Are you a foodie who wants to start their own business? There are countless food business ideas that can provide a great living.

Americans will spend over $1 trillion on food in 2024, according to Statista. And the industry is only growing—meaning there’s surely the perfect niche just waiting to be filled. We investigated different aspects of this booming industry to help you navigate it successfully.

Below, we’ll provide you with information about the food industry, different types of food businesses, and how much money these businesses can make. Then we’ll answer some commonly asked questions that can give you a head start as a budding food entrepreneur.

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Click on any of the following links to jump to the section you’re interested in, or simply read on.

• What are the best food business ideas?
• 6 profitable food business ideas
• Best food business ideas you can start from home
• More unique food business ideas
• Food Industry FAQ
• How to start a food business
• Which food businesses sound appealing to you?[/su_note]

What are the best food business ideas?

Some of the best food businesses to start include:

1. Vending Machines
2. Food truck
3. Dessert cafe
4. Specialty coffee shop
5. Grocery store
6. Food tech/startup ventures
7. Food subscription box
8. Healthy snacks
9. Meal delivery service
10. Catering business
11. Food blogging/recipe website
12. Plant-based/vegan restaurant
13. Farm-to-table restaurant
14. Gluten-free bakery
15. Juice bar/smoothie shop
16. Food product manufacturing
17. Food pop-up events
18. Cooking classes/culinary workshops
19. Meal prep service
20. Artisanal food products
21. Health food store/nutrition shop
22. Food and wine pairing events
23. Baby food business
24. Frozen dessert shop

We’ll discuss each of these food business ideas below.

6 profitable food business ideas

#1. Vending machines

• Average Annual Revenue: $182K+
• Average Profit Margins: 4.3%
• Startup Cost: $2K+
• Time to Revenue: 3+ months
• Annual Market Growth Rate: .5%
• Best For: Organized entrepreneurs who like driving, people who want a semi-passive business

While most vending machine businesses might only make a 4.3% average profit, successful automated vendors can make much more. For instance, Adam Hill started Hill Vending and makes $700K a year selling snacks. Find out how in our interview below.

https://www.youtube.com/watch?v=-s_Y-O1nosw

He provides free training for people who want to become vending machine business owners.

#2. Food truck

• Average Annual Revenue: $41K+
• Average Profit Margins: 6.4%
• Startup Cost: $1K-$100K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.2%
• Best For: Foodies, chefs, cooks, bakers, and other food service veterans

You can start a food truck business based on your own recipes, or you can buy an existing food truck business or franchise. Either way, food trucks are one of the most popular food ventures on our list.

Because there are a lot of them, the failure rate for food trucks is high. You could avoid that fate by targeting a unique niche and making a solid business plan before you hit the road.

Find out how Kyle Gourlie started Vet Chef and started bringing in $417K per year:

https://www.youtube.com/watch?v=YCnE13BaQlk

#3. Dessert cafe

• Average Annual Revenue: $1.5M
• Average Profit Margins: 5.4%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.1%
• Best For: Bakers and pastry chefs with excellent customer service skills

Everyone enjoys a sweet treat now and then. Opening a bakery business or other dessert cafe lets you satisfy your customers’ sweet tooths, and it can be a very profitable endeavor.

The Cupcake Collection has become a Nashville institution and has generated more than $10 million in revenue since its founding. Hear how founder Mignon Francois got started in this interview:

https://www.youtube.com/watch?v=jmviDvmh5js

#4. Specialty coffee shop

• Average Annual Revenue: $865K+
• Average Profit Margins: 5.8%
• Startup Cost: $1K-$100K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.2%
• Best For: Baristas, customer service pros, morning people and coffee lovers with strong time management and communication skills

The coffee shop industry is huge. There were more than 72,000 coffee shops in the U.S. alone in 2023, a number that’s growing by about 3.1% per year on average.

While this is a fairly saturated market, a coffee shop can still be a very lucrative business in the right market. Doing research in your area to identify an unfilled niche is the best way to set yourself up for success.

You don’t need a huge investment to start a coffee shop business, either. Maxwell Mooney started Narrative Coffee as a coffee cart with just $1,800, then grew it into a brick-and-mortar using those profits. Hear his story here:

https://www.youtube.com/watch?v=HPq05GXUgL8

#5. Grocery store

• Average Annual Revenue: $9.3M+
• Average Profit Margins: 1.8%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.8%
• Best For: Organized and detail-oriented entrepreneurs with strong time and inventory management skills

Every neighborhood needs a place to buy fresh foods. This makes grocery stores a potentially profitable food business idea even in a small town or rural area.

Grocery stores can take many forms. You can open an all-purpose supermarket for customers to buy essentials, or you can choose a niche. For example, you can open an organic grocery store or start a specialty shop focused on a specific item like cheese, wine, or spices.

#6. Food tech/startup ventures

• Average Annual Revenue: $131K
• Average Profit Margins: 3.6%
• Startup Cost: $100-$9.5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 6.7%
• Best For: Inventors, developers, tech-savvy food entrepreneurs

Just about everything’s going high-tech these days, and the food industry is no exception. Food tech includes things like:

• Personalized diet and nutrition apps
• Synthetic and alternative meats
• Supermarket automation systems
• Food manufacturing equipment
• Restaurant technology (like inventory tracking and point-of-sale systems)
• Food traceability

Basically, anything that uses technology like software, AI, robotics, or electronics in a restaurant or food processing business counts as food tech. While tech startup ventures can be risky, they’re also among the most profitable food business ideas if you hit on a successful concept.

Best food business ideas you can start from home

#7. Food subscription box

• Average Annual Revenue: $60K to $120K
• Average Profit Margins: 5-15%
• Startup Cost: $100-$10K
• Time to Revenue: 30-90 days
• Annual Market Growth Rate: 16.5%
• Best For: Creative, organized, and system-driven foodies with strong marketing skills

A food subscription box is a twist on the food delivery service business model. Customers sign up to get curated, tasty food products delivered to their door on a regular schedule, generating recurring revenue for the business.

A subscription service is among the top low-cost food business ideas to start. It’s also among the most flexible small food business ideas in terms of your schedule. While a subscription service comes with its own challenges, like inventory management, you won’t need a storefront or to interact with customers face to face.

As far as what to include in your subscription box—the sky’s the limit! You can sell baked goods, organic food, fresh fruits, unique snacks, or entire meal kits, just to name a few options.

Miami Fruit grows its own fresh produce, and its exotic fruit subscription boxes are part of what has made it such a profitable business. Hear how the business started in this interview:

https://www.youtube.com/watch?v=ws08subGdg0

#8. Healthy snacks

• Average Annual Revenue: $130K+
• Average Profit Margins: 5.4%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.4%
• Best For: Wellness and nutrition professionals, athletes and fitness experts, and entrepreneurs who excel at organization, sales, and customer service

There’s growing demand for healthy food. You can create your own health snacks and sell them in an online store, at food kiosks, or even in vending machines.

The most popular snacks among health-conscious food lovers include:

• Gourmet popcorn
• Veggie chips
• Fresh fruits
• Dried fruits
• Trail mix
• Granola bars/protein bars
• Nuts
• Shakes and smoothies

#9. Meal delivery service

• Average Annual Revenue: $131K
• Average Profit Margins: 3.6%
• Startup Cost: $100-$9.5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 6.7%
• Best For: Drivers, those that like to socialize

Growing demand makes a food delivery business an excellent business model for aspiring entrepreneurs. It’s among the most profitable food business ideas you can run out of your home to keep the startup costs low.

