Start a homemade popcorn business by following these 10 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 homemade popcorn business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 homemade popcorn business?
This opportunity requires a relatively small upfront investment. You'll have to purchase the initial supply of ingredients and packaging materials. A reliable commercial or industrial popper will likely be your business’s biggest expense. It will probably cost at least $1,000. A bigger kettle size boosts the number of quarts you can produce. For instance, you could pop around 150 quarts per hour with an eight-ounce unit. It's occasionally possible to find used machines, but you should inspect used machines thoroughly and exercise caution. You'll need implements and containers as well.
What are the ongoing expenses for a homemade popcorn business?
Sealable plastic bags cost less than $75 per 1,000 units. You'll need to buy popping corn, salt, cooking oil, spices, and possibly herbs. Expenses vary drastically depending on the sources and quantities.
Product liability insurance premiums differ based upon your sales revenue and risk level. Unfortunately, popcorn falls into a high-risk category. Coverage frequently costs at least $1,600 per year.
High-wattage machines pop kernels swiftly but also draw more electrical power. A mid-sized unit may cost about $0.17 per hour to run. Most machines' hourly energy consumption ranges from $0.09 to $1.07. Propane-powered poppers are available as well.
Who is the target market?
These products appeal to a wide range of customers, but buyers tend to be relatively wealthy people or individuals with specific dietary needs. They might see ready-to-eat popcorn as a healthier alternative to microwavable products.
You may also seek to attract retailers who buy snacks in bulk. Some supermarkets, health food shops, and general stores carry homemade popcorn. Aim to supply your products to high-traffic businesses that can reliably sell them before expiration dates arrive.
How does a homemade popcorn business make money?
You will sell bags of popcorn at prices that exceed the cost of your ingredients, materials, and overhead. Manufacturers usually measure this snack by weight rather than volume. Income tends to rise during the fall when Americans eat the most popcorn at home. Some individuals also buy high-end products to give as holiday gifts.
How much can you charge customers?
Numerous brands sell mid-sized bags of gourmet popcorn for $5. Bigger packages often cost $7 to $12. On the other hand, a small company in Maine charges around $2 for two-ounce bags of its GMO-free products. Keep in mind that these are retail prices (more than a store will pay you).
How much profit can a homemade popcorn business make?
The ability to run this business in your home greatly increases potential profits. It costs about $1.55 to produce the popcorn and bag used to sell $5 worth of kettle corn, according to Food Truck Empire. Gourmet Popcorn Finder claims entrepreneurs spend as little as $0.50 to make five cups of high-end popcorn that might sell for $5. Small, home-based businesses can potentially generate well over $50,000 in revenue.
How can you make your business more profitable?
Try using a black and white label on a clear plastic bag. Customers will pay more attention to the popcorn than the label, and you'll save money by forgoing colored ink. More tips:
- Use promotions and pricing that boost direct-to-consumer sales.
- Pair popcorn with complementary products to create a gift basket.
- Offer an autopay subscription with automatic monthly deliveries.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your homemade popcorn business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a homemade popcorn business
Post on social media regularly, and use humor when possible. Highlight National Popcorn Day and other reasons to eat this snack, such as selling your product at a popular movie night or sporting event. Suggest innovative ways to enjoy popcorn like dipping it in guacamole.
You may have difficulty attracting visitors to your website unless they see the URL on your packaging. People might not trust a little-known website. To avoid these problems, consider selling products on a major online platform like eBay, Etsy, Sears Marketplace, or Handshake.com.
How to keep customers coming back
Don't produce more popcorn than you can quickly sell. This food benefits from rapid distribution, an airtight seal, and little exposure to sunlight. Be sure to advertise the superior freshness of your snacks when you sell them locally.
Major brands may have flashy packaging and TV ads, but you can still use a great story to gain a competitive edge. People like to buy local goods from ethical companies. Write about how and why you started this business. Highlight a special aspect of the company, such as your donations of gourmet popcorn to a nearby food bank.
To retain customers, include a coupon or promo code with your products. Consider using discounts to incentivize the purchase of different flavors and larger bags. If you sell directly to consumers, you could create a program that rewards them with free popcorn after they buy a certain number of ounces.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Homemade Popcorn Business 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?
It may appeal to someone who genuinely enjoys unique gourmet snacks and thinks creatively. You'll have a better chance at succeeding if you can develop distinctive yet alluring flavors, package designs, and marketing campaigns. This business also attracts entrepreneurs who seek a flexible schedule or want to earn extra cash while retaining their day jobs.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a homemade popcorn business?
You may sell items to customers through a website or at local events, such as fairs and farmers' markets. Fortunately, this food weighs relatively little, so you can benefit from low shipping costs. After finding buyers or a promising sales venue, you'll devote some time to popping, seasoning, and packaging. Related tasks include cleaning the equipment and delivering products to buyers or shipping facilities.
What are some skills and experiences that will help you build a successful homemade popcorn business?
You'll need to know how to run a popper and prepare food for retail sale. Shipping experience also proves valuable. An advantage of this business is that you can learn the necessary skills with comparative ease. Some community colleges offer a class on popcorn making and recipes but such courses remain rare. Online video tutorials instruct viewers on how to use popcorn machines.
What is the growth potential for a homemade popcorn business?
Sales of ready-to-eat popcorn continue to grow in countries around the world. If your business benefits from this trend, you can expand by increasing your popping capacity and moving to a commercial or industrial space. In 2001, a husband and wife opened Angie's Kettle Corn in their garage. They eventually bought a much larger building, hired staff, and quit their previous jobs. The company boosted sales by taking extra steps to protect customers from allergens and offering kosher, gluten-free products, according to CBS. Today, major national grocery and drug store chains sell products from Angie’s Kettle Corn.
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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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 homemade popcorn business?
Countless companies sell basic popcorn at low prices; few businesses can successfully compete with these large companies. You'll probably experience better results when you focus on a certain niche, such as herbal, organic, or vegan products. If you want to colorize popcorn, use beta carotene instead of artificial colors. This healthy natural ingredient adds vitamin A.
Ensure that your labeling not only follows the law but provides further information. Warn customers about unpopped kernels, dangers to small children, and any potential allergens. At the same time, avoid revealing all of your ingredients. It's often acceptable to state "herbs" or "spices" without giving specific details. Don't make it too easy for customers or competitors to duplicate your product.
Offer small bags that contain around one ounce of popcorn. These will let people sample different flavors without taking a big risk. The lower cost also boosts the appeal of these products during economic recessions. You could market them as stocking stuffers as well.
Remember that peoples' reactions may vary significantly when you seek feedback on a new flavor. In one taste test, several individuals consumed the same spicy popcorn. Some found it mild while others said it was too hot. Taste, aroma, texture, and aftertaste hold considerable importance. Keep in mind that overly greasy or messy snacks put off some customers.
How and when to build a team
It's feasible to perform all of the work on your own at first. If there's substantial demand, you'll probably need people to help you run machines, put popcorn in bags, and process orders. ZipRecruiter reports that food production personnel earn nearly $26,000 per year on average. It's vital to screen new employees carefully and provide adequate supervision when they handle edible products.