Your Guide to Starting a Successful Chocolate Business

Here are the most important factors to consider when starting a chocolate business:

1. Decide on products and types or flavors — The type of product you choose to focus on is important because it can influence your target market, branding, and production processes. Here are a few popular types of chocolate products that you might consider: artisan or craft chocolate, chocolate bars, seasonal or themed chocolates, chocolate-covered items, or even vegan or special-diet chocolate.
2. Set up chocolate production — If you want to make the chocolate yourself you will have complete control over the product quality, recipe development, and production timing. However, you will also need more licenses, facilities, and equipment.
3. Location — Find a location that matches your target market. If your target market includes tourists, setting up shop in a tourist-heavy area could be beneficial. If you are targeting local gourmets, consider a location known for specialty food shops.
4. Licenses and permits — Since you are handling consumable products you will likely need to obtain food handler’s permits, which certify that you are trained in safe food handling practices. You will also need a health department permit and a commercial kitchen license.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Ingredient sourcing — Find a reputable supplier for fresh ingredients.
8. Packaging — Chocolate is sensitive to temperature, light, and moisture. Your packaging needs to protect the chocolates from these elements, ensuring they reach the customer in perfect condition. Use insulated packaging and materials that prevent melting or damage during transit.

Step 1: Decide if the Business Is Right for You

Pros and Cons

Starting a chocolate business has pros and cons to consider before deciding if it’s right for you. 

Chocolate Industry Trends

Industry Size and Growth

• Industry size and past growth — The US chocolate industry was worth $21 billion in 2023 after growing about 0.4% yearly over the previous five years.
• Growth forecast — The US chocolate industry is projected to grow over the next five years. 
• Number of businesses — There are about 2,960 chocolate production companies operating in the US. 
• Number of people employed — In 2023, the US chocolate production industry employed 44,233 people.((https://www.ibisworld.com/united-states/market-research-reports/chocolate-production-industry/))

Trends and Challenges

Trends

• Plant-based and vegan chocolates are seeing greater demand, as are chocolates with fruits and nuts.
• Many chocolate companies are coming up with recipes that contain vitamins and antioxidants to boost the nutritional value of their chocolates.

Challenges

• Rising prices of cocoa, cocoa butter, sugar, almonds, and vanilla are cutting into the profit margins of chocolate businesses.
• Cocoa farming is contributing to deforestation, which may lead to new regulations that cause cocoa shortages.

Demand Hotspots

• Most popular states — The most popular states for candy makers are North Dakota, Minnesota, and Indiana.
• Least popular states — The least popular states for candy makers are Oregon, Florida, and Texas.((https://www.zippia.com/candy-maker-jobs/best-states/))

What Kind of People Work in Chocolate Businesses?

• Gender — 57.7% of candy makers are female, while 42.3% are male.
• Average level of education — The average candy maker is high school educated.
• Average age — The average candy maker in the US is 41.3 years old.((https://www.zippia.com/candy-maker-jobs/demographics/))

How Much Does It Cost to Start a Chocolate Business?

Startup costs for a chocolate business range from $3,000 to $8,000. Costs include chocolate-making equipment, ingredients, and packaging supplies.

You’ll need a handful of items to successfully launch your chocolate business, including: 

• Candy thermometers
• Pots and pans
• Stove
• Baking sheets
• Mixers
• Mixing bowls
• Refrigerator
• Packaging supplies

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150–$200	$175
Business licenses and permits	$100–$300	$200
Insurance	$100–$300	$200
Business cards and brochures	$200–$300	$250
Website setup	$1,000–$3,000	$2,000
Chocolate making equipments	$1,000–$3,000	$2,000
Ingredients inventory	$500–$1,000	$750
Total	$3,050–$8,100	$5,575

How Much Can You Earn From a Chocolate Business?

The average price for a box of chocolates is $15. Your profit margin after the cost of ingredients and packaging should be about 80%.

In your first year or two, you could sell 100 boxes online a week, bringing in $78,000 in annual revenue. This would mean $55,000 in profit, assuming a 70% margin. As your brand gains recognition, sales could climb to 500 boxes a week. At this stage, you’d rent a production space and hire staff, reducing your profit margin to around 40%. With an annual revenue of $390,000, you’d make a tidy profit of $156,000.

What Barriers to Entry Are There?

There are a few barriers to entry for a chocolate business. Your biggest challenges will be:

• The skills to make tasty chocolates
• Entering a competitive market with large companies like the Rocky Mountain Chocolate Company and Anthony Thomas

Step 2: Hone Your Idea

Now that you know what’s involved in starting a chocolate business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an Opportunity

Research chocolate businesses in your area and online to examine their products, price points, and what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a homemade chocolate business or chocolate liquor.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine the Type of Your Chocolate Products

Your products will be made from the recipes you develop. You should try to come up with unique flavors that will stand out in the market. 

How Much Should You Charge for Chocolates?

The average price of a box of chocolates is $15. You should aim for a profit margin of about 70%. 

Once you know your costs, you can use our profit margin calculator to determine your markup and final price points. Remember that the prices you use at launch should be subject to change if warranted by the market.

Who? Identify Your Target Market

Your target market will be chocolate lovers, which is very broad. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook. 

