As a cookiepreneur, you have so many important decisions to make - and none more important than establishing both a vision for what you wish to build and the starting point from which to build it.
Launching a business without a vision, strong motivation, clear starting point, and plan is a recipe for fatigue, overwhelm, and burnout. In this post I will discuss some of the most important questions that you should ask yourself in order to determine the size, direction, and scope of your business.
#1: What Is Your Overall Vision?
Your vision may be to open a bakery someday. Perhaps you would like to build the next hottest cookie franchise? Whatever it is, dream a little, stretch a little out of your comfort zone, if need be. The idea is always to start with the end in mind, and then you can tweak things along the way. The clearer the vision, the better.
Make notes of where you would like your shop to be located. Picture yourself walking in and describe everything from the door to flooring. What is the décor like? The vitrines and furniture? Make your way into the kitchen and describe everything you can see from the bun pan racks to the ovens.
Don’t get too hung up on how you will reach that goal at this very moment. Dream up a vision of your business that feels right for you. Remember, all great successes started as an idea in someone’s mind before they actually materialized.
If this feels a bit strange for you, I urge you to throw caution to the wind and go with it. This is an exercise designed by me to help you figure out what you really want and how to move toward it step by step. Write your vision down in a notebook or pad. I keep several notebooks for my business, one in particular entitled VISION and another IDEAS. This will help you build your thoughts and keep them together.
So now that you have your end goal in mind, let’s start the real work and explore where to begin.
The Journey Begins
Hopefully, I will be able to help you through the entire business process, one step at a time, but before we start traveling, you need to figure out where you are going to start.
Figuring out where to start may be a tough decision, but as the philosopher Socrates said “know thyself,” I say to you: the more you know about how you are going to approach your business and your motivations, the easier it will be to sail through all of the highs and lows of being a cookiepreneur. So let’s get started.
The Three Sources of Power
There are three main sources of power that are going to fuel your business:
Money or financial capital (M)
All successful businesses require a combination of all three to some degree. The more you have of one, the less you may need of the others; yet in the beginning of any business, much of your personal energy and time will be required to make sure all goes smoothly.
For example, if you are starting your business with very little capital, you will need to invest more personal energy and time in growing your business. In my case, I applied my time and personal energy thoughtfully, leveraged the little money I had over the years, and turned my business into a money-making enterprise. T+E+m = profits = successful business! (Notice I made the "m" for money small because I had so little.)
If you are starting out with a much larger amount of capital, and you can afford to leverage yourself by hiring staff and delegating work to help you get things off the ground straight away, then naturally you will need to invest less of your personal energy and time, and more of your money to pay your staff. M+e+t = profits = successful business!
Now that you understand the basic components of how to power up your business, and that there are different ways to do this, let's explore some other important questions.
#2: Can You Commit to Making Your Business Successful?
Starting any kind of business is a huge commitment, not just financially, but of time and energy. I always say that money can be lost or gained at any time. You can recover your energy as well. But you can never get back time, so be realistic about your capability to commit.
How many people do you know who started a project with great enthusiasm and then ran out of steam after a week or so? Do you tend to run out of steam, or do you follow through with your commitments once you make up your mind?
As a cookiepreneur, you will face challenges, not only at the onset of your business but throughout. Once you decide to move forward, it is so important to follow through and persevere. You need to truly look within when you ask yourself this question.
#3: How Much Time, Energy, and Money Are You Willing to Invest - Specifically?
Remember our equation for power? How to start was a relatively simple decision for me. If you read my first post, Rise of the Cookiepreneur, you may remember that I launched my business from home with a mere $800. It was all I had at the time, and I decided it was cookie success or bust.
If you are one of the fortunate gals/guys who have a few thousand dollars or unlimited capital that you can invest, then your most pressing question would be: how much of that money am I willing to invest in my operation?
Clearly, that is a decision to be made after you consider some of the other questions I am posing here, and the hard numbers. Starting any kind of business, particularly a brick-and-mortar food establishment, is always a risk no matter how well thought out. According to The National Restaurant Association, the failure rate of restaurants within the first year is 30 percent, and another 30 percent fail within the next two years or so. This is the reality, so if you are planning to open a brick-and-mortar shop, I advise you to put together a serious business plan before you proceed.
