become a fabjob guide to chocolate shop ownerchocolates as part of their ordinary routines, and...

Open your own chocolate shop!

Barbara Lightner

FabJob Guide to

Become a Chocolate

Shop Owner

Visit www.FabJob.com

Contents

About the Author ..........................................................................................9

1. Introduction ..........................................................................................12

1.1 A Growth Industry .......................................................................13

1.2 Owning a Chocolate Shop ...........................................................15

1.3 BenefitsofBeingaChocolateShopOwner ..............................17

1.4 Inside This Guide .........................................................................19

2. GettingReady .......................................................................................20

2.1 Skills and Knowledge You Will Need .......................................20

2.1.1 Being a Chocolate Connoisseur ........................................20

2.1.2 Being a Chocolatier .............................................................21

2.1.3 Self-EvaluationQuiz ..........................................................22

2.1.4 Interpersonal Skills .............................................................24

2.1.5 Business Skills .....................................................................25

2.2 Learning by Doing .......................................................................29

2.2.1 Work in a Chocolate Shop .................................................29

2.2.2 Work in a Chocolate Factory ............................................30

2.2.3 GetVolunteerExperience ..................................................31

2.3 Be Your Own “Mystery Shopper” .............................................32

2.4 Learn From Other Business Owners..........................................33

2.4.1 Talk to Chocolate Store Owners .......................................33

2.4.2 Join an Association .............................................................35

2.4.3 Participate in Online Communities ..................................38

2.4.4 JoinBusinessOrganizations ..............................................39

2.5 EducationalPrograms .................................................................39

2.5.1 GetaCertificate ...................................................................39

2.5.2 Business Courses ................................................................40

FabJob Guide to Become a Chocolate Shop Owner

2.5.3 Chocolate-MakingCourses ...............................................41

2.5.4 Chocolate Classes ...............................................................44

2.6 ResourcesforSelf-Study ..............................................................45

2.6.1 Chocolate Tastings and Tours ...........................................46

2.6.2 ChocolateFestivals .............................................................47

2.6.3 IndustryEvents:TradeShows ..........................................48

2.6.4 Websites ...............................................................................48

2.6.5 Chocolate Blogs ...................................................................51

2.6.6 NewslettersandMagazines ..............................................51

2.6.7 Books ....................................................................................52

3. StartingYourChocolateShop ...........................................................54

3.1 Choosing Your Specialty .............................................................54

3.1.1 TypesofChocolate .............................................................58

3.1.2 StylesofChocolate .............................................................59

3.1.3 Product Forms .....................................................................60

3.1.4 Specialty Chocolates ...........................................................61

3.2 OptionsforStartingaChocolateShop ......................................63

3.2.1 BuyinganEstablishedStore..............................................63

3.2.2 Franchising ..........................................................................70

3.2.3 Opening a New Chocolate Shop ......................................76

3.3 Choosing a Store Name ...............................................................77

3.4 Your Business Plan .......................................................................79

3.4.1 What to Include in a Business Plan ..................................80

3.4.2 Start-UpFinancialPlanning ..............................................86

3.4.3 A Sample Business Plan .....................................................96

3.4.4 Business Plan Resources ..................................................115

3.5 Start-UpFinancing .....................................................................116

3.5.1 GettingPrepared ...............................................................116

3.5.2 Equityvs.DebtFinancing ...............................................118

3.5.3 Borrowing Money .............................................................119

3.5.4 FindingInvestors ..............................................................122

3.5.5 GovernmentPrograms ....................................................124

3.6 LegalMatters ...............................................................................126

3.6.1 Your Business Legal Structure ........................................126

3.6.2 Business Licenses ..............................................................132

3.6.3 Taxes ...................................................................................133

3.6.4 Insurance ............................................................................136

4. SettingupYourRetailStore ............................................................140

4.1 Finding a Location ......................................................................140

4.1.1 Possible Locations .............................................................141

4.1.2 Points to Consider ............................................................145

4.1.3 Signing Your Lease ...........................................................151

4.2 Store Design ................................................................................160

