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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 April 20, 2022
Investment range
$3,300 - $7,350
Revenue potential
$62,000 - $312,000 p.a.
Time to build
0 – 3 months
Profit potential
$44,000 - $93,600 p.a.
Industry trend
Growing
Commitment
Flexible
When establishing your popcorn business, consider these significant factors:
You May Also Wonder:
Can an online popcorn business be profitable?
Yes, profit margins for an online popcorn business are high. The key is to create unique flavors that will stand out in a competitive market.
Are popcorn stands profitable?
Popcorn stands can be profitable, but success depends on factors like location, competition, pricing, product quality, and customer demand. Strategic placement in high-traffic areas, offering a variety of flavors and toppings, and providing exceptional customer service can contribute to profitability.
How can I differentiate my popcorn business from competitors in the market?
To differentiate your popcorn business from competitors, consider unique flavors or combinations that aren’t commonly available. Experiment with gourmet or exotic flavors, and offer customizable options for customers.
How can I handle sales and distribution of my popcorn products?
Establishing your popcorn stand in a high-traffic location can attract walk-in customers. Additionally, consider partnering with local businesses, such as movie theaters, event venues, sports arenas, or gourmet shops, to sell your products.
How can I package and present my popcorn products attractively?
Consider using eye-catching packaging with attractive designs that reflect your brand. Use quality materials that keep the popcorn fresh and crispy. Include clear labels with enticing descriptions of flavors and ingredients.
What is the most popular popcorn flavor?
Classic flavors like buttered popcorn, caramel, and cheddar cheese are generally well-liked. Other popular flavors include kettle corn, chocolate drizzle, spicy flavors like jalapeño, and sweet varieties like cinnamon sugar or toffee.
Starting a popcorn business has pros and cons to consider before deciding if it’s right for you.
Trends in the popcorn industry include:
Challenges in the popcorn industry include:
Startup costs for a popcorn business range from $3,300 to $7,300 if you’re starting an online popcorn business from home. Costs include a commercial popcorn machine, packaging materials, and ingredients.
If you start a popcorn cart, you can add $2,500 to $5,000 to those totals. A popcorn shop will cost at least $20,000 more.
You’ll need a handful of items to successfully launch your popcorn 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 |
| Commercial popcorn machine | $1,000 - $1,500 | $1,250 |
| Packaging and labeling supplies | $250 - $750 | $500 |
| Initial supply of ingredients | $500 - $1,000 | $750 |
| Total | $3,300 - $7,350 | $5,325 |
The average price of a bag of prepared popcorn is about $5. Larger bags can cost $7 to $12. These calculations will assume an average price of $6. Your profit margin after ingredients and packaging should be high, around 70%.
In your first year or two, you could work from home and sell 200 bags per week, bringing in $62,000 in annual revenue. This would mean nearly $44,000 in profit, assuming that 70% margin. As your brand gains recognition and you ramp up your marketing efforts, sales could climb to 1000 bags a week. At this stage, you’d rent a commercial space with more equipment and hire staff, reducing your profit margin to around 30%. With annual revenue of $312,000, you’d still make a strong profit of $93,600.
There are a few barriers to entry for a popcorn business. Your biggest challenges will be:
Now that you know what’s involved in starting a popcorn business, 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 popcorn businesses in your area and online to examine their products, price points, and what sells best. You’re looking for a market gap to fill. For instance, maybe the market is missing a gourmet kettle corn business, or a gourmet popcorn shop or cart.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as gluten-free popcorn or savory popcorn.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You’ll just need to come up with a list of popcorn recipes you want to make. In addition to bags of popcorn, you could sell popcorn in decorative tins for higher prices.
Prices for bags of popcorn range from $5 to $12 based on the size of the bag. After the costs of ingredients and packaging, you should aim for a profit margin of about 70%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market is nearly 80% of the US population plus the global community if you want to sell internationally, so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook. You could also try to get local markets to put your popcorn on their shelves. You can find market owners on LinkedIn or call them directly. You can find them on Google or Yelp.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent a popcorn making facility or a shop space. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
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 sets 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 popcorn businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, 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 popcorn business 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 or by mail or 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 option, other than friends and family, for funding a popcorn business. You might also try crowdfunding if you have an innovative concept.
Starting a popcorn business requires obtaining a number of licenses and permits from local, state, and federal governments. For starters, you should check the cottage food laws of your state to see what’s required for a popcorn business. Some states require that you attend a food safety class and pass health inspections.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), 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 popcorn 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 may want to use industry-specific software, such as LS Retail, Vend, or Retail Pro, to manage purchasing, inventory, and invoicing.
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 services like WordPress, Wix, or Squarespace. 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.
They are unlikely to find your website, however, 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. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your popcorn business 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 popcorn 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 popcorn business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in popcorn 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 popcorn. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home kitchen, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a popcorn business 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.
Popcorn is a fabulous treat that’s still growing in popularity, with the industry poised to nearly double in the coming years. You can get in on that booming market by starting your own popcorn business, getting creative with some bold and interesting flavors and spreading delicious joy — all while making great money.
You’re off to a great start, having learned the business launch process, so it’s time to turn on that popper and start building your popcorn empire!
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