If you are a popcorn lover and have a dream to start your own popcorn business, now is a great time to get started. With the rise of OTT platforms, movie and popcorn is no longer limited to the movie theaters. As popcorn has health benefits, consumers prefer munching on popcorn without any guilt.
That said, starting a food business is no easy feat. Just like when starting any business, you need to make sure that you are legally compliant with all set regulations. But on top of these, popcorn being part of the food category, needs an extra set of regulations to comply with.
The good news is that there is an upward trend of popcorn snacks. As per the statistics more than 230 million Americans consume popcorn products annually. And this number is increasing every year. With such huge consumption, there surely is a business opportunity that you can benefit from.
To get your popcorn business pop, lets first answer the following questions first:
- First of all do you see a big gap in the popcorn market?
- Do you believe that you can fill that gap with your skills?
- What kind of popcorn do you want to sell, gourmet, kettle, vegan, microwaveable, flavored?
- Do you want to start a popcorn making business, selling business or both?
- Do you want to sell raw corn or finished popcorn products?
- Do you have skills to partner with local movie theaters and sports arenas?
Once you have answered the above questions, you will have a better idea about the type of popcorn business you should start.
In this guide, we’ll help you navigate through the steps to formally set up your popcorn business. Read on to learn everything you need to know.
If you are wondering how to start a popcorn business, we can assume that you have a popcorn business idea in mind that you are interested in starting. That's great! While having an interest is the first logical step, you also need to be critical and assess your skills and assets before getting started formally.
Passion is one thing that every entrepreneur needs to have, but it alone isn’t everything. You need to have a business plan and skills plus resources to achieve your goals. We agree that being a first time entrepreneur, you may not know everything off the bat. But you should be actively looking for help whenever you need it. Given that you are reading this article, we can safely say that you are on the right track as you understand and are researching how to start your own popcorn business.
As a first step you will need to decide on the business model for your popcorn business.
Your own popcorn brand
If you have the skills and the knowledge of starting your own popcorn company, this option is an amazing option for you. Basically what you will get out of this is your own popcorn brand just like Orville Redenbacher, ACT II and Pop Secret.
The popcorn products will be sold under your own brand name and will be available locally, nationally or globally. By choosing this option, you will implicitly choose to start from scratch and make popcorn products by sourcing corn, oils, spices, flavoring agents, equipment, packaging, etc.
The entire product cycle will be in your hands. You will have to make and distribute the popcorn products on your own.
Your own popcorn store
In this business model, you can aim to open a set of popcorn stores / kiosks, when you will be selling hot popcorn to the consumers. Mostly these stores are available in malls and movie theaters.
In this business model, you will need to be skilled at making popcorn. Other things will be mostly taken care of by someone else. For example, if you open a kiosk in a mall, you need to invest in corn, popcorn popper machines and containers. The mall in itself will have foot traffic that you can convert by leveraging your salesmanship. It will be illogical to think that someone would drive all the way to a mall to eat popcorn.
Thus, if you would like to go with this option, you will need to find places where you can expect a lot of consumers who are passing by.
Wholesaling other brand popcorn products
If you have an expertise in business to business sales & marketing, this option is an amazing business opportunity. Although it may not be a standalone business, you can start with it and add product range gradually.
In this option you can become a popcorn wholesaler and source popcorn products from all around the world. The retailers can then source the products from you and you can make a decent profit.
Contract manufacturing
Another business model that you can look at is contract manufacturing. You can set up your own manufacturing units and the big popcorn brands can outsource manufacturing to you. This way, all of the branding, recipes, marketing and product ingredients will be taken care of by the brand and all that you will need to focus on will be manufacturing.
Once you have identified your option, you will have a much better idea of how you want to set up your popcorn business.
You may wonder why you need a business plan for your popcorn business, but just like any other thing in life, planning can never hurt. In fact a popcorn business plan will secure the success of your business. You just need to make sure that you set a business plan and work hard to execute it well.
Your business plan may not be a complex plan with every tiny bit of detail as you would need for a complex business idea. You can start small, have a draft business plan with basic outlines and then make changes as you scale your business.
Important things to consider in your business plan include:
Creating a business budget
A business budget will help you outline the financial requirements for your popcorn business. This is a must have before the launch of your business. You do not want to be in a situation of having started the business and then to pause it because of lack of funds.
You need to understand what your costs will be and how you will make money? How long can you run your operations without having to look for more funding? Will your business generate enough profits to fund itself?
A few examples of the costs that you will incur and consider while starting a popcorn business include:
- Equipment
- Initial investment in raw ingredients
- Staff salaries
- Rent
- Marketing
- Packaging
Competition check
It is a no brainer that you are not the only one who can pop a corn. Thus having a competition is expected and actually a good sign. Many strategists say that if you are starting a business where there is no competition, you need to be extra careful. Because there actually is something that you can’t see but others do.
That said, a competition check will help you in many ways. Some of the questions that you should consider:
- Who else do your customers buy from?
- What is it that you need to do to attract customers your way?
- What is their pricing strategy?
- Do they have a skill that you can learn from?
- Do they lack something that you can easily take care of?
- How do they acquire customers?
- How do they talk to customers on social media?
- What variety sells the most?
With this information, you will have a much better idea of who else is out there and what they’re doing. It will also help you in identifying a saturated market in the beginning stages itself.
Once you have studied the market, have a business plan and are confident that there is a business opportunity that you can take advantage of, the next step is to get your popcorn business formally registered and known to the appropriate authorities.