4.2.1 Outside the Store ..............................................................161

4.2.2 Inside the Store..................................................................163

4.2.3 Store Security ....................................................................167

4.3 Displaying Merchandise ...........................................................169

4.3.1 MaximizingSales ..............................................................169

4.3.2 Creating Window Displays .............................................171

4.4 RetailEquipmentandSupplies ................................................174

4.4.1 Items You’ll Need .............................................................174

4.4.2 Suppliers ............................................................................178

4.5 ObtainingYourInventory .........................................................180

4.5.1 Manufacturers ...................................................................182

4.5.2 Wholesalers and Distributors .........................................183

4.5.3 Prices and Terms ...............................................................183

5. RunningYourBusiness ....................................................................185

5.1 Store Operations .........................................................................185

5.1.1 DevelopingaProceduresManual ..................................185

5.1.2 AreasofOperationsChecklists ......................................187

5.2 InventoryManagement .............................................................189

5.2.1 InventorySoftware ...........................................................189

5.2.2 InventoryTagsandLabels ..............................................192

5.3 Pricing Merchandise ..................................................................193

5.3.1 Guidelines ..........................................................................193

5.3.2 Retail Pricing Formulas ...................................................194

5.3.3 ProfitMarginvs.PercentageMarkup............................195

5.3.4 Standard Markups ............................................................197

5.4 GettingPaid .................................................................................198

5.4.1 Accepting Debit Cards .....................................................199

5.4.2 Accepting Credit Cards ...................................................199

5.4.3 Accepting Payment Online .............................................200

5.4.4 Accepting Checks .............................................................201

5.5 Financial Management ..............................................................201

5.5.1 Bookkeeping ......................................................................201

5.5.2 Financial Statements and Reports ..................................203

5.5.3 Building Wealth ................................................................212

5.6 Employees ...................................................................................215

5.6.1 When to Hire Help ...........................................................215

5.6.2 RecruitingStaff .................................................................217

5.6.3 The Hiring Process ...........................................................220

5.6.4 NewEmployees ................................................................224

6. GettingandKeepingCustomers ....................................................229

6.1 Marketing Your Business ..........................................................229

6.1.1 Advertising ........................................................................230

6.1.2 Free Publicity .....................................................................234

6.1.3 Promotional Tools .............................................................238

6.1.4 Your Website ......................................................................243

6.1.5 Social Media ......................................................................248

6.1.6 NetworkingandReferrals ...............................................251

6.1.7 Your Grand Opening ........................................................253

6.1.8 Other Special Promotions ................................................257

6.2 CustomerService ........................................................................261

6.2.1 Greeting Customers .........................................................261

6.2.2 Making the Sale .................................................................263

6.2.3 Return/ExchangePolicy ...................................................265

6.2.4 GettingRepeatBusiness ..................................................266

1. IntroductionCongratulationsontakingthefirststepinstartingupyourownchoco-lateshop.Aheadofyouaredayssurroundedbyscrumptiousprod-ucts,novicechocolateloverslookingfornewindulgences,anddie-hardchocophilesseekingthelatestinexoticflavorstowhettheirpalatesandsatisfytheircravings.

Peoplewhoareinterestedintheideaofowningachocolateshopareasdiverseasthechocolateproductssoldinshopsaroundtheworld.And yet, most people considering a career as a chocolate shop owner havecertainthingsincommon.It’sprobablyasafebettoassumethatyoulovethetasteofagoodchocolate.Butwhatdoesa“good”choco-latemeantoyou?Whatisyourfavoritetypeofchocolate?Doyoulovemilkchocolate,darkchocolate,orwhitechocolate?Areyourfavoritechocolatestheonesyou’velovedforyearsordoyouseekoutnewfla-vorsandvarieties?Doyoufeelasenseofwonderwhenyouenterachocolateshopforthefirsttime?Ifso,youprobablyalreadyspendalotoftimeinchocolateshops,andknowwhatyoulikeanddon’tlikeabout them.

Perhapsyoufindyourselfunconsciouslywindow-shoppingforfriendsandrelatives.Doyouseeabonbonandthink,“Rebeccawouldlovethat” or are you constantly checking out chocolate displays and making mentallistsoffuturegifts?Ifso,you’llprobablybeanaturalsuccessatsellinginaretailenvironment,whereyou’llhelppeoplefinditemsthatmatch their desires and tastes.

Chancesareyou’vespentabitoftimeshoppinginchocolateshopsandyoumightpossiblyhaveworkedinoneortwo.Whileitcanbefunandrewardingtoworkinsomeoneelse’sshop,nothingquitecomparestothesatisfactionofrunningyourownbusinessandtakingcreditforyourownconfectionarycreationsorwelcomingbacktoyourstoreoneofyourfavoritecustomers.

