Candy Business: What are your thoughts?

[Zharlene]

For a few years now I've been playing with the idea of starting a candy business in my little hometown. I want to have a store like Candy Heaven. The store will be in a mall, so the rent will be expensive. This mall is about 10 minutes away from the city centre, and it is frequented by the more wealthier crowds.

I live in a small country, there is no store like it at the moment. So starting something new could turn out to be something really good for the community - or it could be a complete flop. Either way, all new businesses requires a bit of risk.

Is there anyone here who is involved in a candy business, or someone who have also started something similar? Would like to hear anyone's thoughts on the idea. Perhaps something I should consider before pursuing this.

I don't have a business plan yet. I am about 2-3 years away from attempting to implement this idea. So I have some time to do my research. But I don't really know how and where to start. Any ideas? Thanks!

[Harold Mansfield]

In America malls are dead. No sure what country you're in, but my first thought would be is the mall the right location? Will it be the right location a year from now? 2 years from now? How soon will the same fate of malls in America fall on where you are? Also, will you sell online?

[turboguy]

I don't know much about the candy business but where I live the candy stores we have seem to make money and rarely go out of business. Most of our candy stores make their own candy. I am not sure if that is what you plan or if you plan to resell candy others make. None of the stores here are located in the mall although one does take a Kiosk in the mall for a few months at Christmas time. Candy can be a destination. If I think back to when I have wanted to buy candy it was usually a holiday or special occasion and I can't ever recall buying candy because it was convenient. Usually the candy store has been my destination and I was looking for something special as a gift.

[Zharlene]

In America malls are dead. No sure what country you're in, but my first thought would be is the mall the right location? Will it be the right location a year from now? 2 years from now? How soon will the same fate of malls in America fall on where you are? Also, will you sell online?

To be more specific, it's an island country. So you can imagine how tiny it is. The location is an open-air shopping complex right next to a marina, so not exactly a mall I suppose. It was built a few years ago and over the years it has been growing in popularity. Started out with restaurants overlooking the yachts. Now there's a supermarket, clinics, a cafe, gellato shop, juice bar, a Crocs store, etc. The area now has a nightclub and just last year they also opened luxury hotel. A lot of these stores are opened by foreigners, so the concepts are new to locals (esp. juice bar). But many of us also have a lot of international exposure so we like to experience things that people in the bigger countries experience. That said, a candy store will definitely seem quite "foreign" in the area.


I don't know much about the candy business but where I live the candy stores we have seem to make money and rarely go out of business. Most of our candy stores make their own candy. I am not sure if that is what you plan or if you plan to resell candy others make. None of the stores here are located in the mall although one does take a Kiosk in the mall for a few months at Christmas time. Candy can be a destination. If I think back to when I have wanted to buy candy it was usually a holiday or special occasion and I can't ever recall buying candy because it was convenient. Usually the candy store has been my destination and I was looking for something special as a gift.

The focus would be to resell. The plan at the moment is to have most of the store stocked with candy that are sold by their total accumulated weight. Then fill a part of the store with the more familiar boxes of chocolates like Ferrero Rocher, candy e.g. from Candy Lab, the typical gourmet/gifting candies that I expect people will buy as gifts for their loved ones. To help the business grow, I want to place some of the gourmet candies at some of the more popular supermarket outlets for increased brand exposure.

I am currently living in China, and I sometimes go around looking at their candy stores. They also have these stores with individually wrapped mini-cakes and biscuits. I would definitely consider including these to my list. They have these candy arrangements at the larger supermarkets - same concept - you just fill up a bag with candy and you pay depending on their weight. It might be possible for me to rent out spots at our local supermarkets back home, and have these "candy-arrangements" right between an aisle.

I don't know yet if I will have an online store. I do have that background so it will be easy for me to set it up but the problem is that people in my country only really use Facebook when they're online. Online shopping isn't really a thing yet. There's just a lack of basic IT education, coupled with limited payment method capabilities. I don't know how that will be a few years from now but I could set up an online catalogue or FB page. That would also help me to keep the expenses as low as possible.

[Harold Mansfield]

To be more specific, it's an island country. So you can imagine how tiny it is. The location is an open-air shopping complex right next to a marina, so not exactly a mall I suppose. It was built a few years ago and over the years it has been growing in popularity. Started out with restaurants overlooking the yachts. Now there's a supermarket, clinics, a cafe, gellato shop, juice bar, a Crocs store, etc. The area now has a nightclub and just last year they also opened luxury hotel. A lot of these stores are opened by foreigners, so the concepts are new to locals (esp. juice bar). But many of us also have a lot of international exposure so we like to experience things that people in the bigger countries experience. That said, a candy store will definitely seem quite "foreign" in the area.

That sounds a little different than your standard mall. Is it a tourist area too? From what you've described it does sound like a good location. Hate to even ask what the rent is.

[Zharlene]

That sounds a little different than your standard mall. Is it a tourist area too? From what you've described it does sound like a good location. Hate to even ask what the rent is.

You're right, I apologize. It's not quite a mall. Everything is in a much smaller scale when it comes to island life. I just found out that they now have a casino in the area as well. So it's definitely growing, in terms of popularity. In 2-3 years time things might change and heck, there might even be a new "in" place.

The rent depends on the size and location of the store but that is going to be the biggest challenge of all. Forget about capital required to stock up the place, I would need enough capital to rent a store in the area for about 2 years. A regular-sized store in the area would cost around $5000 per month the last time I checked. This might not sound like much in the US, but it's considered quite exorbitant where I'm from.

