After coming up with the idea, the next step in starting your jam and jelly business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your start-up expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.

Related: How to write a business plan

Finding the perfect jam and jelly business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a jam and jelly business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: 3 steps to forming your LLC
 

Many businesses making jams and jellies operate out of their home, however, some will need access to a licensed kitchen on an occasional basis or even expand into a retail store.

Be sure to understand rules and regulations from your local health department regarding the proper kitchen setup.

The Federal Drug Administration (FDA) has guidelines on the safety requirements and labeling of jams the Food Safety Modernization Act. Additionally, most states also have requirements to follow regarding food safety, however, there are some exclusions businesses with volume under a certain amount.

Most states have less strict requirements for a small cottage food operation, which sell in small volumes. The local health department will be the best first contact to learn more about these requirements.

In addition to food safety, specific licensing, there will likely be general business requirements such as a local business license, sales tax permit, and an Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Especially when starting from home, the cost to start a jam business is low, however, if funding is needed, the borrower(s) will need to have good credit and invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

While jams and jellies are sold in grocery stores, you are selling the taste, quality, and uniqueness of your products – in addition to tieing into a locally made product, which people are more than willing to pay more for.

You will face competition, so you need to make sure that you are offering a high-quality product.  Be creative with your flavors and recipes and set your business apart.

Selling at local farmers markets and area retailers will get your product in front of a lot of potential customers. The more opportunities you have to let people sample your product will greatly increase sales.

Common marketing techniques for a jam and jelly business include social media marketing and online advertising. Developing a website can be a significant expense, but it can also give your jam and jelly business greater visibility online.

Related: Low-cost ideas to market a new business

A jam and jelly business needs several types of insurance for full coverage:

– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost of insurance policies will vary based on a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

You may need employees to help you run your jam and jelly business.  Make sure that you select people with appropriate experience and training.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Setting up an accounting system for your jam and jelly business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business