Candy stores are a haven for anyone with a sweet tooth. Packed with all sorts of sweets, these stores are the perfect place for stocking up on snacks, buying gifts, and just enjoying some time out with the family. If you love candy or have a talent for candy making, then a candy store might sound like an ideal business venture. Opening a store of your own can be rewarding, but it’s also challenging since there’s plenty of competition in the industry. If you have an idea for a store that’s unique and that fills an unmet need in your area, then this business venture could be a success.
Candy stores offer a variety of tasty sweets, and stores may specialize in certain types of candies, too. Bulk candy stores are ideal for families with kids or customers stocking up for a big party. Penny candy shops offer wide selections of different types of candy. Some sweet shops specialize in gourmet candies, while others may even make their own candies in-house.
These stores offer customers convenience, and they can attract shoppers who are looking for gift ideas or getting ready for the holidays. Some stores also offer online purchases and ship their products. It’s common for candy stores to expand into other areas, too, like offering small gifts, candy bouquets, other snacks, and ice cream.
The candy industry can be competitive, so before opening a store, do some research into competing candy shops in the area. Visit the stores and see what they offer, but also pay attention to what they don’t offer. There might be an opportunity to offer candy deliveries, candy bouquets, specialty candies, and other product categories that aren’t currently available in the area. Be sure to not only focus on specialty candy stores as big-box stores and online retailers are carrying many of the same items, making it harder for specialty stores to compete.
Starting a candy store requires more than just a passion for sweets. It demands an understanding of the industry, consumer preferences, and more. As an entrepreneur, you need to strike a balance between delivering what customers want while innovatively carving out your unique space in the market. This guide, which offers an in-depth overview of the candy store business and how to start one, is an excellent stepping stone on your path to owning a successful candy store.
The most up-to-date information we could find on candy sales same from the National Confectioners Association, which said Americans spent $36.7 billion on candy in 2020. Most of those products were chocolate candy, and those generated sales of $21.9 billion. The remaining revenues came from $11.5 billion in non-chocolate treats, then gum and mints came in third with $3.9 billion in sales.
Statista reports that Hershey and Mars are the leading confectionery company worldwide., with the United States holding a 45% market share.
Many trends are driving the candy sales industry. According to Market Research, while candy sales are dominated by chocolate sweet, non-chocolate candy companies are shifting their focus to drive sales. These companies are increasingly designing products that are fun and more flavorful to catch consumers’ interests and encourage them to buy these sweets.
Candy may not be the healthiest food, but candy makers are working to appeal to the growing demand for health and wellness products. Manufacturers have started to eliminate GMOs, high fructose corn syrup, and artificial additives. Instead, manufacturers are replacing these products with natural and organic ingredients and adding more nutritious foods like fruits, nuts, and seeds. We’ll likely also see an increase in dark chocolate products since dark chocolate is recognized for its health benefits.
Consumers are increasingly aware of the importance of using their spending power to support the environment, and the candy industry will also feel those effects. Manufacturers and retailers need to adopt a focus on sustainability to continue to appeal to eco-conscious consumers. Many companies have already started to make these changes. Mars has committed to investing $1 billion to support eco-friendly practices like solar energy and renewable food sourcing. Hershey has developed a Cocoa for Good program that helps to develop sustainable cocoa production practices. Mondelez also has a cocoa sustainability program called Cocoa Life. Candy retailers can also embrace this trend by using recyclable bags, implementing energy-saving practices within the store, and highlighting the sustainable actions of the manufacturers whose products the store sells.
The target market for a candy store is quite diverse and broad, primarily including:
- Children: Kids are the most apparent target market for candy stores. Sweets, chocolates, and candies are favorites among children. A candy store can also cater to their interests by offering candies themed around popular cartoon characters, movies, or games.
- Teenagers and young adults: This age group often frequents candy stores for their novelty items, retro candies, and international sweets. They are also more likely to be influenced by trends and unique offerings, such as artisanal or locally sourced candies.
