How to Start a Homemade Popcorn Business

Start a homemade popcorn business by following these 10 steps:

1. Plan your Homemade Popcorn Business
2. Form your Homemade Popcorn Business into a Legal Entity
3. Register your Homemade Popcorn Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Homemade Popcorn Business
6. Get the Necessary Permits & Licenses for your Homemade Popcorn Business
7. Get Homemade Popcorn Business Insurance
8. Define your Homemade Popcorn Business Brand
9. Create your Homemade Popcorn Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

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.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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.