Chocolatestoresareasdiverseastheirowners.Therearenumerousop-tionsfortypesofshops,andamultitudeofproductsandniches.Thischapterlaysthefoundationfortherestoftheguide.Itexplainssomeofthetrendspropellinggrowthinthechocolateretailindustryandgivesanoverviewofemergingorgrowingproductcategories.Italsocoversthebenefitsofthisexcitingcareerchoiceandoutlinesthestepsneededto get started.

1.1 AGrowthIndustryThechocolatemarkethasbeenundergoingsomethingofarenais-sance—orrevolution,dependingupontheanalyst—inrecentyears.In-dustryinsiderssometimescompareittotheburgeoningcoffeemarketofthe1980s,ortothespecialtybreadmarketofthe1990s.Consumershaveincreasinglyexpressedagreaterinterestinspecialtychocolates,particularlydarkchocolate.Newproductshavefloodedthemarket,andsalesofgourmetchocolateshavebeensteadilyincreasingsince2001.

Thisrenewedinterestinchocolatehasbeenattributedtoreportsofthehealthbenefitsassociatedwithdarkchocolateaswellasatrendto-wardspecialtyproducts,suchasorganic,fairtrade,andhighercacaocontentchocolates.AsBobbieBurt,chocolatierandownerofChoco-lateHeaveninScottsdale,Arizona,remarks,“Ithasbeenagreattimeforthechocolateindustrybecauseeverywhereyouturnreportersarewritingarticlesordoingnewsshowsaboutthehealthbenefitsofdark

chocolate.Peopledon’tfeelasguiltybuyingandeatingchocolatebe-causeofthis.”

Chocolatealsohasotherperceivedbenefitsforpeople.JeanThom-sonownerofSeattleChocolateCompanysays,“Researchshowsthatwomenreachforchocolateformanyreasons.Someconsiderchocolateadailyindulgence.Othersconsiderittheidealendtotheperfectmeal.”Chocolatehasalsobecomesomethingofapanaceafordealingwithlife’sstressfulmoments.Thomsontoldusthatmanypeoplechoosechocolate“torelievestressandcopewiththedemandsofeverydaylife.Whateverthedemandsofbusinessorlife,it’smuchmoreenjoyablewith chocolate.”

High-quality,premiumproductsarenolongerreservedforspecialoc-casions,butarebeingchosenforeverydayconsumption.Forsomecon-sumers,chocolatesarearelativelyinexpensivewaytoindulgeinoneofthefinerthingsoflife.Forothers,premiumchocolatesarearewardortreat.Theseconsumersseekoutgourmetchocolatesascomfortorindulgencetooffsetdemandsandpressuresofwork,timeconstraints,andhecticlifestyles.

Accordingtomarketresearchstudies,severaltrendsinconsumerspendingonchocolateareevident.Consumersnowpurchasegourmetchocolatesaspartoftheirordinaryroutines,andpurchasegourmetchocolatesmorefrequentlythaninthepast.Premiumproductsarenolongeraimedatjustthehigh-incomeconsumer.Justascustomersarewillingtospendfourorfivedollarsforaneverydaycupofgourmetcoffee,peoplearewillingtospendmoreongourmetchocolates.

In2007,chocolateretailsalesgenerated$16.3billionintheUnitedStatesaccordingtotheU.S.DepartmentofCommerce’sAnnualConfec-tionaryReport,anincreaseof90%inthefive-yearperiodsince2002.In2011, a Packaged Factsreportnotedretailchocolatesaleswereup6.6%overthepreviousyear,withorganicchocolateenjoyinga20%growthin2011over2010.Andin2013,U.S.confectionerysalescontinuedtogrowatasolidrateof2.5percent,whichtranslatestoabout$33.6bil-lionintotalsales.Withchocolaterepresentingcloseto60percentofallconfectionerysalesintheU.S.,chocolatesalesarea$20+billiondollarindustry.

In 2014, Packaged Factsreportedsalesofpremiumchocolateincreased4.8%overthepreviousyear,while‘everyday’massmarketchocolateincreasedby3.8%.

IBISWorld’sJanuary2015reportstates:

Overthefiveyearsto2015,revenuefortheChocolateStoresin-dustryhasexpandedandwillcontinuetoincreaseduringthefiveyearsto2020.Thisgrowth,thoughfacilitatedbyhighcocoaprices,willbemostlydrivenbyrisingpercapitadisposablein-come.Manyconsumersconsiderchocolatesdailyluxuries,inwhichtheywillindulgeregardlessofeconomicconditions.Al-thoughthemajorityofchocolatewillberetailedatsupermarketsand other retailers outside the industry, industry operators will continuetobenefitfromrisingdisposableincomesandgrowingdemandforpremiumchocolates.