Here are a few more questions for you, that only you can answer:
How much time am I willing to invest in my business?
How much time do I actuallyhave to invest in my cookie business?
What kinds of sacrifices am I willing to make in order to grow my business to the point that it is profitable and self-sustaining?
How long am I willing to work to make this happen and how long is it going to take? (Putting together an initial assessment will give you a better idea; we will cover this in a separate post.)
#4: What Is Your Motivation?
If you read my first post, you already know the motivation behind my cookie business. There is no doubt that part of it was the sheer love I feel for baking, but the driving factor was my financial situation. For me, there was no greater motivation than having a young child to feed without the streams of income I once had. I had to find something to do that would provide a valuable product and service to others, as well as exercise my creativity and allow me to make money.
You may wonder why I’m placing so much emphasis on motivation, but think about your motivation in direct correlation with the kind of commitment you are willing to put forth to make your business grow. The stronger and clearer your motivation for success, the more committed you are likely to be, and, in turn, the more likely your business will succeed.
We all have different motivating factors to start a business. Perhaps you are just looking to have a bit of fun and make few extra dollars while you’re at it. Some of you may want to supplement your household income, and others may be doing it to put kids through college, like the amazing Cristin Sohm of Cristin's Cookies, from whom you will hear in a sec.
This very special lady has managed to parlay a cookie blog into a cookie cutter business and now into a full-on cottage food business in order to help put her son through college. She is also a mom to three, grandmother to a gorgeous baby girl with another grandchild on the way, and an avid cyclist. And get this, she only uses glaze!
I am going to push the pause button on questions for a moment to share a recent interview with Cristin, which underscores the typical motivation and commitment required of a multi-tasking cookiepreneur. (Added bonus: Cristin provides some great tips for launching a cottage food business along the way!)
All photo credits: Cristin's Cookies
AVD: Cristin, when did you start baking and decorating cookies?
CS: My daughter (above, left) and I had been baking and decorating cookies (if you could call it that ) since she was very little, but only at Christmas time. When people ate my cookies, they often said I should go into business. People are always nice that way. Running a household with three active children and working full time as an administrative assistant didn't allow for such luxuries of time. So my daughter and I continued to enjoy cookie baking at Christmas time using the couple of cookie cutters that my mom had given me.
AVD: When did you make the decision to create your own blog (Cristin's Cookies) and feature your cookies?
CS: Cristin's Cookies was started on January 23, 2011. That was the date of my first-ever blog post. I wasn't on Facebook yet. I didn't know there was a cookie community yet. I wasn't addicted to cookie cutters. I was a complete newbie.
I've always leaned toward the technical geek side. I actually wrote my first blog post just to try it out. I remember watching the blog to see if anyone viewed it and being so excited when I had 10 views! Now, over 500,000 views later, I still love blogging and sharing my cookies.
AVD: One thing that is really cool about your cookies is that they mostly use your original cookie cutters. When did you start making your own cutters, and at what point did you know you were ready to go into the cookie cutter business?
CS: My cookie cutter obsession had me at about 900 cookie cutters, most of them from Copper Gifts and eCrandal. Do the math. That's a pretty penny to say the least. I love, love, love all my beautiful copper cookie cutters. I even have them in my will, along with my pretty pink bicycle. But I would see changes/updates that I wanted on the cookie cutters. Beth and Raymond from Copper Gifts and Jamie and Eric from eCrandal put up with me wonderfully. Beth had Raymond stretch the cookie cutters for me because I really like big cookies, and Jamie would give my design ideas to Eric when I would beg. I appreciated the kindness they offered me, but they were also busy running their business, and I always felt bad for having special requests. That's really what prompted me to make my own cookie cutters.
I started by buying that kit to design your own cookie cutters out of tin. But the tin was flimsy and didn't hold together well, and the cutters fell apart pretty quickly. So then I bought a whole bunch of copper strips on a roll and I gave it to my son-in-law and tried to inspire him to make my cookie cutter designs. I think I got three cookie cutters out of that plan, but I was much too impatient and had too many ideas swarming around in my head. That's when I looked into 3-D printing. I was determined to figure it out BEFORE putting in the money since it was such a huge investment.
I spent four months researching every day and trying various software to learn about 3-D printing. Meanwhile, the bump on my forehead got bigger and bigger as I hit my head against the desk. But it finally clicked. Then I became a cookie machine. I made cookies for family and friends and saved up every penny to jump into the 3-D printing world.
