Adventures in Starting a Chocolate Business

[Beth Wilson]

I have only participated in a few trade fair shows in my area and did cash sales only. To simplify our tax charges I posted my prices, showing all taxes (Canadians love our taxes!), For most of my products I rounded the end price to something simple for change.

Instead of say $3.77 for a product I charged the $3.75 to keep the change simple.

I have taken my cash register with me to one show but lugging that piece of equipment and having to pay extra for an electrical outlet to plug the darn thing in makes it a challenge. Calculator with batteries (don't forget the spare batteries!) worked out fine for me the last time. No one asked for a receipt but I had a receipt book just in case.

Most times the shows I have participated have been worth it but the real benefit is getting your name out there, sampling your product and getting people to come back to the store.

[Desiderio]

Thank you so much!! As usual you guys are an incredible source of information and always make things seem so easy

The even is for May so mother's day weekend, I am trying to put together a plan on packaging and what to bring.I have the main boxes and I am going to work around that ( color matching , and bags with my logo printed on ).

Ahhh what I have done!! Gotta try though , gotta try!Thats what the American dream is for me

[tammylc]

Double check if you even need to charge tax - here in Michigan, there's no tax on food items - that makes things much easier.

Like John, I only accept credit cards via PayPal on my website. That might change if I were doing more events like Farmer's Markets etc, but I haven't done much of that, and when I have I've only accepted cash or checks.

Good luck!

[mrose]

Double check if you even need to charge tax - here in Michigan, there's no tax on food items - that makes things much easier.

Like John, I only accept credit cards via PayPal on my website. That might change if I were doing more events like Farmer's Markets etc, but I haven't done much of that, and when I have I've only accepted cash or checks.

Good luck!

←

Tammy

The way it was explained to me is if people can eat your product where it is sold, you have to charge sales tax. That's why it is added to your bill in restaurants. (In Michigan)

[merlicky]

The way it was explained to me is if people can eat your product where it is sold, you have to charge sales tax. That's why it is added to your bill in restaurants. (In Michigan)

Couldn't you get around this if you put the product in a box or some other sort of packaging?

[Desiderio]

Double check if you even need to charge tax - here in Michigan, there's no tax on food items - that makes things much easier.

Like John, I only accept credit cards via PayPal on my website. That might change if I were doing more events like Farmer's Markets etc, but I haven't done much of that, and when I have I've only accepted cash or checks.

Good luck!

←

Thank you :-)

I will double check , but I am pretty sure that I will have to collect taxes , Colorado is like that :-P.

[Lior]

Hi. If you are interested I can tell you how I organized for my festival which is similar to a farmer's market I think. Both beforehand and during. Perhaps we can all give each othersome tips.

[Truffle Guy]

I'm lucky to have 4 CPA's as investor's (or unlucky depending on how you look at it). I would suggest anyone be very careful when it comes to taxes and get your advice from an expert. Sales tax can be very tricky at times but a good CPA can tell you your options and the risks. If having to pay back taxes and penalties would put you out of business....I'd play it safe and be conservative. Just my advice but nothing will end your dream faster than trying to dodge the government.

The way it was explained to me is if people can eat your product where it is sold, you have to charge sales tax. That's why it is added to your bill in restaurants. (In Michigan)

Couldn't you get around this if you put the product in a box or some other sort of packaging?

←

[Desiderio]

Here in Colorado food for home consumption is exempt from sale tax but the county and home rule city dont follow the same rule,for example boulder county still collect taxes ad the same for the ohter home rule cities around here ( I need to bing my business out of the boulder county , its soo expensive anyway )

The event I am going to be in is in a home rule city so I need to go to the town all and get all the permits etc etc from them , so to collect and submit the right sale taxes to the city and the county haha what a pain

[Desiderio]

About paypal, payment options.I think I am going with it , do you guys use the shipping and taxes tools they have for the business package? And if yes how do you likeit?If not what do you use for shipping and how it works for you?

Ahhh too many questions, but take your time :-)

Thank you

[JenMiller1]

Good morning.

I am hoping for some advice from you on some issues that have come up for me at this point in starting my business. I have spent the last several months mastering tempering and creating some of my own ganache recipes for a small business I am trying to start. At this point I am researching where I could rent space in a commerical kitchen. Here are some of the problems I'm experiencing:

1. On the Business Application they state you cannot use a PO Box or Private Mailbox. If I am just renting commercial space somewhere what address would I sue on the business license application? The business would not be located where I'm making the chocolates so I guess I'm confused and don't know what to do.

2. Do any of you ship across state lines and if so, do you have any links or resources for me of what I need to research. I've tried the IRS site as well as the California gov site and I truly get lost and confused when I try to research what I need to do.

3. What type of food handling certification do you recommend? I have researched several site and don't really know if they are legitmate or even necessary.

4. Here is what I believe I need in order to begin legally selling chocolates:

a. A business license

b. A food handling certificate

c. Ability to ship across state lines.

I'm sorry if I seem terribly ignorant to you all who seem to have a lot more experience. Thanks in advance for your assistance.

-Jennifer

[John DePaula]

A lot of this is handled at the State and Local level. I take it you live in California, but you may have to let us know in which city you live to get specific advice for your locale.