- Adults: Many adults have a sweet tooth and enjoy indulging in candy, particularly gourmet, premium, specialty, or nostalgic candy. Adults also visit candy stores to buy gifts, party favors, or confections for holidays and special occasions like Valentine’s Day, Easter, Halloween, and Christmas.
- Event organizers: Candy stores can also target event organizers who need bulk candy for parties, weddings, corporate events, or other celebrations. Event organizers may also be interested in candy buffet services.
- Local businesses: Local businesses such as hotels, restaurants, and other retail stores may also be interested in buying candies either to resell or to offer complimentary treats to their customers.
- Health-conscious consumers: As the trend for healthier eating grows, so does the market for sugar-free, vegan, organic, or natural candies. This group would be interested in stores that offer a range of health-conscious products.
In addition to these, depending on the location and other local factors, a candy store can also attract tourists or fans of a particular brand or type of candy. It’s important for a candy store owner to research and understand their local market to effectively target the right customer segments.
Checklist To Start A Candy Store
Starting a candy store can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1: Research the Market
Understanding market demand is an important first step in starting any business, including a candy store. Without a clear understanding of the market and customer demand, entrepreneurs run the risk of investing time and resources into a business that might not succeed. Researching market demand helps entrepreneurs identify potential customers, understand competition, and develop strategies to effectively serve and attract customers.
So, how can someone ascertain if there’s enough demand to start a candy store? Here are some potential ideas steps:
Online market research: The internet is a treasure trove of information. Use it to study your competition, understand the different kinds of candy stores that exist, and the offerings they have. Tools like Google Trends or Google Keyword Planner can provide data on the popularity of certain candy-related keywords. This information can give an indication of the level of interest and demand for different types of candies.
Local area survey: Conducting surveys in the area you plan to open your store is another cost-effective method. This allows you to gather direct feedback from potential customers. You can use online survey tools like SurveyMonkey or Google Forms to create surveys and distribute them to local community groups. Alternatively, face-to-face surveys also provide a rich source of data, and these interactions can give you insights into people’s preferences, spending habits, and more.
Social media analysis: Social media platforms like Facebook, Instagram, Twitter, and Pinterest can provide valuable insights into customer preferences and behavior. Look for local community groups or pages, and observe the engagement on posts related to candies or similar sweet treats. Platforms like Instagram can be particularly useful due to their emphasis on visually engaging content. Pay attention to the popularity of posts involving candy and note the types of comments they elicit.
Observe existing businesses: Another effective way to gauge market demand is to study the performance of existing candy stores in and around your target area. Are these stores bustling with customers? What types of products do they stock? Remember to also check out their online presence and customer reviews to understand their strengths and weaknesses.
Attend trade shows and festivals: Candy trade shows, food festivals, and farmer’s markets provide excellent opportunities to assess consumer interest and observe industry trends. You can interact directly with both vendors and customers, getting an idea of what products are popular and how they are priced.
Local Chamber of Commerce or Business Development Centers: These entities often have useful data about local demographics and business conditions. They can provide statistics on age groups, income levels, and other relevant factors that could influence demand for a candy store.
Test sales: Once you have a broad understanding of the market, consider doing test sales of your products at local fairs, markets, or online. This can be a cost-effective way to validate your product offering and gauge customer response before investing in a full-fledged store.
By conducting comprehensive market research, aspiring candy store owners can build a robust business plan that caters to their audience’s needs and preferences, thus significantly increasing the chances of business success. While it may take time and effort, understanding your market is a crucial investment that lays the groundwork for your entrepreneurial journey in the confectionery world.
Step 2: Write a Business Plan
After determining that people may be interested in your sweet shop concept, a business plan serves as the next step for your candy store. It’s an essential tool that crystallizes your vision, outlines your strategy, and gives direction to your venture. Consider it a roadmap to your destination – the sweet success of your candy store.