My plan was never to go into the cookie cutter business. My plan was to get the design ideas out of my head and into cookie form. Yes, it was all about ME! Well, then my son went off to college. Have you ever had a child in college? A private college? A Catholic private college? With a top-rate engineering school? Yep, you guessed it. It became all about HIM. My husband and I are blessed with good kids. I mean GOOD. I actually get tears just thinking about how good my kids are. So when Nick got those big envelopes from the colleges asking him to go to their school and they offered him amazing scholarships, we knew we had to let him go and we had to come up with the difference. Thus Cristin's Cookies Etsy Shop was born. [EDITOR'S NOTE: I can feel Cristin's motivation! Can you?]
AVD: What were the main factors that influenced your decision to form your cottage food business at home?
CS: Plain and simple . . . the law. In September 2012, the Cottage Food Operation (CFO) law was finally passed in California. The law went into effect on January 1, 2013, but the departments weren't ready so it was several months before we could apply for the CFO permit. Santa Clara County was one of the last to start accepting applications. I loved working, so going back to work was an option that I would have enjoyed, but then I'd be away from the house all the time and juggling family, chores, activities, to-do lists, and so on. I love cookie decorating. I love cycling. I love having time to do the things I enjoy. So I talked it over with hubby. He had his concerns, but he does like me being home, so we decided to give it a try. [EDITOR'S NOTE: Notice how thoughtfully Cristin weighed her three sources of power - money, energy, and time - before taking the leap.]
AVD: How did you navigate the whole process? Did you do it on your own or have help?
CS: Well, thank God for Google, right?! Nowadays you can find most everything from a simple search, but I also am part of a couple of cookie decorating groups on Facebook, and everyone is always happy to help and share knowledge. Hint: Be friends with people who are around sugar all day; it makes them sweet.
Since California was pretty late to the party with their cottage food law, there were already a number of people who had gone through the process. So I asked some random questions here and there. I also joined two groups on Facebook that were specific to California's cottage food law. The hardest part was the beginning, when it seems there are so many facets and you want to make sure not to leave something out. There wasn't a clear-cut "do this, go here." Since the law was new, I had to do a lot of research to make sure to follow all the right steps. Once I finished the process, I created a "go here, do this" list and shared it in the California cottage food law groups.
AVD: What process did you have to go through to get your cottage business approved?
CS: I've attached my "Starting a Cottage Food Operation" list, here. It is specific to California, but the details are all there, and each person just needs to follow it for their state specifically. Here are the basic requirements for the California CFO:
Food handler's training and certificate
Product food labels for the Department of Environmental Health
Zoning permit - this is not necessary in most counties of most states, but it was necessary in mine
Fire permit - also not necessary in most counties
Business license - you must have a business license to sell ANYTHING at ANY TIME; in some cities, this is called a business tax certificate
Legal business structure - optional; since a CFO is dealing with food, I decided to go with a LLC (Limited Liability Company); www.legalzoom.com provides a lot of information about possible business structures
EIN (Employer Identification Number) or FEIN - or you can use your social security number; but if you're running a business, it's a good idea to keep everything separate and it is fast and free to get an EIN through the IRS website
Statement of information - if setting up a legal business entity, this is required by the Secretary of State within the first 90 days of starting your business
State tax ID - necessary IF you are going to hire employees
Sellers permit - you must have this if you are going to sell anything at any time; easy and free to apply online through the Board of Equalization website
Business bank account and business credit card - optional
Insurance - you will want liability insurance in case anything goes wrong; you can often add it to your homeowner's insurance policy or get a separate policy
Income and sales tax filings - federal and state
[EDITOR'S NOTE: Have no doubt, assembling all of this stuff takes plenty of commitment.]
AVD: Do you feel that all the work will be worth it in the end?
CS: It was a lot of work to be sure, but I think a big part of that was because it was a brand new law, and the people trying to get the CFO and those running the CFO were both muddling their way through, trying to understand the law. It was also very expensive to get started, but in California everything is about three times as expensive, so don't let that stand in your way.
I have a constant flow of cookie orders and I love every part of that. I say no to at least one-third of the requests and try to learn to balance work with family. I think it is worth all the effort to do what you love.
