If you are looking for a lucrative business idea to start from home then you should consider selling popcorn online and starting you own popcorn business. The question that comes to mind next may be “is the popcorn business profitable?”
According to statistics, the global popcorn market valued at USD$9.8 million in 2020. The market is expected to reach USD$18.8 million by 2031. Without a doubt, this figures prove that the popcorn market is highly profitable.
Popcorn, in itself, is one of the most popular healthy snack ideas. Almost everyone loves it! Whether at the cinemas or homemade. Unlike some snack foods, popcorn is healthy, convenient, and instant.
In this blog, you’ll learn how to start a popcorn business, what you need to know before selling popcorn online, and how much it cost to open up a small popcorn business. We’ll also explore how to write the best popcorn business plan.
Let’s get started.
How Much Does it Cost to Start a Popcorn Business?
Before we continue, it’s important you know the cost implications of what you are getting yourself into.
So, how much money to open up a small popcorn business? From getting your business license and the right popcorn equipment to buying wholesale popcorn supplies and sustainable eCommerce packaging materials, your new business idea might require relatively small investment upfront.
Typically, starting your popcorn business online costs a lot less than having a brick and mortar store or a popcorn cart. Here are some estimated figures:
For an online popcorn business - $4000 - $8000
This is inclusive of an industrial popcorn machine/popper, business registration and incorporation, business permits and licenses, insurance, eCommerce website design, labelling supplies, eCommerce packaging materials, and wholesale supplies.
For a popcorn cart business - $6000 - $12,000
This is inclusive of a commercial popcorn machine, business registration and incorporation, business permits and licenses, insurance, eCommerce website design, labelling supplies, packaging materials, wholesale supplies, and a popcorn cart.
For a brick and mortar popcorn shop - $30,000 - $50,000
This cost covers the lease for the building, commercial popcorn machine, business registration and incorporation, business permits and licenses, insurance, eCommerce website design, labelling supplies, packaging materials, and wholesale popcorn supplies.
Other startup costs that you may incur include:
- Costs to hire staff
- eCommerce marketing and popcorn promotion costs
- Utility costs
- Popcorn equipment costs
- Miscellaneous costs
It is important to note that these figures are estimates only. The actual cost of starting a popcorn business depends on the market, consumer trends, seasonality in business, and other economic factors.
How Much Can You Make From Selling Popcorn?
Now that you have a projected startup cost in mind, it’s good to know how much you can gain back from selling popcorn and if you’ll get high ROI. In essence, let’s find out if learning how to start a popcorn business is worth the investment.
A bag of pre-made popcorn typically costs around $5. Costs for larger bags range from $7 to $12. We'll use a $6 average pricing for these estimates. After costs for materials and packaging, your profit margin should be substantial—roughly 70%.
You'll see how to calculate your profit margin in a bit.
Working from home and selling 200 bags a week in your first year or two may earn you $62,000 a year. If the 70% margin is accurate, this would result in a profit of around $44,000. Sales could increase to 1,000 bags per week as your brand becomes more well-known and you step up your marketing initiatives.
At some point in your growth phase, you would need to lease a commercial space with additional equipment and recruit people, bringing your profit margin down to about 30%. With $312,000 in annual revenue, you'd still turn a healthy $93,600 profit.
Now, these figures are based on estimates and if market conditions are favorable. You can probably make more profit with the right omnichannel marketing and sales process.
How to Calculate Popcorn Profit Margin
So, how do you calculate your popcorn profit margin?
Popcorn Profit Margin = Price per bag of popcorn sold (USD$) X Number of bags sold - Cost of kernels (USD$)
How to Start a Popcorn Business in 7 Steps
You know the projected startup costs and the popcorn profit margin, if you still plan to start your popcorn business at this point, that means you are truly hooked. So, what do you need to start a popcorn business? Let’s not waste anymore time and explore how to start a popcorn business in seven steps.
- Conduct Market Research
Before starting your popcorn business, it is important to take a survey of your target niche market. Your findings will help you determine the type of popcorn your customers, how to price and charge your customers for each bag of popcorn, and who your competitors are.
When conducting your market research, focus on three main areas:
- Your target market: Understand who your target market is and where you’ll find them. It is also important to know their preferences, their pain points when finding popcorn, and what they’ll consider the best popcorn price. You can take note of the popcorn flavors and colors they like as well.
- Your competitors: Know what the market currently offers and who your local competitors are. While it may be difficult competing with big name brands at the beginning of your business, it is important to know the local brands. Check out their pricing strategy, marketing tactics, how their packaging looks like, and the popcorn flavors they make. It is necessary to also find out what customers think about this brand so you can identify the gap in the market.
- Your product: Create your own USP (unique selling proposition) that will position your product and brand to deliver what your target market wants. Your market research will help you know the right packaging, pricing model, flavors, and colors for your popcorn.
With your market research data ready, you are one step closer to knowing how to start a popcorn business.
- Write a Popcorn Business Plan
Once you have conducted your market research, it’s time to write a business plan. This plan should outline your goals, target market, products, and marketing strategy. Additionally, you should also consider the financial aspects of your business, including your start-up costs, operating expenses, and expected profits.
