secure a two-year lease agreement for a vacant facility within the city’s largest shopping mall. We are fortunate to secure a facility with an option of renewal for 5 years.
Cookie House® Cookie Company, LLC. is designed to meet both the health and safety standard as recommended by the local authority.
b. Products and Service
- Different types and flavors of cookies such as bar cookies, drop cookies, fried cookies, molded cookies, no-bake cookies, refrigerator (icebox) cookies, rolled cookies, and sandwich cookies.
c. Mission Statement
Our mission is to establish a standard and world-class cookie brand that in our own capacity will favorably compete with leaders in the industry. We want to build a business that will be listed amongst the top 20 cookie product brands in the United States of America.
Vision Statement
Our vision is to build a cookie-making business with franchises all across the United States of America and Canada.
d. Goals and Objectives
The goals and objectives of a cookie-making business are to produce different flavors and types of cookies for consumers and retailers.
e. Organizational Structure
- Production Manager
- Accountant
- Cookie Decorator
- Bakers
- Salespersons
Marketing Plan
a. SWOT Analysis
Strength:
- Ideal location for a cookie making business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to ingredients and supplies.
- A reliable, clean, healthy, and efficient method of preparing cookies.
Weakness:
- Financial constraints may restrict the publicity and branding of the business
- A new business that will be competing with well-established cookie-making businesses and franchises in the city.
- Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
Opportunities:
- A rise in the number of cookie lovers within our market space
- Online market, new services, new technology, and of course the opening of new markets.
Threat:
- The arrival of a new cookie making business within our market space
- Steady wage expenses and increasing prices of gas amid the low demand during the pandemic will reduce industry profitability.
- Economic uncertainty
- Liability problems
- The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Cookie Making Businesses Make Money?
Cookie making businesses make money by selling the following products;
- Different types and flavors of cookies such as bar cookies, drop cookies, fried cookies, molded cookies, no-bake cookies, refrigerator (icebox) cookies, rolled cookies, and sandwich cookies
- Franchise
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your cookie-making business by sending introductory letters alongside your brochure to schools, event, and party planners, households, and other key stakeholders throughout the city where your cookie-making business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your products.
- Join local cookie making business associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
Financial Projection
a. How Much Should You Charge for your Product/Service?
Well, you should plan to charge between $2 and $6.50 per cookie, or between $8 and $15 per dozen if you choose to sell your cookies in bulk. When setting your pricing, you should consider the cost of both the ingredients and baking equipment, as well as your time, and the complexity of the cookie. Note that a single homemade cookie tends to sell for about $3 to 4, and cookies by the dozen sell for anywhere between $10 to 25.
b. How Much Profit Do Cookie Making Business Owners Make a Year?
It depends, but the available report shows that on average, a small to medium-sized cookie-making business can earn anywhere from $80,000 to over $150,000 in a year.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the cookie making business
- The types of related products retailed in the shop
- The location the cookie making business is covering
- The management style of the cookie making business
- The business approach of the cookie making business
- The advertising and marketing strategies adopted by the cookie-making business.
- The number of years the cookie making business is in business
d. What is the Profit Margin of a Cookie Making Business?
Experts recommend adding a 50 percent profit margin to baked goods. But it is important to state that the average cookie business sells their baked goods with a profit margin of 25 to 30 percent.
e. What is the Sales Forecast?
Below is the sales forecast for a cookie-making business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $240,000
- Second Fiscal Year: $400,000
- Third Fiscal Year: $600,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Cookie Making Business?
- The demography of the location especially as it relates to people that eat cookies regularly
- The demand for cookies in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of cookie making businesses and retail outlets in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Cookie Making Business?
- San Antonio, Texas
- Miami, Florida
- Houston, Texas
- New York City, New York
- Oklahoma City, Oklahoma
- Chagrin Falls, Ohio
- Kaysville, Utah
- Cedar Rapids, Iowa
- Las Vegas, Nevada
- Los Angeles, California
c. What Equipment is Needed to Operate a Cookie Making Business?
You will need cookie making machines (e.g., industrial ovens and baking equipment), storage hardware (bins, utensil rack, shelves, food case), counter area equipment, computers and receipt issuing machines, a sound system (for playing music), and Point of Sale Machines (POS Machines).
Hire Employees
When it comes to hiring employees for a standard cookie-making business, you should make plans to hire a competent production manager (you can occupy this position), account clerk, baker’s, and salesperson’s.
Launch the Business Proper
In recent times, no cookie-making business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the cookie-making business, you will be able to officially inform people in your city that your cookie-making business is open for business.
a. What Makes a Cookie Making Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure you produce different flavors and types of cookies (give your customers options)
- Throw an open house party before officially opening the cookie making business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your cookie making business
- Leverage on all available online and offline platforms to promote your cookie making business
b. What Happens During a Typical Day at a Cookie Making Business?
- The production facility and shop are open for the day’s work
- Supplies and ingredients are ordered
- Bakers go to work to start baking cookies
- Walk-in customers are attended to
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Cookie Making Business?
- Excellent baking skills
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a bakery
- Experience in managing people
- Experience in business administration
- Experience in baking different types of cookies.