Chocolate Business Plan: How To Start a Successful Business

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Introduction

Chocolates are the go-to choice for many consumers, regardless of occasion, time, season, or mood. The reason is very simple- they are distributed and sold in many forms, are delicious to eat, and are available with ease, even in the remotest of places. A chocolate business is a very good start-up idea, given the right tools, planning, implementation, execution, and most importantly- guidance.

If you are comfortable producing chocolates at home, you may start your own business and sell handcrafted chocolates under your brand name. People are increasingly preferring homemade chocolates, thus the homemade chocolate company is successful. According to a 2017 research, almost 300,000 tonnes of chocolate were eaten in a single year.

As a result, it is a successful business to start, and your profits will increase if your consumers enjoy your chocolates. However, you must ensure that your products are of the highest quality so that clients always prefer your chocolates over those of your competitors.

Chocolate Industry in India

In recent years, India has emerged as one of the world’s fastest-growing chocolate markets, with a total market size of more than 112.5 million Indian rupees in 2016. Despite the fact that chocolate production and consumption were increasing years after year, only a few corporations dominated the industry. Mondelez, formerly known as Cadbury in India, has been the country’s top chocolate manufacturer since the 1990s.

In 2016, it controlled almost 49 percent of the country’s chocolate confectionery market. This was far greater than the other global food and beverage business behemoth, Nestle, which had a market share of roughly 13%. Read ahead for a detailed overview of everything you need to start and maintain a successful chocolate business.

Chocolate-related businesses are abundant in India, which however might not be visible to the average consumer. Two ultra-famous Indian chocolate manufacturers include Parle and Candyman. However, these were founded a long time ago, and in completely different circumstances.

How much is the chocolate industry worth

The total share of the premium and super-premium chocolate in the broader chocolate category is only 11%. When it comes to consumer expenditure on chocolates, mass chocolate brands accounted for 15% of total spending, premium brands accounted for 43%, and the super-premium segment accounted for nearly 40% of total spending. The global chocolate industry is estimated to be worth $1,682 million in 2019 as well as expected to develop at a 16 % compound annual growth rate (CAGR).

With the advent of over 22 different types of milk, chocolates have become accessible to everyone. Domestic chocolates and confectionaries are using social media to get their new brands across cities, and countries, while hypermarkets with their weekly/monthly offers have made food, like chocolates, infinitely more attractive and accessible.

Creating a Business Plan for your Chocolate Business

Executive Summary

Entrepreneurial success requires a well-thought-out strategy. It will assist you in mapping out the details of your company and uncovering some unknowns. Consider the following crucial points:

What are the initial and ongoing expenses?

Who is your primary audience?

What is the maximum amount you may charge customers?

What will you call your company?

fortunately, we’ve already done a lot of the legwork for you.

Certification And License

To establish a successful chocolate business, you’ll need the following licenses and certificates: –

Obtaining a trade or business license is the first and most significant step. You’ll need permission from the local government for this. So that there won’t be any problems in the future. If you are establishing a chocolate business by forming a corporation, you must first register your corporation. As a result, it may be demonstrated that your organization is lawful, as many bogus companies are founded in India nowadays that perform illegal services.

FSSAI Certificate — Because this is a food-related company, you will need to obtain an FSSAI certificate . In order to create certain food products, the health department of the state or nation must check the kitchen.

Trademark Registration – When beginning a firm, trademark registration is critical. Because no other brand or company logo will be able to copy your logo. Customers will have no problem contacting you, and their trust in you will last for generations.

GST Number – You must register a current account in the name of your firm before you can start it. You’ll need a GST number for this.

Training to Learn the Chocolate-Making Process

You don’t have to go to a training center to learn how to manufacture chocolate. You can receive all of the excellent information you need simply by searching on Google while sitting at home.

You may discover many movies and articles on Google that will provide you with all of the knowledge you need about chocolate. You may also learn how to make chocolate on the internet.

Finding chocolates that are wonderfully delectable is one approach to adding a particular touch. So that it attracts people and you may profit from it on the market and make a lot of money.

Marketing Plan

The correct location, where all clever marketing methods may be utilized, is the first need in launching any firm. Choosing a location is also a vital step in smart marketing strategies because here is where all of the items are carried and unloaded into the market and made.

The following step is to determine the marketing of that smart location and business so that the largest number of people become aware of it and cannot resist coming.

  • In advertising, contact local merchants, suppliers, and dealers for company promotion. Additionally, the company portfolio must be distributed to all prospective clients.
  • Using some innovative techniques to enhance sales, such as chocolate boxes with gift hampers or a store at a child’s school, may also be a marketing approach.
  • Allowing for some custom orders and a special festive collection is also a great idea for a marketing strategy, especially if there are some discounts on the deals.

