Start a sea salt business 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 sea salt business. 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 sea salt business?
Starting a sea salt business is a low-cost venture. In fact, Wellfleet Sea Salt Co. won a business competition in part because the startup expenses were so low. To get started, business owners need:
a pickup truck (for sourcing salt from locations)
- 5-gallon buckets or 50-gallon barrels (for carrying seawater)
- a method of evaporating the seawater (see below)
- a food processor (to grind the salt crystals)
- jars and labels (for packaging)
While some businesses use expensive evaporators or factories for processing seawater, a greenhouse or other sun-exposed structure will work just fine. Whatever method is used, air should be allowed to pass through as this will speed up the evaporation process.
In theory, business owners could source all of these materials for very little. Many food-service businesses will give away 5-gallon buckets, and most people have a food processor. A greenhouse can be built from scrap wood and clear plastic. If business owners don’t have a pickup truck, they can rent one as needed. Jars and labels must be purchased, but they can be bought in small quantities until the business has an established revenue.
What are the ongoing expenses for a sea salt business?
The ongoing expenses for a sea salt business are minimal. They include costs associated with:
packaging and shipping costs
utility costs (depending on the type of evaporator used)
Who is the target market?
The target market for a sea salt business is people who appreciate fine food and have some discretionary income. Such people will be interested in high-quality, unique salts, and they’ll have enough income to afford sea salt.
How does a sea salt business make money?
A sea salt business makes money by selling jars of salt to wholesale and retail customers. Jars may be sold individually or in a set that contains several different flavors.
How much can you charge customers?
Most sea salt sells for between $8 and $12 retail. The Marblehead Salt Co. has fishing salt priced at $10 and Fire Salt priced at $13. A high-end truffled salt made with truffle mushrooms is $25.
How much profit can a sea salt business make?
Because seawater is free to source, a sea salt business’ potential profit is high. A 3-ounce jar that’s priced at $10 might have cost $1 (for the jar, label and associated fuel). Using these numbers, a business that sold 500 pounds in a year would net $24,000. At 40,000 pounds annually, the profits would grow to be much more.
How can you make your business more profitable?
A sea salt business can increase its profits by selling sets of multiple salts together. The owners of Amagansett Sea Salt Co. found that customers who spent $10 on a jar of salt would often spend $30 on a set of several blends. Some customers may also be interested in purchasing sea salt cellars, which are wooden or ceramic containers for storing sea salt.
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 sea salt business 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 sea salt 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
A sea salt business is usually 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 sea salt business:
- 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 sea salt 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 sea salt business:
- 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 sea salt business will be in compliance and able to obtain a CO.
If you plan to sell food at your sea salt business, 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 inspection can be found here.
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 sea salt business
While direct retail sales can be profitable and efficient in the first stages of a sea salt business, there’s a ceiling on the number of direct retail sales a business can do. To grow beyond this, a business need wholesale accounts.
Therefore, one of the most effective ways to promote a sea salt business is by cold calling retailers that might become wholesale customers. Specialty restaurants, gift shops, food stores and similar retailers are worth contacting.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
A sea salt business can set itself apart from other businesses in the industry by offering salt from specific seawater. For instance, Main Sea Salt Company’s first product was salt made from Maine waters and branded for use with lobster. Alaska Pure Sea Salt Co. uses Alaskan seawater.
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 Sea Salt 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?
Anyone who is self-driven, likes working with their hands and can connect with people may be well-suited to running a sea salt business. The day-to-day work of making sea salt is largely done independently and involves a significant amount of manual labor. To sell their salts, though, business owners need to be able to successfully share their product with customers.
What happens during a typical day at a sea salt business?
Most days at sea salt businesses are spent either making sea salt or getting it to customers.
Making salt involves collecting ocean water from pre-selected locations and then evaporating the water molecules. Evaporation techniques range from leaving the saltwater in primitive wooden boxes to using high-tech evaporators.
When selling manufactured salts, the day might be spent finding wholesale accounts, selling at retail locations or analyzing online sales. Some of these methods also require packaging and shipping salts.
What are some skills and experiences that will help you build a successful sea salt business?
To successfully run a sea salt business, business owners must understand the nuances of ocean salt. Much more than just sodium-chloride, sea salt contains many minerals that give it its unique flavor, density and shape. At different locations and in different seasons, the minerals in the water change.
Finding the best locations, seasons and times to source seawater requires a knowledge:
- seasonal currents
- sea level maps
A familiarity with each of these areas helps business owners predict what trace minerals will be in specific locations’ seawater at any given time.
What is the growth potential for a sea salt business?
A sea salt business may be a small one- or two-person operation that produces just a few hundred pounds of sea salt, or it can be a large company that makes thousands of pounds. For example, Amagansett Sea Salt first produced 500 pounds of salt in 2010. By 2014, the company was making 4,000 pounds annually and had plans to reach 40,000 pounds each year.
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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 sea salt business?
Although much of the work involves making salt, business owners can’t forget the interpersonal side of running a sea salt business. When starting out, a business’ first few customers are usually people who already know the business owner. Thus, networking is an integral part of getting this type of business launched.
How and when to build a team
Many sea salt businesses remain one- or two-person operations. If needed, a business owner might hire employees to help process salt, find wholesale accounts or fulfill orders as a business grows.