Cookie Business Plan, With a 12-Month Projection

A cookie business plan sets out what you'll bake, who buys it and how, what a cookie costs and sells for, your state's cottage food rules, and the first year month by month. The decision that shapes a cookie plan is the mix between drop cookies and decorated ones. Decorated cookies make the photographs and the custom orders, but each takes about seven minutes of piping; a drop cookie takes about one. In the example below, a home baker reaches 600 drop cookies, 120 decorated singles and 30 custom dozens a month by month 11, makes a small profit from month 1, and ends the year about $11,600 ahead on top of paying $20 an hour for the baking. Measured per hour, though, the drop cookies earn six or seven times what the decorated ones do. Below is a description example, each part of the plan, the projection, the hours, and a free template.

The short version

• Describe the business in a paragraph: the cookies, the customers, the kitchen, the goals.
• Check your state's cottage food rules first: what you can sell, where, and any yearly sales cap.
• Cost a cookie: ingredients, packaging and your time, which for decorated cookies is most of it.
• Price drop cookies, decorated singles and custom dozens separately.
• Count the hours at full speed; decorated orders fill a week fast.
• Project 12 months with sales ramping up, and compare the year's sales with any cap.
• TaroStack costs every batch from what you paid and keeps the custom orders in one list. More below.

Part 1: the business description

Windward Roots, the made-up taro business I use in these examples, has a home cookie business run under a cottage food permit. Its description reads:

Windward Roots Cookies bakes taro-and-coconut drop cookies and hand-decorated sugar cookies in a home kitchen on Oʻahu, under the state's cottage food rules. We sell at Saturday markets, and take custom decorated orders for birthdays, showers and offices, picked up or delivered locally. In the first year we plan to sell 600 drop cookies and 30 custom dozens a month.

Part 2: what a cookie costs

The costs come from how to start a cookie business. For the plan, overhead moves to the monthly costs, and the card fee goes on each sale:

Part 3: customers and prices

The contribution is what's left after paying for the ingredients, the packaging and your time at $20 an hour. Every line is positive, so every line pays. The difference shows up in the hours.

Part 4: the hours, and what each one earns

Drop cookies take 15% of the hours and bring in more than half the contribution. Decorated cookies are worth making, because custom orders bring new customers and photographs that sell everything else, but the plan shouldn't depend on them. Add four market days of about seven hours each, and full speed is about 94 hours a month before the shopping and the dishes. How to price the decorated dozen properly is in how to price baked goods.

Part 5: cottage food rules

A home cookie business usually runs under your state's cottage food law, which decides which cookies are allowed (frosting or fillings that need the fridge often aren't), where you can sell, what goes on the label, and in some states a cap on yearly sales. Check yours before you plan; how is in how to start a cottage food business. If your state has a cap, compare it with the year's sales in Part 6, because a plan that outgrows the cap needs a licensed kitchen, and that changes the fixed costs.

Part 6: the first year, month by month

Sales start at 15% of full speed and reach 100% by month 11, against $343 of fixed costs a month: market booths, insurance, the online order page, extra oven power, marketing and samples, and the permit spread over the year.

The year's sales are $29,850 and the profit $11,649, on top of $20 an hour for the baking and decorating. With $343 of fixed costs, the business never needs much cash; what it needs is hours, and from month 9 the custom orders start to crowd the market days.

Part 7: the startup budget

Get the template

Download the cookie business plan template. Type your cookies with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast sales will come; it works out each month's sales, profit and cash, the first month with a profit and the lowest cash point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The plan has three products. The kitchen has nine doughs, four icing colors on the go, butter bought in three sizes, and eleven custom orders for next week, each with its own date, design and count. Friday night is spent working out how much dough to make for Saturday plus the orders, and whether there's enough powdered sugar for the royal icing. And when butter goes up a dollar a pound, nobody knows what a decorated dozen costs now.

How TaroStack does it

TaroStack keeps the recipes, the orders and the cost of every batch in one place.

Every dough and icing, costed. Each cookie is a recipe, with sub-recipes for doughs and icings, and units convert: buy butter by the case, bake by the gram. Recording a batch takes ingredients off stock at what you paid and divides by the cookies that came out good, so a butter price rise is in the next batch's cost.

Custom orders, in one list. Each custom order is a sales order for its date, with the customer and the count. "What could I make right now" checks the shelf against a recipe, so the powdered sugar question is answered before Friday night, and the reorder list shows what's running low in days of cover.

And what pays. Margins are reported by product and by customer, on what each batch actually cost, so the drop cookies' share and the office that orders every month are both visible.

Recipes, batches, sales orders and margins are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

How do I write a cookie business plan?

Describe the business, check your cottage food rules, cost each kind of cookie including your time, price drop cookies, decorated singles and custom dozens, count the hours, and project 12 months.

Is a cookie business profitable?

It can be. In the example, the year ends about $11,600 ahead on top of $20 an hour for the baking, and drop cookies earn far more per hour than decorated ones.

How much does it cost to start a cookie business?

About $2,750 in the example: a permit, a stand mixer, pans and tools, decorating tools, packaging, first ingredients, a market tent, insurance, an order page and $450 of working cash.

Can I sell cookies from home?

In many states, yes, under a cottage food law, with limits on which cookies, where you sell, the label, and sometimes yearly sales. Check your own state's rules.