Do you want to start a cookie manufacturing business? If YES, here’s a complete guide to starting a cookie manufacturing business with NO money and no experience.
There are several business opportunities that an aspiring entrepreneur can start on a small scale and then grow to become a national phenomenon; most often than not, some of these businesses require little or no technical skills. One of such businesses is a cookie manufacturing business.
The truth is that if you are a baker, it would be easier for you to start a cookie baking business because the same ingredients and processes that are used in baking cakes are also used in baking cookies except for the size difference.
The basic ingredients that are used in cookie baking are flour, butter, sugar, eggs, and flavors et al. One thing about cookie baking is that your creativity can stand you out of your competitors. No doubt, people that bake cookies are quite creative, which is why you can come across cookies in different shapes, designs and flavor.
A cookie baking business is indeed a profitable business because you can operate the business with your family members and from your home kitchen thereby cutting operational cost to the barest minimum. If you are able to secure a strategic location to open a shop, you can be rest assured to rake in good returns from your cookie business.
The bottom line is that if you are interested in starting a cookie business, then you should ensure that you read this article because you are going to get the guide you need to launch your business in any location in the United States of America.
Steps to Starting a Cookie Manufacturing Business
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss With an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
- 17. Work Out a Reasonable Pricing for your Services & Products
- 18. Develop Iron-clad Competitive Strategies to Help You Win
- 19. Brainstorm Possible Ways to Retain Clients & Customers
- 20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
The Cookie, Cracker and Pasta Production industry produces cookies, crackers and dry pasta from ingredients such as flour, sugar, salt, seasoning, emulsifiers, flavorings, syrups, preservatives, food acids and gluten.
If you are close observer of the Cookie, Cracker and Pasta Production industry, you will notice that the industry has marginally increased over the past five years. As a matter of fact, the industry benefited from stable demand for industry products as changing trends prompted operators to innovate new goods.
On the other hand, diets which cut out carbohydrates and wheat-based goods has stifled industry growth significantly. Increasing disposable income over the period has allowed consumers to trade up to more premium varieties, as well as purchase a broader range of goods.
The cookie, cracker and pasta production industry is expected to grow over the five years to 2023. Rising discretionary income will enable consumers to purchase a greater volume of snacks and trade up to branded and premium products at retail stores.
The Cookie, Cracker and Pasta Production industry is indeed a major sector of the economy of the world and the industry generates over $27 billion annually from more than 2,408 cookies baking companies scattered all around the world. The industry is responsible for the employment of over 56,489 people.
Experts project the cookie, cracker and pasta production industry to grow at a 0.6 percent annual rate. Campbell Soup and Kellogg companies boast of having lion shares of the available market in this industry.
A recent report published by IBISWorld shows that the cookie, cracker and Pasta Production industry has a low level of market share concentration, with the top four manufacturers accounting for an estimated 22.8 percent of industry revenue in 2018.
The report revealed that the concentration in this industry has decreased with an influx of small privately-owned businesses, despite strong acquisition activity from top industry operators at the start of the current period.
The top players engage in acquisitions frequently due to the extensive number of brands available in the industry, and the fast-changing nature of snacking trends. For instance, the Campbell Soup Company acquired Plum Organics in 2013 and Synder-Lance in 2018, in order to expand their snack segment.
Some of the factors that motivate aspiring entrepreneurs to venture into cookies baking business is the fact that you can start the business on a small scale from the comfort of your kitchen. You only need to spend money on baking ingredients and relevant supplies.
As a matter of fact, you can start by supplying your cookies to mom and pop shops around your community or you can even open a small shop/kiosk in front of your house and start retailing your cookies.
If you are hardworking and lucky enough, you can secure contract to start supplying cookies for events (parties and wedding ceremonies et al). This is why it is important to network and enter into strategic business alliance with event managers and wedding planners et al.
If you are contemplating starting your own cookies baking business in the United States, you should ensure that you carry out a thorough market survey and feasibility studies. If you get some key factors wrong before starting out, you are likely going to struggle to stay afloat.
But over and above, cookies manufacturing business is a thriving and profitable business especially if you are creative and ready to take on the available market within your location.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
If you are thinking towards starting a cookies baking business, you should know that there are no restrictions to the demographic and psychographics composition of your target market.