If you want insights into how to launch your own food delivery business, check out this interview with the founder of Trellus, a local market delivery business:

#10. Catering business

• Average Annual Revenue: $124K+
• Average Profit Margins: 5.5%
• Startup Cost: $1K-$100K
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1%
• Best For: Chefs, cooks, bakers, and other food experts

If you’re looking for a low-cost food business idea, a catering service can be an excellent choice. All you need to start is cooking skills and ingredients.

You can prepare the meals at customers’ homes or event venues, or rent a commercial kitchen when you need it. Either way, you’ll save yourself the startup costs of buying equipment and getting a brick-and-mortar store.

#11. Food blogging/recipe website

• Average Annual Revenue: $46K
• Average Profit Margins: 14.6%
• Startup Cost: $100-$200
• Time to Revenue: 1 month to 3 Years
• Annual Market Growth Rate: -1.50%
• Best For: Writers and content creators, marketing and advertising pros

Another great choice if you’re looking for low-cost food business ideas is food blogging. All you need to get started is a computer, an internet connection, and opinions or expertise about some aspect of the food industry.

For cooks and bakers, sharing recipes is one way to generate food blog content. You could also review restaurants and products, explore world cuisines, or share insider knowledge about the food service industry, just to name a few ideas.

Once you have the content, you can monetize a food blog by:

• Selling ad space
• Including affiliate links
• Selling eBooks and recipe books
• Creating online cooking courses
• Making sponsored posts and brand deals
• Selling physical products and merchandise
• Implementing a membership or subscription model

If you want to learn more, check out our guide to affiliate marketing.

More unique food business ideas

#12. Plant-based/vegan restaurant

• Average Annual Revenue: $1.1M+
• Average Profit Margins: 4%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.2%
• Best For: Foodies and cooks, people with strong customer service and time management skills, effective leaders, managers, and motivators

Nutritious food is increasingly in demand. One food business idea in this niche is to sell plant-based and vegan food made from fresh produce and meat alternatives.

Aspiring food entrepreneurs can capture a growing market segment by opening a vegan restaurant, cafe, or retail store. Roughly 1.62 million U.S. adults keep to a strict vegan diet, and there are many more who are vegan-curious or adding more plant-based food to their diets.

#13. Farm-to-table restaurant

• Average Annual Revenue: $263K+
• Average Profit Margins: 27.9%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: -0.5%
• Best For: Chefs and other food service industry pros with a passion for local food and sustainability

Farm-to-table dining means that the food on customers’ plates comes directly from the supplier to the restaurant. It’s all about turning fresh produce, meat, and other ingredients into tasty food for people to enjoy.

Food lovers flock to farm-to-table restaurants. You can apply this concept to other food business ideas, too, like farm-to-table catering services or food trucks.

#14. Juice bar/smoothie shop

• Average Annual Revenue: $633K+
• Average Profit Margins: 19.66%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 4.8%
• Best For: Health and nutrition experts, creative food lovers with customer service experience

A juice or smoothie bar is another profitable food business idea created by the recent push for tasty food that’s both healthy and convenient.

Like with other food businesses, choosing the right location for a juice bar or smoothie shop is key. They do well as food kiosks inside gyms or retail centers, and they also make a great concept for food trucks or other mobile food businesses.

#15. Food product manufacturing

• Average Annual Revenue: $78M+
• Average Profit Margins: 12.24%
• Startup Cost: $1M-$10B
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 2.2%
• Best For: Creative and inventive food lovers with strong branding, market research, and supply chain management skills

A food processing business lets you bring unique foods to life. You can sell the products you make directly to customers with an online store or local market, or you can connect with other food retail store owners to get your product on their shelves.

Some of the most popular product categories for a food processing business include:

• Hot sauce
• Dry fruits and nuts
• Cereals and beans
• Ready-to-eat meals
• Frozen or canned foods
• Baked goods

Frozen food production makes $44.4 billion annually across 564 organizations, with an average revenue per employee of $464,882.

#16. Food pop-up events

• Average Annual Revenue: $49K+
• Average Profit Margins: 16.33%
• Startup Cost: $500-$5K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 8.8%
• Best For: Event planners, people who excel at organization, scheduling, publicity, and advertising

You don’t need to be a cook or industry pro to start your own food business organizing pop-up events. It can be just as lucrative to coordinate events where other food businesses can showcase their products or recipes.

Food festivals, farmers markets, food truck events, and pop-up restaurants are just some of the events you can plan with this business model.

#17. Cooking classes/culinary workshops

• Average Annual Revenue: $18K+
• Average Profit Margins: 13.1%
• Startup Cost: $100-$1K
• Time to Revenue: 1-3 months
• Annual Market Growth Rate: 8.5%
• Best For: Teachers, educators, professional chefs, and experts in a particular skill or knowledge area

Cooking classes are a popular way for foodies to expand their culinary skills or learn more about a particular cuisine or cooking technique.

Teaching cooking classes can be a profitable business idea on its own, or it can serve as an extra income stream for a personal chef or restaurant owner.

#18. Meal prep service

• Average Annual Revenue: $41K+
• Average Profit Margins: 6.4%
• Startup Cost: $1K-$100K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.2%
• Best For: Cooks and chefs with strong planning, problem-solving, and organization skills

A meal prep service is an affordable alternative to having a personal chef. Customers get the fresh ingredients and recipes they need to quickly cook up meals at home.

This is among the top business ideas for aspiring food entrepreneurs who don’t want much face-to-face customer interaction. You can focus primarily on planning and preparing the meal kits but use an online ordering system and team of delivery drivers to take care of the customer side of the business.

#19. Artisanal food products

• Average Annual Revenue: $278K+
• Average Profit Margins: 16.33%
• Startup Cost: $500-$250K
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: -0.8%
• Best For: Creative chefs and foodies with strong sales, marketing, and customer service skills

This food business idea is a classic but will never go out of style. Hot sauce, pickles, and gourmet popcorn are particularly popular artisanal food niches, but if you have a great recipe for any food that can be packaged, you can start a food business selling it.

#20. Health food store/nutrition shop

• Average Annual Revenue: $130K+
• Average Profit Margins: 5.4%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.4%
• Best For: Wellness and nutrition professionals, athletes and fitness experts, entrepreneurs who excel at organization, sales, and customer service

Consumers today want nutritious food and are more concerned with healthy eating than ever before. The health and wellness food market is projected to grow by $452 million dollars from 2022 to 2027. This gives opening a health food store the potential to be very lucrative.

#21. Food and wine pairing events

• Average Annual Revenue: $1.7M+
• Average Profit Margins: 3.8%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.9%
• Best For: Wine lovers, social foodies with strong planning and marketing skills

Whether you’re a wine expert or just love planning fun events for local foodies to enjoy, organizing food and wine pairing dinners can be a rewarding and lucrative way to start a food business.

You can also put a twist on this idea with things like beer, cocktail, or mocktail pairings.

#22. Baby food business

• Average Annual Revenue: $142M+
• Average Profit Margins: 12.24%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 4.1%
• Best For: Parents who are cooks or chefs, creative and inventive food entrepreneurs

This is one of the more unique food business ideas on the list, but it also has the potential to be among the most profitable business ideas to start.

Many parents want to feed their babies fresh food but don’t have time to make their own baby food. Launching your own baby food brand can fill that in-demand niche.

The global baby food market is booming. In North America, the market for baby food and formula surpassed $9.9 billion in 2022 and is expected to reach $13.9 billion by 2028.

#23. Frozen dessert shop

• Average Annual Revenue: $279K+
• Average Profit Margins: 3.7%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 0.7%
• Best For: People who want winters off, friendly and fun-loving entrepreneurs with customer service expertise

Trips to the ice cream parlor are a summer tradition for many. Kids and adults both enjoy a frozen treat, like ice cream or frozen yogurt, on a hot day.

