How to Start a Cookie Business

Table of contents

Did you know that in 2018, the average weekly cookie sales in grocery stores across the US averaged more than $1,000? Over 95% of Americans eat at least one cookie monthly. Americans love cookies, which makes it a perfect business to start. Do you want to learn how to start your own cookie business? This article will compare the steps you need to take depending on your cookie business's direction. It will also cover the importance of cookie business insurance policies.

Are you interested in learning how to start a cookie business? You must follow steps like registering your business, deciding what to offer customers, and getting the proper permits:

Decide What to Call Yourself

The name of your cookie business is a critical decision. It is difficult to change once you decide what to call your business and it becomes official. You will want to choose a simple name that is easy to spell. With a simple name, it will be easier for customers to search for your business name online. Choose a name that illustrates the benefits of your brand. If you want to focus on delivering cookies quickly, you could choose a name like “Express Cookies.”

Legally Register Your Business

When learning how to start a cookie company, take some time to consider what type of business you want to form. Once you start operating under your business name, your business has to be registered legally in your state. You could choose to be a sole proprietor, which allows you to remain the sole owner and enjoy all the profits. The downside is that you will also take on the business debts and liabilities yourself.

Another option is a limited liability company (LLC). With an LLC, you avoid the taxation rates of a corporate business structure but keep the business liability protection. With a corporation structure, you could issue stocks to raise capital but must worry about double taxation on dividends and profits.

Get an EIN From the IRS

Even when learning how to start a small cookie business, you will still likely need an employer identification number or EIN from the IRS. An EIN is required before you can hire employees and for certain activities like opening a business bank account. This number identifies your cookie business with the IRS. You can apply for an EIN online, by mail, or by fax with the IRS.

Open a Business Bank Account

Are you curious about how to start a cookie shop and other steps you need to take? One essential step to setting up your business for success is to open a business bank account. Your business bank account lets you receive customer payments, accrue interest, process credit card transactions, and more. Having a separate account for your business helps you keep invoices, payments, and income on track for tax season once it rolls around.

Choose What Products to Offer

You will not and should not try to offer every cookie product you can initially think of. When starting a new business, trying to carve out a niche in the marketplace is helpful. To this end, select certain products you feel will sell well with your local customer base. Some product ideas include:

  • Chocolate chip: This cookie is also known as America’s favorite cookie. They form the bread and butter of any successful cookie shop because of their universal acclaim.

  • Macaroons: These are French-inspired convections that are notable for their striking colors. They can be made from coconut or almonds and are often flavored with chocolate, cherries, or jam.

  • Sugar cookies: The humble sugar cookie can be decorated with tons of different flavorings to be truly unique.

  • Shortbread cookies: A shortbread cookie is a delightful treat made from white sugar, butter, and wheat flower. They are notable for their lightness and crumbly texture.

Get the Right Permits

Another critical step to consider when learning how to run a cookie business is what permits you will require. These may include:

  • Health permit: You must pass an inspection from your local health department that allows you to serve food directly to customers.

  • Food handler license: A food handler license will be needed for employees to ensure they are practicing safe food preparation techniques.

  • Seller’s permit: This permit allows you to charge sales tax to customers to conform with the law.

No matter what type of cookie business you choose to create, a website will be a huge help. With a website, you can display your menu to customers digitally. 

Customers can research what options you have for cookies and dietary restrictions ahead of time. Typically, you need a domain name and a web host to create a website. Services like GoDaddy provide a way to get your web domain up and running. 

You will then design a website from a template or hire a web designer who can code valuable features like a shop to order cookies and a way for customers to leave reviews.

Hire the Right Employees

When starting your business, you should plan for the employees you want to hire. You will need someone to help you run your store during the hours when you cannot be present to make cookies. Also, consider hiring a business assistant or bookkeeper to help track your business inventory and expenses.

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A tray of cookies on a display tray.

Are you interested in learning how to start a cookie decorating business? Cookie decoration allows your cookie business to put out custom orders and unique designs to stand out from the competition:

Decide A Location for Your Shop

Do you want to know how to start a sugar cookie business with decoration as a significant feature? An important consideration to make is deciding where to set up shop. Your ideal location will depend on what customers you want to appeal to. You could set up a shop near a local college and try to appeal to college students with sweet midnight cravings for cookies. Another option is a downtown or shopping area with lots of foot traffic. The smell of your convections could bring in many potential customers from off the street.

Utilize Social Media

Social media is a free way to get attention and eyeballs on your business. Create an account for your business on a site like Facebook, Instagram, or Tiktok and make fun posts about your business. You can advertise your products or send promotional messages to your biggest fans.

It seems like with the advent of social media, trends have come and gone quicker than ever. You will need to know the latest trends in your industry to keep up with popular demand. For example, a trend called “newstalgia” has recently become popular. Newstalgia aims to create a vintage-looking cookie that looks photogenic and elegant. People are reinventing classic convections using Oreo cookie crumbs and creating Baked Alaska cookies.