I want to manage this business but I will most likely have to offer a percentage of the company to investors (this is what I expect, in order to get them to agree to the amount I need).

Apart from renting a store, I will need storage space. At the moment I am looking into converting used shipment containers into storage space. Hook it up with some airconditioning and I wonder if that will be enough? Anyone here ever tried that? What am I missing?

In addition, the biggest annual holidays are Christian holidays, e.g. Christmas, Easter, etc. and then there's Valentine's Day, weddings, Holy Communion, etc. I'd really like to supply candies to people celebrating these events.

So this is basically all I have at the moment.

[Harold Mansfield]

Are you a candy maker, or chef, or have family recipes or something? Why candy? I'm assuming there's a connection to some kind of life experience.

[Zharlene]

Are you a candy maker, or chef, or have family recipes or something? Why candy? I'm assuming there's a connection to some kind of life experience.

Unfortunately, no. I don't plan to make candy, just resell. I love eating candy, and there's just a deep interest in it. I have a sweet tooth, and I always have candy lying around at my place. I don't know if that reason is good enough. I strongly believe in the 'product'. I think I would be happy dealing with candy, supplying candy to people for events, etc.

[shrinkme]

Sounds like a sweet idea... :) You may want to start small to see what kind of response you get from potential customers. Sometimes it takes a little experimenting before you get the right combination of product and such before you will see success.

Note that I have never sold candy.

[Aurelio]

Sounds like you're from Europe - Mediterranean area is my guess. Malls are not dead here, not dead at least in Czech rep. and Slovakia and I guess it's the same for Mediterranean islands. BUT I wouldn't go for it. It's very difficult to succeed in the place where rent is high. We pay around 6000€ / month for kiosk in the mall and we are closing after 1 year /we opened in November/. High rent will just kill your bottom line and you need a good back-up from already running operations to start in the mall. And we are a producer with way higher margins than resellers. If you want to sell candy worth 2-3€ with 30% gross margin, how much you need to sell to cover 5000€ rent? A LOT! How much more for inventory, salaries, marketing expenses and so on? Start in a small place with 400€ rent instead, get experience with managing a retail place, get a customer base and if this brings a profit at least 2000€ on monthly basis, then move to the mall with 5000€ rent. With no prior experience and stream of profit you are doomed for a painful lesson.

[Zharlene]

Sounds like you're from Europe - Mediterranean area is my guess. Malls are not dead here, not dead at least in Czech rep. and Slovakia and I guess it's the same for Mediterranean islands. BUT I wouldn't go for it. It's very difficult to succeed in the place where rent is high. We pay around 6000€ / month for kiosk in the mall and we are closing after 1 year /we opened in November/. High rent will just kill your bottom line and you need a good back-up from already running operations to start in the mall. And we are a producer with way higher margins than resellers. If you want to sell candy worth 2-3€ with 30% gross margin, how much you need to sell to cover 5000€ rent? A LOT! How much more for inventory, salaries, marketing expenses and so on? Start in a small place with 400€ rent instead, get experience with managing a retail place, get a customer base and if this brings a profit at least 2000€ on monthly basis, then move to the mall with 5000€ rent. With no prior experience and stream of profit you are doomed for a painful lesson.

I really appreciate your thoughts and experience Aurelio! The rent is definitely my biggest worry at the moment. I would definitely consider starting smaller, at another location. If this happens, I would have to open shop at the city centre where there are more options. Another alternative would be starting online which would eliminate the expense on rent, and then spend the money marketing the business. But as the country is small, it wouldn't cost much to market because word goes around fast. At this point I'm still playing around with different ideas, so anyone with previous experience or similar experience to share truly offers invaluable input.

Although, I am also quite hesitant about starting too small.

[Aurelio]

I really appreciate your thoughts and experience Aurelio! The rent is definitely my biggest worry at the moment. I would definitely consider starting smaller, at another location. If this happens, I would have to open shop at the city centre where there are more options. Another alternative would be starting online which would eliminate the expense on rent, and then spend the money marketing the business. But as the country is small, it wouldn't cost much to market because word goes around fast. At this point I'm still playing around with different ideas, so anyone with previous experience or similar experience to share truly offers invaluable input.

Although, I am also quite hesitant about starting too small.

OK, my bet is it's Malta :-) Isn't it?

Definitely start smaller, it will give you a perspective. When you open store in the mall, you need to give them a project how it will look like, you'll need costly reconstruction of the unit and then you cannot change it (well you can, but it will cost a lot). You can fix all the mistakes and inefficiencies of space design in the small testing place before moving to expensive mall premises. You need to be 100% sure you know what you're doing when you're going there. Every mistake is multiplied with high costs! If you screw things up with 400€ rent it's not such disaster like when you screw with 5000€ rent. Your ability to build cash excess from operations is vital!

If you plan to start online, then you need warehouse anyway. And why not to find such warehouse premises where you can open your first store? Small retail premises in the city center should do just fine. You don't have to start small. It's still better to open one retail unit with 400€ rent and in 2-3 months to open another and another and so on, so you have 10 units with total rent costs of 5000€ than 1 unit it the mall. You can do that during those 2 years till you enter mall as you described you plan to do in 2 years.

And it's a good for your negotiation with the developer. I don't know how's the situation in your country, but here if you want to get in the mall, you need to have some outlets already. There is no way they would let you open a unit in the mall with no track of record.