[JenMiller1]

A lot of this is handled at the State and Local level.  I take it you live in California, but you may have to let us know in which city you live to get specific advice for your locale.

←

Hello.

Yes I live in SANTA BARBARA, CALIFORNIA. Thanks so much!

[John DePaula]

Check out your local chapter of S.C.O.R.E..

Check out the right side-bar for useful links: SCORE PDX (see rt. sidebar).

[John DePaula]

More links. These look good for Santa Barbara:

Starting a Business in S.B.

City of S.B. Business Links

[JenMiller1]

More links.  These look good for Santa Barbara:

Starting a Business in S.B.

City of S.B. Business Links

←

John - Thanks so much for your responses. Very generous!!!! I'm researching my local chapter of SCORE now and will review the other sites you sent me.

[Desiderio]

I am not in Cal , but I am starting the business as well.I found the kitchen and filed and formed my LLC.Aslo for the LLC , you can to not have a PO Box, so I just rent a mail place in one of the pack an dship place they have a physical address not a PO Box.Also I know that , at least here, you need to contact your health department and have them come to inspect you and the kitchen you work from ( the kitchen its already license but they need to see if you know how to use it and if you know the regulations to handle food etc etc..) if they approve you I think they give you the license , after you pay the fee ,and I also think they check for the ingredients labels and any label you put on your products, so have them ready for the inspection.

[Desiderio]

A question for the rest of you gusy that already have a business running.

What do you use for shipping and what do you suggest.Also how do you come up with a standard shipping price ,just weight some of your boxes and use that standard to charge d=for shipping etc?

Thank you as usual.

[readingrilke]

A question for the rest of you gusy that already have a business running.

What do you use for shipping and what do you suggest.Also how do you come up with a standard shipping price ,just weight some of your boxes and use that  standard to charge d=for shipping etc?

Thank you as usual.

←

http://www.dryiceinfo.com/ControlTempPack.htm

I have shipped using them and know people who do, with no problems thus far.

For shipping price, you can do a generic 'quick qoute' on the fedex website. You put in the zip codes and the weight of the box and then it lists all the different options and costs. Plus if you create an account with fedex you get a discount on shipping.

Hopes that helps.

[mrose]

A question for the rest of you gusy that already have a business running.

What do you use for shipping and what do you suggest.Also how do you come up with a standard shipping price ,just weight some of your boxes and use that  standard to charge d=for shipping etc?

Thank you as usual.

←

I have used Thermosafe boxes . This series of boxes are fairly cheap, $3-4 a box. They also sell cold paks to go with them. Cost will be about $5 for packaging. You have to remember that shipping for 1/2 the year can get to be extremely exorbitant. During the warm months you will have to ship overnight, it will cost more to ship than the cost of the chocolates. From Michigan to Texas, a 3# package costs ~$50 overnight. Be careful about planning a business around mail order. You have to ship an awful lot of product to get good rates.

[Mary F]

Jennifer,

You may also want to look into insurance, it is not that expensive and well worth it. They will require you to have the kitchen certified before they will issue it.

[Desiderio]

Thank you guys for the great info on shipping :-)

I second the insurance , you have to get one ( they have some package for this line of work for around 500.00 a year )

[tammylc]

Vanessa - I'm still looking for a good solution for calculating shipping! It was easy when I was handling orders on a case by case basis, because then I'd go to the FedEx website, find out what the shipping would be, then just add that to the amount for the chocolates and invoice the customer. Plus a handling fee for packaging materials and time spent packing and shipping (which is more than you'd expect).

But if you're doing web sales, people are more likely to buy if they can complete the transaction all at once, and for that, you can't do such customized shipping. So what i did was to download FedEx rate tables, figure out (roughly) which states are in which zones (I say roughly because the zones are based on zip codes, and parts of a state may be in different zones). Then I figured out what weight different dollar amounts equate to - so if people buy one box, it's likely to weigh this much, two is this much, etc. Don't forget to take into account the cost for the shipping box and fill - even just a single box of chocolates ends up weighing over a pound once all that's included. Then i put all that together to create different shipping amounts for different weights for different zones, and entered that into the PayPal Shipping Calculator. I know if I had a good shopping cart instead of just PayPal "buy now" buttons it would probably do all this for me, but I'm not ready to spend the money on that quite yet.

The system isn't perfect - FedEx charges a surcharge of over $2 for rural delivery, and my system doesn't pick up those addresses. And it doesn't differentiate between residential and business deliveries. Home deliveries have a $1.85 surcharge - since the majority of my delivers go to homes, I just include that in my base pricing, and the two things usually balance themselves out. And I don't know what I'm going to do come my Mother's Day sale, when some orders will need insulated packaging and ice packs, and others won't!

That was probably way more information than you wanted! If anyone has a better solution, I'd love to hear about it!

[Desiderio]

Absolutely not! Thank you so much for taking the time to explain your method I really really appreaciate it , expecially know that you have a little boy a full time job , just like me :-)

I am going to use the paypal as well , I am not ready for the price of a full shopping cart yet :-P

Thank you so much again

[sote23]

If you are going to rent a commercial kitchen they usually require insurance. Mine came out to about $500 a year as well.

Luis