Here are a few things you need to know:
Choose a business entity
For your popcorn business, you will need to choose an entity structure before launching your business. This step affects tax, registration, licensing, funding and pretty much everything that you want to put in an important to-do list.
It will depend on the business model you choose. For example, entity structure for a mall kiosk business model will be entirely different from the contract manufacturing model. If you are not registered correctly, a big brand may not want to partner with you.
You need to plan ahead and choose from the following options:
- A sole proprietorship
- Limited liability company (LLC)
- General partnership
- Corporation
Generally, in the beginning a sole proprietorship is an obvious choice and a popular legal entity structure. It is the simplest and easiest way to get started. You can transition to another entity structure as your business grows.
Tip: Consider consulting an attorney or a qualified professional for this step, as their experience will be extremely valuable. They will be able to help you with everything that you need to have to be compliant with everything.
Register your popcorn business
You will need to make sure that your business is registered and follows all rules and regulations as set forth by the authorities. These rules vary from state to state. You can consider a quick visit to the local chamber of commerce and know about your obligations.
Additionally, depending on where you are located and the business model you decide, you may be legally required to obtain certain permits and licenses before you can start your own popcorn business.
Registering a business name
As you already know, you will need a name for your business. Unfortunately, you can’t just choose any name you like. You will need to make sure that the name is not in use by any other person and is also not a trademark of other companies.
You can check the availability of the name by visiting the state website.
Tip: If affordable, hire a brand consultant to help you get creative and set you up for an outstanding business name.
When starting a popcorn business, you will need more than just money and a business entity. To make your popcorn business dream a reality, you will need equipment, popcorn product supplies and a sales channel to sell it on.
The requirements will vary depending on the business model that you choose. For example, if you choose a contract manufacturing you will not need a POS system, whereas if you go with a kiosk model, a POS will be amongst the first set of things to take care of.
Some of the things that you will need, if you decide to go in retailing include:
Suppliers
You will surely need to do extensive research of suppliers for your popcorn business needs. The suppliers that you choose will complement the things that you can’t do on your own. For example, you can’t grow your own corn and will need someone to source it from. As it is the most important raw ingredient, you will need to make sure that you know the corn that you are buying from a certain supplier.
The cost at which the supplier will sell things to you will be your input costs. Given that selling popcorn is a competitive space, there is not much beyond which you can raise the prices. This lower the input costs, higher the profits will be for you.
But at the same time, you will need to make sure that you are not selling low quality products and thus aim to get the best quality possible at that price point. This is an important thing to know to have a sustainable competitive business. The corn for a $1 popcorn will be different from a gourmet $10 caramel popcorn. You can’t use the same price ingredients and thus knowing what you will be able to sell your product for, is an important information.
You should aim to find trustworthy suppliers that will be able to get you supplies on time and for the best price.
Point of sale system
A POS ( point of sale ) is a necessary system you will need to invest in. It is a 21st century version of a good old cash register. This is where your staff will be able to take orders and payments from customers.
There are many POS systems available in the market and you can do your research to select the one that is in your budget and meet your needs.
Buy or rent equipments
Before you can launch your business, you will need to procure equipment that is needed to create the popcorn products. As the investment in equipment can be in thousands of dollars, you can consider renting them in the beginning. Once the business starts making money, you will always have an option to upgrade your equipment and buy them.
Assess the costs
You will need to understand what you will have to pay right away, what can wait and what will be a recurring expense. The different types of costs that you will need to consider are as following:
- Fixed costs
- Variable costs
- Marginal costs
- Sunk costs
Tip: Don't make the mistake of buying all your equipment and supplies without testing your business in real life. These costs are sunk in costs and will hurt your popcorn business profits.
There will come a time when you will feel the requirement of money to scale your business. In the beginning stages, you will actually be spending money from your initial investment corpus. But once the business scales, you will need to secure more funds to support your business growth potential.
Worry not, this is the case with every other entrepreneur out there and your popcorn business is no exception. Luckily there are a ton of options available for you to secure external funds.
We have listed a few options to consider:
- Friends and family
- Angel investor
- Venture capital
- Short term business loan
- Small business loan
- Credit card
By now you should have a popcorn business that is setup and ready to make sales. But do the customers know that you are ready? How will you tell them about your business?
Each and every business needs a way to market themselves and your popcorn business is no exception. You will need a way to get paying customers for your business.
These are the questions that you will now need to answer as a part of your popcorn business marketing plan. The success of your popcorn business will now depend on how well you can do marketing for your business.
Before you can start writing your marketing plan, you need to get some marketing fundamentals sorted out first. These are also called the four Ps of marketing: Product, Price, Promotion and Place.
After you have a clear understanding of the above fundamentals of marketing, you can start marketing your popcorn business.
- Email marketing
- PPC marketing such as Google Ads, Facebook Ads
- Instagram marketing
- Tiktok marketing
- Traditional marketing
- SEO
- Local guides
- Online review platforms
Tip: Establishing your online presence and nurturing your customer base is one of the most important steps in growing your business.
Starting a popcorn business will surely have its own ups and downs. You will learn a lot from this new experience of being an entrepreneur.
You will also make a lot of mistakes. Making mistakes is perfectly okay. Don't get demotivated at any point of time. To make your popcorn business successful, you will need a lot of hard work and dedication. Above all self belief that you can do it, will make up for every gap that you will see in your business. It will help you take on any challenge your business will throw at you.
Follow the above steps to launch your popcorn business and we are sure that your business will pop its own place in the popcorn product niche in no time.
We wish you the best of luck and can’t wait to hear the stories of what you’ll build.
