Start a cheese shop by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your cheese shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cheese shop?
Your storefront location will be top priority. Many cheese shop owners choose to rent space for the first year or so to help get a feel for the business and its needs. Once you’ve put down a deposit and first month’s rent, it’s time to start outfitting your shop. A few items you’ll need are:
- Refrigeration systems - Selecting the right refrigerator for your space is critical to the quality of your cheeses. Average cost of a new unit is $5,000.
- Refrigeration engineer - Chilling a space draws all the moisture out of the air, so be sure to invest in a system that isn’t too aggressive. While hiring an engineer will cut into your start-up costs, they’ll analyze the details of the space to ensure proper refrigeration.
- Proper lighting - The last thing you want to do is invest in proper refrigeration, only to have it sabotaged by your lighting. Invest in high quality LEDs for a more natural lighting that doesn’t give out too much heat.
- Shelves and display cases for unrefrigerated cheese and non-cheese inventory.
- Point of Sale software (POS) - The right software will not only assist in ringing up your sales, it will track inventory and notify you when running low on products.
What are the ongoing expenses for a cheese shop?
In any business, it’s important to pay close attention to the details. The three components that will keep a steady flow of customers are: quality of inventory, store location, and employees. These are also your top ongoing expenses. Good businessmen are always looking for ways to cut costs. But they also understand which areas require top quality.
Who is the target market?
Food enthusiasts who are passionate about artisan cheeses. Cheese isn’t just something they eat, it is, in a sense, a way of life. They enjoy conversations about the various types of cheeses and which regions produce the best cheese. They savor cheese platters and have friends who share the same passion. These are the individuals that will not only become regulars, they’ll become friends. And they will tell all their friends.
How does a cheese shop make money?
Cheese shops generate revenue through the individual and bulk sales of their inventory of cheese and accompanying products.
How much can you charge customers?
Prices vary from cheese to cheese and producer to producer. Cheese shop owners report a profit margin of 35%, although some gourmet food margins can go as high as 100%.
How much profit can a cheese shop make?
The average annual sales for a shop carrying 125-150 cheeses is between $750,000 and $1.6 million. Subtract annual expenses from total sales and most have realized a significant profit.
How can you make your business more profitable?
There are several strategies you can implement to ensure a more profitable business:
- Cross-merchandising - Offer a variety of items to complement your cheese stock. This could include anything from crackers and honey, to artisan bread, condiments, and nuts. Some cheese shops have even found success carrying complementing kitchenware and books on cheese.
- Sell part of your inventory in bulk to local restaurants - Restaurants that offer cheese plates or prefer high quality ingredients in their dishes can be a great source of income. Build relationships with just a few restaurants and you’ve added some stability to your company’s revenue.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your cheese shop is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a cheese shop. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Food establishments are randomly inspected by the local health department on a regular basis. These inspections will check for compliance with local health laws, typically related to prevention of food contamination. Tips for faring well on a health inspection can be found here.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources
Certificate of Occupancy
A cheese shop is generally run out of a small retail location. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a cheese shop.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build your cheese shop:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your cheese shop will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a cheese shop
For many, wine and cheese go hand in hand. Selling wine, however, often requires additional licensing, so many cheese shop owners leave the wine to the wine experts. If this is the route you choose, consider developing relationships with your local wine shops. By partnering with them to offer discounts to customers who shop at both, you ensure a steady flow of regular customers.
This is a great start, but it won’t be enough to turn a real profit. Many cheese shop owners have found success through old fashioned marketing methods such as newspaper ads, community paper ads, and a door-to-door leaflet drop at homes in the surrounding neighborhoods. One shop owner generated a 20% response from his door-to-door strategy, which included a handwritten note on each leaflet.
Social media is the most effective (and affordable) marketing method for the modern small businessman. This is a wonderful platform for sharing the shop’s deals, promotions, and discounts with your current followers. Fans will share your posts, helping you reach a broader audience.
Contact local food bloggers and invite them in for a taste of your products. Ask to appear as a guest blogger, which would assist in getting your name out there and establishing yourself as a leader in your industry.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Location will be a huge part of building a strong customer base. Make sure your storefront is visually appealing and reflects the persona you’re trying to convey.
To create a loyal following, offer each customer a personalized experience, where you pass on your product knowledge. Offer a variety of different products and maintain high quality control at all times, setting you apart from the competition.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Cheese Shop In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
The cheese business is right for foodies who are particularly passionate about cheese and everything that goes with it. The food industry requires hard work and dedication, so you must also be open-minded, willing to take risks, and continuously evolving and growing your business.
What happens during a typical day at a cheese shop?
A cheese market entrepreneur’s days are centered around cheese. Relationships with cheese producers must be built and nurtured. Inventory is restocked on a regular basis to assure fresh, quality product.
Customers will come to you for advice, so it’s important that you and your staff are continuously educated on the latest trends, packaging and storage methods, and pairing options. Depending upon the cheese, some cheese wheels will be cut-to-order, while others are pre-cut and packaged for customer convenience.
What are some skills and experiences that will help you build a successful cheese shop?
If you’re considering this career choice, you likely know a good bit about cheese already. The cheese trade is, however, much more intricate than most of us realize. If you haven’t already, you’ll want to spend some time engulfed in the industry, learning the ins and outs of the trade. You’ll gain invaluable knowledge regarding the regions, styles, and pairings, and offer a deeper understanding of the creation and distributing trades. This experience will also offer you the opportunity to network and connect with cheesemakers and distributors in your area. If you’re unsure where to begin, the American Cheese Society offers a wealth of information on everything from cheese educators to conferences and suppliers.
Once you’ve gained this knowledge and experience, your passion for everything cheese will influence you to work hard, be flexible, and continuously strive to grow and ameliorate your business.
What is the growth potential for a cheese shop?
With more and more consumers realizing their devotion to cheese, the industry has realized a spike in growth over the last decade. With an expected increase in value to over $100 billion by 2019, it’s showing no signs of slowing down.
Despite its continued growth, however, many shop owners choose to maintain small, Mom and Pop stores. This keeps overhead costs down and ensures the intimate setting that food lovers associate with food and wine.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a cheese shop?
- Location is top priority. Choose a community that is most likely to want your product. Try to situate yourself close to complementing businesses, such as wine shops.
- Stock shelves with items that can sell within 2-4 weeks.
- Store cheeses at 45-55 degrees Fahrenheit and in butcher or waxed paper. Store away from fans, direct sunlight, and vents.
- Avoid pre-cutting whenever possible.
- For items you must pre-cut, take care to not slice too thin or small. This helps keep proper moisture inside.
- Encourage customers to try the cheeses. Always taste the cheese first before offering it to a customer.
- Offer competitive prices, but don’t sell yourself short. Cheese lovers are willing to pay extra for quality product and are suspicious of rock bottom prices.
How and when to build a team
The number of employees you employ will depend upon the hours you keep. You’ll want at least two staff members present at all times to ensure the shelves are stocked and the customers are given the attention they deserve. It’s critical that you have a knowledgeable staff who is passionate about cheese. Choose staff members who are a little older and more experienced - individuals your clients can relate to.