Adults and children all consume cookies; the demography is all encompassing which is why you can find cookies been served in wedding receptions, birthday parties, children’s parties, school graduation parties, baby shower, and a whole lot of events and parties.
This goes to show that the target market for cookies is wide and far reaching, you can create your own make niche yourself to serve a specific purpose. Having said so, here are some of the groups of people and organization that you can sell your cookies to;
- School Children
- Sport Lovers / Fans (In Stadiums during live sport events)
- International and Local Tourists
- Corporate Organizations
- Families/Households in and around your neighborhood
- Churches and other religious centers
- Event Planners and Wedding Planners
3. Decide What Niche to Concentrate On
Cookies is a niche market in the cookie, cracker and pasta industry hence it is difficult to come up with different niche ideas within the cookies baking line of business.
However, those in the cookies baking line of business are known to be extremely creative which is why they come up with cookies in different designs, themes, flavors and of course packaging just to appeal to their target market.
Entrepreneurs that are interested starting a cookie baking business may choose to start homemade cookie baking especially if they want to start small and market to a small group of people within their immediate community.
The Level of Competition in the Industry
First and foremost, the fact that anybody with baking skills can decide to start a cookie baking business means that the business is open to all and sundry hence it is expected that there will be a high level competition in the industry. There is hardly any busy community or even street that you won’t find loads of people retailing cookies.
As a cookies baker or business person, it is important to note that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers or distributors.
Don’t hesitate to adopt successful strategies from your competitors, but understand that directly competing with an entrenched rival is a bad idea; creativity and diversification is the key in this regard which is why people with low startup capital opt for homemade cookies business.
4. Know the Major Competitors in the Industry
Cookie bakers are categorized into two groups; those who are into homemade cookies and those who run the business on a large scale, hence the list of well-known cookie bakers depend on the angle you are going to be looking at it from.
Here are some of the well – known cookies manufacturing companies in the United States;
- Chips Ahoy
- Pepperidge Farm Food processing
- Keebler Food Processing Company
- Nestlé Food Processing Company
- Famous Amos
- Pillsbury Food Manufacturing, Food processing Company
- Fig Newtons
- Trader Joe’s Retail
- Duncan Hines
- Russell Stover
- Lance Inc. Cookies and Crackers
- Kirkland’s Home
- Charleston Cookie Co
- Pacific Cookie Company
- Williams Sanoma
- Gamesa Manufacturing
Just like any other business, when starting a cookies baking business, you just have to get your economic analysis right if your intention of building the business is to generate profits, grow the business, sell franchise and perhaps expand the business to other locations within the United States.
When conducting economic analysis for your business, you just have to critically examine these key factors; place, product, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your business. As a cookie baking business owner, you just have to have a proper grasp of your competitive landscape.
Cookie baking business owners should also know that running their own single homemade cookie business is different from managing or operating a standard cookie company that has the potential to manufacture and distribute cookies all across the United States of America and other countries of the world.
Managing or operating a standard cookies company or franchise attracts additional impediments like incentive alliance, bureaucracies, growth strategy, and operational guidelines et al.
It is important to note that payment of utility bills, rent, packaging and promotion and of course the purchase of cookie making ingredients is one of the most important factors contributing to the overall cost of a cookie baking business and should be considered as a major factor when carrying out your economic analysis.
5. Decide Whether to Buy a Franchise or Start from Scratch
You can actually find some of the leading cookies manufacturing brands in the United States in different cities in the U.S. This was achieved because some of the leading cookies companies decided to venture into selling their franchise and at the same time operating chains of distribution outlets. No doubt, the franchise model has indeed help cookies companies to successfully expand both locally and globally at a very fast pace.
If you are considering starting a cookies baking business, then you can either buy a cookies manufacturing franchise from an existing brand or start your own cookies baking business from the scratch.
All you need to do is to look at what is available before you and you will be able to make a good business decision as regards choosing whether to start your own cookie business from the scratch or buy an existing franchise.
Part of the factors that can influence your decision when it comes to choosing between starting from the scratch or buying a franchise are, the type of business model that you want to build, your business goal and vision, your finance, the competition available within the location you intend starting your cookies manufacturing business, and the available market.
