Selling Chocolates

[merlicky]

Getting into the chocolate business is something that I would like to do at some point. I am not at that point yet, as feel I am still too novice to produce a competitive product. But, I am curious about a couple things.

Reading other threads about starting a chocolate business I see that people on here range from small direct sales to selling via the internet to wholesaling to owning a boutique. A lot of focus in other threads has been in starting a wholesale business or opening a boutique.

I’m curious about the direct sales or internet sales side of the business. What rules are involved? Do you need to work out of a commercial kitchen? Are there labeling requirements? Etc… I guess I’m looking for the minimum requirements to be able to sell chocolates.

Obviously I know nothing about this stuff. And as I said before, I am not ready to start being a chocolatier yet, but I’d like to know what it entails when I am ready.

Thanks.

[mrose]

Getting into the chocolate business is something that I would like to do at some point.  I am not at that point yet, as feel I am still too novice to produce a competitive product.  But, I am curious about a couple things.

Reading other threads about starting a chocolate business I see that people on here range from small direct sales to selling via the internet to wholesaling to owning a boutique.  A lot of focus in other threads has been in starting a wholesale business or opening a boutique.

I’m curious about the direct sales or internet sales side of the business.  What rules are involved?  Do you need to work out of a commercial kitchen?  Are there labeling requirements?  Etc…  I guess I’m looking for the minimum requirements to be able to sell chocolates.

Obviously I know nothing about this stuff.  And as I said before, I am not ready to start being a chocolatier yet, but I’d like to know what it entails when I am ready.

Thanks.

←

In Michigan you need to work out of a commerical kitchen, unless you want to take the chance. You also need a food handler's license from the State. You also need correct lableing listing product, weight, ingrediants and a contact address.

Internet sales might sound good but the main drawback is the shipping cost during the warm months. It will cost more than the chocolates.

Read the thread that Tammy started, she talks about issues that she encountered. She lives in Ann Arbor

Edited January 14, 2008 by mrose (log)

[KarenDW]

Many cities will have guide-books or other publications (printed and on-line) which review the basics of doing business in the particular city. Keep in mind which side of the city limits you are on; I have a home office in one city, and sometimes do business in neighboring cities, therefore am required to have a business license for each city.

There will be "business operating" regulations (i.e., getting a business license or having the property zoned for commerce) as well as "food producer" regulations (safe food handling), not to mention "employer" regulations (worker safety & minimum labor laws). Look for a seminar or p/t college course about operating a small business.

There may also be state or federal grants for people opening new businesses. Check it out. Good luck. :-)

[gfron1]

Just a minor clarification. In the US "grants" for business start-up are virtually non-existent. They might be out there but you'll have to fit a very specific demographic. There are, however, "loans" that are specific to all sorts of groups. I always encourage folks to go to their Small Business Development Center as a starting point. Its free. Sometimes they don't have the most appropriate expertise, but sometimes they do, and even if they don't, they'll be able to point you in the right direction. Also, some loans require participation with the SBDC.

[merlicky]

I guess I should start at an even more basic level. Can I do anything without a license or a commercial kitchen?

I made some truffles for birthdays at work and had people ask if they could buy some. I made some truffles for the artistic director at my wife’s ballet company and she loved them and wanted to know about buying some. Some of the ballerinas also were interested or had other people interested in purchasing some. I made some for friends who ended up giving them away as Christmas presents and those people wanted to know about buying some more.

I’m not sure what, if anything, I’m actually allowed to do. But, even though I feel that I’m nowhere near ready to actually start a business, I’ve had enough response to at least think about what it would take.

[mrose]

I guess I should start at an even more basic level.  Can I do anything without a license or a commercial kitchen?

I made some truffles for birthdays at work and had people ask if they could buy some.  I made some truffles for the artistic director at my wife’s ballet company and she loved them and wanted to know about buying some.  Some of the ballerinas also were interested or had other people interested in purchasing some.  I made some for friends who ended up giving them away as Christmas presents and those people wanted to know about buying some more.

I’m not sure what, if anything, I’m actually allowed to do.  But, even though I feel that I’m nowhere near ready to actually start a business, I’ve had enough response to at least think about what it would take.

←

You could quietly continue as you have been. Just continue by word of mouth & sell to friends as you have been. I wouldn't try to act as a business, advertise or do anything as such that might attract. Probably nothing would happen & I believe little chance that you would be discovered. But you can't legally act as a business.

Edited January 19, 2008 by mrose (log)

[merlicky]

Thanks for the info. I don't plan on acting as a business right now (would like to at some point, but I'm still learning about making the things).