Create Content on Your Website

With all the work you put into decorating your cookies with intricate designs, it would be a shame not to take full advantage of it. Consider producing and posting videos and photo collages of some of your more attractive designs on your website.

Take Cooking Classes

Check to see if your local culinary school offers cookie decorating classes so you can learn the best techniques and get experience with the latest cooking tools. You can also consider seeking out an online class from a place like The Flour Box or Summer’s Sweet Shoppe.

If you want to avoid the overhead costs of paying for building rent, why not learn how to start a cookie business at home? A home cookie business has many advantages, though you might need help in other areas, like finding clients and interacting with professionals in your field:

Find Clients

One of the first things you need to resolve when learning how to start a home based cookie business is how you will get a steady stream of clients. You should focus heavily on spreading the word about your business. Contact friends, family, and other contacts and ask them to refer your new business to people they know. Try to take advantage of the power of word-of-mouth advertising by offering unique products for your customers.

Source Your Ingredients

Another crucial consideration to make when learning how to start a homemade cookie business is how you will source your ingredients. If some ingredients are not available to be sourced locally, you may need to consider importing them from overseas. Once you have your EIN, you can go to supply stores and order products for a wholesale bulk price, saving you money compared to what customers typically pay for.

Try an Email Campaign

Email campaigns are a highly effective form of marketing with a high return on investment. LinkedIn estimates that email marketing has a $40-$1 return on investment. This means you are generating $40 in sales for every $1 spent on email marketing. Email campaigns allow you to target customers directly with customized messages and spread awareness of your products, promotions, and brand. People are more likely to form an emotional connection to your business when you interact with them directly.

If you need more ideas about what products you want to make, try a video-sharing site like Youtube or Tiktok. You can watch videos on making complicated cookie recipes and see what creative convections others are coming up with. Pay attention to how many views each video gets to gauge the popularity of different cookie recipes.

Learn About Cottage Food Laws

Cottage food laws differ by area and regulate the sale of certain kinds of food products from someone’s home. They may also require you to purchase cottage food insurance. These laws may restrict who you can sell your products to but allow you to sell food without a proper food license. Some cottage food laws don’t allow you to sell food to customers in other states. Typically cottage foods are defined as food with a low chance of foodborne illness, even if they aren’t handled properly. Cookies generally fall under this classification.

Do you want to learn how to start an online cookie business? With an online business, you must take special care to learn about the mechanics of operating in a digital space. You will want to consider the advantages of setting up an online marketplace and determine your shipping logistics:

Sell Your Products on an Online Marketplace

When learning how to start selling cookies online, consider setting up an online marketplace on a place like Amazon. As long as you sell shelf-stable products, you generally don’t have to worry about breaking the rules of online marketplaces. Through Amazon, you can set up a customized storefront for your business that Amazon customers can search through. Using Amazon expands the reach of your business to its millions of monthly users.

Invest in SEO

SEO or search engine optimization is getting your website to rank higher on search engines like Bing or Google. To do this, you must produce content on your website containing keywords that you target customer searches for. Because your content is targeted toward your customer, SEO effectively draws in organic traffic that is more likely to convert to being a customer.

Allow Customers to Leave Reviews

Set up your website so customers can interact directly with you. Customers leaving reviews can provide valuable feedback on your business products and services. If customers can read a review directly from your website, they will likely keep clicking and purchasing your product. You also have the opportunity to reach out to unhappy customers who leave negative reviews and win them back.

Figure Out Your Shipping Method

You will want to decide the range you are willing to ship your products to. Will you ship domestically through a service like UPS, or will you offer your cookies to international customers also? It is recommended that when shipping cookies, you use an airtight container and line it with material to stop the cookies from breaking during transit. Depending on what cookies you sell, your cookies might be fragile. If your cookies don’t survive shipping and arrive in many broken pieces, it will leave a negative first impression on your customer.

Research Your Target Customer

Market research is critical to the success of your business when you are starting out. You will want to utilize surveys or focus groups that can give valuable feedback on your customer's needs. With enough information, you can adapt your business to provide benefits that address these needs.

Are you wondering how to start a crumbl cookie franchise? To become an official Crumbl franchise, the company lists several steps that you must follow:

Research Crumbl

Before moving forward, you must research to ensure you meet the requirements for applying for a Crumbl franchise. You must possess a minimum liquidity of $150,000. You need to read their Franchise Disclosure Document (FDD) to see all the expectations you must meet.

Pass the Interview

Before you can move further, you must be interviewed by a Crumbl representative. This interview will determine if you will be a good fit to be a franchise owner.

Discuss Your Operating Plan

You must present an operating plan to Crumbl, which includes proposing a suitable location for your franchise. They will also want to know your plan of attack in your target market. Crumbl already has over 800 bakeries in 50 US states. Despite being only open for five years, they are a rapidly growing cookie company.

