How do you start a chocolate-covered strawberry business?

You start a chocolate-covered strawberry business by determining your costs, determining your financing, and obtaining the proper registration, licensing, and permits.

The costs for starting your business will vary based on the size and the amount of equipment you will need to purchase or lease. In some cases, you may be able to get started with just a few hundred dollars out of pocket. For this reason, you will need to decide whether you will operate from home or a storefront.

A basic setup for a home kitchen should include the following:

• Convection oven

• Refrigeration

• Molds

• Ingredients

If you already have this equipment, your startup costs will be significantly lower than someone who needs to purchase everything. Once you have crunched these numbers, you will want to determine how much you can charge your customers. After all, you need to make a profit. Right?

To do this, you must determine what other similar businesses charge for their products. How can you price your product competitively and still maintain a profit? When starting, most bakeries recommend charging between $1 and $2 per chocolate-covered strawberry.

With your costs and profits outlined, you can determine how to source financing options for your business. You must think through each method because each decision may financially impact you and your business in the long run. Possible financing options include:

• Raising money from friends and family

• Tapping into your savings account

• Sourcing investments from outside investors

• Obtaining a bank loan

• Getting money from a hard money lender

It is also recommended that you open a business bank account. Be sure to shop around and compare features and fees before deciding. You will also want to consider options for simplifying your accounting and taxes. There are many software options available that are built for entrepreneurs.

Next, you must register, license, and insure your business. Registering your business means deciding if you will operate as a sole proprietor, partnership, or limited liability corporation (LLC).

The primary advantage of an LLC is that it reduces your personal financial risk. A sole proprietorship is simple to set up, as is a partnership if you're going into business with other people. However, both of those structures leave you exposed to any financial liability that might come up from operating your business.

Once you have decided how you will operate, it is time to choose a business name. You want something unique and easily identifiable related to the industry or business. Once you have a short list of names, you can go to www.uspto.gov to see if they are available.

In addition to registering your business, you must ensure that you have the appropriate insurance coverage. At a minimum, you will need to have general liability insurance. This coverage protects you if something happens while operating your business.

While not required, it is recommended that you also have the following insurance policies:

• Worker's Compensation: This covers employee medical costs and a percentage of their lost wages if they are hurt on the job.

• Professional Liability: This helps to pay for work oversights that can result in a financial loss. For example, if someone says you didn't deliver the services you said you would provide, they can ask you to pay for any losses. Professional liability can help cover the costs of defending your business or fixing the problem.

If you are operating a storefront, at a minimum, you will likely need to obtain a Certificate of Occupancy (CO). This confirms that all building codes, zoning laws, and government regulations have been met. If you rent or lease the property, the landlord will be responsible for obtaining and providing the CO.