When the weather’s cold, though, that demand dwindles. The seasonality of an ice cream shop is often the biggest challenge for aspiring food entrepreneurs in this niche, and it’s something you’ll want to account for when writing your business plan.

As long as you’re prepared for seasonal fluctuations, an ice cream parlor can be a profitable food business. The global ice cream market was valued at $71.5 billion in 2021 and is projected to grow at an average rate of 5.2% through 2029.

Food Industry FAQ

What are the best food franchises to start?

The brand recognition that comes with opening a franchise can be a big help for a first-time entrepreneur in the food industry. A fast-food restaurant is the most common franchise option.

The publication Entrepreneur ranked the top food franchises as:

1. Arby’s
2. Auntie Anne’s
3. Baskin-Robbins
4. Captain D’s
5. Charleys Cheesesteaks & Wings
6. Cinnabon
7. Culver’s
8. Denny’s
9. Dunkin’
10. Jersey Mike’s Subs

How much do food businesses cost to start?

That varies greatly depending on the type of business you’re starting and what other skills you bring to the table.

As a general rule, a business that requires a brick-and-mortar storefront is going to have the highest startup costs—often upwards of $50,000, especially if you’re going the route of a fast food franchise.

Having said that, you’ll definitely find people who have started full restaurants on a shoestring budget and succeeded. Starting with something like catering or a food cart can be a great option if you want to start a restaurant with limited financial resources.

What is the failure rate of businesses in the food industry?

According to the National Restaurant Association, about 60% of restaurants fail in their first year, and 80% fail within five years. The statistics are similar for startups in food tech and other areas of the industry.

You can increase your odds of success by writing a solid business plan and conducting effective market research to identify your target customer before you open. For help, check out our guides on business plan writing and market research.

How to start a food business

You’ll want to follow the steps below to start your food business idea:

1. Assess your skills.
2. Create a business plan.
3. Register your business.
4. Fund your business.
5. Buy food and cooking equipment.
6. Contact your local health department to arrange an inspection.
7. Hire employees for your food business.
8. Create a menu with prices.
9. Build a following online.
10. Serve your food to customers.

Which food businesses sound appealing to you?

Everyone has different interests and goals when they start a food-based business. Whether you want to write about food or open your own food truck, there are plenty of ways to start a business involving food.

Which ideas would you like to know more about?

Would you like to start a laundry business and make $24K/month for providing a place for people to clean their clothes and linens? The laundromat industry in the US is worth $5bn, with over 21,000 businesses in operation that employ over 50,000 people. Do I have your attention? If I do, then here are 20 steps to follow to start your laundromat! We interviewed the owners of two different laundromat businesses. Both have great advice to share about how to start and run a laundromat business. Jeff Orgill owns Rosie Wash Express Laundry in Los Angeles (LA), California. Justin Pike and Mike Cox formed a partnership to acquire Ferndale Laundry, located in Ferndale, Washington. Let's get down to business! Jeff's background is in the film industry. One day, he decided he was tired of: [su_quote]sitting at a desk editing all the time.[/su_quote] After reading about opportunities for passive income, he decided to own a laundromat. In 2017, he plunged into the cold water of entrepreneurship through a laundromat business sale near his home in LA, going from film editing to towel folding in about two years! After 18 years in the military, Justin moved back to his hometown to purchase and run a laundromat with his business partner Mike. But that's only part of the story: As a kid, Justin used to visit the very same laundromat to get coins to play video games! Justin's interview is available here. [su_youtube url="https://www.youtube.com/watch?v=HVCJ-_VpGrY"] In this guide, you will learn how to start a laundromat from scratch. We’ll provide you with every detail you need to know to open your own laundry business.

Step 1: Learn about the industry

Have you ever found yourself wondering how much money a laundromat makes? Or, is the average laundromat cost something I can afford? Established organizations provide the information you need. Keep reading. The free industry overview by the Coin Laundry Association (CLA) is available here. Also, download their most recent Laundry Industry Survey and Laundry Customer Profile that presents the results of over 400 customer surveys. For commercial laundry, the Textile Rental Services Association (TRSA) offers benchmarking reports. Don't overlook the National Apartment Association (NAA) because they provide insight into the industry's multi-housing segment. Technology infiltrated the coin laundry business with software applications (apps), allowing many owners to accept payments and manage operations. IBISWorld provides detailed research reports on this topic.            While you're at it take some time to learn about a business mindset.

Step 2: Pick a laundry business type

Before you open a laundromat, sort through all the colors in the load. There's more to it than a glass storefront with rows of laundry equipment behind it! Consider these different kinds of laundromat businesses:

• Coin laundry
• Private laundromat equipment for multi-tenant buildings
• Wash-and-fold service
• Commercial laundry for uniforms, linens, and facilities
• Additional services, such as pick up and delivery 

This video tells you what a day in the life of a laundromat is like. Information about owning a pickup-and-delivery business is available here. Data for analyzing possibilities with multi-housing is on NAA's website. TRSA provides market-specific information covering commercial laundry. Best get started with it! Buying an existing laundromat lets you start earning revenue right away rather than taking the time first to buy and install equipment.

Step 3: Build your skills

Starting a laundromat business does not require any super-special skills, training, or education. Just shake the wrinkles out of a few of the skills you already have and stain your brain with a little knowledge. A few capfuls of knowledge never hurt anyone! Consider this Business Fundamentals course offered by edX.org. The Small Business Association (SBA) Learning Center is another place to start! Learn even more from Udemy and SCORE.

Laundromat customer care

The level of care Jeff shows to customers helps him stand out from the competition, saying,: [su_quote]I will talk to anybody that calls me and has a problem with their laundry.[/su_quote] Even though he wants to pull his hair out some days, he enjoys seeing customers return week after week. Sometimes, he even throws in a free wash! His focus on a positive customer experience and going the extra mile is paying off because he currently has about 500 regular customers. New people come in every week. Try this course on taking customer service to the next level.

Appliance repair

Community colleges may offer courses in appliance repair. RepairClinic.com offers a free wizard to isolate a problem with laundry equipment and guide you through repairs. CLA publishes a laundry equipment and services directory. The most common repairs in a laundromat include:

• Broken belt in a dryer
• Door circuits 
• Fuse
• General machine breakdowns
• Heating coil
• Idler pulley in a dryer
• Motor
• Overheating due to a clogged vent (a fire hazard)
• Roller in a dryer
• Start switch
• Temperature switch
• Thermostat

Laundromat-specific training

Training for laundromat business owners is available here. Check out TRSA's commercial laundry training resources and their certification programs here. Detergent companies offer advice, such as what Clorox offers here.

Step 4: Write a business plan

Iron out your vision, objectives, and strategy into a laundromat business plan that will help you accomplish things, such as securing financing or partnering with other businesses. It's totally worth your time. If you want some extra guidance on how to write a business plan that will appeal to investors, consider working with a company like Wise Business Plans, whose team of MBA-trained writers have experience writing business plans that successfully secure funding from banks and other lenders.

Templates

Here are some free business plan templates:

• Laundromat business plan available here
• Startup business plan template
• Single-page business plan
• Business Guide by the Small Business Administration (SBA) 

Resources

We're not through yet! Here’s a list of additional resources:

• Take online courses for business
• Guide describing how to write a Business Plan
• Service Corps of Retired Executives (SCORE) resources
• The Complete Business Plan Course 
• Calculating Startup Costs

Step 5: Name your business

Jeff says "Coin Laundry" is "boring but descriptive." Here's some better advice. Load what you do into the name of your laundry business. Both Rosie Wash Express Laundry and Ferndale Laundry include the word "laundry." Try a laundromat name generator here.