Where? Choose Your Business Premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a production facility. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Chocolate Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “chocolates” or “chocolate candies,” boosts SEO
• Name should allow for expansion, for example, “Divine Delights” over “Vegan Chocolate Company”
• A location-based name can help establish a strong connection with your local community and help with the SEO, but might hinder future expansion

Once you’ve got a list of potential names, visit the US Patent and Trademark Office website to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan for your Chocolate Company

Here are the key components of a business plan:

• Executive summary — A concise summary outlining the key aspects of the chocolate business plan, including its objectives, mission, and potential for success
• Business overview — A brief description of the chocolate business, covering its mission, vision, legal structure, and location
• Product and services — Detailed information on the types of chocolates offered, highlighting unique features, quality, and any special offerings such as artisanal or ethically sourced ingredients
• Market analysis — A comprehensive evaluation of the chocolate market, identifying target demographics, trends, and potential growth opportunities
• Competitive analysis — An examination of competitors in the chocolate industry, including their strengths and weaknesses, to position the business effectively
• Sales and marketing — Strategies for promoting and selling chocolates, encompassing pricing, distribution channels, and a marketing plan to reach and attract the target audience
• Management team — Introductions to key personnel involved in running the chocolate business, emphasizing their relevant skills and experience.
• Operations plan — A detailed outline of the day-to-day operations, including the chocolate production process, quality control measures, and any necessary equipment or facilities
• Financial plan — A comprehensive overview of the financial aspects, including startup costs, revenue projections, and a break-even analysis, providing a clear picture of the business’s financial viability
• Appendix — Supplementary materials, such as charts, graphs, or additional documentation, supporting and enhancing the information presented in the business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose Where to Register Your Company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to chocolate businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state. 

Choose Your Business Structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your chocolate business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) — Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corporation — Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corporation — This refers to the tax classification of the business but is not a business entity. Either a corporation or an LLC can elect to be an S Corp for tax status. In an S Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online or by mail/fax. Visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund Your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans — This is the most common method, but getting approved requires a rock-solid business plan and a strong credit history.
• SBA-guaranteed loans — The Small Business Administration can act as a guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants — A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding — Websites like Kickstarter and Indiegogo offer increasingly popular low-risk options in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal — Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a chocolate business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Chocolate Business Licenses and Permits

Starting a chocolate business requires obtaining a number of licenses and permits from local, state, and federal governments.

You may need a food handler’s license. Check with your local governments for requirements.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your chocolate business as a sole proprietorship. Opening a business bank account is quite simple and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked, yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability — The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business property — Provides coverage for your equipment and supplies.
• Equipment breakdown insurance — Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation — Provides compensation to employees injured on the job.
• Property — Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto — Protection for your company-owned vehicle.
• Professional liability — Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) — This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential Software and Tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Poster, Brilliant, or Bepoz, to manage your purchasing, inventory, sales, and payments.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, FreshBooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences of filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop Your Website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.

However, people are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Website & SEO optimization — Enhance your website with engaging visuals and detailed descriptions of your chocolate products to improve search rankings for terms related to artisan chocolates and gourmet gifts.
• Professional branding — Ensure your branding reflects the elegance and quality of your chocolates, from your logo to the packaging design.
• Direct outreach — Network with local businesses, event planners, and gift shops to introduce your chocolates as ideal options for corporate gifts and retail offerings.
• Social media engagement — Utilize Instagram, Pinterest, and Facebook to post captivating images of your chocolates and share the chocolate-making process.
• Chocolatier blog — Publish content about the art of chocolate making, the origin of your ingredients, and pairings with wines or coffees.
• Chocolate tasting events — Organize events where customers can sample various chocolates and learn about your unique production techniques.
• Local market participation — Participate in farmers’ markets and food expos to showcase your chocolates to a wider audience.
• Partnerships with local cafes — Collaborate with local dining establishments to feature your chocolates on their menus or in their venues.
• Loyalty rewards program — Develop a loyalty program that offers discounts, early product access, or exclusive tastings for frequent customers.
• Targeted digital advertising — Strategically advertise on online platforms and in food and lifestyle magazines to attract customers interested in gourmet and luxury products.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Today, customers are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your chocolate business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your chocolate business could be:

• Handmade luxurious chocolates because you deserve a treat!
• Homemade chocolates from our kitchen to yours
• Unique chocolates to tempt your tastebuds

Networking

You may not like to network or use personal connections for business gain, but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a chocolate business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in chocolate for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in chocolate. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a chocolate business include:

• Chocolate makers — assisting with making chocolates
• Packagers — packaging prepared chocolates
• General manager — ordering, scheduling, accounting
• Marketing lead — SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Chocolate Business — Start Making Money!

Chocolate is a treat that will never be obsolete. It’s a huge US industry that you can get it on with your own chocolate business. If you have excellent chocolate-making skills and make chocolates that your family and friends crave, why not make some money from it? You can start from home and eventually have a production facility that you can use to develop your own chocolate brand.

You’ve done your business homework, so now it’s time to start confectioning your way to successful chocolate entrepreneurship!

FAQs

Can a chocolate business be profitable?

Yes, profit margins on chocolates are high. You just need to make a high-quality product with unique flavors and you can be successful.

How can I learn to make chocolates?

You can take chocolate-making classes from The Chocolate Academy. You can access the classes by getting a membership which costs less than $10 per month. You can also take inexpensive classes on sites like Udemy.

What is the best selling type of chocolate?

Milk chocolate is generally the most popular type of chocolate. People prefer its sweetness rather than the bitter taste of dark chocolate.

Can I sell homemade chocolate?

You can generally sell homemade chocolate. However, you may need certain health licenses and permits at the state and local levels.

What is the most expensive ingredient in chocolate?

Cacao is the most expensive ingredient in chocolate. Other ingredients added to chocolate, such as nuts, increase the cost to make it. 

Which chocolate lasts longer?

Dark chocolate lasts the longest because it doesn’t contain dairy ingredients. If it’s unopened it can last up to 2 years.

How are luxury chocolates made?

Luxury chocolates are made with more rare types of Cacao beans and contain a higher percentage of Cacao than other chocolates.