Writing a business plan breathes life into your ideas, turning them from mere thoughts into concrete plans. It provides a structured approach to thinking about your business, forcing you to consider many aspects – from the products you’ll offer, to how you’ll market them, to the finances that will underpin it all. Not to mention, it’s an indispensable document when seeking funding as lenders or investors will want to see a solid, well-thought-out business plan before they commit to backing your venture.
Here are some sections that are particularly important for a candy store business plan:
Market analysis: This section is a deep dive into the specifics of your target market and competition. For a candy store, it’s particularly important to demonstrate a strong understanding of customer preferences, seasonal trends, and the competitive landscape. Highlight the findings from your market research and explain how your store will meet customer needs and stand out from the competition.
Marketing and sales strategy: Here, you outline how you’ll attract and retain customers. Will you have a loyalty program? Do you plan on using social media, local advertising, or partnerships with schools and local organizations? This section needs to be well thought out because it shows how you plan to generate revenue.
Financial projections and funding request: In this section, you’ll need to provide detailed financial projections for at least the next three years, including income statements, cash flow statements, and balance sheets. For a candy store, factoring in seasonality is key. There are times of the year when sales may skyrocket (like Halloween, Christmas, and Easter) and times when they may be slower. These fluctuations need to be considered when estimating revenue, expenses, and cash flow.
If you’re seeking funding, clearly state how much you need and how you plan to use it. For example, will the funds be used for starting inventory, store setup, marketing, or working capital during off-peak seasons?
Related: How to write a business plan
Step 3: Choose a Business Name
Navigating the world of getting the funding to start a business is a key step. It’s important to understand the funding options that are available when seeking funding for a candy store.
Personal savings: Personal savings are often the first source of funding for many entrepreneurs. Using your savings has the significant advantage of freedom from debt; you don’t have to worry about monthly loan repayments eating into your profit margins, especially in the early stages of your business. However, it’s important to remember that businesses can face unexpected costs and challenges, so maintaining a financial cushion is a good move. You may also find that your savings alone may not be enough to cover all the costs associated with starting a candy store.
Bank loans: Traditional bank loans are a common funding source for small businesses. Banks typically require borrowers to invest around 15%-25% of their personal funds into the business, have a good credit score (above 650), and provide sufficient collateral. In some cases, a bank may require a loan guarantee from the SBA (Small Business Administration) loan guarantee, which helps protect the lender should the borrower default on the loan.
Microloans: These are smaller loans typically offered by local non-profit organizations and alternative lenders, and they can be a great option for new businesses or those with smaller financing needs.
Angel investors: Angel investors can also be a viable funding option, particularly for candy stores with a unique concept or niche. These are typically high-net-worth individuals who provide funding in exchange for equity or convertible debt in the company. Finding an angel investor who has an interest in your type of business or industry can provide both funding and valuable industry expertise. However, keep in mind that angel investment may be challenging to secure, as most angel investors are looking for businesses with high-growth potential and scalability.
Step 4: Select your Location
With funding secure, finding and preparing the perfect location is often the next step in the journey of starting a candy store. The right location can set the stage for your business success, attracting customers and creating an inviting atmosphere that complements your store’s candy offerings. It’s important to approach this step with careful consideration and a well-thought-out plan.
The first step is finding the right location. High foot traffic areas, such as shopping centers, near schools, or in busy downtown streets, are ideal for a candy store. When considering a potential location, think about visibility, accessibility, and the proximity of your competition. It’s also beneficial to observe the area at different times of the day and week to understand the patterns of potential customers.
Once you’ve identified a potential location, it’s time to negotiate and sign a lease. It’s highly recommended that zoning is confirmed and funding is secured before signing any contracts as the process of acquiring funds may take longer than expected or might be denied altogether.
Next, you’ll need to plan the layout of your store. Aim for a design that is inviting, fun, and makes your product the star of the show. The right layout can lead to increased sales, as customers are enticed to explore different areas of the store and discover new candies.