6. Know the Possible Threats and Challenges You Will Face
The threats and challenges that is likely going to confront a cookie manufacturing business is the fact that they will be competing with already established cookie brands. We are not ruling out the fact that you will be competing with manufacturers of other forms of flour snacks.
Other threats and challenges that you will face are economic downturn which usually affects purchasing powers and also unfavorable government economic policies.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you are considering starting a standard cookie manufacturing business, a business that hope to sell franchise and sell your cookies in the different cities in the United States and other parts of the world, then you should take the selection of legal entity seriously.
When it comes to choosing a legal entity for a business, the nature of the business, the industry the business falls into and your business goals should inform your decision. When it comes to choosing a legal entity for a cookie manufacturing business, you have the option of choosing from a sole proprietorship, general partnership, a limited partnership, an LLC, a “C” corporation, or even a “S” corporation.
It is important to clearly state that these different forms of legal structure have their advantages and disadvantages; which is why you must weigh your options properly before making your choice.
These are some of the factors you should consider before choosing a legal entity for your cookies manufacturing business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes. If you take your time to critically study the various legal entities to use for your cookie business especially if you want to build a standard cookie manufacturing business, you will agree that Limited Liability Company is the most suitable.
One good thing about LLC is that you can start your cookies manufacturing business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or even an ‘S’ corporation especially when you have the plans of going public or selling franchise.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your cookies manufacturing business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structures, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name from the ideas Below
When it comes to choosing a name for your business, you should be innovative because whatever name you choose for your business will go a long way to create a perception of what the business represents will represent in the heart of your target market.
If you are considering starting your own cookie manufacturing business, here are some catchy names you can choose from;
- Brownie Delight® Cookies Production Company
- Angelic Bite™ Cookies Production Company
- Fresh Food® Cookie, Cracker and Pasta, Inc.
- Kids® Cookies Manufacturing Company
- Ernesto Foods® Cookie, Cracker and Pasta, Inc.
- Doris Flickers® Cookie, Cracker and Pasta, Inc.
- Shannon Steve® Cookie, Cracker and Pasta, LLC
- Creamy® Cookie, Cracker and Pasta, Inc.
- Sammy Fingers® Cookie, Cracker and Pasta, Inc.
- Jules Tasty® Cookie, Cracker and Pasta, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
When it comes to starting a standard cookie manufacturing business, there are key insurance policies that you must have in place. It is important to note that you can’t be permitted to run a standard cookie manufacturing business in the United States, Canada, Australia and Europe if you don’t have the basic insurance cover for your business.
These are some of the basic insurance covers that you should consider purchasing if you want to start your own cookies manufacturing business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Kitchen Insurance
- Workers compensation
- Overhead expense disability insurance (optional)
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are running a franchise cookie manufacturing business model, it is compulsory that you file for intellectual property protection. It will come handy as your cookie brand begins to expand beyond your reach.
It is difficult to build your cookie manufacturing business from the scratch, and watch the brand name slip off your hands. Even if you intend buying a cookie franchise, you would still need to contract the trademarks and service marks from the franchising company.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. Please note that the final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
By and large, you might not have need for professional certification before you can be allowed to operate your own cookie manufacturing business in the United States of America, but you would need to get clearance from the local health authority and foods and drugs agencies before you can be allowed to open and operate a cookie manufacturing factory. This is because the cookies business is considered delicate business as it involves food.
You will also need a kitchen clearance certificate, food handler certificate and perhaps other relevant certification as it applies to your country or even your state.
12. Get the Necessary Legal Documents You Need to Operate
The legal requirements for a cookie manufacturing business varies slightly from state to state, so it is important to contact your local authority to know the legal requirements that you would need in order to open your own cookie business in your country.
Be that as it may, here are some of the basic legal requirements needed for you to successfully start and run your own cookie business in the United States;
- Business and liability insurance
- Food handler certificate
- Health inspection Certificate
- Copy of license for the service support facility and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Kitchen insurance
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Building License
- Franchise or Trademark License
13. Raise the Needed Startup Capital
It is often said that money is the lifeline of any business. No doubt raising startup capital is perhaps one of the major concerns of entrepreneurs as it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from investors.
The first thing to put in place before sourcing for startup capital for your business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business. The truth is that no bank can give you a loan if you don’t have a good and workable business plan. Besides, investors will not take you seriously if you don’t have a business plan on ground before launching out to source for startup capital.