Have a safe spelling

Think about it: Customers need to spell the name of your business correctly to find it. The ability to pronounce it is essential! Register alternate spellings to direct queries to your website. This helps you to capture all the web-based traffic you can, just like those screens that capture lint in a dryer!

Tag your location

Naming your business with its location adds credibility. Ferndale Laundry is in Ferndale, Washington, giving the name of the laundromat business some weight. Simple, right?

Pick a dot-com website URL

Having a dot-com for your virtual address also adds credibility. People trust dot-com sites, perceiving them as more mainstream and representative of an established for-profit business. Search for one by clicking here. Set up a business email account that includes it, such as contactus@yourdomainname.com. Alternatively, register a Google account for your laundromat business and use a Gmail address like ferndalelaundromat@gmail.com. If your desired dot-com name is taken, make slight changes, such as adding a hyphen, to keep it.

Test your branding

Make sure your name ties in easily with the branding you envision for your coin laundromat. Rosie Wash Express Laundry brands with a red rose, of course! Test your name on Google Trends. Propose it to loved ones. Read this article about naming your business. Finally, register your name with the government.

Step 6: Decide on a business model

Both laundromat owners purchased existing laundromat businesses. But this doesn't have to be you. Let's dig a little deeper.

Existing laundry business

Jeff bought the land, building, and existing laundry business for around $700,000. He decided against leasing because he did not want to pass on the unavoidable cost of rent increases to his customers. CLA offers "The Laundry Owner's Guide to Leases." Justin bought Ferndale Laundry from a friend who already owned several laundromat businesses and could no longer manage the one in Ferndale.  In situations like these, "How to Value a Coin Laundry" can help.

Advantages of an existing laundromat

Existing laundry businesses present several cost-saving advantages, such as:

• Exempt from the cost of hooking up to a city's water and sewer.
• Built-in customer base.
• Power, water, utilities, and other costs are known in advance.

Disadvantages of an existing laundromat

Some of the disadvantages are:

• Older equipment that might need replacing.
• Aging infrastructure that might be dated or not up to code.
• Inheriting the reputation of the previous business.

All of these factors can prevent you from realizing an immediate return on your initial investment right away.

Due diligence

Vet the business before buying. Do your due diligence. Check out this white paper called "Best Practices for Due Diligence from the Coin Laundry Association." Consider asking the following questions:

• Is it not profitable?
• Did all the machines break down?
• Are they asking for a premium but leaving you with a lot of maintenance costs?
• Is the person just tired and wanting to retire?                                               

Investigate water usage

Jeff used a hack he learned from a real estate broker. He checked the laundromat's water meter, determined gallons per cycle and price, and then calculated the usage.

Investing in improvements

Jeff invested $300,000 in improvements, amounting to one million dollars initial spend on his Rosie Wash Express laundromat business. Justin and Mike invested almost $500,000, which covered 56 washers and dryers, bulkheads, related infrastructure, computers, and software. 

New laundromat

The advantage of building a new laundromat is that it allows you to customize the facility's layout and features. It involves the following steps:

1. Select a site.
2. Analyze the market.
3. Design and build-out.
4. Finance the business.
5. Host a grand opening.

Disadvantages of a new laundromat

This approach has many disadvantages, including:

• Paying the enormous fees cities charge to businesses that impact the sewage system.
• Obtaining the required permits.
• Estimating the future costs of running the laundromat without the benefit of comparable enterprises nearby.

Justin estimates that impact fees for Ferndale could have exceeded $300,000 for a new facility. Read more about water and sewer impact fees here.

Step 7: Select a location

Spending the time to find an ideal location is the best investment of your time as a future laundromat owner. Let me explain: The right setting is one of the top predictors of ensuring a good laundromat profit margin for your store or company.

Review local ordinances and zoning laws

Learn the ordinances and laws that govern where laundromat businesses may operate by searching the Municode Library.  This article teaches you how to check zoning laws in your locale. Also, read about zoning challenges and trends. Guidance about commercial leasing is available here.

Compare and contrast

A real estate comparable provides information about recent sales in a local market. This information helps you understand what it costs to buy or lease a laundromat business in a specific area. CLA offers a program that covers how to value a coin laundry store. Additionally, tools are available for finding comparable commercial properties, such as UpFlip’s established businesses and companies for sale. How did Justin, Jeff, and Mike choose a location? Let's take a closer look. Justin wanted to offer laundromat services in a convenient location in a city of fewer than 12,000 inhabitants. So, he put it downtown! Justin said,  [su_quote]We wanted it close enough to grocery stores and pharmacies so that you can load up your machine, do your 22 to 29 minutes cycle, and be able to run another errand within close distance.[/su_quote] Jeff's experience wasn't as straightforward as Justin's. He says that finding a location for his laundromat business "was a long process" because LA is a competitive market that is "dense with laundromats" and "sometimes there's two on the same block facing each other." He searched for a laundromat for sale near his home, a great way to spend more time with his family in traffic-choked LA. Consider what this could mean for you and your family. He found an existing laundromat ten minutes away.

Location importance

Jeff says: [su_quote]You gotta be somewhere where people need to do laundry.[/su_quote] CLA offers information about site selection here. Consider a location near any of the following:

• Apartment buildings
• College students
• Tourist areas
• Hotels and motels
• Large families

Is an older neighborhood a good place to open a laundromat?

Parts of town with aging buildings are good areas to target for a laundromat because building owners usually don't invest in plumbing renovations to support in-unit laundry equipment. In gentrified neighborhoods, a few factors are at play that can make a massive impact on a laundromat's success.

In-unit washers and dryers

Nowadays, many new multifamily housing developments include a washer and dryer in each unit. For more information about the apartment industry trends, check out research conducted by the NAA by clicking here.

Utility costs

Nationwide, the cost of water and sewage is on the rise. These factors have led to a nationwide decline in traditional neighborhood laundromats.

Step 8: Equipment and supplies

Jeff uses a combination of old and new equipment. About 25 percent of it was already in his laundromat at the time of purchase. Before replacing the laundromat equipment, his staff "tinkered" to try to restart it when it failed. Jeff admits that "was kind of a disaster" and "looked bad" in front of customers.

New equipment 

Jeff emphasizes that new equipment helped him reduce overhead and costs,  [su_quote]So when you get new equipment, you reduce all your costs, your bills, your utilities, it's more efficient. So that alone paid for the loan on that stuff.[/su_quote] The new equipment also comes with a warranty. A white paper about replacing laundry equipment is available here. You might also want to include vending machines or a small convenience store in your laundromat to supplement income.

Equipment and services directories

Buy the right laundry equipment for your store by referring to the laundry equipment and services directories available here. Jeff purchased nine machines that cost $5,000 each. Smaller machines were selling for about $1,000, which he purchased on sale for about $900 each. Bigger machines cost $6,500, $8,000, and $10,000 each. Jeff also purchased a natural-gas-powered heating system. The machines range from 30 to 80 pounds. To learn more, check out this handy formula for calculating the capacity of a machine.

Step 9: Revenue

Jeff's first-year revenue was $220,000.  His last tax return reports $270,000, and he anticipates exceeding $300,000 by year-end. His return on investment (ROI) is 36 percent, which is fantastic! Sundays often bring in $800. Vending machines, a massage chair, and an automated teller machine (ATM) fetch about $1,500 a month.