AVD: So how would you summarize your vision/goal for your business?
CS: It's still very new for me and I still have a lot to learn, but that's what keeps it interesting, right? My immediate goal is to pay for Nick's college, soak up time and love with my family, and convince Abigail to say "Grandma." For the business, my goal is to keep coming out with new designs and to learn how to balance work and family well enough to get some sleep once in a while too.
[EDITOR'S NOTE: A pretty clear vision, yet adaptable, wouldn't you say?]
AVD: Cristin, you rock! Thank you for such great insight and information.
I told you Cristin was going to be a great help!
Now that we have explored the "mindset" part of setting up your cookie business (i.e., defining your vision, commitment, and motivation), we come to the two final questions you should ask yourself before you set sail.
#5: Who Is Your Client and What Kind of Cookies Will You Create for Them?
How many times have you experienced a potential client trying to nickel and dime you or beat your cookies out of you for nothing? Right, I thought this might have happened to you once or twice, and it’s downright demoralizing.
Before you decide what kind of operation you wish to establish, you need to know who your client is and how much they are willing to pay for your cookies. Choose your clients carefully and then constantly educate them as to the work that goes into your cookies.
You may think that you don’t have a choice in the kind of clientele you attract, but you do. For instance, I chose to streamline my cookie offerings and simplify my designs so that I could produce them quickly and turn a profit. Stay tuned; I'll talk more about knowing your customer and pricing in a future post!
#6: And, Lastly, Big Dreams, Little Money - What Kind of Operation Will You Set Up?
When I started baking out of my home in Bonita Springs, Florida, my vision was to set up a cookie franchise that gave that other popular one that offers cookie bouquets a run for their money. I have since modified my vision a bit, but I have to admit that, had I not had that goal as a beacon, I don’t think I could have grown as fast as I did.
Even though my ambitions were quite lofty, the reality of my financial situation was a huge consideration when I started. With $800 as an initial investment, I had to start small and work my way up. I began as a cottage food operation selling to family, friends, and anyone in the state of Florida who would buy my cookies.
I have since moved to Virginia and expanded my business. I work both from home and out of a commercial kitchen part time. Although my end goal has shifted, I have always remained clear that, as long as I am in this business, I want to grow every year - and I am very specific about those numbers.
Like me, you may choose to start small and expand from there, or if you feel that you are ready and have the means and experience, you may want to dive into the deep end of the cookie pool. My personal recommendation, start small and take it from there.
Before we explore the types of operations you could possibly launch, here are a few blanket recommendations that I believe anyone starting any kind of cookie/edibles business should heed. Please note that all of my suggestions may or may not be required by law, but they are musts, in my opinion, if you are serious about moving forward.
Find out about all your state rules and regulations, and follow them to the letter.
Find out about all of your regional/township rules and regulations, and follow them to the letter.
Attend a food handler's course and obtain your certification either online or at a local college or facility.
If possible, attend a course for a food manager’s certification at a local college or facility. (In some states, this will be necessary for those of you who want to rent space in a commercial kitchen, even if on a part-time basis; this will most certainly be required in most states if opening your own bakery or commercial kitchen operation.)
Choose a system and plan for accurate bookkeeping/accounting.
Decide if you will be moving forward as a corporation, LLC, or sole proprietorship for IRS purposes and incorporate and acquire a tax ID number at www.irs.gov.
[EDITOR'S NOTE: It's interesting, and reassuring, to see how closely Aymee's recommendations mirror Cristin's recent experience.]
Now onto types of operations. Here's my quick synopsis:
Type of operation
Little or no licensing requirements
Highly restrictive/ cannot sell outside of state
Liability insurance required
Full-time commitment required
Home-based cottage food operation
Check state law
Licensed home kitchen
Part-time commercial kitchen rental
Full-service bakery/ shop
Home-Based Cottage Food Operation: If you are starting out with limited capital or time, this is probably the best type of business to launch if allowed in your state.
www.cottagefoods.org is a great, quick reference tool for cottage food laws in each state, but I will caution you not to substitute it for checking with your local Department of Agriculture website.
With a cottage food business, you can generally bake cookies, cakes, and other candies and baked goods that do not require refrigeration from your home. Note that rules and regulations vary according to state, and there are restrictions in some states as to the amount of money you can make yearly.
