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Cookie Company business plan for starting your own business
Food is one of the most lucrative businesses on the planet. If you want to enter this industry, opening a cookie company can be a very good option. In this cookie bakery business plan, we will look into how you can open such a business and run it in a profitable manner. This homemade cookies business plan will explain all the aspects of running the business. If you want to know how to start a cookie business, all you need to do is to read this document to the end. You can also use this document for creating a franchise business plan.
Executive Summary
2.1 The Business
For this cookie dough business plan, we will use the example of Steve Bakes. This will be a cookie company based in Houston, Texas. Steve Baker is starting a cookie business because it is his family business.
2.2 Management of Cookie Company
For anyone who wants to know how to start a cookie business, it is important to have a clear idea of how the company will be managed. To run the business the right way, Steve will hire managers to run the day-to-day affairs of the company. Steve will be the CEO of the company and all matters will be brought to his notice on a daily basis. Having a well-defined management structure of the company is not only necessary to run the business in a profitable manner but also for creating a business plan for a bank loan.
2.3 Customers of Cookie Company
Just like starting a coffee bean business, it is important to have an idea of the customers that you’ll be dealing with when you start a cookie company. The main customers of the company will be:
- Private buyers who need the cookies for themselves.
- Local retailers who need the cookies for their business.
- Hotels, cafes and restaurants.
- Hand-made cookie exporters.
2.4 Business Target
The next important thing that needs to be done before starting a business is to set a business target. The target of Steve Bakes will e to:
- Become the best cookie maker in the city.
- Expand the business to three more locations by the end of year one.
- Start making $178,900 in profits by the end of year two.
- Establish the name of the business as a top cookie brand in all of USA.
Company Summary
3.1 Company Owner
The business plan for homemade cookies needs to cover the owner of the company too. Steve Baker has been working in a bakery since he was 10. He knows a secret cookie recipe that is a part of his family’s legacy.
3.2 Why the Cookie Company is being started?
Steve wants to start a cookie business because he knows that no one can make better cookies than him. He wants to capitalize on the secret cookie making technique passed on to him by his father and his love for cookies. With such a fantastic technique and passion, nothing can stop him from starting this business.
3.3 How the Cookie Company will be started?
The steps involved in starting the cookie company are more or less the same as those seen in the restaurant business plan template. Here’s how this business will be started.
Step1: Market Survey
Like any other business, the first thing to do is to determine how profitable is a cookie business and to do that, it is important to conduct a market survey. This will tell us the demand of the product and the profit margin we have. The cookie shop names will also be finalized on this stage.
Step2: Marketing
The next step in how to open a cookie business is to market the business. You need to reach as many people as you can in order to make sure that the business gets adequate customers once it is functional.
Step3: Establishing the Bakery
Once you have started the marketing effort, it is the time to establish the bakery where the delicious treats will be made. Just like the juice corner business plan, you need to make sure that the capacity of the production unit is in line with the demand of the product.
Step4: Going Online
Once the bakery is being built, you need to establish a website and make an online presence so that your customers can order the cookies easily. As all businesses these days have an online presence, this is very important to compete in the market.
| Start-up Expenses | |
| Legal | $251,000 |
| Consultants | $0 |
| Insurance | $30,000 |
| Rent | $28,000 |
| Research and Development | $25,000 |
| Expensed Equipment | $53,000 |
| Signs | $4,100 |
| TOTAL START-UP EXPENSES | $391,100 |
| Start-up Assets | $340,000 |
| Cash Required | $357,000 |
| Start-up Inventory | $38,000 |
| Other Current Assets | $234,000 |
| Long-term Assets | $278,000 |
| TOTAL ASSETS | $1,247,000 |
| Total Requirements | $1,638,100 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $391,100 |
| Start-up Assets to Fund | $1,247,000 |
| TOTAL FUNDING REQUIRED | $1,638,100 |
| Assets | |
| Non-cash Assets from Start-up | $1,625,000 |
| Cash Requirements from Start-up | $380,000 |
| Additional Cash Raised | $52,000 |
| Cash Balance on Starting Date | $39,000 |
| TOTAL ASSETS | $2,096,000 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $47,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $76,000 |
| Capital | |
| Planned Investment | $1,638,100 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,638,100 |
| Loss at Start-up (Start-up Expenses) | $381,900 |
| TOTAL CAPITAL | $2,020,000 |
| TOTAL CAPITAL AND LIABILITIES | $2,096,000 |
| Total Funding | $1,638,100 |
Services
A cookie company might appear to be a straightforward business but, as a matter of fact, you can include a number of different services in your cookie shop business plan.
