A fudge shop sells a show as much as a candy: fudge cooked in copper kettles and worked on marble slabs in the window, sold by the half-pound slab. The ingredients in a slab cost about $2.48, and it sells at the counter for $12.75, so the margin is wide; what the plan has to cover is a storefront on the main street, staff for the kettle and the counter, and a season: a tourist town sells most of its fudge between Memorial Day and Labor Day. Gift shop wholesale and shipped gift boxes carry the quiet months. Fudge dates at about three weeks, so the kettle runs to what sells. The plan below works per slab. In the example, a Mackinaw City fudge shop starts with $83,500, ends its first year about $3,600 behind before the owner's pay while sales build, and makes about $4,600 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the shop in a paragraph: the town, the kettles in the window, who buys, the goals.
- Cost each slab: sugar, butter, cream and chocolate by the batch, the box, the card fee.
- Plan sales by product: counter slabs, gift shop wholesale, shipped gift boxes.
- A tourist town sells most fudge in the summer: plan cash for the winter.
- Wholesale and shipped boxes carry the quiet months.
- Fudge keeps about three weeks: make to what sells.
- TaroStack costs each slab from its recipe and what each batch used. More below.
Part 1: the business description
Straits Fudge Kitchen, a made-up fudge shop in Mackinaw City, Michigan, writes:
Straits Fudge Kitchen makes fudge in copper kettles and works it on marble slabs in its front window on the main street of Mackinaw City, selling half-pound slabs at the counter, slabs to gift shops around northern Michigan, and two-pound gift boxes shipped year-round. In its first year it aims to reach $23,640 of sales a month at full speed.
Part 2: what a slab costs
| Product | Ingredients | Box or wrap | Card fee | Cost | Price | Cost share |
|---|---|---|---|---|---|---|
| Half-pound slab at the counter | $2.48 | $0.30 | $0.38 | $3.16 | $12.75 | 24.8% |
| Half-pound slab to a gift shop | $2.48 | $0.30 | $2.78 | $9.00 | 30.9% | |
| 2 lb gift box, shipped | $9.92 | $2.50 | $1.44 | $13.86 | $48.00 | 28.9% |
A 12-slab batch takes $29.70 of sugar, butter, cream and chocolate, $2.48 a slab. Shipping is charged to the customer on top of the $48. Time at the kettle is in the wages, below. How the slab price was set is in how to price fudge.
Part 3: the season, the window and wholesale
The kettle runs every day from May to October, with the window drawing people in off the street; from November to April the shop opens weekends and makes fudge for gift shops and shipped boxes. Gift shops take slabs by the case every two weeks in summer. Fudge is dated 21 days from making, so batches follow the week's sales, as in fudge shelf life.
Part 4: what each product earns
| Product | Price | Variable cost | Contribution | Margin | Units a month at full speed |
|---|---|---|---|---|---|
| Half-pound slab at the counter | $12.75 | $3.16 | $9.59 | 75.2% | 1,200 |
| Half-pound slab to gift shops | $9.00 | $2.78 | $6.22 | 69.1% | 500 |
| 2 lb gift box, shipped | $48.00 | $13.86 | $34.14 | 71.1% | 80 |
At full speed the business sells $23,640 a month and keeps $17,349.20, 73.4%; counter slabs bring $11,508 of it.
Part 5: the first year, month by month
Fixed costs are $12,750 every month: rent ($3,500), wages for a fudge maker and counter staff ($7,500), utilities ($600), ads ($400), insurance ($250), register and software ($100), and other costs ($400). Sales start at 35% of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $8,274 | −$6,678 | −$6,678 |
| 2 | $9,948 | −$5,450 | −$12,127 |
| 3 | $11,574 | −$4,256 | −$16,383 |
| 4 | $13,248 | −$3,028 | −$19,411 |
| 5 | $14,874 | −$1,834 | −$21,244 |
| 6 | $16,548 | −$606 | −$21,850 |
| 7 | $18,222 | $623 | −$21,227 |
| 8 | $19,848 | $1,816 | −$19,411 |
| 9 | $21,276 | $2,864 | −$16,547 |
| 10 | $22,458 | $3,732 | −$12,815 |
| 11 | $23,640 | $4,599 | −$8,216 |
| 12 | $23,640 | $4,599 | −$3,617 |
The year's sales are $203,550, and the business ends it $3,617 behind, before the owner's pay. It breaks even at about $17,370 of sales a month, in the seventh month. The lowest cash point, −$21,850 in month 6, is covered by the $25,000 of working cash with about $3,100 to spare. This is the plan's weakest point for a tourist town: it treats every month alike once sales are built up, but July sells several times what February does. Change the shares in the workbook's second row month by month, and keep the summer's cash for the winter rent.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out | $25,000 |
| Marble slab tables | $6,000 |
| Display case | $6,000 |
| Lease deposit and first month | $7,000 |
| Copper kettles and burners | $5,000 |
| Signs | $3,000 |
| Boxes and labels | $2,000 |
| Opening inventory | $2,000 |
| Website | $1,500 |
| Licenses and permits | $1,000 |
| Working cash | $25,000 |
| Total to start | $83,500 |
The $58,500 before working cash is earned back in about 13 months at full speed. Making fudge by the kettle is in how to make fudge in bulk, and a candy business beyond fudge in candy business plan.
Get the template
Download the fudge shop business plan workbook. Four sheets: your products, each with its price, variable cost and units a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one cost per slab. Butter and chocolate prices move, a batch grains and goes to the seconds tray, and slabs made Tuesday sit behind Thursday's in the case.
How TaroStack does it
TaroStack costs each slab of fudge from its recipe and from what each batch used.
Recipes by weight. Each slab of fudge is a recipe, with unit conversion from the case or sack to the gram.
True cost from the batch. Each batch takes ingredients at their real cost, from the deliveries they came from, so a price rise shows up in the next batch.
Price creep. A price-creep report per supplier shows which ingredient is quietly costing more.
| The job | Notebook | In TaroStack |
|---|---|---|
| What a slab of fudge costs this week | Last season's sheet | True cost from the batch |
| Slabs by batch date | Tape on the tray | Lots with dates, oldest first |
| An ingredient creeping up | Noticed at tax time | A price-creep report |
| Whether wholesale still pays | A guess | Margins on real cost |
Recipes, batches and true cost 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.