Start an edible cookie dough cafe 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 guide to starting your edible cookie dough cafe. 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 an edible cookie dough cafe?
Costs involved in starting a small cafe are modest. For less than $500, you can buy all or most of the supplies you need and start selling out of your home. Business licensing and permits may be required to do this, however.
What are the ongoing expenses for an edible cookie dough cafe?
Ongoing expenses for this business are modest and include costs for maintaining liability insurance, licensing, permitting, and of course supplies. You may find yourself spending between $500 and $2,000 per month for a small operation, up to $10,000 per month for a large operation on these expenses.
Who is the target market?
The target market for this product is wide, but the core market is young families. Young children tend to love cookie dough, but so do young adults.
How does an edible cookie dough cafe make money?
Cafes make money by charging customers for edible cookie dough.
How much can you charge customers?
This is a premium product, so you can charge between $5 and $7 for a 4 oz serving, or between $8 and $20 for a 16 oz serving.
How much profit can an edible cookie dough cafe make?
Edible cookie dough has a high markup. While this industry is still new, some businesses have a profit margin between 5% and 10%. A highly profitable business would have profit margins exceeding 10%.
How can you make your business more profitable?
Make your business more profitable by selling related products like various candies and ice cream, sodas, and milkshakes. You could also sell miniature mixing spoons with chilled cookie dough caked on them, similar to an ice cream cone or a "cookie dough on a stick" product concept.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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 edible cookie dough cafe is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
In most states, it is necessary to obtain a business license. Certain state permits and licenses may be needed to operate a cookie dough business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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
An edible cookie dough business is generally run out of a storefront. 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 an edible cookie dough business.
- 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 a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your edible cookie dough business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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 an edible cookie dough cafe
Promoting your business doesn't have to be expensive. Start small and distribute fliers, go to networking events, and run ads in the local paper or online.
How to keep customers coming back
Retaining customers and turning them into repeat business is simple if you sell a good product and stay in front of them. Consider collecting email addresses from customers. Enter them into a monthly contest for free cookie dough. Then, send out frequent emails reminding them to come back in to try your latest flavors.
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 An Edible Cookie Dough Cafe 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?
This business is perfect for professional bakers or baking enthusiasts, stay-at-home moms who are looking to transition back into the workforce, or anyone who is passionate about cooking or baking and has a basic understanding of how a business is run.
What happens during a typical day at an edible cookie dough cafe?
Just like any bakery, an edible cookie dough cafe has a very specific setup and breakdown process for the day. The business owner and/or his or her employees start the day early by prepping their work areas and cleaning all working surfaces.
They perform a basic accounting of existing supplies and stock as well as any overnight shipments. Some shops chill their dough overnight while others prefer to make their product fresh for the day and "quick chill" before serving customers.
Employees take orders, fulfill customer requests, while business owners keep tabs on the accounting books, order supplies, and monitor employees. At the end of the day, everything needs to be cleaned up and put away. It's a hectic business that never stops, which is why it's suited to a specific type of personality.
What are some skills and experiences that will help you build a successful edible cookie dough cafe?
Being good at this business means having a keen eye and skill for baking. Professional bakers typically make the best cafe owners (at least in theory), but you also need good business sense. This is especially true if you plan on shipping your product across the country.
What is the growth potential for an edible cookie dough cafe?
Growth potential is huge, though many shops remain a small operation. Since this is a niche product, often seen as a specialty item, most business remain one or two-shop operations. Some companies may expand with branch locations throughout a state. Some brands, like Sweet Megan Edible Cookie Dough are shipped all over the U.S., however. Smaller cafes are realizing they can ship nationwide and forego the need for a large chain business.
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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 an edible cookie dough cafe?
Start off by selling product in your local neighborhood, at PTA meetings, and local community events. Family, friends, and business associates or partners may also be a good way to jumpstart sales.
How and when to build a team
You will probably need a small team to start out — at least 3-5 people. However, it is at all possible, you may want to start the business alone from home. A small cafe running out of a storefront should have enough staff to cover all shifts, Monday through Friday, minimum. Weekends tend to be busy for this kind of business, so you'll want weekend shifts covered as well. In fact, weekends should be your priority shifts.