Your popcorn business plan serves as a roadmap for your business and is a valuable tool for securing funding and attracting investors. If you don’t have time to write a business plan yourself, you can download business plan templates online or even hire a business plan writer.
The following are the key components that should be included in your popcorn business plan:
- Executive Summary: This section provides a brief overview of your business, including your goals, target market, products, and marketing strategy.
- Company Description: This section provides a detailed description of your business, including your mission statement, history, and ownership structure.
- Market Analysis: In this section, you will provide a thorough analysis of the market for popcorn, including your target audience, competitors, and the market trends and opportunities.
- Product and Service Offerings: This section describes the products and services you will offer, including the flavors and packaging options you will provide.
- Marketing and Sales Strategy: In this section, you will describe how you will market and sell your products, including your pricing strategy, promotions, and advertising campaigns.
- Operations Plan: This section outlines how you will run your business, including your production process, supply chain management, and staffing requirements.
- Financial Plan: This section includes your financial projections, including your start-up costs, operating expenses, and expected profits. You should also include a cash flow analysis, balance sheet, and income statement.
- Appendices: This section includes any additional information that is relevant to your business, such as resumes of key personnel, legal documents, and market research data.
By including these components in your popcorn business plan, you will have a comprehensive document that will help you to start and grow your business successfully.
- Choose a Unique Name and Register Your Business
Choosing a unique name for your popcorn business is important as it will help you stand out from the competition and create a strong brand identity. Here are some steps to help you choose a unique name and register your popcorn business:
- Brainstorm: Start by brainstorming a list of potential names. Consider names that are memorable, easy to spell and pronounce, and relevant to your business. You can also use a thesaurus or a word generator to find inspiration.
- Research Availability: Once you have a list of potential names, research their availability to make sure they are not already in use by another business. You can do this by searching for similar names on websites such as Google, social media platforms, and the U.S. Patent and Trademark Office database.
- Check Domain Availability: If you plan to have an online presence, make sure the domain name for your website is available. You can check domain availability on websites such as GoDaddy or Namecheap.
- Get Feedback: Share your list of potential names with friends, family, and potential customers to get their feedback and see which names are the most memorable and appealing.
- Make a Final Selection: Based on your research and feedback, make a final selection of your business name and register it.
Examples of Unique Popcorn Business Names:
- Popping Good Popcorn
- Kernels of Joy
- The Popcorn Spot
- Gourmet Pops
- Crispy Treats
To register your popcorn business, you will need to obtain any necessary licenses and permits. This will vary depending on your location and the type of business structure you choose (such as sole proprietorship, partnership, or corporation).
You may also need to register for a tax ID number and obtain insurance. It is advisable to consult with a lawyer or a small business advisor to ensure that you have taken all the necessary steps to legally register your business.
- Select Your Products
Selecting the right products for your popcorn business is an important step in ensuring its success. Here are some key factors to consider when choosing your products:
- Market Demand: Based on your market research, determine which types of popcorn are in high demand. Consider offering traditional flavors, as well as unique options that set your business apart from your competitors.
- Quality Ingredients: Use high-quality ingredients to ensure that your popcorn is of the best quality. This includes the popcorn kernels, seasonings, and any other ingredients you may use. The type of food wholesale distributor you choose matters as well. Consider running a vendor check and using a vendor management system to manage your wholesale distribution companies.
- Food Safety: Ensure that your popcorn products are safe for consumption by following all food safety regulations and guidelines. This may include obtaining a food safety certificate and implementing food safety system procedures in your business.
- Packaging: Choose appropriate packaging that not only keeps your popcorn fresh but also showcases your brand and products effectively.
- Cost-Effectiveness: Look at the cost-effectiveness of your products, including the cost of ingredients and packaging, to ensure that you are able to offer competitive pricing while still making a profit.
- Allergen Awareness: Provide options for customers with food allergies, such as gluten-free or nut-free popcorn. This not only appeals to a wider range of customers but also helps to reduce the risk of food allergens in your business.
- Seasonal and Limited-Time Offers: Consider seasonal or limited-time offers to keep your customers engaged and coming back for more.
By considering these factors, you can select the right products for your popcorn business and position it for success. It's important to remember that you can always make adjustments and additions to your product line based on customer feedback and market trends.
- Purchase your Equipment
The right equipment will not only help you produce high-quality popcorn, but it will also make the production process more efficient and cost-effective. Here are some steps you should follow when purchasing equipment for your popcorn business:
- Determine your needs: The first step in purchasing equipment is to determine your needs. This includes the size of your business, the type of products you will be offering, and your production capacity. Consider how much popcorn you will be producing and how many customers you expect to serve, as this will impact the type and size of equipment you will need to purchase.
- Research equipment options: Research the different types of equipment available for producing popcorn. This may include commercial-grade popcorn machines, ingredient bins, warming decks, and packaging materials. Consider the features, price, and warranty of each option before making a decision.
- Consider your budget: Equipment can be expensive, so it's important to consider your budget when making a purchase. Make sure to only purchase equipment that you need, as purchasing unnecessary equipment can be a waste of money.