Note
Remember, the more services you offer, the more profit you can make. This cookies business plan sample includes some of the services that you can provide. You can also include more if you want.
The services that are a part of this cookie business plan template are:
Hand-Made Cookie Production
The basic service of the business will be the production and delivery of hand-made premium cookies.
Custom Cookies
People who want custom-made cookies can commission us to make cookies as per their demands.
Custom Cakes
Custom birthday, wedding, and other celebration cake designing, and production will also be one of the services provided by Steve Bakes.
Bakery Training
We will also include an apprenticeship program in the services for aspiring bakers to come and learn from our cookie making.
Marketing Analysis of Cookie Company
The single most important thing that you need to do to start cookie business I the marketing analysis of the business and the market you are going to enter. This is important because no matter how good you know how to sell cookie dough, if you are not aware of market dynamics, you’ll fail.
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5.1 Market Trends
If you know how to create your own cookies, the thing that you need to know next is the market trends of the business so that you can run it in a profitable way. There are a number of different cookie marketing ideas that can be used to advertise the business and attract customers. However, none of them will work if you do not know how to start your own cookie business.
5.2 Marketing Segmentation
The next thing that you need to know in order to start a successful cookie business is to have an idea of market segments that you will be serving. Here’s a rough idea of the market segments you’ll be dealing with:
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5.2.1 Private Customers
People who like cookies and want to buy premium hand-made cookies will be the main customers of the business.
5.2.2 Retail Stores
Retail stores in the area who want to add cookies to their stock will be another market segment for us.
5.2.3 Cafes, Bars and Restaurants
Local cafes, bars, and restaurants will also be among the market segments and will buy the product in bulk.
5.2.4 Exporters
Export businesses specializing in hand-made cookies will also be a lucrative market segment for the business.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Private Customers | 33% | 30,000 | 32,000 | 34,000 | 35,000 | 36,000 | 10.00% |
| Retail Stores | 26% | 23,000 | 25,000 | 27,000 | 29,000 | 30,000 | 10.00% |
| Cafes, Bars and Restaurants | 24% | 20,000 | 23,000 | 25,000 | 27,000 | 28,000 | 10.00% |
| Exporters | 17% | 13,000 | 14,000 | 16,000 | 18,000 | 19,000 | 11.00% |
| Total | 100% | 86,000 | 94,000 | 102,000 | 109,000 | 113,000 | 10% |
5.3 Business Target
When people explain how to open a cookie business, they tend to forget business targets. Here are the targets set by Steve Bakes.
- To become the best premium hand-made cookie maker in the city.
- To provide healthy and tasty cookies to everyone.
- To expand the business to other cities and then states.
- To make a ton of money.
5.4 Product Pricing
Just like we did in the business plan for cafe, we will price the product at the market average. Our product will be of better quality than any of the competitors and having a price similar to what people are already paying will help us get customers. Once we start getting enough customers, we can then increase the prices.
Marketing Strategy
The next thing that you need to start this business is a solid marketing plan for cookie business. The business plan for a bakery cannot be complete without it. Especially, if you are starting a cookie business at home, you need to be clear about how the business will be started and how it will be marketed. This part of this cookie making business plan deals with the marketing part of the business. This is because no cookies business plan sample can be complete without it.
6.1 Competitive Analysis
Here’s the competitive analysis of this cookie bouquet business plan:
- No one in the area offers handmade and custom cookies.
- The cookies available in the area are expensive and really not up to the mark.
- The bakeries that do offer cookies are often out of stock.
- Once we attract enough customers, we can sell the cookies at whatever price we want.
