How to Start a Cheese Shop

Start a cheese shop by following these 10 steps:

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

We have put together this simple guide to starting your cheese shop. 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 important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Cheese Shop Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

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.

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 cheese shop 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.

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.

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

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?

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.