A cottage food business has incredibly low overhead, and you can enjoy good tax breaks for use of certain areas of your home and utilities, but you must be a tidy bookkeeper and separate products for home use from business use.
Cottage food law generally does not allow you to ship out of state or to sell your goods wholesale or to a third party. You must label products accordingly. Again, always check your local Department of Agriculture for specific details on the laws applicable to you.
Licensed Home Kitchen: Some states, such as Virginia, allow home kitchens with the proper equipment and setup to be approved by the State Department of Agriculture as an inspected food preparation facility.
A home bakery can require a greater financial commitment (for the required equipment, licensing, etc.), but is still fairly low overhead compared to renting a commercial kitchen operation. You will enjoy the benefits of being able to ship out of state, the operation can be run solely by you, and you, of course, have the option of hiring staff during the high season or as needed, all without having to incur many of the overhead costs associated with leasing a commercial kitchen or running a full-time bakery operation.
Part-Time Incubator or Commercial Kitchen Rental: This is an ideal option if your business has outgrown your home, but you are still unable or undecided about taking the financial plunge into a full-time bakery.
There are some cities where you can find incubator or cooperative commercial kitchens. These facilities are licensed commercial kitchens where local chefs can share space and are able to prepare and package their products for sale. [EDITOR'S NOTE: If there are no incubator kitchens in your city, another alternative is renting space in a licensed church kitchen or from a local caterer. I did the latter when I launched my cake business in 1996, because operating any kind of food business from home was not permitted in Missouri then.]
This type of business setup requires a greater financial investment, such as a food manager’s license and the purchasing of blocks of hours at a time. It can often require the hiring of staff (to serve the volume needed to offset the added overhead), who must also be certified food handlers in most states.
You may have to work late at night or very early in the morning depending on the schedules of other chefs and deal with the overall frustration of having to share food processing equipment, refrigerators, freezers, and the like. (And you may even have to clean up after them or organize items to bring things up to your standards.)
Some of the pros are that you can expand your network and clientele through these kinds of shared operations, without bearing a large amount of financial risk.
Full-Service Bakery or Cookie Shop: This is a brick-and-mortar establishment where you are fully committed to a commercial location. It involves the highest overhead and staff, usually (again, to serve the volume needed to offset the added overhead). But you can ship out of state and have complete control over the operations.
This kind of operation is recommended if you already have extensive experience with decorating, baking, and business. You must also have the time, personal energy, capital, and willingness to charge full-steam ahead with a commitment that is all or nothing.
I'll explore types of operations more fully in future posts, but for now, I hope that this brief overview has left you with a clear understanding of the depth of commitment required with each of these alternatives.
Putting It All Together
Amazon.com started in Jeff Bezos’ garage. Apple started in Steve Jobs’ parents' spare room. All great businesses started with someone’s vision of what they would be someday.
There is often a wide gap between your vision for your company and where you are right now. The key is to take small and systematic day-to-day steps that will lead you toward building your vision.
Baking and decorating cookies are great fun, and cookies are a fantastic medium though which to express yourself creatively. But if you want to move your cookie interest to the next level, the first and best small step you can take is to start answering - with the utmost of honesty - the questions I've posed here.
Please let me know what you have decided - or not decided - after reading this post. How committed are you, and to what lengths are you willing to go to build your cookie business?
I look forward to reading your replies, and until next time, always remember that persistence is the most important key to success! Never give up, never!
Aymee VanDyke, also known as Cookiepreneur, is a successful entrepreneur and business consultant whose main focus is to help women in the cottage food industry build profitable and rewarding businesses. She is the founder and owner of Cookiepreneur and The Wacky Cookie Company, a four-year-old cottage/commercial cookie business that has operated in the black for most of its existence. Aymee has an extensive background in personal development and attended the Norwegian School of Business in Oslo. Her articles have been published in BISSI, the magazine of the Norwegian School of Business, and Somos Magazine.
Photo credit: Aymee VanDyke
Note: From Dough to Dollars is a regular Cookie Connection blog feature written by Aymee VanDyke that provides business planning, marketing, and other tips for starting a cottage cookie business and taking it to the next level. Its content expresses the views of the author and interviewees, and not necessarily those of this site, its owners, its administrators, or its employees. To catch up on all of Aymee's past posts, click here.