6.2 Sales Strategy
- The business will be advertised over all the local and national marketing channels. This will make the business known to everyone who a customer can be.
- The focus of the business, in the start, will be to earn customers rather than making huge profits.
- Discounts and special offers will be offered to the repeat customers and bulk buyers.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Hand-Made Cookie Production | 55,000 | 58,300 | 61,798 |
| Custom Cookies | 40,000 | 42,400 | 44,944 |
| Custom Cakes | 34,000 | 36,040 | 38,202 |
| Bakery Training | 28,000 | 29,680 | 31,461 |
| TOTAL UNIT SALES | 157,000 | 166,420 | 176,405 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Hand-Made Cookie Production | $45.00 | $52.20 | $60.55 |
| Custom Cookies | $50.00 | $58.00 | $67.28 |
| Custom Cakes | $60.00 | $69.60 | $80.74 |
| Bakery Training | $75.00 | $87.00 | $100.92 |
| Sales | |||
| Hand-Made Cookie Production | $2,475,000.00 | $3,043,260.00 | $3,741,992.50 |
| Custom Cookies | $2,000,000.00 | $2,459,200.00 | $3,023,832.32 |
| Custom Cakes | $2,040,000.00 | $2,508,384.00 | $3,084,308.97 |
| Bakery Training | $2,100,000.00 | $2,582,160.00 | $3,175,023.94 |
| TOTAL SALES | $8,615,000.00 | $10,593,004.00 | $13,025,157.72 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Hand-Made Cookie Production | $43.00 | $49.00 | $56.00 |
| Custom Cookies | $48.00 | $55.00 | $63.00 |
| Custom Cakes | $58.00 | $66.00 | $76.00 |
| Bakery Training | $73.00 | $84.00 | $96.00 |
| Direct Cost of Sales | |||
| Hand-Made Cookie Production | $2,365,000.00 | $2,856,700.00 | $3,460,688.00 |
| Custom Cookies | $1,920,000.00 | $2,332,000.00 | $2,831,472.00 |
| Custom Cakes | $1,972,000.00 | $2,378,640.00 | $2,903,382.40 |
| Bakery Training | $2,044,000.00 | $2,493,120.00 | $3,020,236.80 |
| Subtotal Direct Cost of Sales | $8,301,000.00 | $10,060,460.00 | $12,215,779.20 |
Personnel plan
The next important part of this cookie bakery business plan is the personnel plan. This is the part where we discuss the manpower required to run the business. As the main products of the business will be handmade and custom cookies, we will need quite a bit of workers to run this cookie business from home. That means, while answering the question how to start an online cookie business, it is important to mention how many people will be needed to operate it.
7.1 Company Staff
The following people will be needed to run the business:
- Steve Baker, the owner, will be the CEO of the business.
- 1 shopkeeper for operating the factory outlet.
- 3 managers will be hired for sales, operations, and marketing.
- 4 Bakers.
- 3 delivery drivers.
- 1 accountant.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Sales Manager | $13,000 | $14,300 | $15,730 |
| Marketing Manager | $13,000 | $14,300 | $15,730 |
| Operations Manager | $14,000 | $15,400 | $16,940 |
| Bakers | $40,000 | $44,000 | $48,400 |
| Shopkeeper | $9,000 | $9,900 | $10,890 |
| Delivery Drivers | $27,000 | $29,700 | $32,670 |
| Accountant | $9,000 | $9,900 | $10,890 |
| Total Salaries | $125,000 | $137,500 | $151,250 |
Financial Plan
When you offer homemade cookies for sale, the first thing that you need to decide is how much does a cookie cost you to manufacture. What most manufacturers fail to realize is the cost of the cookie is not just the cost of the dough used to make it. You need to include everything from the cost of starting the business to running it in order to get the correct estimate of the cost of the product.
The money needed to start this home bakery business plan will include:
- The cost of buying land to build the bakery.
- Marketing costs.
- Cost of making a website.
- Salary of the employees.
- Cost of raw materials to make the cookies.