Self-service

At Ferndale Laundry, most revenue comes from self-serve machines. Justin says: [su_quote]There's little to no maintenance or cost to me because they're doing all the work.[/su_quote] Sources of revenue for Ferndale Laundry, from highest to lowest, are as follows:

• Self-service
• Wash and fold
• Delivery
• Commercial contracts (which pay well but are hard to win and maintain)
• Vending

Wash and fold services

Jeff expanded his business to include a fluff and fold laundry service. He says,  [su_quote]It's really taken off in the last maybe two or three months.[/su_quote] If you would like additional information, click here.

Vending

Justin and Mike contract with local vending companies, receiving a quarterly commission check that ranges from $40 to $200. They didn't want the additional responsibility for managing expiration dates and restocking products.

Step 10: Expenses

The highest expenses for a laundromat are employee payroll and utilities. CLA offers helpful information.

Payroll

Payroll is Rosie Wash Express Laundry's most significant expense. Jeff has four part-time employees who all earn minimum wage.

Utility bills

Ferndale Laundry's most significant expense is water, which includes the sewer and storm drain. It's a considerable expense for Rosie Wash Express Laundry as well, using about 200,000 gallons of water per month. The cost is about $3,500 each billing cycle for his medium-sized establishment.

Tank vs. tankless water heaters

Jeff installed a tankless water heating system and said that it's reduced his utility bill from $6,000 to $4,500 per month. Ferndale Laundry uses a dual-tank-based water heating system. Justin says,  [su_quote]If we had one big tank, we would have to have it inspected every year, and that would be a cost.[/su_quote] Think about that for a minute.

Ozone injections

Adding ozone to wash cycles improves the cleaning effect of cold water. It's an attractive option to the laundromat business owner seeking to reduce water-heating costs.

Electricity and gas

A store's electric bill can be over $500 per month. A typical gas bill can range from $1,000 to $2,000 per month.

Maintenance and repair

To keep the machines running at Rosie Wash Express Laundry, Jeff keeps a repair technician on retainer for $350 per month. Other expenses include replacing parts, such as motors and door circuits.

Step 11: Integrate technology

Technological innovations are fueling a revival of the industry. Laundry apps are becoming increasingly popular, but what's the bottom line?

Dexter Pay

According to its website, Dexter Pay is an app "that allows laundry customers to pay for their laundry and track cycle progress via their smartphone or mobile device."

Speed Queen Value Center

Speed Queen is a popular laundromat equipment manufacturer that offers an app for cash users. Customers add physical cash to the value center machine, which uploads it to their payment app.

Delivery

Rosie Wash Express Laundry uses an app to manage its home delivery business, allowing customers to enter details and pay online. Delivery drivers receive GPS information to complete their routes.

Step 12: Build profit margins

The average profit margin for a laundromat is 25 percent. Increase this is by offering additional services, such as a wash and fold service. In truth, it's how Rosie Wash Express Laundry achieved its impressive margin of 36 percent. 

Rewards

Rosie Wash Express Laundry implemented a rewards card program. After ten washes, customers receive a free wash and enter the quarterly raffle. Jeff announces the winners on Facebook live, allowing him to interface with customers frequently.

Reinvestment

The owners of Ferndale Laundry reinvest all profits back into the business. Entrepreneur.com offers a helpful article on surviving your first year of business.

Step 13: Organize daily operations

After the grand opening, you will need to handle day-to-day operations. Let's begin.

Layout

Here's the magic: A great layout increases revenue! An equipment manufacturer helped Justin and Mike with the layout for their coin laundry facility.

Coin collection

Coin collection is an unavoidable chore, but technology can help! Ferndale Laundry's machines notify Justin and Mike when it's time to empty a coin box. The partners deposit the coins at their bank or add them to the coin vault, where patrons get change for dollar bills.

Cleaning

Bulkheads must be cleaned every night because lint buildup will cause a sewer smell in the store and water to back up and spill all over the floor. It's a dirty job, but somebody has to do it!

Lost items

Customers lose things! Sometimes, Justin or Mike open a bulkhead to search for lost items. As for lost socks, they just post them on the wall for customers to claim.

Delegating tasks

Jeff advises that establishing sound systems and delegating tasks to staff has helped him to be more hands-off, his ultimate goal. He realized that some things work better if he abstains from his involvement.

Challenges

In addition to owning the laundromat, Justin has a day job. Balancing these competing priorities probably would not be possible without Mike, his business partner. Another significant challenge is the daily accounting and management of money to make decisions, such as affording employees. CLA offers a class titled "A Day in the Life of a Laundromat" that discusses everything needed to operate your self-service laundry.

Step 14: Create a marketing strategy

Jeff does his own marketing, saying he likes to "tinker" with it and advises researching and defining your target market and competitors. And then focus your efforts on improving your competitive edge. Rosie Wash Express Laundry is located near many large families, an ideal demographic for a laundromat! CLA offers a comprehensive marketing workbook. Best get started with it!

Digital marketing

Digital marketing includes email newsletters, social media, and search engine optimization (SEO). Jeff uses Google My Business, which helped him get 13 new customers from one promotion! This service enables him to:

• Track the number of visitors and impressions.
• Determine where visitors saw his advertisement based on the code.
• Know if a new customer is the result of a conversion from his marketing campaign.

So here's the magic: Jeff estimates that: [su_quote]Each of those customers is worth probably anywhere from $600 to $1,000 a year if we keep them.[/su_quote] Facebook is how Ferndale Laundry puts itself on the digital marketing map, and it's working well. Ferndale Laundry also shows up in Google's search results with their "nice star ratings next to it." Another pro tip is to invest in an all-in-one marketing software like Semrush. The Site Audit tool demystifies search engine optimization for new business owners, while their Keyword Magic tool can save you tons of time on keyword research. Using this type of program also makes it much easier to track marketing campaigns across multiple platforms to ensure you're getting the full value from the time and money you spend. 

Printed materials

Print marketing includes business cards, flyers, brochures, t-shirts, and even uniforms! Try designing yours in Canva. Justin runs advertisements in local newspapers, costing $75 to $150 per month. He also advertises through ValPack mailers, for which a five-month subscription costs about $300, reaching 10,000 residents.

Attracting customers

Consider offering extra amenities, such as Wi-Fi. CLA published a guide to help laundry owners through the basics of setting up a secure network. Other ways to create a welcoming atmosphere include cleanliness, professionalism, a children's area, and televisions.

Step 15: Legal considerations

Licenses, permits, and tax forms

Regardless of the legal structure, determine if your business may require any licenses, permits, or tax forms to operate legally. Use the SBA’s tool. Also, you might be required to collect sales tax. Now go out and do it!

Sole proprietorship

A sole proprietorship is the easiest way to start a business. Still, this structure does not protect the owner's personal assets. You must fill out a unique tax form called a Schedule C. Sole proprietors can join the American Independent Business Alliance.

Limited Liability Corporation (LLC)

LLC is a legal structure that protects the owner’s assets. It’s a hybrid of a partnership and a corporation and requires a document called an operating agreement.

Franchise

A franchise consists of a franchisor company and franchisee in a joint venture to sell the franchisor’s products and services. Excellent franchise opportunities exist in the coin laundry industry, including Maytag Commercial Laundry, Speed Queen, and Express Laundry Center.

Partnerships and corporations

Partnerships and corporations are additional legal structures to consider. Learn more about partnerships and corporations. Justin and Mike are business partners for Ferndale Laundry, and their arrangement is working out. As he puts it:  [su_quote]You have the ability to bounce ideas off of another person.[/su_quote] He adds:  [su_quote]You reduce your risk... I'm only into it 50 percent, and he's in it for the other 50 percent. So I'm reducing my risks and loss of income.[/su_quote]

Step 16: Hire employees

A laundromat has many moving parts. So, for practical and profitable reasons, it helps to have dependable, trustworthy employees. Take the next step by reading this section.