Before you can open your doors, you’ll need to outfit your store. This includes installing shelving, display cases, and cash registers.
From the beginning, you will want to ensure your store complies with local health and safety regulations. This might involve arranging for health inspections, obtaining necessary permits, or making modifications to the store’s structure. Consult with your local health department before making any decisions to ensure you meet all necessary guidelines.
Related: Choosing a business location
Step 5: Register the Business
With funding and the location out of the way, registering the business is our next step. This process involves several key steps and decisions, including forming a business structure, registering your business name, and obtaining necessary licenses and permits.
Forming a business structure: The first step is choosing a legal structure for your business. This will affect your tax obligations, the level of personal liability you’ll have for business debts, and the amount of paperwork you’ll need to do. The most common structures include the sole proprietorship, partnership, Limited Liability Company (LLC), and corporation.
A sole proprietorship is the simplest form of business structure. It’s easy to set up, has lower startup costs, and gives you full control over your business. However, it does not separate your business and personal assets, which means you’re personally liable for the business’s debts and liabilities.
A partnership is similar to a sole proprietorship, but it has two or more people.
An LLC offers more protection as it legally separates your business and personal assets. If your business goes into debt or faces a lawsuit, your personal assets are typically safe. However, forming an LLC is more complex and expensive than a sole proprietorship.
A corporation is a legal entity that’s separate from its owners. Like the LLC, it offers protection against personal liability, however, it’s the most expensive to set up and requires more extensive record-keeping and reporting.
The choice of business structure can depend on various factors, including your business goals, financial situation, and risk tolerance. Most small businesses, including candy stores, tend to start as either sole proprietorships or LLCs due to their simplicity and flexibility.
Related: Comparison of business structures
Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Obtain business licenses and permits: Depending on your location and the specifics of your candy store, you may need various licenses and permits to legally operate. This can include a general business license, health department permits, sales tax permit, and Employer Identification Number (EIN). You’ll need to check with your state, county, and city governments to determine what licenses and permits you need for your candy store.
Related: What licenses do candy stores need?
Step 6: Choose Suppliers
With the store coming along, finding suppliers to purchase candy from and have items to sell is the next step to cover. The reason why we recommend waiting to search for suppliers is that most suppliers will require your business registration details and may need to know you have a physical location before they’ll discuss pricing or set up an account. A good supplier can not only provide you with quality products at competitive prices, but can also offer valuable industry insights and help you keep up with trends.
Here’s some things to think about when working with candy suppliers.
Determine your needs: Before starting your search for suppliers, identify the types of candy and related products you plan to sell in your store. Do you plan to focus on gummy candies, chocolates, retro candies, international candies, or a mix of all? Also consider the quantity you’ll need, keeping in mind your storage capabilities.
Start your search: You can start by conducting online searches for wholesalers or distributors specializing in candy. Visit industry trade shows or exhibitions to network with potential suppliers. Trade publications or industry-specific online platforms are also good resources. If you’re part of a local business network, other business owners might have recommendations.
Vet potential suppliers: Once you have a list of potential suppliers, you’ll need to vet them. Consider factors like their product range, prices, minimum order requirements, delivery schedules, and reputation within the industry. Reading reviews and testimonials can give you an idea of their reliability and service quality.
With a shortlist of potential suppliers, it’s time to reach out. In your communication, provide details about your business such as its location, size, and the types of products you’re interested in.
Negotiate terms: Once you’ve chosen your suppliers, negotiate the terms of the contract, including pricing, payment terms, delivery schedules, and return policies. Don’t be afraid to negotiate for better terms; remember, you’re building a partnership that should benefit both parties.
Step 7: Set Up Accounting & Inventory Management
Setting up accounting and inventory management systems are integral to running a successful candy store.