- Cost of registration and insurance.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.15% | 8.22% |
| Long-term Interest Rate | 8.39% | 8.46% | 8.51% |
| Tax Rate | 24.01% | 24.50% | 25.80% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5341 |
| Monthly Revenue Break-even | $133,100 |
| Assumptions: | |
| Average Per-Unit Revenue | $234.00 |
| Average Per-Unit Variable Cost | $0.66 |
| Estimated Monthly Fixed Cost | $163,400 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $8,615,000 | $10,593,004 | $13,025,158 |
| Direct Cost of Sales | $8,301,000 | $10,060,460 | $12,215,779 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $8,301,000 | $10,060,460 | $12,215,779 |
| Gross Margin | $314,000 | $532,544 | $809,379 |
| Gross Margin % | 3.64% | 5.03% | 6.21% |
| Expenses | |||
| Payroll | $125,000 | $137,500 | $151,250 |
| Sales and Marketing and Other Expenses | $120,000 | $130,000 | $140,000 |
| Depreciation | $2,200 | $2,300 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,800 | $2,900 | $3,100 |
| Payroll Taxes | $30,000 | $31,000 | $32,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $285,000 | $308,800 | $334,050 |
| Profit Before Interest and Taxes | $29,000 | $223,744 | $475,329 |
| EBITDA | $29,000 | $223,744 | $475,329 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $5,800 | $44,749 | $95,066 |
| Net Profit | $23,200 | $178,995 | $380,263 |
| Net Profit/Sales | 0.27% | 1.69% | 2.92% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $55,000 | $59,400 | $64,152 |
| Cash from Receivables | $20,000 | $21,600 | $23,328 |
| SUBTOTAL CASH FROM OPERATIONS | $75,000 | $81,750 | $88,290 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $75,000 | $82,000 | $89,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $41,000 | $42,000 | $44,000 |
| Bill Payments | $25,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $66,000 | $70,000 | $75,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $66,000 | $71,280 | $76,982 |
| Net Cash Flow | $20,000 | $21,000 | $22,000 |
| Cash Balance | $26,000 | $29,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $23,000 | $25,760 | $28,954 |
| Inventory | $4,100 | $4,592 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $283,000 | $316,960 | $356,263 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,000 | $21,280 | $23,940 |
| TOTAL LONG-TERM ASSETS | $22,300 | $24,976 | $28,098 |
| TOTAL ASSETS | $295,000 | $330,400 | $371,700 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,800 | $21,056 | $23,667 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $17,000 | $19,040 | $21,401 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $56,000 | $61,040 | $67,144 |
| Earnings | $198,000 | $215,820 | $237,402 |
| TOTAL CAPITAL | $286,000 | $311,740 | $342,914 |
| TOTAL LIABILITIES AND CAPITAL | $303,000 | $330,400 | $371,700 |
| Net Worth | $294,000 | $320,460 | $352,506 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.22% | 8.00% | 8.86% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.18% | 10.17% | 11.27% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 150.02% | 152.00% | 152.00% | 158.00% |
| Long-term Assets | 11.45% | 11.49% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.61% | 7.67% | 7.74% | 7.38% |
| NET WORTH | 100.90% | 101.71% | 102.64% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.80% | 97.36% | 100.09% | 99.00% |
| Selling, General & Administrative Expenses | 94.00% | 96.54% | 99.24% | 97.80% |
| Advertising Expenses | 1.56% | 1.60% | 1.65% | 1.40% |
| Profit Before Interest and Taxes | 42.60% | 43.75% | 44.98% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.6 | 34.44 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 75.02% | 75.10% | 75.00% |
| Pre-tax Return on Assets | 94.67% | 99.40% | 104.37% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 32.40% | 33.40% | 34.44% | N.A. |
| Return on Equity | 55.00% | 56.71% | 58.46% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32 | 33.6 | 33 | N.A. |
| Accounts Payable Turnover | 15 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $248,900 | $262,838 | $277,557 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.86 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29.1 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
Frequently asked questions of the cookie business
Answer the following questions in your cookie business plan –
- Will you offer cookies online or sell locally, or both?
- If online, how you are going to ensure safety in shipping?
- What makes your recipes unique?
- How you are going to market cookies?
- Do you have proper licenses and permits to start your business?
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