Sign the Franchise Agreement

Once your operating plan and location are approved, you must sign a franchising agreement with Crumbl. In addition, you must also settle franchising fees and other costs related to your franchising onboarding. During onboarding, you will receive the training to conform your bakery to Crumbl standards.

Construct and Open Your Location

As the franchise owner, you are responsible for paying for constructing your Crumbl bakery and getting the proper licenses and permits to operate your business. Once you have met all the requirements to open, you can officially have a grand reveal as the newest Crumbl franchise.

Do you think you have what it takes to learn how to start a cookie delivery business? Cookie delivery can be a lucrative business because customers will pay increased rates for the privilege of freshly-baked cookies delivered right to their doorstep:

Decide Your Delivery Method

Your delivery method will depend on your location and business plan. Consider hiring a delivery driver to hand deliver cookies to a specified location. If you are operating in an enclosed location, like near a college campus, you may not need to pay for a delivery vehicle. Your delivery driver can use a transportation method like a bike or scooter.

Set Prices

People often get sticker shock when they see how much it will cost to get food delivered to them. For this reason, you will need to carefully consider the price of your products so that when all the fees and tips are added, your customer feels like they are getting good value. You could offer promotions that give customers free delivery if they order a certain amount of your cookies.

Offer Other Products

While people may be solely craving your delicious cookies, it doesn’t hurt to offer other products to go along with their meals. Consider offering drinks to help your customers wash their cookies down. To stand out from your competition, try to offer something unique. Maybe you could focus your delivery business around coffee and cookies. You may also offer delicious tea made to be consumed alongside your cookies.

Consider Custom Ordering

Getting custom-ordered cookies delivered to your door sounds like a dream. Your customers may be willing to pay for custom designs on their cookies for a last-minute occasion. Someone may need themed cookies for an office or birthday party and would love the convenience of a cookie delivery service.

Get Noticed on Delivery Apps

It is possible to outsource your delivery to third-party apps like Uber Eats or Doordash. Setting up a store is simple with these services. You just need to create an account and fill in the relevant information in your merchant portal. By choosing to partner with one of these services, you can expand the reach of places you can deliver to. These services also help you meet high delivery demand during peak hours.

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Insurance Requirements for Boosting Income

Insurance policies can save your business from an unexpected bankrupting event. Damage to your property or a lawsuit from a customer could cost your business thousands of dollars. You need the policies outlined below to protect and boost your income:

Business Owner’s Policy

A business owner’s policy combines multiple coverages together, typically making it the most comprehensive insurance option. A business owner’s policy has commercial property and general liability coverage rolled into one. NEXT is our top pick with this policy. Their business owner’s policy offers the same coverage as their general liability insurance, so you don’t have to choose. Their policy is affordable and also includes business income interruption coverage. This will help you pay for unexpected expenses from a damaging event that results in the suspension of business operations. 

General Liability Insurance

General liability insurance protects your business against property damage, bodily injury, and personal injury claims from third parties. It helps pay for costs if a customer sues you for falling while in your cookie business. For this policy, we recommend Thimble. With Thimble, you can purchase short-term general liability insurance with a custom policy period. You can set your policy to expire down to the month, day, or hour. They are an excellent choice for first-time buyers. Over 75% of its business comes from first-time insurance purchasers. Thimble has an A+ rating from the Better Business Bureau.

Professional Liability Insurance

Professional liability insurance covers you from lawsuits related to business mistakes. This policy typically covers events like negligence, copyright infringement, libel, and slander. We recommend Hiscox for professional liability insurance. They have a trusted service award from the review site Feefo and offer flexible monthly payment options. AM Best gave Hiscox an A rating.

Commercial Property Insurance

A commercial property insurance policy covers your business equipment, building, and other property damaged by fires, theft, wind, water, vandalism, and more. Choose CoverWallet for your commercial property insurance policy. They have three different coverage levels that let you customize your policy to what you need. You can easily get quotes on your insurance policy without being committed to buying. CoverWallet has an A+ from the Better Business Bureau.

Commercial Auto Insurance

You must get commercial auto insurance if you use vehicles for business purposes. It will cover accident liability and damage to your business vehicles. If you need to cover your vehicles with commercial auto insurance, look no further than Tivly. They offer over 200 insurance partners, with options like gap insurance, uninsured motorist coverage, and more. Tivly has an A rating from the Better Business Bureau.

Workers’ Compensation Insurance

Workers’ compensation is required in most states. It protects your employees when they get ill or injured at work. The policy pays disability benefits if they miss work and necessary medical treatments. The Hartford is an excellent choice for this policy. Tracking claims is easy, and they offer benefits to AARP members. Their worker's comp policy makes it easy for employees to access prescription drugs to treat their injury or illness. The Hartford has an A- with AM Best and an A+ with the Better Business Bureau.

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