Consider the problem of opening your own chocolate candy retail business in your

Question

Consider the problem of opening your own chocolate candy retail business in your local town. In order to do this, you need estimates on the amount of chocolate candy you can sell in a given month, as well as estimates on the cost of running your business. Conduct research to determine the average per-capita consumption of chocolate candy to determine how much candy you can realistically be expected to sell in a given month in your town. Find a suitable location within your town, for example a small retail store at the mall or some other location that is for lease, and define fixed costs such as rent, required insurance, etc. to determine your fixed costs. Set up an appropriate number of hours to be open and determine how many employees you will need and how much you will have to pay them. Data on wages for different occupations in different parts of the country is available from the Bureau of Labor Statistics. Finally, determine various costs, for example your average fixed and variable costs, and the price at which you can realistically be expected to sell your chocolate candy. Are you able to turn a profit on your business? Why or why not? Write up your analysis and discussion in a 500 to 750 word APA formatted paper (word count does not include title page, Certificate of Authorship, or references) and submit it to the dropbox.

Explanation / Answer

A research says that in United States $20.6 billion dollars worth of chocolates are old every year. This means that opening a chocolate shop can be a lucrative investment. The research also says that the sales for boutique chocolate shops alone increased 17% between 2006 and 2011, a trend that does not appear to be slowing down soon. This means that the end reward to be a chocolatier is very appealing. One of the safe options if I plan to open a chocolate candy shop would be to adopt a franchisee since these are businesses that are well established elsewhere giving a ready made foundation to build on and costing only the initial fees and ongoing royalties.

Chocolate Store Franchise Costs

Franchise

Franchise Fee

Royalties

The Chocolate Bar

$35,000

4 percent

Kilwins

$40,000

5 percent

Chocolate Works

$50,000

5 percent

Rocky Mountain Chocolate Factory

$24,500

5 percent

Chocolate Chocolate Chocolate Factory

$20,000

5 percent

Schakolad Chocolate Factory

$30,000

$600/month

(Entrepreneur.com, February 2016)

As per this research opening a candy franchise can cost anywhere from $112,000 to $622,000 including franchise fess, location, equipment, employees and supplies to make the chocolate.

Chocolate is often an impulsive buy. A indoor or a strip mall location or a store front in a down town can be a good idea. Further a lot of licenses and permissions need to be obtained. Few of which are business license, a seller’s permit, health code permit, fire department permit, I will have to apply for the Employer Identification number, liquor license (incase of chocolates infused wit liquor), weights and measures device registration. Other than permissions various insurances are also important like a General liability which is a must – this covers any and every accident that may happen on the property or any kind of illness brought by the product to the consumers after consuming the same, further I will need workers compensation insurance for the workers helping to run the business. I will also have to make provision for intellectual copywright. I will need some equipments as well depending on the chocolates that I decide to sell some of the equipments are work table, ingredient bins, commercial mixers, pans and pan racks etc.

To add to all this the factor that will help me boost my business is efficient marketing because it is only through productive marketing that I will win over potential customers and expand my business.

(Please note you will have to collect the actual lease/rent, the costs for obtaining various licenses and permissions, the wages of labour are approximately $10 hourly, electricity bills and other reccuring expenses and deduct all this from the revenue obtained after selling the chocolates)

Franchise

Franchise Fee

Royalties

The Chocolate Bar

$35,000

4 percent

Kilwins

$40,000

5 percent

Chocolate Works

$50,000

5 percent

Rocky Mountain Chocolate Factory

$24,500

5 percent

Chocolate Chocolate Chocolate Factory

$20,000

5 percent

Schakolad Chocolate Factory

$30,000

$600/month

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