Target Demographic

Do you wish to sell your product to pre-teens, e.g. Kinder Joy? Or, do you want your product to be sold to all age groups, like Cadbury Dairy Milk or Temptations?

Deciding this appropriately will help you understand who you want to sell to. If your target is 5-10-year-olds, then your advertisements need to target not just the kids, but should also showcase to their parents why your product is safe to be bought and consumed.

A promotional technique that aims at identifying divisions within the primary demographic so that more personalized information may be delivered for relationship quality. Geographic region, gender identification, age, ethnicity, wealth, and amount of formal schooling can all be used to create subgroups.

Equipment and Tools

You can easily rent out business kitchens or a room and specifically tailor it for kitchen use. The suggestion here would be to make it as danger-proof as possible. The place must be hazard-proof and free of any pests and insects.

Initially, try to purchase all of the necessary items for the enterprise, such as:

  • High-quality chocolate components
  • Wrappings
  • A facility for preservation
  • A fridge to store the products and other ingredients
  • Chocolate-making utensils and devices

It is preferable to begin your company with all of these items, and as your business grows, you can expand forward with numerous additional tools.

Transportation

To sell consumables like chocolates country-wide, you will require to have warehouses or at least factories/kitchens in major hub cities in each state. This will only be possible with a big budget.

Once you have decided who you want to sell your product to, and how much land your capital allows you to acquire by rent or to buy, you can decide on the mode of transport. Make sure you don’t stretch yourself too thin to have a high reach. If it seems to be an issue, then start small, and grow eventually.

Depending on how personalized and frequent your orders are, you can opt for either a local parcel courier service like Dunzo, or rent a refrigerated truck. You can even have a totally online business and partner up with a third-party conglomerate like Zomato or Swiggy, who will handle the distribution for a percentage of profits.

Marketing Plan for your Chocolate Business

Since you’re just getting started, a social media presence and a blog or small website that communicates the brand message, your goal, and how you want to receive orders are essential. Explain how you intend to fulfill your Corporate Social Responsibility responsibilities (CSR).

It is not necessary to hire a marketing team in the beginning if you have a clear vision of how you will reach a wider audience within your intended location and groups.

Importance of a Good Social Media Presence for Businesses

In today’s economy, having a strong social media presence is critical, especially for small firms. It’s gotten really simple to reach out to people from all walks of life. All you need is a basic understanding of how Instagram and/or Facebook ads function, as well as someone who can create high-quality creatives and copy for the same.

If you’re doing it on your own, Canva is a great, simple-to-use, open-source program that you can pick up in an hour or two.

A WhatsApp Business Account is also a good idea.

Get Appropriate Licensing

It’s necessary to pay serious consideration to the red tape, or the legal aspect of a business, once you’ve settled on a moniker and have a suitable business strategy on paper and funds in hand.

  1. FSSAI Certification- FSS (Food Safety and Standards Authority of India) Guidelines 2011, which is one of the most important licenses, is regulated by the Food Safety and Standards Authority of India (FSSAI).
  2. Business Incorporation- To get legal standing and leverage various kinds of funding in India, a chocolate business license can be secured through a sole proprietorship, Limited Liability Partnership (LLP) certification, or the formation of a private limited company. In comparison to a private limited company, an LLP and a business entity require less compliance obligations and other connected formalities.
  3. Trade License- Obtain a Commercial License You must first receive a NOC from the relevant authorities in your state so you can begin producing Cocoa Business Licenses.
  4. Obtaining a Trademark Registration- A protected trademark is by far the most important notion for any new business because it protects the logo from duplication as well as other firms’ logos while also keeping client trust.
  5. Goods and Services Tax (GST) Identification Number- Opening a current account is a requirement of starting a company, and you’ll need a GST number to do it.
  6. Code for Exporting and Importing- You must first acquire an IEC license from the competent authority in order to import or export cocoa and extend your business internationally.

Business Insurance

For your business to operate securely and lawfully, you’ll need insurance, just like you’ll need licenses and permits. Business insurance helps protect your company’s financial well-being in the event of a loss event.

Different types of insurance policies cover a wide range of risks that a company may face. If you aren’t sure what types of risks you will face, start with General Indemnity Coverage. Since small businesses typically need this type of coverage, it makes sense to start there.

Find a Name

Now that you have an actual grasp of what your business model is supposed to look like, have you already thought of a name? If not, this is the time to think up something simple, yet creative and catchy.

Financial Analysis

Your available capital and your ability to invest more by acquiring more funds from various sources, like bank loans, money from family or friends, or business partnerships will define the size of your business, how long and far your product will reach, and the various requirements of a business in this segment.

Make sure you have a significant amount set aside to work on your marketing and social media advertising since these are key components of any well-functioning start-up.

Business Accounting

You can lower interest charges, increase credit limits, increase available credit lines, and qualify for credit cards and other finance in your company’s name (instead of your own).