There are several options when it comes to raising money to finance a cookie manufacturing business. Some of the options are;
- Raising money from personal savings and sale of personal stocks
- Raising money from investors and business partners
- Applying for loan from the bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Sourcing for soft loans from family members and friends
14. Choose a Suitable Location for your Business
The fact that there are different sizes of cookie manufacturers scattered across the United States does not mean that cookies manufacturing business can thrive in every location. Before choosing a location for your cookie business, ensure that you conduct a thorough feasibility studies. The possibility of you coming across a cookie baking shop that just closed shop in the location you want to start yours can’t be ruled out.
These are some of the factors that you should consider before choosing a location for your cookies manufacturing business;
- The demography of the location
- The purchasing power of residents of the location
- Accessibility of the location (closeness to major road)
- The number of cookies manufacturing companies and importers in the location
- The local laws and regulations in the community
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
Aside from relevant software applications such as CRM software applications, accounting software et al and perhaps POS machines, there is hardly any technicality involved in cookie manufacturing. When it comes to operating a cookies manufacturing business, it is important to ensure that you acquire brand new bakery equipment. As a matter of fact, kitchen utensils and equipment are affordable.
Some of the kitchen/bakery utensils and equipment that you would need to launch your business are;
Industrial Oven, Microwave Oven, Fridge, Pans and POS machines.
If you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your factory especially if you choose not start a homemade cookie production business; it usually gives you the freedom to design the facility the way you want to it to be. But if you are low on cash, then you don’t have any option other than to rent a facility for your cookie factory.
As regard manpower, if you are running a small scale homemade cookies manufacturing business, you may not need full – time employees if you have family members that are willing to lend helping hands.
But a standard cookies manufacturing company would usually hire production manager, professional bakers, factory workers, accountant, sales rep, delivery drivers, cleaners, and security men. On the average, a standard medium scale cookie manufacturing would have between 10 and 20 employees.
The Service Delivery Process of the Business
The business process involved in cookie manufacturing is simple and straightforward; it involves getting your recipe right as regards the flavors, shapes and varieties of cookies you intend baking.
Once you have the exact details and numbers you want bake for the day, then you are expected to get your ingredients and the packaging (foil, and cardboard casing et al) on ground and then go into baking and packaging of the cookies.
Once the cookies are baked and well packaged, then it will be displayed in the shop, supplied to events as required or delivered via dispatch riders to stores.
After the day’s sales, the books will be balanced, stocks will be taken and if need be ingredients and supplies will be re – stocked. The bakery, bakery equipment and shop will be thoroughly cleaned and all the kitchen utensils placed in the right position so as to get set for the next day.
16. Write a Marketing Plan Packed With ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a cookie manufacturing business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction of the Cookie, Cracker and Pasta industry.
People will buy your cookies if they know that they are going to get good tasting cookies and of course value for their money.
Your marketing strategy should center on quality, pricing, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet which is why they will do all they can to maximize the internet to market their services or products. In other words, a larger percentage of your marketing efforts should be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your cookie manufacturing business;
- Introduce your cookie manufacturing business and brand by sending introductory letters alongside your brochure to corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists, and every adult in the neighborhood where you intend retailing your cookies
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need to locate where to purchase your cookies
- Create a basic website for your business, so as to give your business an online presence
- Directly market your products.
- Join local chambers of commerce and industries for business networking and industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your cookies at rock bottom prices is to purchase your ingredients and packing items directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your cookies at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives and also purchase.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of a wide range of different flavors of cookies under your brand, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your product can favorably compete with the some of the leading cookies manufacturing brands.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customers’ retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and services delivery, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service.
If you can continue to make available a wide range of flavors of cookies, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software. With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness.
If your intention of starting a cookie manufacturing business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution channels, then you must be ready to spend money on promotion and advertisement of your brand.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your cookies manufacturing business;
- Place adverts on both print (newspapers and related magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Billboards on strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your cookies brand
- Distribute your fliers and handbills in target areas
- List your cookies manufacturing business in local directories / yellow pages
- Advertise your cookies in your official website and employ strategies that will help you pull traffic to the site.
- Position our Flexi Banners at strategic positions in the location where your cookies manufacturing factory is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.