It's just that based on truffles I made for people at Christmas, I've gotten a lot of requests for Valentine's truffles. I could probably sell 100-200 truffles without doing any marketing or advertising.

BTW, I've read Tammy's thread and found it very interesting. I’ve also read the thread about The Sweet Life Bakery in the NJ forum - another interesting journey.

[Truffle Guy]

I've gone down a similar road and now have my own business. My suggestion would be to not try and sell anything until you have everything in place. It is far more dangerous to make a few dollars selling from your home than as a business. If someone gets sick (or just decides to sue) you are not protected by a corporate entity and could be held personally responsible. I always just gave my chocolates away as gifts to the host or event organizer before I was a business. At most, I would have them purchase the ingredients. It was always with the understanding that it was their choice to offer the chocolates to their guests and hence their liability. Of course had anything happened who knows if that would have worked.

Bottom line.....my personal opinion would be it is better to plan a business than try to back into one. You can get liability insurance pretty cheaply if you are not doing any significant business. Use a commercial kitchen, even if you have to rent one. I'm not a lawyer but I could see a case being made that you were negligent by not obeying your local laws and requirements.

If you choose to sell to people...try to limit high risk items (such as nuts) that could cause an allergic reaction. I never sold anything before getting legal and I truly feel it worked out best for me. One advantage might be that it will make you focus more on becoming a business and you will reach your end goal sooner. If you sell a few hundred here and there...it might actually delay taking the plunge (assuming that is what you want to do).

In any case, good luck!

Thanks for the info.  I don't plan on acting as a business right now (would like to at some point, but I'm still learning about making the things).

It's just that based on truffles I made for people at Christmas, I've gotten a lot of requests for Valentine's truffles.  I could probably sell 100-200 truffles without doing any marketing or advertising.

BTW, I've read Tammy's thread and found it very interesting.  I’ve also read the thread about The Sweet Life Bakery in the NJ forum - another interesting journey.

←

[merlicky]

Holey truffle sample Batman! Maybe I should start looking into this business thing a bit sooner than I anticipated.

I made some truffle samples on Valentine’s Day for a few people we know; they all loved them and most also shared them with people they know. One girl works at a pretty exclusive dinning club in town and let her manager have one…he loved it too! He actually asked her how to get a hold of us because he would like me to make chocolates for their next big event…and this is just one example. It’s amazing how fast word can spread.

Only problem is that I am not a business and have not even really started looking into becoming one. I’m attending the small business start-up class for my area on March 1st, but that is about as far as I’ve gotten.

The feedback on these chocolates has been crazy and really has me thinking seriously about throwing my hat into the ring. One quick question for now – why do I hear a lot about people starting bakery businesses from their homes, while at the same time hearing that you need a commercial kitchen for a confectionary business?

[mrose]

Holey truffle sample Batman!  Maybe I should start looking into this business thing a bit sooner than I anticipated.

I made some truffle samples on Valentine’s Day for a few people we know; they all loved them and most also shared them with people they know.  One girl works at a pretty exclusive dinning club in town and let her manager have one…he loved it too!  He actually asked her how to get a hold of us because he would like me to make chocolates for their next big event…and this is just one example.  It’s amazing how fast word can spread.

Only problem is that I am not a business and have not even really started looking into becoming one.  I’m attending the small business start-up class for my area on March 1st, but that is about as far as I’ve gotten.

The feedback on these chocolates has been crazy and really has me thinking seriously about throwing my hat into the ring.  One quick question for now – why do I hear a lot about people starting bakery businesses from their homes, while at the same time hearing that you need a commercial kitchen for a confectionary business?

←

Probaly depends on state regulations. Some states allow for a home based business. This is definately not the case in Michigan. Even for a bakery you would have to work out of a commercial kitchen.

Edited February 20, 2008 by mrose (log)

[pringle007]

The laws for making confections out of a home/commercial kitchen vary from state to state. In Ohio, you can produce things like cookies, baked goods and breads, chocolates, and canned goods like jams and jellies out of your home without the need to rent a kitchen. Each state is different though, and I know some states have regulations changes from county to county. Call the health dept. for your county and they will be able to tell you exactly what you can sell from your home, if anything at all. I know in Ohio, its called a Cottage Food License.

Edited February 21, 2008 by pringle007 (log)

[merlicky]

Makes sense…I never really paid attention to which state it was where people were starting their businesses.

As for Michigan, I looked over the Food Law of 2000 (current regulatory law) and it looks like Truffle Guy’s previous advice is very good since as of April this year it appears that any violation of certain aspects of this code, one of which is selling without a license, is fined and becomes a misdemeanor. Prior to this amendment there was a provision that let minor violations off with just a warning.