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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on January 29, 2022
Investment range
$6,550 - $21,100
Revenue potential
$150,000 - $400,000 p.a.
Time to build
1 – 3 months
Profit potential
$135,000 - $160,000 p.a.
Industry trend
Growing
Commitment
Full-time
Here are the most important factors when you are starting your candy store:
You May Also Wonder:
Are candy stores profitable?
Yes, candy store profit margins are relatively high, as people are willing to pay good money for fine candies. You need to have good, unique products and a good location, and you’ll soon have customers coming back for more.
What kinds of candy are most popular?
Chocolate is always at the top of the list, and uniquely-flavored chocolates are particularly popular. People are also demanding sustainably produced candy, so if you have a candy store, make your candy onsite with locally-sourced ingredients and you’ll likely draw a lot of patrons.
What candy is best to sell?
Homemade chocolate candies always do so well. However, nearly everyone likes all kinds of candies, so it’s best to offer a variety.
What is the world’s favorite candy flavor?
By some accounts, strawberry is the world’s favorite candy flavor. Some also claim cherry to be the most popular.
What is America’s #1 candy?
The number one candy in the United States is Reese’s Cups. But almost all types of candy are profitable.
What are some best practices for managing and growing a successful candy store business?
You need to keep track of your costs so that you can monitor your profit margins. You also need to manage your inventory well so that you don’t have waste.
Starting a candy store has some advantages and disadvantages to consider before you decide if it’s the right path for you.
Candy is part of the broader confectionery market, which is worth about $586 billion. Sugar confectionery alone brings more than $116 billion in revenue, while chocolate confectionery is worth more than $133.5 billion. On top of that, the confectionery market is expected to expand to more than $721 billion by 2028((https://www.statista.com/outlook/cmo/food/confectionery-snacks/confectionery/worldwide)) That steady growth offers an excellent opportunity for bold entrepreneurs.
Trends
Challenges
Startup costs for a candy store range from $6,500 to over $20,000. The low end is for an online candy store, and costs are mainly for candy making equipment. The high end is for opening a brick-and-mortar candy store and includes the space rental and space preparation.
You’ll need to be an excellent candy maker, so you might want to take an online course (at Chocolate Academy, for example), and learn the latest in candy making.
You’ll need a handful of items to successfully launch your candy store business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150–$200 | $175 |
| Business licenses and permits | $100–$300 | $200 |
| Insurance | $100–$300 | $200 |
| Business cards and brochures | $200–$300 | $250 |
| Website setup | $1,000–$3,000 | $2,000 |
| Deposite on candy store space | $0–$5,000 | $2,500 |
| Space preparation and decor | $0–$5,000 | $2,500 |
| Candy making equipment | $5,000–$7,000 | $6,000 |
| Total | $6,550–$21,100 | $13,825 |
Let’s say the average price for a box of chocolates is $15 (though the prices went up due to inflation). Your profit margin for a candy store with a physical location should be about 40%. For an online store, it will be about 90%.
In your first year or two, if you sell 200 boxes a week online, you’ll be bringing in over $150,000 in annual revenue. This would mean a profit of $135,000, assuming that 90% margin. As your store builds a reputation, you could open a physical store and sales could climb to 500 boxes a week. Your profit margin will fall to 40%. With an annual revenue of nearly $400,000, you’d make a cool $160,000.
There are a few barriers to entry for a candy store. Your biggest challenges will be:
Now that you know what’s involved in starting a candy store, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research candy stores in your area to examine their products, price points, customer reviews, and what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a candy store with locally sourced ingredients.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as exotic candies, like salted blueberry chocolate.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You should make a list of all the candies you’ll make. In addition to just candies, you could make candy gift baskets, decorative boxes, and more. You could also buy candy from wholesalers and sell them at a markup.
You’ll need to research prices in your area for various types and quantities of candies. Your cost to make them will be the cost of your ingredients, plus rent and overhead. You should aim for a profit margin of about 40%.
Once you know your costs, you can use our profit margin calculator to determine your markup and final price point. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be broad, so you should spread your marketing efforts across various social media sites, including TikTok, Instagram, Facebook, and even LinkedIn.
Selecting the right location for your candy store is crucial for attracting customers and ensuring its success. Look for a spot in a high-traffic area with strong footfall, such as a busy shopping district or a popular tourist area.
Consider accessibility and convenience, ensuring that the location is easily reachable by public transportation and has ample parking.
By strategically choosing the right location, you can establish a profitable and popular candy store that caters to a wide range of customers and stands out in the competitive confectionery industry.
You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
Here are some ideas for brainstorming your business name:
Discover over 240 unique candy store name ideas here. If you want your business name to include specific keywords, you can also use our candy store name generator. Just type in a few keywords, hit Generate, and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to candy stores.
If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your candy store will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online, by mail, or by fax. Visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a candy store business. You might also try crowdfunding if you have an innovative concept for your store, or if you want to grow into a larger candy manufacturer.
Starting a candy store requires obtaining a number of licenses and permits from local, state, and federal governments.
You may need the following, depending on the requirements in your area:
Federal regulations, licenses, and permits associated with starting your business include doing business as, health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your candy store business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats — from marketing to sales to accounting — which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You can use industry-specific software, such as Poster, Brilliant, or Bepoz, to manage your purchasing, inventory, sales, and payments.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.
However, they are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Today, customers are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your candy store meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your candy store business could be:
You may not like to network or use personal connections for business gain but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a candy store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in candy for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in candy stores. You’ll probably generate new customers or find companies with which you could establish a partnership.
Potential positions for a candy store business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
You could be like a kid in a candy store – literally! For some people, candy is the sixth food group and an essential part of life, so tasty treats will always be in demand. You just need to make yours delicious and unique enough to gain attention in this $586 billion industry.
If the startup costs faze you, just start with an online shop, make some money, build your reputation and eventually open a physical location. And then maybe another, and another. Your candy could become the treat every kid wants at Halloween. You’re off to an auspicious start by learning the business, so get ready to make your way to sweet entrepreneurial success.
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