Compensation

Both Jeff and Justin have employees whom they pay hourly. Learn more about compensating employees from “How to Create a Pay Structure That Promotes Team and Company Growth.”

Employer Identification Number

Obtain an Employer Identification Number (EIN) from the IRS for your company. Apply for one or call 800-829-4933.

Tax filing and withholding

Federal and state tax filing requirements apply to new employers. You will need to keep records of employment taxes for at least four years, which involves particular forms and accounting for state taxes. But don’t worry, because the IRS publishes a handy guide for employers.

Unemployment insurance tax 

You will need to pay Unemployment Insurance Tax through the UI Program under the Social Security Tax for employers.

Federal employment and labor laws

Employers must display Workplace Posters. Other requirements include:

• Employment Eligibility Verification (Form I-9)
• State’s New Hire Program
• Worker’s Compensation Insurance
• Disability insurance, as required by some states
• Occupational Safety and Health Administration (OSHA)

Step 17: Add safety protocols

A whole laundry list of things can go wrong in a laundromat. Safety considerations include:

• Heavy machinery with fast-moving parts.
• Large quantities of water near high-voltage sources of electricity.
• Equipment large enough for a person (like a child) to fall or climb into.
• Rolling carts scattered everywhere.
• Spills that can make people slip and fall.
• Americans with Disabilities Act (ADA)-compliance for customers and staff.

The cost to open a laundromat must factor in creating and maintaining a safe environment for you, your staff, and your customers.  Most importantly, do not be negligent of safety because it can result in lawsuits! Review the specific OSHA guidelines. CLA also offers a guide on complying with the ADA. Best get started with it!

Step 18: Purchase insurance

During his first week of operations, Jeff witnessed a man fall down, crack his head on the floor, and start bleeding. Think about that for a minute. Every laundromat owner needs property and liability insurance. Both will typically be included in small business general liability insurance that you can get from trusted providers like Simply Business. Even if you have an insurance provider you trust for your personal property, it's a smart move to work with a company that specializes in small businesses for your laundromat. Simply Business helps you find the best coverage for your unique business needs. Furthermore, if you plan to hire employees, then you may need Workers’ Compensation Insurance. Gain general knowledge about insurance for a small business. CLA offers insurance products that meet the specific needs of a coin-operated laundry business. CLA's insurance blog covers several useful topics. For the commercial business model, TRSA offers insurance products. Best get started with it!

Step 19: Finalize finances

So, here's the deal: Getting into the laundromat business isn't cheap. It involves a brick-and-mortar facility full of expensive laundromat equipment! Keep reading.

Budget

Making a budget and sticking to it is even more important in business than in your personal life. Udemy offers inexpensive courses on budgeting that are worth checking out.

Accounting

Don't just collect coins without accounting for them! Otherwise, your laundromat could end up in hot water! Record and keep track of income and expenses and run regular reports to understand how your laundromat business performs. Try accounting software, such as Xero or QuickBooks.

Funding

The SBA offers free courses on financing options and funding programs. Consider alternative sources of funding, like crowdfunding or a home equity loan. Many small business owners finance their investment at least partially through a business loan. You can inquire about financing options with your business banker, or compare options from multiple lenders on National Business Capital. You can find a range of financing options on their site, including term loans with flexible financing and business lines of credit. Many of these have no credit score requirement, either, so you can access funds for your business regardless of your personal financial situation. Want to know how to open a laundromat with no money? Apply for grants or start from home. To explore further, take a look at this article by First Quarter Finance. Go solve it!

Pricing

Most laundromats set prices according to the capacity of the machine. Prices at Ferndale Laundry range from about 5 dollars per load to over 15 for a machine that can wash 8 loads of laundry at once! Rosie Wash Express Laundry has a similar pricing scheme. The Balance Small Business published two articles on this topic.

Money handling

Keep personal assets separate from your business. The bottom line is this: It helps with taxes, accounting, and protects personal funds and resources. Depending on your legal structure, separate accounts might be required. Open a separate bank account for your business. Apply for a business credit card, which will help you acquire things (with buyer protection) and establish a credit history for your laundromat business.

Step 20: Explore passive income

Laundry is a chore done mostly by machines, but is it truly a passive income opportunity? All owners realize that no matter what their laundromat business plans were at first, they need to be physically present more hours per week than anticipated. Jeff says: [su_quote]It's not very passive. That was a big surprise initially.[/su_quote] Justin acknowledges that he would need "employees to be here from start to finish."  A typical week for Jeff has him spending 10 to 20 hours either in his store or on a delivery route. It's a balancing act between supporting full-time staff and making the laundromat equipment as self-service as possible. And even though technology helps, it's still a cash-based business. Jeff wishes he would have followed his intuition during the first year to offer pickup and delivery, upgrade his website, and do other things. In his words:  [su_quote]I would have just jumped in with both feet.[/su_quote]

Conclusion

Like those crumpled bills you find in your jeans, pocket treasures of information are available to tell you how to own a laundromat. CLA provides a treasure trove of white papers. Entrpreneur.com published a comprehensive guide for starting your own laundromat business.

Question

To recap what you've learned about how to start a laundromat business, ask yourself if starting a laundromat is the right choice for you! 

Are you a fanatic about footwear? Do you want to know how to start your own shoe line and make over $60k a month? Afshan Abbas, founder of Fuchsia Shoes, did it! Before Afshan started her business, she quit her job as a software engineer at Microsoft to follow her passion for artisan arts and crafts (including shoes). Over the past 4 years, she's worked to grow her business from $100k in revenue to being on track to make $1 million this year. In this article, we'll tell you how to start a shoe line step-by-step. Follow our guide and Afshan's advice to realize your passion and build your own shoe empire.

1. Get Fashion Design Training and Experience

If you're thinking of starting a shoe line, you probably already have an interest or some experience in fashion design. However, shoe design isn't a business to take lightly. It's necessary to know what you're doing (or at least partner with someone who does!). The best way to get training in the retail shoe industry is to attend a school that features a program in fashion design or retail. Even better, you can find schools devoted to fashion design with a department that focuses on shoe design and development. Here are a few to consider:

• Fashion Institute of Design and Marketing
• Fashion Institute of Technology
• Pensole Footwear Design Academy

You also should consider classes or a certification course in business and/or entrepreneurship. This will help you tremendously with the non-design aspects of your shoe line.

Work in the Retail Industry

Though helpful, degrees and certifications are not a requirement to start your shoe line. They're also not an indicator of your chances of success. However, it's best to have experience in the retail industry. Work in areas where you can gain an understanding of fashion buying and the things that drive consumers to purchase particular products (e.g. Why do people buy this shoe brand over another brand?). This experience can also help you network with others who may become key allies in your quest to start your own shoe empire.

2. How Do I Start My Own Shoe Line? Start Researching!

We spoke with Afshan to get her insights and tips on how to start a shoe company and create a profitable e-commerce business. You can watch part 1 and part 2 of our interview with Afshan to hear her story.

[su_youtube url="https://www.youtube.com/watch?v=Z1Iz4tTVrZE"]

Afshan explained that she did quite a lot of research before launching her shoe line. [su_quote]I studied the artisan market. It turns out it is a $32 billion industry.[/su_quote] Analysts project the global footwear market to reach a value of over $500 billion by 2027. And if you want a slice of that pie, you must narrow down your market and make key choices that will guide the course of your business. The easiest (and fastest) way to open a shoe store is to buy one that’s already up and running. You can check business listings to see what’s available in your area and how much you should expect to spend.

