Nut Butter Business Plan, With a 12-Month Projection

A nut butter business plan sets out what you'll grind and who buys it, what a jar costs and sells for, the allergen controls a nut business lives by, and the first year month by month. Nut butter is simple to make, nuts roasted and ground, sometimes with salt, honey or cinnamon, and the nuts are most of what a jar costs: peanuts are cheap, almonds three times the price. The other thing to plan around is that peanuts and tree nuts are major food allergens, so labels, cross-contact and records matter from the first batch. In the example below, a maker in Arkansas sells peanut butter direct and wholesale, almond butter and snack packs, makes a profit from month 3, and ends the year about $18,000 ahead on $62,200 of sales, after paying $20 an hour for the work. Below is a description example, each part of the plan, the allergen side, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: what you grind, where you sell, the kitchen, the goals.
• Cost a jar from the nuts up: they're most of it, and almonds cost three times what peanuts do.
• Price direct and wholesale separately; wholesale peanut butter leaves the least.
• Declare peanuts and tree nuts on every label, and keep them apart where you can.
• Keep each batch's nut lots: if a supplier recalls a lot, you need to know which jars it went into.
• Budget for a stone mill and a roasting oven before the first sale.
• TaroStack keeps every batch with its lots and walks any jar back to its nuts. More below.

Part 1: the business description

Red Oak Nut Butters, a made-up nut butter maker in Little Rock, Arkansas, I use in these examples, writes:

Red Oak Nut Butters roasts and stone-grinds peanut and almond butter in small batches in a licensed kitchen, sold at two farmers markets, online and wholesale to local grocers, with peanut butter snack packs for lunchboxes. Every jar carries a lot code. In our first year we plan to supply 12 grocers.

Part 2: what a jar costs

A batch of 60 jars takes about two hours from roasting to labeling. The snack packs are filled by hand, ten squeeze packs to a box, which is why their labor is five times a jar's. How to work out an ingredient's cost per ounce is in how to calculate cost per ounce.

Part 3: customers and prices

Wholesale peanut butter is the biggest line by jars and leaves the least: $2.00 a jar, against $5.33 at a market. It's what keeps the mill busy and puts the brand on grocers' shelves, but if peanut prices rise a dollar a pound, the wholesale jar loses nearly 40% of its margin, so the plan should review that price every time the nuts are reordered. How to set a wholesale price a grocer will accept is in how to price handmade items for wholesale.

Part 4: allergens

Peanuts and tree nuts are major food allergens, so every jar's label declares them by name. A kitchen that grinds both peanuts and almonds on one mill can carry one into the other, so the plan either cleans thoroughly between runs and labels for cross-contact, or keeps a separate mill. Each batch's record should name the nut lots that went in, so a supplier's recall of one lot of peanuts can be traced to the jars it made. How a small maker lays out which products carry which allergens is in allergen matrix template, and what happens when a label misses one is in undeclared allergen recall. Whether nut butter can be made at home for sale depends on your state; this plan uses a licensed kitchen.

Part 5: the first year, month by month

Fixed costs are $1,015 a month: the kitchen lease ($700), insurance ($60), market fees ($150), the website and online shop ($40), software and card fees ($35), and quality and allergen testing averaged over the year ($30). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $62,220 and the profit $17,981, on top of $20 an hour for the work.

Part 6: the startup budget

Get the template

Download the nut butter business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

A thousand jars a month, peanuts and almonds from two suppliers, a mill shared between them, and 12 grocers reordering. When a nut supplier calls about a lot, a notebook can't say which batches used it or which grocers got them, and the price of peanuts has moved twice since the wholesale price was set.

How TaroStack does it

TaroStack keeps every batch with its lots.

Batches with their lots. Each nut butter is a recipe, and units convert: peanuts bought by the 50-pound bag, weighed by the gram. Recording a batch takes the nuts, jars and labels off stock from the lots used, at what you paid, and notes the lots automatically. One report walks a nut lot to every batch and every customer who got it.

Allergens on a matrix. TaroStack doesn't work out allergens or print allergen statements; keep those on an allergen matrix like the template linked above. What it does keep is which nut lot went into which batch.

And the price of nuts. Every batch is costed at what it used, a price-creep report per supplier shows whose prices are rising, and margins are reported by product and by customer, so the wholesale price that's slipping shows up.

Recipes, batches, lots, recalls and margins by product and customer 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

Is a nut butter business profitable?

It can be. In the example, a maker selling peanut butter direct and wholesale, almond butter and snack packs ends the first year about $18,000 ahead on $62,200 of sales, with $20 an hour paid for the work.

How much does it cost to make a jar of peanut butter?

In the example, $3.67 for a 12-ounce jar sold direct: $1.73 of peanuts and salt, 90 cents for the jar, lid and label, 67 cents of work, 10 cents of mill power and the card fee.

Can I sell homemade peanut butter?

It depends on your state's cottage food rules; some allow nut butters made at home, others don't. Peanuts are a major allergen, so the label must say so either way.

How much should I charge for almond butter?

Cost it from the almonds up, then price. In the example, a 12-ounce jar costing $7.17 sells for $14 direct.