1.2 OwningaChocolateShop

Product Trends

Premium,gourmet,everydayindulgent,artisan,handcrafted,fine,prestige,luxurychocolate—thewordsbeingusedtodescribethefast-est-growingchocolateindustrysegmentvary,butonethingiscertain.Salesofthesechocolatesareescalatingandaregivingbirthtoawholenewwayofselling—andconsuming—chocolates.Manyoftheworld’sfinestchocolatestraditionallyhavecomefromBelgiumandFrance,butaninterestinartisanconfectionsintheUnitedStatesandCanadahasevolvedinrecentyears.

Consumer interest in chocolates is high, specialty products are entering themarket,andnichesandsubcategoriesareemergingandsolidify-ing.AccordingtoTonyMiller,chocolatierandownerofTreatSweetsinCalifornia,“theconsumerismoreknowledgeableanddemandingaboutchocolatethesedays.Asaresult,youareseeingamovetowardhigherendchocolatesbytheconsumer.”Theimageofchocolateshopsandwhattheysellisundergoingarevolution,leadingtoawholenewwayofsellingchocolate,andnumerousnewtypesofchocolatestosell.

Salesofgiftboxesaredown;barsareup.Darkchocolateisexperienc-ingdouble-digitgrowth.SomecustomerscomeintoshopsaskingforadarkchocolatefromaspecificregioninVenezuelaoranorganicbean-to-barchocolate.CaroleBloom,confectionerandauthor,reportsthat“thetrendsarebetterqualitychocolate,includinghighcacaopercent-age chocolates, single origin chocolates, and organic chocolate. Another trendismixingunusualflavorswithchocolatesuchastropicalflavors,teas,andspices.”Otherswantaveganchocolate,orchocolatebarwithspecifichealthbenefits.Specialtychocolatesincludesingleorigin,FairTrade,organic,vegan,enrichedorhealth-benefits,exoticflavored,andkosher.

SpecialServices

Withthegrowinginterestinchocolate,storeshavebecomemorethanmerepurveyorsofatastyproduct.Manystoreshavetakenontheroleofeducatingcustomersaboutdifferenttypesofchocolates.Theymayhold chocolate tastings, sampling parties, or tours that allow custom-erstobecomefamiliarwithandlearnaboutnewproducts.Somestoreownersusewebsitestoprovideforums,blogs,andarticlesabouteventsand new products. Stores that make artisan chocolates may hold choco-late classes.

1.3 BenefitsofBeingaChocolateShopOwnerOwningachocolateshopcanbeafulfillingandrewardingcareer.Inadditiontothebenefitsofworkingforyourself,itoffersthepossibilitytoshapeyourbusinessaccordingtoyourownpreferencesandpersonalambitions.Youwillalsofindthereisplentyofopportunitytoexerciseyourcreativityandshareyourloveofchocolatewithothers.

FinancialRewards

Theincomepotentialinthisindustryisquitehigh.Forexample,aver-ageannualsalesforsmallshopswithtwoemployeesisabout$100,000.Largershopswithfourormoreemployeescanearninexcessof$300,000.Inaddition,storeswithhighvolumeandlowoverheadcostsusuallycanturnaprofitwithinthefirstyear.

GrowthPotential

Achocolateshopoffersmanyopportunitiesforexpansion.Asyougrowyourbusinessyoucanopenadditionalstores,movetoalargerlocation,oraddnewproductlinesandmerchandise.Youcanfindnewmarketopportunitiesbysellingyourproductsthroughmail-ordercatalogsoranInternetsite.Additionally,youcanincreaseyourrevenuesbysellingtocustomersbeyondtheretaillocation;forexample,bysellinggiftbas-ketstocorporateclients,partyfavorsforweddings,anniversarypar-ties,andotherspecialoccasions.Youcanhostprivatechocolate-tastingparties in homes and other sites.