Starting with accounting, it’s crucial to implement a robust accounting system from the get-go. This will help you keep track of your income, expenses, and overall financial health. Start by choosing reliable accounting software that fits your needs and budget. Some popular options include Wave Accounting (FREE) or Quickbooks. These platforms automate many accounting tasks, saving you time and reducing the potential for errors.
Your accounting system should enable you to track sales, cost of goods sold (COGS), operating expenses, and taxes. Regular financial reporting, which your software should be capable of generating, is essential. These reports (including income statements, balance sheets, and cash flow statements) provide you with insights into your business’s financial status and inform your decision-making.
You should also consider hiring a professional accountant or bookkeeper, especially for tasks like tax preparation and financial analysis. This allows you to focus more on your business operations while ensuring your finances are in good hands.
In addition to accounting, inventory management is another essential aspect of running a candy store. A good inventory management system helps you track your stock levels, understand which items sell well (and which don’t), prevent stockouts or overstocks, and ultimately increase profitability.
Look for inventory management software that can integrate with your point-of-sale (POS) system and accounting software for seamless data flow. The system should enable you to track product details (like supplier info, cost, and price), monitor stock levels in real time, and provide alerts when it’s time to reorder. Some popular candy store focused options include Bepoz, Poster, and Brilliant POS.
Another important aspect of inventory management is implementing a process for regular stock counts. This could be done weekly, monthly, or at another interval that works for you, but consistency is key. Regular stock counts help you identify discrepancies, combat theft or loss, and maintain accurate inventory records.
Both accounting and inventory management can be complex, but with the right systems in place and perhaps some professional help, you can ensure these critical business tasks are well-managed, setting your candy store up for success.
Step 8: Hire and Train Staff
A candy store, like any other retail business, relies heavily on its employees to provide exceptional customer service, manage inventory, and keep the store running smoothly. Hiring employees for your candy store can help you manage the workload, provide better service to your customers, and ensure that the store is well-managed.
Common roles in a candy store include store manager, sales associates, and possibly an inventory manager if you have a larger operation.
From a legal perspective, there are several things to consider before you start hiring. Firstly, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you haven’t done so already. This number is used to identify your business entity and is required for reporting taxes.
Next you will need to set up tax withholding for your employees. This means you’ll need to withhold part of each employee’s income for taxes. The employee fills out a W-4 form, and you use this information to determine how much to withhold.
Third, you will need to verify that your employees are eligible to work in the United States. You can do this by having each new hire complete an I-9 form within three days of their start date.
You are also required to report each new hire to your state’s new hire reporting agency. This process varies by state, so you’ll need to check with your state’s agency to learn how to do this.
In summary, hiring employees for your candy store involves identifying the roles you need, finding suitable candidates, and making sure you comply with all legal requirements, including tax withholding, verifying work eligibility, reporting new hires, and adhering to health regulations.
Step 9: Get the Marketing Plan in Place
Marketing is an essential aspect of any successful business, and a candy store is no exception. It’s the primary way you make potential customers aware of your store, its location, and the sweet treats you offer.
Let’s dive into some of the most popular ways to market a candy store, encompassing both online and traditional methods.
Leverage social media: Social media platforms like Instagram, Facebook, and TikTok can be highly effective marketing tools for a candy store. These platforms are visually oriented, allowing you to showcase the colorful, tempting array of candies you offer. Regular posts of new arrivals, special promotions, or behind-the-scenes glimpses can engage your audience and lure them into your store.
Set up your Google business profile: Claiming your Google Business Profile is a smart move for any business, and it’s free. This allows your store to show up on Google Maps and local search results, making it easier for customers to find you, see your hours of operation, read reviews, and even take a virtual tour if you’ve added photos of your store. Besides Google, ensure you are listed in other relevant business directories.
Email marketing: Building an email list and sending out newsletters is a cost-effective way to keep in touch with your customers. Share updates about new candies in stock, upcoming promotions, and special events. Just remember to comply with all regulations related to email marketing.
