Starting a candy store takes a retail food license, a spot with foot traffic, an opening order from candy distributors, bulk bins if you'll sell pick-and-mix, a scale certified for trade to sell it by the pound, and a register that knows which candy is taxed. Candy keeps well, so a candy store is a simpler food business than most: the license is a retail one, and in Minnesota the fee runs by last year's sales and a risk category, from $265 to $415 a year for a store selling $125,001 to $250,000. Bulk bins have their own labeling rule: candy received in bulk can be sold without a label on each bag if the bulk container's label is in view or a sign gives the ingredients, in letters at least a quarter of an inch high. And sales tax: in Minnesota, candy and soft drinks are taxed, but anything made with flour isn't candy under the tax law, so a wafer bar or wheat licorice is exempt food. In the example below, a Stillwater candy store opens for $57,700 and makes about $17,400 before the owner's pay in its first year. Below are the steps, the rules, the example, and a free first-year plan.
The short version
- A candy store needs a retail food license; Minnesota's runs by sales and risk category.
- Bulk candy: the bin's label in view, or a sign with the ingredients in quarter-inch letters.
- Retailers under $500,000 in sales skip the Nutrition Facts, unless the label makes nutrition claims.
- Pick-and-mix sells by the pound, net of the bag, on a scale certified for trade.
- In Minnesota, candy and soft drinks are taxed; anything made with flour isn't candy.
- Bulk candy carries the best margin, and the most samples and spills.
- TaroStack counts the bins, the samples and the reorders. More below.
The steps
| Step | What to settle |
|---|---|
| The spot | Foot traffic: a main street, a tourist town, near a school or a theater |
| The license | Your state's retail food license, applied for before you open |
| The mix | Pick-and-mix bulk, packaged and chocolate bars, nostalgic and imported, gifts |
| Suppliers | A candy distributor for the range, and direct accounts for the best sellers |
| Bulk bins | Gravity bins or scoop bins, the ingredient signs, a scale certified for trade |
| Prices | A price per pound for the bins, and a markup for packaged candy |
| The register | Each item marked taxed or exempt, and a way to see what sold |
Pricing by markup is in keystone pricing, and the shelf labels in shelf tag template.
The rules
| Rule | Where |
|---|---|
| License fee, Minnesota | By last year's gross sales and a high, medium or low risk category; $265, $350 or $415 at $125,001 to $250,000; a new license on expected sales (Minn. Stat. 28A.08) |
| Prepackaged only | $90 a year for under $30,000 of prepackaged nonperishable food, with a statement filed (28A.08) |
| Bulk candy | The bulk container's labeling in view, or a counter card or sign with the ingredients, in lettering at least a quarter of an inch high (21 CFR 101.100(a)(2)) |
| Nutrition Facts | Not required for a retailer with $500,000 or less in sales to consumers, unless there's a nutrition claim (21 CFR 101.9(j)(1)) |
| Sales tax, Minnesota | Candy and soft drinks aren't exempt food; a preparation containing flour isn't candy (Minn. Stat. 297A.61, 297A.67) |
Making candy to sell, rather than buying it in, is in license to sell candy and how to start a candy business. Other states set their own fees and tax lines. This is general information, not legal advice.
An example: a Stillwater candy store
Chestnut Street Candy Co., a made-up candy store in Stillwater, Minnesota, I use in these examples, opens in May on a main street with summer tourists. Its owner works the counter, with part-time help:
| Category | Cost per $100 of sales | At full speed, a month |
|---|---|---|
| Pick-and-mix bulk candy, $15.99 a pound | $41.50 | $9,000 |
| Packaged candy and chocolate bars | $56.00 | $6,000 |
| Nostalgic and imported candy | $54.00 | $3,500 |
| Gift boxes and party favors | $48.50 | $2,500 |
| Soda and novelty drinks | $54.00 | $2,000 |
| All categories | $49.03 | $23,000 |
Bulk candy costs $5.60 a pound, 35% of the price; samples, spills and card fees bring it to $41.50 per $100. The fixed costs are $6,470 a month: rent $2,400, part-time help $2,600, utilities $450, insurance $200, the register and software $120, ads $400, and $300 of other costs.
| First year | |
|---|---|
| Startup: inventory $14,000, bins and fixtures $16,000, build-out and signs $9,000, lease $5,600, register and scale $2,500, licenses $600 | $47,700 |
| Working cash | $10,000 |
| Total to start | $57,700 |
| Sales in the first year | $186,400 |
| Break-even sales a month | About $12,700 |
| Months below break-even | January to April |
| Profit before the owner's pay | $17,400 |
Opening in May matters: four summer months and December carry January to April, when sales fall below $12,700 a month. The first year's $186,400 puts the license in the $125,001 to $250,000 bracket. Shrink in a candy store is samples and bins left open; how to count it is in grocery store shrink.
Get the plan
Download the candy store first-year plan. Four sheets: each category by $100 of sales with what it costs and what it sells at full speed, the twelve months with your own share of full speed, the fixed costs, and the startup budget; the sheet works out each month's sales, profit and cash, the first month with a profit, and whether the working cash covers the low point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
A plan sets the first order. After that, 80 bins and 300 packaged lines run down at different speeds, the gummy bears from one distributor and the chocolate from another, and the samples come out of the bins without a receipt.
How TaroStack does it
TaroStack keeps the stock straight: what came in, what's left, and what to reorder.
Buy by the case, sell by the pound. Candy comes in by the case or the 5-pound bag and is stocked by the pound or the each; TaroStack does the conversion at receiving.
Best-by dates. Each delivery is received with its best-by date, and the oldest goes out first.
Samples and spills on record. A count of the bins records the difference as an adjustment with its reason, sample, damaged or expired, reported by reason and item.
Reorders in days of cover. The reorder list shows each item in days of cover, with each distributor's lead time and minimum, so the gummy bears are reordered before the bin runs empty. TaroStack connects to Square.
| The job | Notebook | In TaroStack |
|---|---|---|
| Pounds left in the bins | Guess by eye | Stock by the pound |
| What samples cost | Unknown | Adjustments, by reason |
| Old stock on the shelf | Read the boxes | Best-by dates, oldest first |
| What to reorder | Walk the aisles | Reorder list in days of cover |
Receiving, counting, best-by dates and the reorder list 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.