Family-RunBusiness

Severalchocolateshopownersthatweinterviewedstatedthathavingaplacewherefamilymemberscouldworkandspendtimetogetherwasoneoftheprimebenefitstoowningachocolateshop.Ownerswithyoungerchildrenlikedhavingaplacewherechildrencouldgoafterschoolandonweekends.Ownerswitholderchildrenoftenhadtheirchildrenhelpoutatthestore.Someownersenjoyedteachingthebusinesstotheirchildrenwiththehopesofturningthebusinessovertothemsomedayinthefuture.Otherslikedtheopportunitytoinstillworkethicsandhelptheirchildrendevelopbusinessskills.Andhus-bandandwifeteamsenjoyedbeingabletospendtimetogetheraswellastocombinetheireffortstomakeasuccessfulbusiness.Ifyouliketheideaofhavingyourfamilyaroundyouandhelpingtogrowyourbusi-ness, then a chocolate shop is the ideal business.

SharingLoveofChocolate

Manyshopownerscitedsharingtheirloveofchocolatewithothersasoneofthemostsatisfyingrewardsofowningachocolateshop.Chocolatierswhosoldtheirownhandmadechocolatesespeciallyenjoyedseeingthedelightofcustomerstastingtheirwares.Othersenjoyedteachingcustom-ersaboutdifferenttypesofchocolatesandhelpingthemdiscovernewfla-vorsandfavorites.Hereiswhattwoofthemsharedwithusaboutsharingtheirloveofchocolatewiththeircustomers:

“I love watching someone taste a truffle or a chocolate-coated caramel and soaking in the look of ecstasy they so often get.”

– Brian Pelletier, Chocolatier, ownerofKakaoChocolate

“The most rewarding aspect of my career is seeing people’s faces light up when they talk about chocolate.”

– DeniseRyan,Motivationalspeaker,Motivationby Chocolate and Leadership by Chocolate

CreativeVision

Owningyourownchocolateshopallowsformanyopportunitiestouseyourcreativity.Youwillupdateyourdisplaysconstantlyandyou’llbedesigningnewpromotionalactivitiesandeventstodrawcustomersintothestore.Ifyoulikethethoughtofcreatinguniqueanddeliciousnewchocolateflavorsandformsfromyourownrecipesanddesigns,you’llhavelotsofopportunityforthat,too.Inshort,ifyouhaveacreativebent,achocolateshopwillallowyoutoexpressitincountlessways.

FringeBenefit

Andofcourse,there’stheaddedbonusofbeingsurroundedbychoco-latesandgettingtotasteawidespectrumofflavorsandvarieties.

1.4 InsideThisGuideThe FabJob Guide to Become a Chocolate Shop Ownerisorganizedtohelptakeyoustep-by-stepthroughthebasicsyouwillneedtoopenandop-erateyourownstore.Thechaptersareorganizedasfollows:

Chapter 2 (“Getting Ready”)explainshowtolearntheinformationandskillsyouwillneedasachocolateshopowner.Itcoverswaysoflearn-ingfromexpertsandthroughobservation,research,andhands-on activities.

Chapter 3 (“Starting Your Chocolate Shop”) will help you decide what kindofstoreyoushouldopen.Thischapterdiscussesdifferentprod-uctsyoucansellandwillhelpyoudecidewhethertobuyanexistingstore,operateafranchise,oropenanewstore.Italsoexplainswhatyou

needtogetstarted,includingyourbusinessplan,start-upfinancing,storename,andotherimportantmatters.

Chapter 4 (“Setting Up Your Store”)offerstheinformationyouneedtoactuallysetupyourstore.Itgivesadviceonhowtochoosealocation,getmerchandisetosell,andarrangedisplays.Youwillalsodiscoverwhatequipmentandsuppliesyouwillneed.

Chapter 5 (“Store Operations”)takesyouintotheday-to-daychallengeofrunningyourstoreonceit’sopen.Itexplainshowtodevelopapro-ceduresmanual,andcoversinventorymanagement,financialmanage-mentandpricing,marketingyourbusiness,andworkingwithstaffandcustomers.

Chapter6(“GettingandKeepingCustomers”)tellsyouwaystobuildupyour customer base and how to keep your customers happy so they keep comingback.Itdescribeswaystopromoteyourshopthroughadvertis-ing, press releases, a website, and other promotional tools. It describes qualitycustomerservice—andhowtoensureyouareprovidingit.

Byfollowingthestepsinthisguide,youwillbewellonyourwaytolivingyourdream—openingyourownsuccessfulchocolateshop.

YouhavereachedtheendofthefreesampleoftheFabJob Guide to Become a Chocolate Shop OwnerToorderanddownloadthecom-pleteguidegotohttps://fabjob.com/program/become-chocolate-shop-owner/.

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