A spice shop sells spices by the ounce from big jars, fresher and cheaper than a supermarket's little bottles, and house blends mixed in the back. A 2-ounce bag of a single spice costs about $1.47 with its bag, label and card fee and sells for $5.50; a house blend in a jar keeps a little less of its price but sells for more. Gift boxes fill December, online orders reach people who've moved away, and blending classes fill a weeknight. The plan turns on rent for a storefront where people walk by, opening inventory of 300 spices, and buying from suppliers who treat their spices for pathogens, since a spice shop sells straight to the cook. The plan below works per item. In the example, a Providence spice shop starts with $80,900, ends its first year about $24,900 ahead before the owner's pay, and makes about $5,600 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 street, the spices, the blends, the goals.
- Cost each item: spice by the ounce, the bag or jar, the label, labor for blends, the card fee.
- Plan sales by product: bags by the ounce, house blends, gift boxes, online orders, classes.
- Opening inventory of a few hundred spices is the biggest start-up line after the build-out.
- Buy spices treated for pathogens from suppliers who can show it.
- A shop that mostly sells straight to cooks is a retail food establishment.
- TaroStack makes each house blend a recipe and each mix a batch with its spice lots. More below.
Part 1: the business description
Saltbox Spice Shop, a made-up spice shop in Providence, Rhode Island, writes:
Saltbox Spice Shop is an 800-square-foot spice shop in Providence selling about 300 spices, salts and peppercorns by the ounce, 40 house blends in jars mixed in the back room, gift boxes, online orders shipped across the country, and monthly blending classes. In its first year it aims to reach $24,630 of sales a month.
Part 2: what an item costs
| Item | Spices | Bag, jar or box | Labor | Card fee | Cost | Price | Cost share |
|---|---|---|---|---|---|---|---|
| Single spice, 2 oz bag | $1.10 | $0.20 | $0.17 | $1.47 | $5.50 | 26.7% | |
| House blend, 2 oz jar | $1.20 | $0.65 | $0.40 | $0.26 | $2.51 | $8.50 | 29.5% |
| Gift box of four jars | $4.80 | $4.60 | $1.60 | $1.14 | $12.14 | $38.00 | 31.9% |
| Blending class, per seat | $10.00 | $1.35 | $11.35 | $45.00 | 25.2% |
Online orders average $45 and cost about $16.35 with the spices, packing and card fee; shipping is charged to the customer. Spices are bought by the pound from importers and treated for pathogens before they arrive. Pricing the blends is in how to price spice blends.
Part 3: suppliers, blending and the rules
Spices come by the pound from two importers and a few small farms, each lot with the supplier's treatment record. Blends are mixed by weight in the back on Mondays, each batch with its own lot. A shop that sells mostly straight to the people who cook with its spices is a retail food establishment, not a facility that registers with FDA, as fda food facility registration explains; selling blends wholesale to other stores can change that. Jars and labels are in how to package seasoning for sale.
Part 4: what each product earns
| Product | Price | Variable cost | Contribution | Margin | Units a month at full speed |
|---|---|---|---|---|---|
| Single spice, 2 oz bag | $5.50 | $1.47 | $4.03 | 73.3% | 1,200 |
| House blend, 2 oz jar | $8.50 | $2.51 | $5.99 | 70.5% | 900 |
| Gift box of four jars | $38.00 | $12.14 | $25.86 | 68.1% | 60 |
| Online order, average | $45.00 | $16.35 | $28.65 | 63.7% | 150 |
| Blending class, per seat | $45.00 | $11.35 | $33.65 | 74.8% | 30 |
At full speed the business sells $24,630 a month and keeps $17,085.60, 69.4%; house blends bring $5,391 of it.
Part 5: the first year, month by month
Fixed costs are $11,500 every month: rent ($3,800), wages ($6,000), ads ($500), utilities ($400), insurance ($250), website and shipping software ($150), and other costs ($400). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $12,315 | −$2,957 | −$2,957 |
| 2 | $13,817 | −$1,915 | −$4,872 |
| 3 | $15,281 | −$899 | −$5,771 |
| 4 | $16,738 | $110 | −$5,661 |
| 5 | $18,202 | $1,126 | −$4,535 |
| 6 | $19,704 | $2,168 | −$2,366 |
| 7 | $20,980 | $3,054 | $688 |
| 8 | $21,942 | $3,720 | $4,408 |
| 9 | $22,940 | $4,412 | $8,820 |
| 10 | $23,669 | $4,919 | $13,740 |
| 11 | $24,630 | $5,586 | $19,325 |
| 12 | $24,630 | $5,586 | $24,911 |
The year's sales are $234,848, and the business ends it $24,911 ahead, before the owner's pay. It breaks even at about $16,580 of sales a month, in the fourth month. The lowest cash point, −$5,771 in month 3, is covered by the $20,000 of working cash with about $14,200 to spare. December, with gift boxes and online orders, sells about twice a normal month; the plan spreads it as an average, so stock jars and boxes by October.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out | $20,000 |
| Opening inventory | $15,000 |
| Shelving and display jars | $8,000 |
| Lease deposit and first month | $7,600 |
| Website | $3,000 |
| Grinder and scales | $2,500 |
| Signs | $2,500 |
| Register | $1,500 |
| Licenses and permits | $800 |
| Working cash | $20,000 |
| Total to start | $80,900 |
The $60,900 before working cash is earned back in about 11 months at full speed. Making blends to sell to other stores is in spice business plan, and when a co-packer blends for you in spice co-packer.
Get the template
Download the spice 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 spice. Three hundred spices from two importers, each lot priced differently, and 40 blends made from them: which lot of smoked paprika went into which blend, and what a jar really cost, is a guess.
How TaroStack does it
TaroStack costs each house blend from its recipe and from what each batch used.
Recipes by weight. Each house blend 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 house blend costs this week | Last season's sheet | True cost from the batch |
| Which spice lots went into a blend | Not recorded | Lots on every batch |
| 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.