SEO and content marketing: Investing in search engine optimization (SEO) and content marketing can increase your online visibility. This could include creating a blog on your website where you share fun candy recipes, the history of different candies, or candy-related trivia.
Collaborations and partnerships: Consider partnering with local businesses, schools, or organizations for special events or cross-promotions. Collaborative marketing efforts can expose your business to a wider audience.
Join your local Chamber of Commerce: Your local Chamber of Commerce is an excellent resource for networking and gaining exposure in your community. They often host events, sponsor local initiatives, and offer marketing opportunities for member businesses.
Print advertising: While digital marketing is popular, don’t overlook the power of traditional print media. Local newspapers, magazines, and flyers distributed in strategic locations can still attract a lot of attention.
Sponsor local events or teams: Sponsoring local events or sports teams is a great way to get your candy store’s name out into the community. It shows you’re invested in your community, and it’s a form of advertising that reaches a wide audience.
Successful marketing is all about reaching your potential customers where they are, capturing their interest, and giving them compelling reasons to visit your candy store. By combining online and traditional marketing methods, you can maximize your store’s visibility and attract a steady stream of customers.
Step 10: Prepare to Open!
As we draw near to the exciting moment of opening your candy store, there are a few remaining steps that you’ll need to address. The journey of each entrepreneur is unique, and you may find that some of these steps are more relevant to your situation than others.
First, securing business insurance is essential. Insurance protects your business from unforeseen circumstances and is a prerequisite for many commercial leases. Be sure to shop around for the best rates and coverage for your business needs.
Second, establish your bookkeeping system. Whether you decide to manage your books yourself using software like Wave Accounting (FREE) or Quickbooks or hire a bookkeeper, a clear system for tracking your income and expenses is necessary to understand your business’s financial health and to comply with tax requirements.
Opening a business bank account is another crucial step, which keeps your personal and business finances separate. This makes your financial management easier and more transparent, and it also helps to present a professional image to your customers and suppliers.
Setting the right pricing for your products is another key step. Research the market, understand your costs, and consider your target audience’s willingness to pay to set prices that are competitive yet profitable.
In the modern business world, accepting credit cards is a standard practice that can increase your potential customer base and make transactions smoother. Look into credit card processing from popular providers like Square or Stripe.
Last, start planning for your grand opening. This is an opportunity to attract customers and make a strong first impression. Consider strategies like offering promotional deals or hosting an event to celebrate the opening.
This material is property of StartingYourBusiness.com
Common Questions When Starting A Candy Store
How much does it cost to start a candy store?
The cost of starting a candy store can vary widely, but you should expect to invest anywhere from $50,000 to $200,000 to get up and running. The cost can fluctuate based on a range of factors including the location and size of your store, the extent of your inventory, and the quality of your equipment and fixtures.
Here are common costs to consider when opening a candy store.
Lease and store setup: The lease will likely be one of your most significant costs. Depending on your location, this could range from a few thousand dollars a month to much higher. To set up your store, including interior design, fixtures, signage, and candy display units, you could be looking at costs in the range of $20,000 to $50,000.
Initial inventory: Your initial inventory cost will depend on the variety of candies you plan to offer. A smaller selection may require an initial outlay of around $5,000, whereas a larger variety could cost up to $20,000 or more.
Equipment: You’ll need equipment like cash registers, security systems, and possibly cooling units for certain types of candy. Expect to spend between $10,000 and $25,000 for this.
Licensing and permits: Costs for business licenses and permits can vary greatly depending on your location, but typically range from $100 to $500.
Insurance: Initial insurance costs, including liability insurance and property insurance, may cost around $1,000 to $2,000.
Marketing: Marketing costs for your grand opening and initial promotional activities could range from $2,000 to $10,000, depending on your marketing strategy and local advertising rates.
Adding these costs up, the lower end of the spectrum could see you starting a candy store for around $50,000, while a larger or more high-end establishment could push costs up to $200,000 or more.