Questions to Consider When Researching

We'll help you answer some of these in the next sections, but here are some questions to research and consider before you proceed:

• What is the market analysis of the entire shoe industry?
• Are you making active, non-active, or both types of footwear?
• What is your niche in the shoe business? (See Step 3)
• Do you want to be gender-specific?
• Who is your competition?
• Are you designing your line or do you need to find a designer?
• What are the costs of your supplies and where will you get them?
• Do you intend to mass-produce your line?

3. Determine Your Niche and Sales Platform

[su_quote]When you're starting a shoe company, figure out what your niche in that shoe business would be because it's a very crowded market. And if you are going to do something that other people are doing, it will be a really hard sell.[/su_quote] To solidify Afshan's statement, here is a list of the 20 "best" running shoe brands. You can find a similar list for most styles of shoes. To gain a foothold (get it?) in the market, you must determine how your shoe line will stand out above the competition. For Fushsia Shoes, Afshan and her team ran with (I can't stop!) a luxury ballet shoe niche. Some other niche examples to research for inspiration include:

• Keen - Known for their Uneek shoe made from recycled plastic and shoes that accommodate work and outdoor activities (steel toe, waterproof, slip-resistant).
• Nobull - Marketed to the CrossFit crowd. Nobull makes stripped-down training shoes for athletes.
• Simon Miller Shoes - Luxury thick-soled shoes and boots along with designer platform and heel shoes. They also have a vegan leather collection.
• By Far - Designer shoes that are a throwback to the '80s '90s and early 2000s.

Here are some questions you can ask yourself when trying to determine your niche:

• Can my shoe line solve a problem?
• Will it market to a specific audience?
• Will my design offer a distinct improvement over other brands?
• Is there something that makes my line special?
• Is there a section of the market that is underserved?

Ecommerce is the Way

We won't tell you how to run your business. But if you haven't noticed, brick-and-mortar retail spaces are being slaughtered by ecommerce (pandemic aside). Unless you own an existing space or have access to free rent, determining the sales platform of your shoe line is an easy decision. Here's what Afshan had to say on the subject: [su_quote]We're trying to grow this shoe company by massive numbers, and getting caught up in brick-and-mortar will halt that. With ecommerce, the sky is the limit.[/su_quote] If you're not experienced with ecommerce or need to polish your skills, edX, Udemy, and Coursera offer excellent courses on the subject.

4. Write a Business Plan

Every company needs a business plan. It's an essential document that summarizes the research and decisions you made about the course of your business. It acts as a guide that lays out your ideas and serves as a quintessential document for loan applications or investor recruitment.

What's in a Business Plan?

• Market Analysis
• Mission Statement
• Startup and Operating Costs
• Marketing Plan (Target Market)
• Supply and Manufacturing Chain
• Sales Funnels

Templates

• Startup business plan template
• U.S. Small Business Administration Business Plan Guide
• 500 sample business plans
• One page business plan template

How Much Money Do You Need to Start a Shoe Line?

In order to complete your business plan, you must determine the startup and operating costs for your business. Doing so requires you to assess and decide the scale of your operation. Afshan's business started as a global venture with domestic and international customers. Her operation, though small when compared to a brand like Nike, was actually large in scale for a startup shoe line. We asked her about Fuchsia's startup costs, and she said: [su_quote]When we started, we were 4 partners. And between the 4 of us, we invested $50,000.[/su_quote] To put things into perspective, here are the average startup costs for a small, medium, and large-scale shoe line.

• Small - $30,000
• Medium - $110,000
• Large - $200,000 and up

Remember, you can always start small and scale up as you increase your revenue and streamline your operation.

5. Create Your Brand

Once you determine your market and niche, it's time to create your brand. Your brand differs from your product because it is the means by which people identify your product. For example, when you see a "Swoosh" on a pair of shoes, you know they were made by Nike.

What Makes Up a Brand?

There are many elements to consider when creating your brand, but here's a short list:

• Logo
• Colors
• Font and Typography
• Web Design
• Story

Branding Resources

Remember that your brand should be distinct, memorable, scalable, and easy to apply. It's not a simple task, but neither is designing and manufacturing a shoe, as you'll see in the next steps. To help you, here are 101 brand-building tools and a great branding resource from the experts at HubSpot.

6. Choose a Business Name

Business names are more important in some industries. The name of your shoe line is the direct connection to your brand. When choosing a name, consider what you want people to think when they hear it, and think about the following tips. If you need help to get started, try an A.I.-powered naming service like Namelix or BNG to point you in the right direction.

Avoid a Name That is Hard to Spell

Since you'll likely engage in an ecommerce business, choose a name that's easy to spell and find on a web search. Don't risk losing potential customers because they can't remember how to spell it correctly.

Don't Pick a Name that Limits Your Growth

Think big when choosing! You don't want to limit your growth just because your business name is too narrow. For example, what if "Nike" had named themselves "Nike Shoe Retailers of Oregon?" It would have limited their potential to grow into an international brand that also markets other apparel.

Secure the .com Domain

Before picking your name, do a thorough internet search and check the availability of the domain name and related spellings. If someone else has already established the name, it may be wise to reconsider. You can check the domain here and register it with Google, GoDaddy, or Namecheap.

Test it Out

Afshan and her team chose Fuchsia Shoes, and the title of her webpage is "Fuchsia Shoes: Luxury Ballet Flats." This works wonderfully with her brand considering people recognize fuchsia as a beautiful color and associate it with a flower that is equal in that respect. Once you choose your name, talk to others about it to see if it represents your ideal branding. If you need some help, you can read this article with 12 tips on how to name your business, and be sure to register your name at the federal and state levels.

7. Register Legal Entity

Once you've chosen a name, it's time to register your business for taxes and establish a legal structure. Before choosing a business structure, do your research and work with an accountant or business attorney to maximize your legal and tax benefits.

Licenses and Permits

Aside from your legal structure, you must also determine whether your business requires specific licenses or permits to operate. No worries! The SBA has a tool you can use to check.

Legal Structures

There isn't a standard legal structure to start a shoe line. You have five base options to review with your accountant or attorney: Sole Proprietorship, Partnership, Corporation, S Corporation, or Limited Liability Corporation. The IRS has a great resource to help you better understand these structures.

Limited Liability Corporation (LLC)

Though there's no standard for a shoe business, you'll most likely register your business as an LLC. This will allow you to protect and separate your personal assets from your business. Also, you can pass on profits and losses from your business as personal income without corporate taxes. However, we cannot stress enough to find a qualified attorney or accountant before choosing your legal structure.

8. Funding Your Shoe Line

Think of funding as a two-step process. First, there is funding to build your team and create initial designs, sketches, and prototypes. Then, you'll require more funding for manufacturing and larger-scale production and distribution.

How Do I Raise the Money?

As we explained earlier, there are three scale tiers of startup costs to start your own shoe line (small, medium, and large). Your funds to launch can come from a variety of sources:

• Personal funds
• Personal loan from family or friends
• Business investors (Afshan's path to launch)

The SBA also has loan programs and other funding programs to help small businesses launch. Another option, if you have good credit, is to use a credit card with an interest-free period to help launch things. Ideally, you'll make enough money to pay off the card before the interest kicks in. You can also try crowdfunding, a home equity loan, or a rollover for business funding from your retirement plan (ROBS). However you obtain your funding, be sure to understand the risks before taking on any debt. If you want to educate yourself further, the SBA has a great course on business financing.