Open a Bank Account For Your Business

  1. This keeps your individual resources separate from those of your firm, which is important for private asset preservation.
  2. Evaluating your company’s financial results requires keeping track of your different costs and sources of revenue.
  3. It also simplifies the tax accounting process.

Find your USP (Unique Selling Proposition)

It is extremely important for your business to have a USP, and such a thing is harder to find than you might expect. A USP can be a quality, service, or product that only you can offer. It should allow you to stand out from the competition and attract more consumers, as well as solidify your consumer base.

Type of Chocolates

There are three broad categories of chocolates:

  1. Milk- Milk chocolate is often recognized as perhaps the most common form of chocolate, with its brownish hue, creamy texture, and sweet flavor. Chocolate liquor (cocoa solids and cocoa butter) is mixed with sugar and milk to make it. To improve the smoothness, an emulsifier, such as soy lecithin, can sometimes be used.
  2. Dark- The second most popular form of chocolate is dark chocolate, which has a distinctive deep brown color. It’s also known as black or bittersweet chocolate, and it’s significantly less sweet than milk chocolate.
  3. White- The cream or ivory tint of white chocolate makes it simple to spot. Sugar, cocoa butter, milk, vanilla, and lecithin are used to make it (an emulsifier that helps the ingredients blend).

Type of Packaging

The importance of safeguarding chocolate’s quality throughout shipping and conserving chocolate wrappers can’t be overstated.

Chocolate is a heat-sensitive product, thus it needs packaging that specifically addresses the issue of quality preservation at high temperatures. Chocolate bars are frequently packaged in multilayer packaging.

A primary layer of very thin aluminum foil is wrapped in a thin film of paper, followed by a secondary layer of plastic wrapping or box. The chocolate is protected by an aluminum layer in case the exterior packaging is destroyed, and producers utilize secondary wrapping to promote brand awareness and communicate with customers about the goods and the firm.

Type of Packages Offered

(Individual, party packs, bundles, etc)

You can choose to sell your chocolates in various lucrative packages. For example, you can make creative bundles of them during festive times, like how Cadbury has its celebrations boxes, or how Snickers has a party pack with smaller treats inside it. You can pair up chocolates that will go well together.

Type of Cocoa

The type of cocoa you use will define the taste of your brand.

  1. Cocoa Forastero- This cocoa is aromatic and straightforward.
  2. Cocoa de Criollo- Criollo plants presently account for less than 1 to 5%. Criollo cocoa is frequently fruity, fragrant, and has a high sweetness level.
  3. Trinitario Cocoa- Albeit not as exotic as Criollo, Trinitario beans nevertheless account for fewer than 10% of total cocoa production. The criollo to forastero proportions, as well as geography, have a significant impact on the depth of flavor observed in this crop.
  4. Nacional Cocoa- The fourth cocoa varietal, Nacional, is the least well-known. In 2011, this bean variety was rediscovered in Peru for the first time. It is considered the world’s rarest cocoa in its purest form. Chocolate bars prepared from Nacional beans are smooth, luscious, and mildly tart.

Chocolate Business Success Stories

Ruthie Penn Carliner, 51, began manufacturing kosher chocolates in a commercial kitchen at a retirement facility for $50 per month in 2010. She opened her first stand-alone boutique in 2011, and her chocolates were presented to Oprah during an engagement at the Fancy Foods Show in New York City. One of Oprah’s “favorite things of 2011” is Carliner’s sea-salt-accented dark chocolate caramel cups.

Her advice for aspiring chocolatiers, here’s some advice: Begin small and grow your business before investing in a large commercial facility or pricey hardware.

Chocolate Making Resources

There is always tons of material available online, in the form of courses or books. Maybe you’re already aware of bakers who are passionate about making chocolate. Keep in mind that you need to know a significant amount of everything about running a business. Making chocolates and various recipes, managing accounts, and handling the day-to-day happenings of your organization- all of this is crucial information you need to learn before you start a business.

Courses

There are always a lot of online courses available for almost all trades, and all tricks included.

  1. Chocolate Academy
  2. Manju’s Cooking Class
  3. Art Chocolat
  4. Yummy- YouTube Channel

Books

These are a few of the best-rated books on making chocolate and managing a start-up which is available online!

  1. Cocoa: An Exploration of Chocolate, With Recipes
  2. Step by Step Chocolate Cookbook
  3. The Chocolate Cookbook: Luxury Chocolate Recipes for Valentine’s Day and Special Occasions

Conclusion

Here is all the information that is necessary to start and manage their chocolate-making and selling business. Make sure you do your research, refer to any experienced acquaintances you might have in the culinary or entrepreneur world, and make the best out o what is available to you. Hopefully, this guide has been helpful. Best of luck in your future endeavors!

This post is also available in: English Hindi

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