Popcorn has been a popular snack for over a century and has evolved into a gourmet snack that comes in every flavor imaginable. If you love popcorn and being creative, a popcorn business could be an opportunity for you to be your own boss and make a great living.
A popcorn business makes various popcorn flavors from simple butter, cheese, or caramel to more adventurous buffalo, salt, and vinegar, or any combination of spices and sells them in single servings or bags. The business may operate out of a shop, a kiosk, or sell online only. Often, the popcorn is also available packaged as a gift in tins or other decorative packaging.
According to Allied Market Research, the global popcorn market was $9,060 million in 2016. According to IBIS World, the market size as of 2021 is $2 billion. Interestingly, the popcorn industry boomed during the pandemic due to people staying at home and “binge watching” shows and movies.
Healthy eating trends help to drive the popcorn market because popcorn is considered a healthier option than other salty snacks. As the pandemic winds down, discretionary spending on snacks is expected to increase with the increase in income and more time spent on leisure and sports watching.
Your target market will be popcorn lovers and those who prefer healthier snacks.
Skills, Experience, and Education Useful in Running a Popcorn Business
There are several specific skills that you will need to open a popcorn business.
- Experience. Experience in making different kinds of popcorn and the ability to come up with creative flavors is extremely helpful.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Popcorn Business
Here are the typical costs you will face when you open a popcorn business. You could choose to open a franchise at a cost of $150,000 – $400,000 as an alternative.
- Commercial-grade popcorn machine $2,500 +
- Initial ingredients $1,000 – $3,000
- Packaging supplies $2,000 +
- Store or kiosk rental downpayment $500 – $5,000
Steps to Starting a Popcorn Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your popcorn 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 startup 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 think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect gourmet popcorn 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.
Step 3: Form a Business Structure
A business structure refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a 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.
Related: Comparison of Business Entities
Step 4: Select your Location
Finding a location with high foot traffic and visibility is ideal for a retail location. A kiosk or popcorn cart in shopping malls, retail outlets, or other locations that bring lots of people can be a more inexpensive way to start versus deciding to purchase or rent a storefront.
Mobile popcorn carts that are set up at fairs and festivals are another way to get started without needing a large initial investment.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Check with your state for specific license and permit requirements for your popcorn business. Some other common local, state, and federal registrations a popcorn business may need include a sales tax permit and an Employer Identification Number.
Step 6: Find Financing
Fortunatley, the cost to start a popcorn business can be low, however, if funding is needed, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A popcorn business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a popcorn business include social media platforms like Facebook and Instagram, in addition to online advertising. Developing a website can be a significant expense, but it can also give your popcorn business greater visibility online.
Step 9: Get Insurance
A popcorn 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.
Insurance policies will vary. 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.
Step 10: Hiring Employees
You may need employees to help you run your popcorn 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
Step 11: Set up an Accounting System
Setting up an accounting system for your popcorn 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.
How Much Can You Potentially Make Owning a Popcorn Business?
Popcorn sells for around $20-25 per pound. If you sell 20 pounds of popcorn per day at $22 per pound, you will make $160,600 in annual revenue.
Things to Consider Before Starting a Popcorn Business
Starting your own gourmet popcorn business or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. If you have a physical location, you need to have high visibility to attract customers. The best locations are going to be more expensive.
If you sell online only, you’ll need to spend a fair amount of money on online advertising and search engine optimization.
You will face competition, so your products need to be of high quality with creative flavors so that your business stands out from the others.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other popcorn businesses to see what they offer and what prices they charge.