9. Build Your Team: Sketches & Shoe Designs

If you haven't already, the next step is to bring your ideas into reality by sketching and designing your shoe line. You may think, "How can I create my own shoe line if I'm not talented at shoe design?" Don't worry! It's not a deal-breaker—you just need to build a team that can help. When Afshan started her business, she was working for Microsoft as a software engineer. [su_quote]What inspired me to start a shoe business was... I was traveling across different parts of the world when I was with Microsoft, and I would come across these beautiful, local artisan arts and crafts that I would find and bring back to Seattle.[/su_quote] She took her affinity for local artisan arts and crafts and worked with them directly to create her shoe line. You can also hire local artisans to sketch and design your shoes. NOVICA and the Unicef Marketplace are good spots to find artisan designers. Look at their products on those sites and reach out to them directly. However, if you're short on local talent, there are other options.

Freelance Designers and Software Shoe Designs

There are several freelancing sites on the web with a pool of shoe designers who can help you turn your ideas into reality. Upwork and Fiverr are two trustworthy sites where you can explain your ideas and negotiate rights and pricing before hire. If you want to design your own shoes, there are software programs to assist. Shoemaster and Romans CAD are two design options that allow you to create 2D or 3D models you can use for prototyping.

10. Create Prototypes and Analyze Materials

[su_quote]In the beginning, [our investment] was mostly spent on research [and] prototyping.[/su_quote] As Afshan explained, the prototype stage is key to developing your shoe line. You must review your designs and take into account all of the materials that go into creating the shoe. They must be financially viable for manufacturing, and you may need to alter your design for the shoe to be wearable.

The Mockup Shoe

The first version of the prototype may be a non-wearable "mockup" shoe made with low-quality materials. Create this shoe to get a full visual of the patterns and designs. It helps determine if the shoe is feasible for manufacture.

The Final Sample

Your final sample is a base production shoe and is the launch point for any shoe line. This is the shoe to bring to manufacturers for evaluation and into pitch meetings for potential investors. You'll also use your prototypes as the base for your marketing campaigns.

11. Patents and Trademarks

In the shoe line business, it's important to protect your designs and brand by filing for patents and copyrights with the United States Patent and Trademark Office. This way, if someone steals your designs or logos and tries to profit from them, you're legally entitled to payment or royalties. For filing, you can find an experienced patent and trademark attorney, or the U.S. PTO has all of the information you need for patent and trademark registration on their site. They also have a search function so you can see if you're not infringing on someone else's design before you begin.

Keep Track of Everything

An important note before filing or working with an attorney: During your shoe line development, keep a record of your designs and ideas. You can use a platform like Evernote (it syncs with multiple devices) or XMind (for professional prototyping) to keep things organized and well-documented. It's important to keep your notes as a record of a claim on a patent. When you develop your prototype, photograph it extensively and store the files securely.

12. Manufacturing: How Do You Get a Shoe Made?

With your designs, prototypes, patents, and trademarks in place, it's time to secure the manufacturing arm of your shoe line. In our connected world, there are a lot of options. But first, here are some questions to answer before you go to production:

What is the Location of the Manufacturer?

Where you manufacture is a key part of your brand identity. Ever notice how some companies stamp "Made in the USA" in large print on the side of their box? Be mindful of your choice if you intend to integrate your manufacturing process into your brand. Also, if you intend to import your shoes from another country, you could face import taxes based on the country of origin. However, sometimes it's cheaper to import the item and pay the fee than to have it manufactured in the U.S. Either way, it's a calculation you must consider when choosing a manufacturer.

Does the Manufacturer Have Minimum Order Requirements?

Most manufacturers require a minimum quantity with each order, and it can cut deeply into your budget if you're not prepared to make a quick turn on revenue. Review the requirements from any manufacturer before signing an agreement.

Can Your Manufacturer Handle Growth?

[su_quote]For the last four years, I have been working on building an infrastructure on the supply chain side. We literally started from 200 pairs a month, [and] we are at a point where we can do 1,000 pairs a month.[/su_quote] Like Afshan, you'll want to start small and should research standard shoe sizes customers typically order. Ideally, your business will grow, so you want to be sure that your manufacturing arm can handle growth. This is always a work-in-process, but it isn't fun or profitable to pause due to supply issues.

What's the Price Point of My Shoe Line?

Pricing is deeply rooted in the amount of funding you have and your brand. Lower-end brands sell shoes for as low as $20 – $30 per pair because brands work to keep their materials and manufacturing price point low. However, luxury brands sell at prices starting at $250 and can increase to over $1,000 based on perceived value. Before choosing a manufacturer, you must review your branding and price point. Then you can match up with a manufacturer who can deliver in your range.

Tech Pack Submission and Manufacturing Resources

With those questions answered, you must create and submit a tech pack. It's a package that contains all the designs, specifications, and components necessary to turn your prototype into a finished product. Think of it as a blueprint for your shoe design. There are thousands of manufacturers in the world to develop your shoe line, but here are a few standouts:

• Otabo
• Italian Shoe Factory
• Modern Vice
• Alanic

13. Packaging and Distribution

A shoebox says a lot about a brand, and it's one of the top marketing opportunities in the shoe business. Top shoe lines deliver shoes in a box that prominently features their label as many people keep and reuse shoeboxes for years. To keep with this industry trend, here is a list of custom shoebox manufacturers:

• The Premium Boxes
• The Custom Printed Boxes
• The Printing Daddy
• Fantastapack

Walking Your Shoes from Point A to Point B

The last element of the fulfillment process is shipping the product safely from your site to the customer. It's important to work with various shipping agencies (UPS, FedEx, DNS, USPS) to find the lowest prices to ship your goods. Otherwise, it can cut into your profits.

14. Establish a Marketing and Sales Plan

With your supply chain in place, the last step before opening your shoe line is establishing your marketing and sales plan. Your marketing strategy is what your business will thrive on. Base it on the extensive market research put into your business plan. Forbes has an excellent resource on developing a marketing strategy. A sales strategy defines your approach to selling your product. Both plans are essential to revenue generation and should be two of your biggest investments. If you don't have experience, consider hiring a marketing and sales consultant through a freelancing site like Upwork.

Digital Marketing & Social Media

Digital marketing means engaging potential customers on digital platforms through email campaigns, newsletters, digital advertising, search engine optimization (SEO), and social media. The key to digital marketing is that it nets a higher ROI (return on investment) than traditional marketing methods.

Social Media

Your social media presence is essential to your brand and is a great way to engage with your customers. It's also the primary method you can use to obtain analytics and figure out better ways to market your product. Interact with your customers via posts and encourage them to post pictures about your shoe line! Afshan used social media to develop marketing relationships with influencers who are also sustainability advocates. Through those relationships, she was able to increase her brand's reach, directly access her target market, and turn her customers into marketers.

Website

If you're starting an ecommerce-based business like Afshan, then your website is your storefront. That means you need to invest heavily in designing and optimizing your site. If you’re not good at web design or don't have experience, there are a lot of resources to help you find a reliable web designer and webmaster to run your site. However, as an ecommerce business, work with a designer and webmaster with experience setting up and maintaining an ecommerce shopping cart.

Refine Both Strategies and Watch Your Revenue Grow

Fuchsia's revenue jumped from $150k in 2019, but they're already at $400k in 2020 and on track to do $1 million by the end of the year. We asked Afshan what contributed to the large jump in revenue and she said, [su_quote]I think we got really good at the sales funnels and our marketing and being able to run and scale that marketing with a positive ROI (return on investment).[/su_quote]

Conclusion

With these steps, you now know the essentials and have resources on how to start a shoe line. As we said, analysts expect the shoe industry to grow over the next decade. So get started now to make your presence known and take your place. To send you off, here's one final piece of advice from Afshan on how to be successful in the industry: [su_quote]Coming this far, [it] was having grit. We failed ten times, but the eleventh time it worked. So, it's about repeating the process, trying out different things, and figuring out what works for you.[/su_quote] Do you have any experience in the shoe or fashion industry? Let us know what you think!