Sugar-Coated Ventures: Starting a Candy Store

Here are the most important factors when you are starting your candy store:

1. Location (physical and online) — Consider a hybrid model that combines both online and physical presence. This approach allows you to leverage the benefits of both channels. You could start online and sell on Etsy and participate in local markets or pop-up shops to build brand awareness and interact with customers directly before deciding on a physical store.
2. Theme — Themes like “Old-Time Classics,” “Around the World,” or “Candy Land Adventure” can offer exciting possibilities for decor, product offerings, and marketing campaigns.
3. Licenses and permits — Since candy is a consumable product, you and your staff 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.
4. 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.
5. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
6. Online presence — Take your candy business online and create a brand. Get listed on Google Business and Yelp, and optimize your listings.

Step 1: Decide if the Business Is Right for You

Pros and Cons

Starting a candy store has some advantages and disadvantages to consider before you decide if it’s the right path for you.

Candy Store Industry Trends

Candy is part of the broader confectionery market, which is worth about $586 billion. Sugar confectionery alone brings more than $116 billion in revenue, while chocolate confectionery is worth more than $133.5 billion. On top of that, the confectionery market is expected to expand to more than $721 billion by 2028((https://www.statista.com/outlook/cmo/food/confectionery-snacks/confectionery/worldwide)) That steady growth offers an excellent opportunity for bold entrepreneurs. 

Industry Size and Growth

• Industry size and past growth — US candy producers took in $11.1 billion in 2023 after a steady growth of 1.9% per year since 2018.((https://www.ibisworld.com/industry-statistics/market-size/candy-production-united-states/))
• Growth forecast — The US candy market is predicted to decline in the next few years.((https://www.ibisworld.com/united-states/market-research-reports/candy-production-industry/))
• Number of businesses — Around 1,400 candy producers are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/candy-production-united-states/))
• Number of people employed — The industry employs nearly 24,000 people.((https://www.ibisworld.com/industry-statistics/employment/candy-production-united-states/))

Trends and Challenges

Trends

• Chocolate is always popular, and chocolate’s share in the candy market has been steadily growing. Exotic flavors are also trending, such as chocolate with bacon, salt, or a spicy twist. 
• Consumers are increasingly demanding sustainably made candy and want transparency in terms of sourcing and manufacturing.
• Candy, as with most things, is increasingly being purchased online, presenting an opportunity for an online candy business.

Challenges

• High inflation has led to increases in the prices of ingredients, cutting into profit margins and forcing candy stores to raise prices.
• Customers are demanding more variety, putting pressure on candy stores to go beyond traditional types of candies. This is an opportunity as well as a challenge. 

Consumer Spending

• Average consumer spend — US consumers spent $3.6 billion on candy for Halloween in 2023.((https://nrf.com/media-center/press-releases/halloween-spending-soars-celebrations-near-pre-pandemic-levels))
• Potential customer base — Almost all (99%) US households buy chocolate or candy at least once a year.((https://candyusa.com/our-industry/))
• Average prices — In 2019, candy was sold for $2.27 each for chocolate and $1.88 each for non-chocolate.((https://www.statista.com/statistics/643582/average-unit-price-candy-and-chocolate-us-by-segment/)) In 2023, the prices went up to an average of $2.82 for chocolate and $2.53 for candy overall.((https://cstoredecisions.com/2023/02/24/candy-sales-climb-as-prices-rise/))

What Kind of People Work in Candy Stores?

• Gender — Half of store owners in the US are female.((https://www.zippia.com/store-owner-jobs/demographics/#gender-statistics))
• Average level of education — Half of store owners hold a bachelor’s degree.((https://www.zippia.com/store-owner-jobs/demographics/#degree-level-types))
• Average age — The average age of a store owner is 44.5 years old.((https://www.zippia.com/store-owner-jobs/demographics/#age-statistics))

How Much Does It Cost to Start a Candy Store Business?

