Popcorn is a tasty treat that has been around for millennia. Today's popcorn lovers can enjoy many varieties, including sweet, savory and novelty options. The markup on a bag of popcorn is typically 500%, so there's considerable potential for popcorn-business profit as a full- or part-time venture.
A "Corny" Success Story
Eric Bickernicks started his Massachusetts-based company, Velma's Wicked Delicious Kettle Corn, after attending a local fair and seeing long lines for $5-a-bag kettle corn. Kettle corn is now Bickernicks's full-time job, selling at venues such as fairs, farmers' markets and special events. He's written a 25-page book on starting your own popcorn-stand business, and it's available for free download on his website.
Regulations for a Home-Based Food Business
State and federal regulations govern food production to ensure the safety of consumers. States' cottage food laws eliminate some of the red tape associated with licensure and inspections by allowing home cooks and bakers to prepare and sell their wares at venues such as farmers' markets and roadside stands. Popcorn, since it does not require refrigeration, is an allowable product under cottage food laws. When building a popcorn-making business, you can start small at home like Eric Bickernicks did with Velma's.
Vending With a Popcorn Cart
A popcorn-stand business is a popular attractions at events, in public parks and on city streets. Commercial popcorn machines are priced starting around $450 and can go as high as several thousand. Carts can be purchased at various price points, starting around $300. Before looking at new popcorn-business equipment, particularly if you're purchasing high-end equipment, see what's available in the used market.
Bulk quantities of popping corn, salt and flavorings as well as supplies like bags, cups and napkins can all be purchased from a restaurant-supply store, either in person or online. There are several other items in addition to a commercial popcorn maker that are typically needed to start a popcorn-stand business. Your needs will vary depending on the types of popcorn you'll offer, how you'll package it and how many customers you plan to serve on a daily basis.
- Popcorn staging cabinet: $1,100 and up
- Cooker and tumbler (for caramel, cheddar and other flavored popcorns): $400 and up
- Paper popcorn bags: $11/1000
- Popcorn cups and buckets: $5.69 and up for packs of 50
- Colorings and flavorings: $7/pound and up
- Scoops: $1.99 and up
- Filler funnel: $38 and up
- Measuring cups: $1.99 and up
- Salt/flavorings shakers: $2.99 and up
Rules vary by municipality for vendors who use non-mechanized vehicles to sell their food products. Some cities and towns restrict the areas where you can set up, or they may restrict the total number of street vendors. Check with your town or city administrative offices on the laws governing a popcorn-cart business.
The Food Truck Option
Another "corny" success story is that of Rich and Kristie Arlan, who started selling America's Favorite Gourmet Popcorn from a food truck in the Washington, D.C. area when they realized that renting a storefront was too expensive. They eventually sold their business (at a profit), and America's Favorite Gourmet Popcorn is now available online and at two Virginia storefront locations.
Like food carts, food trucks are regulated by local laws. Check with city or town offices on the laws applicable to a food truck business.
Food trucks are much more expensive than pushcarts, but they have the advantage of greater mobility and visibility. Food trucks have allowed many entrepreneurs to test their offerings and build a loyal customer base. For those who have bigger aspirations, you can look to many examples of foodies who have turned a single truck into a fleet or successfully opened a brick-and-mortar location.
Getting Started With Your Popcorn-Making Business
Rich and Kristie Arlan of America's Favorite Gourmet Popcorn spent two years researching every aspect of their business, a practice they highly recommend. They also recommend meeting with a counselor at your local small business development center. A counselor can help you understand funding options and prepare a business plan. The Arlans were able to get a loan from the federal government's Small Business Administration with their counselor's assistance.
Name and Register Your Business
Choose a name that immediately identifies your business with popcorn. It pays to hire a professional graphic designer to create an eye-catching logo incorporating your business name that you can use for signage, advertising and paper goods.
Obtain a federal tax ID number (also called an employer identification number) by visiting the website of the IRS. The application is free, and you'll usually receive your unique number quickly.
Create a Popcorn Business Plan
A formal business plan may seem excessive for a small, even home-based business, but it will guide you through many of the decisions you'll have to make in order to build a successful enterprise. If you'll be working with suppliers, investors, banks or other lenders, they'll want to see a written business plan as a condition of working with you.
Look online for a business plan template suitable for a small business. A simple popcorn business plan should contain the following elements:
- Executive Summary: In this, the most important section of your business plan, tell who you are and what market niche you aim to fill. Tell about yourself and other key personnel. Summarize financial details.
- Company Description: Include information such as where the company was founded, the state where it's registered and business structure (e.g., sole proprietorship, limited liability company, etc.).
- Products and Services: Describe the products and services you'll provide. Aim to show the customers' perspective by explaining what market niche you're planning to fill. You can start with a statement as simple as, "Pop's Popcorn will be made fresh, satisfying customers' cravings for a healthier snack in one of five gourmet flavors."
- Market Analysis: Who are your target customers? Is anyone else in the area selling popcorn? How are you going to distinguish yourself in the market? Will you offer unique flavors or perhaps delivery service?
- Management Team: Tell about the knowledge and experience each individual, including yourself, brings to the business. What qualifies them to run a popcorn business?
- Financial Plan: Provide a detailed overview of your finances, including cash-flow statements and financial projections for the next three to five years, including estimated popcorn-business profits. If you're seeking outside funding, it pays to get the assistance of a professional accountant to prepare your documentation.
- Appendix: Use an appendix to include any additional documents such as resumes, legal documents, letters of reference, bank statements and credit histories.
Licensing requirements for businesses vary by state and municipality, so speak with someone from the small business development department in your city or town. In addition to permit and licensing fees for the town, you may be subject to inspections from the health department and, since you're using a heat source, the fire department.
- PickYourOwn: Cottage Food Laws by State: Selling Your Homemade and Home-Canned Foods
- Velma's Wicked Delicious Kettle Corn: Home
- U.S. Chamber of Commerce: Why the Co-Founders of America's Favorite Gourmet Popcorn Took the Food Truck Route
- WebstaurantStore: Popcorn
- City of Boston: How to Get a Food Truck Permit
- Business News Daily: Simple Business Plan Templates for Entrepreneurs
- Entrepreneur: Popcorn Cart