- Check for quality: When purchasing equipment, it's important to make sure that you are getting high-quality equipment. Look for equipment that is durable, easy to use, and easy to clean. Consider purchasing equipment from a reputable manufacturer to ensure that you are getting the best quality.
- Consider maintenance costs: Make sure to factor in maintenance costs when considering the total cost of equipment. Some equipment may require regular maintenance, so consider the costs associated with this when making your purchase.
- Get recommendations: Ask other popcorn business owners for recommendations on equipment suppliers. This can help you find a reputable supplier that offers quality equipment at a reasonable price.
- Purchase from a trusted supplier: Make sure to purchase your equipment from a trusted supplier that has a good reputation. Consider purchasing from a supplier that offers warranties, as this will give you peace of mind in case something goes wrong with the equipment.
- Choose Your Business Location
If you plan to start your popcorn business from home, then all you need to do is create your business website, and register your business on eCommerce marketplaces online. This will drive traffic and sales.
You can also consider social commerce channels to promote your online store. However, it is important to partner with delivery companies that will take care of omnichannel order fulfillment.
In the case you prefer a brick and mortar store, then here’s what you should do.
There are several factors to consider when selecting a location, and the right choice can greatly impact your business's success. Here are some key factors to keep in mind when choosing a location for your popcorn business:
- Foot Traffic: One of the most important factors to consider when selecting a business location is foot traffic. You want to choose a location that is easily accessible to your target audience and has a high volume of foot traffic. Consider locations in busy shopping centers, near movie theaters, or in high-traffic areas of town.
- Competition: Another factor to consider is the competition in the area. Research other popcorn businesses in the area to see what they are offering and how you can differentiate yourself. However, keep in mind that having other businesses in the area can also drive foot traffic to your location.
- Parking: Make sure your business location has convenient and accessible parking. Customers should be able to park close to your store with ease.
- Rent and Utilities: Consider the costs associated with your business location, including rent and utilities. Choose a location that fits within your budget and will allow you to keep operating costs low.
- Zoning Regulations: Make sure your business location complies with local zoning regulations and meets any necessary requirements.
- Accessibility: Consider the accessibility of your business location for both customers and employees. Choose a location that is easily accessible by public transportation or has good road connections.
- Visibility: Choose a location that is highly visible, so that customers can easily find your store. Consider adding signage or displays to make your business more noticeable.
- Promote and Monitor Business Performance
Finally, with every other part set up, it’s time to promote your business. Promoting and monitoring the performance of your popcorn business are two important steps to ensure its success.
Let’s see how you can make it happen:
Promoting Your Popcorn Business
- Utilize Social Media: Utilize social media platforms like Facebook, Instagram, and Twitter to promote your business and reach your target audience. Share pictures of your products, post about promotions, and interact with your followers.
- Offer Samples: Offer free samples of your products to potential customers to give them a taste of what you have to offer. This is a great way to generate buzz and attract new customers.
- Partner with Local Businesses: Partner with local businesses to promote your products. For example, you can offer your popcorn as a snack at local coffee shops or movie theaters.
- Host Events: Host events, such as pop-up stalls or tasting events, to promote your business and generate interest.
- Use Email Marketing: Use eCommerce email marketing to keep your customers informed about new products, promotions, and events.
Monitoring Your Popcorn Business Performance
- Track Sales and Expenses: Keep track of your sales and expenses to monitor your business performance. This will help you to see what is working and what is not, and make any necessary adjustments.
- Conduct Customer Surveys: Conduct customer surveys to gather feedback from your customers. This will help you to identify areas for improvement and make changes to ensure customer satisfaction.
- Analyze Website Traffic: If you have an online store, analyze website traffic to see how many people are visiting your site and what products are popular.
- Monitor Social Media Engagement: Monitor engagement on your social media accounts to see how your followers are interacting with your posts. This will help you to see what is resonating with your target audience and make any necessary adjustments.
- Evaluate Marketing Campaigns: Evaluate your marketing campaigns to see what is working and what is not. This will help you to see what is generating the most interest and make any necessary adjustments to ensure the success of your business.
Frequently Asked Questions About How to Start a Popcorn Business
Let’s answer some popular questions about starting a popcorn business.
Is a Popcorn Business Profitable?
Whether a popcorn business is profitable or not depends on various factors such as the market demand for popcorn, the target customer base, the pricing strategy, and the operational costs involved in starting and running the business. If there is a high demand for popcorn in the target market, and if the business is able to effectively target its desired customer base with a competitive pricing strategy and manage its costs effectively, it has the potential to be profitable.
How Much Should I Charge for Popcorn?
For a small-scale popcorn business, the cost of ingredients such as popcorn kernels, oil, and flavorings can range from $0.10 to $0.30 per serving, depending on the quality and type of ingredients used. Based on these costs, you may consider charging $1 to $3 per serving for plain popcorn, and $2 to $5 per serving for flavored popcorn.
How Do You Pack Popcorn for Sale?
There are different packaging options for popcorn. Some of these options are:
- Clear plastic tubes
- Popcorn tins
- Paper bag
- Gusseted pouch