Startup costs for a candy store range from $6,500 to over $20,000. The low end is for an online candy store, and costs are mainly for candy making equipment. The high end is for opening a brick-and-mortar candy store and includes the space rental and space preparation. 

You’ll need to be an excellent candy maker, so you might want to take an online course (at Chocolate Academy, for example), and learn the latest in candy making. 

You’ll need a handful of items to successfully launch your candy store 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
Deposite on candy store space	$0–$5,000	$2,500
Space preparation and decor	$0–$5,000	$2,500
Candy making equipment	$5,000–$7,000	$6,000
Total	$6,550–$21,100	$13,825

How Much Can You Earn From a Candy Store Business?

Let’s say the average price for a box of chocolates is $15 (though the prices went up due to inflation). Your profit margin for a candy store with a physical location should be about 40%. For an online store, it will be about 90%. 

In your first year or two, if you sell 200 boxes a week online, you’ll be bringing in over $150,000 in annual revenue. This would mean a profit of $135,000, assuming that 90% margin. As your store builds a reputation, you could open a physical store and sales could climb to 500 boxes a week. Your profit margin will fall to 40%. With an annual revenue of nearly $400,000, you’d make a cool $160,000.

What Barriers to Entry Are There?

There are a few barriers to entry for a candy store. Your biggest challenges will be:

• Competing in a saturated market
• Making great candy that will make your business stand out

Step 2: Hone Your Idea

Now that you know what’s involved in starting a candy store, 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 candy stores in your area to examine their products, price points, customer reviews, and what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a candy store with locally sourced ingredients.

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

What? Determine Your Candy Types and Additional Products

You should make a list of all the candies you’ll make. In addition to just candies, you could make candy gift baskets, decorative boxes, and more. You could also buy candy from wholesalers and sell them at a markup. 

How Much Should You Charge for Candy?

You’ll need to research prices in your area for various types and quantities of candies. Your cost to make them will be the cost of your ingredients, plus rent and overhead. You should aim for a profit margin of about 40%.

Once you know your costs, you can use our profit margin calculator to determine your markup and final price point. Remember, 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 broad, so you should spread your marketing efforts across various social media sites, including TikTok, Instagram, Facebook, and even LinkedIn.

Where? Choose Your Candy Store Location

Selecting the right location for your candy store is crucial for attracting customers and ensuring its success. Look for a spot in a high-traffic area with strong footfall, such as a busy shopping district or a popular tourist area.

Consider accessibility and convenience, ensuring that the location is easily reachable by public transportation and has ample parking.

By strategically choosing the right location, you can establish a profitable and popular candy store that caters to a wide range of customers and stands out in the competitive confectionery industry.

You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

Step 3: Brainstorm a Candy Store 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 “candy” or “chocolate,” boosts SEO
• Name should allow for expansion, for example, “Candyland Delights” over “Marshmallow World”
• 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 website of the US Patent and Trademark Office 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 set 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 Candy Store Business Plan

Here are the key components of a business plan:

• Executive summary — A concise summary outlining the key points of the candy store business plan, including its mission, goals, and financial projections
• Business overview — A brief description of the candy store, highlighting its location, target market, and unique selling propositions
• Product and services — Clear details about the types of candies and related products the store will offer, emphasizing any specialty or unique offerings
• Market analysis — An examination of the candy market, identifying the target demographic, market trends, and potential opportunities for the business
• Competitive analysis — An assessment of the candy store’s competitors, analyzing their strengths and weaknesses to position the new business strategically
• Sales and marketing — A plan outlining how the candy store will attract and retain customers, including marketing strategies, pricing, and sales tactics
• Management team — Introductions and brief bios of the key members of the candy store’s management team, emphasizing their relevant skills and experience
• Operations plan — A detailed overview of the day-to-day operations of the candy store, covering aspects like suppliers, inventory management, and staffing
• Financial plan — Comprehensive financial projections, including startup costs, revenue forecasts, and profit margins, providing a clear financial roadmap for the business
• Appendix — Additional information, such as supporting documents, market research data, or any other relevant details that provide depth and credibility to the candy store 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 candy stores. 