These are just the initial startup costs. Once your business is up and running, you will have ongoing operating costs, including rent, utilities, employee salaries, and restocking your inventory. It’s highly recommended to have three to six months’ worth of operating expenses on hand as a buffer to ensure the smooth running of your business, especially in its early stages. Planning for these costs now will help you create a more realistic budget and increase your chances of running a successful candy store.
How profitable is a candy store?
The profit potential for a candy store can vary widely depending on numerous factors such as the store’s size, location, overhead costs, and the types of candy sold.
To gauge the potential profitability of a candy store, let’s use some industry data and make a few reasonable assumptions. According to the United States Census Bureau, the population of the United States is 335,131,182. Furthermore, in 2020 (the most up-to-date info we could find) Americans spent $36.7 billion on candy.
With this information, we can roughly calculate how much each person spends on candy on average. If we divide the total amount spent on candy ($36.7 billion) by the total population (335,131,182), we find that each person spends approximately $109.50 on candy each year.
If we target a local market with 250,000 residents, and we estimate that 10% would purchase candy, we have a total potential market of 25,000. Next, let’s consider the percentage of candy purchases made locally. For simplicity, let’s assume that our market will make 20% of their candy purchases at a local candy store. This means that the average person spends approximately $21.90 at local candy stores annually ($109.50 * 20%).
Therefore, $21.90 spent per resident times 25,000 residents gives us a potential annual revenue of $547,500.
Now, we’ll factor in expenses. These costs can vary significantly depending on several factors such as the cost of goods sold (COGS), location, rent, wages, utilities, insurance, and other miscellaneous costs. However, let’s use some industry averages for our calculation:
COGS: This generally includes the cost of the candy and packaging, and it can make up about 45% of total revenue. For our candy store, this would amount to $246,375 ($547,500 * 45%).
Rent: This expense can depend heavily on the location of your store, but it often makes up around 8% of sales. In our case, this would be $43,800 ($547,500 * 8%).
Wages: The cost of staff can vary depending on the size of your store and local wage rates, but let’s assume it’s around 15% of your sales, or $54,750 ($547,500 * 15%).
Utilities, insurance, and miscellaneous costs: These additional costs can be around 10% of your sales, or $54,750 ($547,500 * 10%).
If you add all these costs together, the total expenses come out to $399,675. Subtracting this from the total revenue of $547,500 gives us an estimated annual profit of $147,825.
Remember that this is a rough estimate, and actual figures can vary significantly depending on many factors. Also, this doesn’t account for any business loan repayments or taxes, which would also need to be deducted from profits. As with any business, profitability depends on effectively managing expenses and maximizing sales. It’s also worth noting that the store’s profit might be lower in the initial years and could potentially increase as the business becomes more established.
To improve sales and profits, many candy stores offer both candy and ice cream. This popular pairing can help expand your customer base and profits, but be sure to perform a cost analysis to make sure that expanding into ice cream is worth the cost. Ice cream freezers, supplies, and inventory will drive up your operating costs, but it can also be a wise investment if carefully implemented.
What skills are needed to run a candy store?
A candy store owner doesn’t need a business degree, but certain skills and experiences can increase the chances of that business becoming a success.
Knowledge of candy trends: A store owner will need knowledge of the types of candies that are most popular and that sell best. The foresight to predict upcoming trends, especially when it comes to holidays, can also ensure that a store is stocked with the candies that consumers will be looking for.
Design skills: An eye for aesthetics and design will help a store owner create attractive and eye-catching displays.
Customer service skills: Great customer service skills and a strong rapport with both kids and adults can help a store owner create positive customer experiences that encourage customers to return.
Candy-making talents: Some stores make the candy that they sell. If a store owner adopts this model, then previous candy-making experience is a must.
Creativity: From making new and exciting candies to coming up with the perfect arrangements, creativity is helpful in this industry.
What is the NAICS code for a candy store?
The NAICS code for a candy store is 445292.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?