A jam business plan sets out what you'll make, where you're allowed to make it, who will buy it at what price, and the first year month by month. Two choices shape the whole plan: whether you'll sell from a home kitchen under your state's cottage food law, which usually means direct to customers only, or move to a licensed kitchen so you can sell to shops; and how big your batches are, because kitchen time rented by the hour is most of what separates a jar that's worth selling wholesale from one that isn't. In the example below, a jam maker in a rented kitchen sells 200 jars a month at markets and 400 to shops by month 11, makes a monthly profit from month 2, and ends the year about $12,100 ahead on top of paying for the kitchen hours, but only because it cooks two batches per booking. Below is a description example, each part of the plan, the projection, and a free template.
The short version
- Decide first: cottage food at home, direct sales only, or a licensed kitchen and shops too.
- Cost a jar with the kitchen hours in it, at the batch size you'll really cook.
- Wholesale works only if the jar is cheap enough; batch size is the biggest lever.
- Name the shops and markets you'll sell to, and how many jars each takes.
- Project 12 months with sales ramping up.
- Keep a batch record and a lot code for every batch from the first one.
- TaroStack costs each batch from what you paid and dates every jar. More below.
Part 1: the business description
Windward Roots, the made-up taro business I use in these examples, starts a jam line. Its description reads:
Windward Roots Jam makes guava, lilikoʻi and pineapple jams in small batches, with fruit from island farms, in a rented commercial kitchen on Oʻahu. We sell 8 oz jars at two Saturday markets and online, and wholesale to gift shops and cafés. Every jar has a lot code and a best-by date. In our first year we plan to be in 15 shops and to sell 600 jars a month by month 11.
Part 2: what a jar costs, and why batch size matters
The costs come from starting a jam business, where a batch is worked through:
| Per 8 oz jar | One batch per kitchen booking | Two batches per booking |
|---|---|---|
| Ingredients | $0.61 | $0.61 |
| Jar, lid and label | $1.23 | $1.23 |
| Labor | $1.35 | $1.35 |
| Kitchen time | $2.03 | $1.01 |
| Cost per jar | $5.22 | $4.20 |
At a $7.25 wholesale price, a $5.22 jar leaves $2.03 and a $4.20 jar leaves $3.05. The plan assumes two batches per booking, and says so, because the wholesale half of the business depends on it.
Part 3: customers and prices
| Channel | Price | Variable cost | Contribution | Jars a month at full speed |
|---|---|---|---|---|
| Markets and online | $12.00 | $4.56 | $7.44 | 200 |
| Wholesale to shops | $7.25 | $4.20 | $3.05 | 400 |
The market jar's variable cost includes a 3% card fee. Four hundred wholesale jars a month is about 15 shops taking two cases of 12 or so. How to set a wholesale price a shop can mark up is in how to price handmade items for wholesale.
Part 4: operations
| Area | In the plan |
|---|---|
| Where you make it | Cottage food at home, or a licensed kitchen; what your state allows for each |
| Kitchen bookings | How many hours a week, and two batches per booking |
| Fruit | Farms, seasons, frozen pulp for the off-season, price per kilogram |
| Jars and labels | Supplier, minimum order, lead time |
| Recipe and label | Fruit-to-sugar ratio, the name on the label, the ingredient list |
| Records | A batch record and lot code for every batch: fruit lot, sugar, pH if your process asks, jars filled |
What a batch record holds is in what is a batch record.
Part 5: the first year, month by month
Sales start at 15% of full speed and reach 100% by month 11, against $525 of fixed costs a month: insurance, four market Saturdays, the website, marketing and samples, and delivery.
| Month | Market jars | Shop jars | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|
| 1 | 30 | 60 | $795 | −$119 | −$119 |
| 2 | 40 | 80 | $1,060 | $17 | −$102 |
| 3 | 50 | 100 | $1,325 | $152 | $50 |
| 4 | 60 | 120 | $1,590 | $287 | $337 |
| 5 | 80 | 160 | $2,120 | $558 | $895 |
| 6 | 100 | 200 | $2,650 | $829 | $1,724 |
| 7 | 120 | 240 | $3,180 | $1,100 | $2,824 |
| 8 | 140 | 280 | $3,710 | $1,371 | $4,195 |
| 9 | 160 | 320 | $4,240 | $1,641 | $5,836 |
| 10 | 180 | 360 | $4,770 | $1,912 | $7,748 |
| 11 | 200 | 400 | $5,300 | $2,183 | $9,931 |
| 12 | 200 | 400 | $5,300 | $2,183 | $12,114 |
At one batch per booking, every jar would cost $1.02 more, a shop jar would leave $2.03 instead of $3.05, and the year would end about $4,200 lower, $2,800 of it on the shop jars. That's the line in the plan worth defending: how the kitchen bookings will be filled. How batch size moves cost per unit is in batch size calculator.
Part 6: the startup budget
| Item | Example |
|---|---|
| Kitchen deposit and first booking | $500 |
| Recipe review, if your state asks for one | $200 |
| Label design and nutrition analysis | $600 |
| First 1,000 jars, lids and labels | $1,230 |
| Fruit and sugar for test batches | $150 |
| License and permits | $300 |
| Market tent and table | $300 |
| Barcodes from GS1, for stores | $250 |
| Website | $300 |
| Working cash | $1,500 |
| Total to start | $5,330 |
Get the template
Download the jam business plan template. Type your jars with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast shops will come on; 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's $4.20 jar assumes two full batches every booking. Then a guava shipment is short and the second batch is half size, the pineapple sets soft and a batch is recooked, and jar prices go up on the next order. The plan's spreadsheet still says $4.20, and nobody sees the wholesale jars sliding toward $2 of contribution until the year-end sums.
How TaroStack does it
TaroStack costs every batch from what you paid, and keeps every jar's lot and date.
Each batch, costed by what came out. Each jam is a recipe, with units converted: buy sugar by the 50 lb bag, use it by the kilogram. Record a batch and TaroStack takes the fruit, sugar, pectin, jars and labels off stock from the lots used, at what you paid, and divides by the jars that came out good, so a half batch or a recook shows in the cost per jar the same day. Recipe truth shows whether a recipe keeps yielding what it claims.
Every jar, dated and traceable. Each batch's jars go into a lot with a best-by date, sold first-expired-first-out. Batch record forms are filled in as the batch is recorded, with your own fields and limits. One report walks any lot to the shops that got it and back to the fruit lot inside.
And the shops, with their margins. Each shop is a customer with its sales orders and delivery notes. Margins are reported by product and by customer, on what each jar actually cost, so you see which shops and which jams pay.
| The plan's line | In the spreadsheet | In TaroStack |
|---|---|---|
| Cost per jar | $4.20, assumed | Every batch, by what came out |
| Two batches per booking | Hoped for | Each batch's real yield and cost |
| Which shops pay | Unknown | Margins by customer |
| A fruit supplier's recall | Search the notebook | One report, lot to shop |
Lots, expiry, recipes, batches, batch records and margins are on every plan, from $49 a month; planning is on Standard at $99. 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.