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 candy store 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. 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, by mail, or by 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 an increasingly popular low-risk option, 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 candy store business. You might also try crowdfunding if you have an innovative concept for your store, or if you want to grow into a larger candy manufacturer.

Step 8: Apply for Candy Store Business Licenses and Permits

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

You may need the following, depending on the requirements in your area:

• Food service license
• Food handler’s permit
• Building health permit

Federal regulations, licenses, and permits associated with starting your business include doing business as, 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 candy store 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 clients who say 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 can 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, they 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:

• Professional branding — Design branding that captures the fun, colorful, and whimsical essence of your candy store, including your logo and in-store design.
• Direct outreach — Collaborate with local schools, event planners, and businesses to promote your store as the ideal source for party favors, gifts, and treats.
• Professional website and SEO — Develop a vibrant, easy-to-navigate website showcasing your product range, optimized for candy-related search terms.
• Local SEO — Ensure your candy shop is prominently featured in local search results, making it easily accessible to nearby customers. Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Candy blog — Publish posts about candy history, fun facts, DIY candy crafts, and seasonal confectionery trends to engage your audience.
• Social media engagement — Utilize Instagram, TikTok, and Pinterest to post enticing photos and videos of your candies, store events, and promotions.
• Customer stories and testimonials — Highlight positive experiences from customers who have incorporated your candy into their celebrations.
• In-store events — Host candy-making demos, themed events, or tastings to draw foot traffic and engage directly with customers.
• Community event participation — Set up booths at local festivals and fairs to promote your candies and offer special promotions.
• Local business partnerships — Form partnerships with cafes, gift shops, and party services to cross-promote your candies as part of their offerings.
• Community sponsorships — Engage in sponsorships and support local causes to enhance brand visibility and community goodwill.

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 candy store 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 candy store business could be:

• Unique chocolate creations to make your taste buds tingle
• Support your community by buying locally sourced candies
• The best homemade candies you’ve ever had! 

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 candy store, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in candy 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 candy stores. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Potential positions for a candy store business would include:

• Store clerks — make sales, customer service
• Candy makers — assist with making and packaging candy
• Marketing lead — staff management, ordering, accounting

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 Candy Store — Start Making Money!

You could be like a kid in a candy store – literally! For some people, candy is the sixth food group and an essential part of life, so tasty treats will always be in demand. You just need to make yours delicious and unique enough to gain attention in this $586 billion industry. 

If the startup costs faze you, just start with an online shop, make some money, build your reputation and eventually open a physical location. And then maybe another, and another. Your candy could become the treat every kid wants at Halloween. You’re off to an auspicious start by learning the business, so get ready to make your way to sweet entrepreneurial success.

FAQs

Are candy stores profitable?

Yes, candy store profit margins are relatively high, as people are willing to pay good money for fine candies. You need to have good, unique products and a good location, and you’ll soon have customers coming back for more.

What kinds of candy are most popular?

Chocolate is always at the top of the list, and uniquely-flavored chocolates are particularly popular. People are also demanding sustainably produced candy, so if you have a candy store, make your candy onsite with locally-sourced ingredients and you’ll likely draw a lot of patrons. 

What candy is best to sell?

Homemade chocolate candies always do so well. However, nearly everyone likes all kinds of candies, so it’s best to offer a variety.

What is the world’s favorite candy flavor?

By some accounts, strawberry is the world’s favorite candy flavor. Some also claim cherry to be the most popular. 

What is America’s #1 candy?

The number one candy in the United States is Reese’s Cups. But almost all types of candy are profitable.

What are some best practices for managing and growing a successful candy store business?

You need to keep track of your costs so that you can monitor your profit margins. You also need to manage your inventory well so that you don’t have waste.