How does one make a living in the chocolate business?

One thing that all of us have in common is a passion for chocolate. It is important to find meaning in work and for some reason I find meaning in chocolate. I love the process of making chocolate confections, especially on a large scale. I have been working hard on my own chocolate business since I started in late 2008. I'm still quite small with big bursts of business at the Holidays and at Valentine's. While I don't believe we should continue to blame everything on the economy, I have noticed quite a few extremely talented chocolatiers going out of business. I would love to hear from others how they make their business work year round? Thanks in advance!

Daniel

updated by @daniel-herskovic: 04/09/15 05:21:32PM

1. Drill it into your brain that business is about one thing: money. Business is not about talent and artistic ability. Business is about money. Period. Yeah, brownies are boring. 1,000 brownies are 1,000 times more boring. However 1,000 brownies over the course of the month pays your rent. Business is about money.

2. Find out what your customers want and then give it to them. Talented people go out of business for lots of reasons - one of the most common being Ego. They feel that THEY are the talent, THEY feel that only THEY can create the product that people like, and THEY don't manage their time/cost ratio. Yet they never ask the end customer what the customer thinks! Sure, they can make a chocolate sculpture that rivals a Michelangelo. However how many can they make in an 8 hour day which they canpackage and sellat prices that people will be willing to pay? Better yet, how many can their staff make? In the end, the talented person works themselves into a corner - busy being artistic, and in the end there isn't enough time in the day, and they don't get paid enough for what they do, so... poof! They don't make enough money and they're done.

A really good example of this is an "ice wine" truffle. When I started in the business, I had several chocolatiers insist that I "had" to have an ice wine truffle center on the menu. It was one of their biggest sellers. Today, my shop offers over 500 different varieties of custom made truffles, and the "ice wine" has been discontinued because it's the least popular. Why is that you ask? The reason is because when people visit an averagechocolate shop, they make their purchases through a process of elimination - starting with the ones they dislike the most, then narrowing it down to a couple of confections they like, and a few they can tolerate. Apparently the ice wine center fell into the "tolerate" category with my peers. Conversely at my shop, when people are given choices of anything they want, theyalways start with what they like most, and go down the list like that. In our shop people prefer other more convential centers, than the "creative" or "artistic" ones.

WHY???

BECAUSE PEOPLE ARE CREATURES OF HABIT!!! MOST PEOPLE DO NOT LIKE STEPPING OUT OF THEIR COMFORT ZONE - ESPECIALLY WHEN IT COMES TO SPENDING MONEY. Find out what your customers like, and then give it to them!!! Be artistic on your own time, but remember, business is about getting your customers to open their wallets and give you money.

2. Work smart not hard. What's your time worth? Should you be sitting over a vat of chocolate all day hand dipping truffles, or can you pay someone $10 per hour to do that simple task while you get on the phone and drum up some more business? Can the $10 per hour person drum up business? In the confectionary business, if you are making confections you aren't making any money.

These are three great rules to begin with, and will totally change the way you look at your business. I live by these rules, my business is doing extremely well, and after only a couple of years I never have to be in the shop helping customers and making chocolate or confections. I enjoy life, and research new recipes for my staff to offer our customers.

You can too. IF you follow some basic rules about business.

Cheers

Brad

Daniel -

Brad makes some very good points, but I think it makes some sense to generalize them.

In the chocolate business, there are (very broadly speaking) the creative side, the production side, and the sales side of the business. It is often the case that the person who starts the business is really good in the first two, and not so good on the third. In the end, to grow the business, you need to decide what your personal core competencies and interests are and what you are not good at and don't like doing.

For the long-term success of the business, you need to find people with complementary skills and interests to fill those gaps.

It also helps to understand your definition of what success is - your visions for a) where you want the business to go and b) what you personally want to achieve from and through the business ... keeping in mind that, first and foremost, it has to be a real business in order to achieve either a) or b).

If what you want to do is make a respectable living and support yourself and your family - that's an okay goal. What does that mean to you? $100,000/year after taxes? What level of sales and its underlying cost structure - and people resources - are required to get you there? Do you want to grow a $10 million business? Then a different focus is required.

But never, never, never lose focus on the fact that it has to be a real business and part of making it a business is putting aside your ego and acknowledging that you will make mistakes about what the market wants to buy, and that you actually have all the skills to make it work. If you're great at selling and can close large orders, it makes sense for you to be selling if you're the only person in the organization who can - even if your heart and soul is in the kitchen doing production. If you want to be in the kitchen then you need someone to do the sales to support that decision.

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clay - http://www.thechocolatelife.com/clay/

wow, that's some great growth. But shucks on the you not being much in the kitchen anymore. I was working up the courage to ask if a stge might be possible. I'm really dying to get a closer view on the chocolate making end of things.

Jessica;

I could be at my shop all day if I wanted to be. What's important tolearn here is that a chocolate business can be built in such a way that it gives the owner CHOICES. Most entrepreneurs don't have those choices. There's a colloquialism for not having those choices. It's called "Retail Jail".

By building my chocolatebusiness in the manner that I have, I can get up most mornings and decide what I would like to do that day. Did the mountains get a big dump of snow? Should I go skiing? Or should I work on that coconut creme/passion fruit truffle center I've been mulling over lately? Or should I go spend a day with my daughter?

As a serial entrepreneur who has had many successes and failures over the years, I've learned that it's important to be passionate about what you do to make money, but making money isn't everything. It's also important to balance your life with other things.

I'm passionate about chocolate. I'm also passionate about my daughter and extreme sports. All three of these are important components of who I am and how I live my life. However, only one makes me money, so I have to embrace that passion in such a way that it allows me the freedom to embrace the other two just as much. It just so happens there are some "school of hard knocks" lessons that I've had to learn in order to do so. If I can pass those on to others, then I'm happy to do that too.

This tiny window into "Brad" dovetails nicely into what Clay writes below. To summarize, he says you need to evaluate your skills and priorities, but to never lose focus that what you have isa businesswhichneeds many different (and sometimes mutually exclusive components)to make money. There's no place for ego in business.

...and don't forget to balance your life.

Cheers

Brad

Hello to all! My point of view differs a bit from what has been said. I am close to 60 and started this business 8 years ago as a second career and did not set out to make a fortune but aiming for a smaller revenue. I started with a couple of thousand dollars of my saving in investment and rented space. I use fairly simple tempering pots and keep a relatively small overhead. I employ 4-8 people and have production, retail, web sales and wholesale. I started from the principle: "if you build it they will come" and it worked for me. The mortgage was almost paid and the kids were out of college. Some would call me naive but it has been a joyful journey with consistent and manageable growth and last year a 40 % increase in sales. A very noticeble store front, great graphics and logo, passion for the work and customer contacts and a fantastic staff who love what they do and are encouraged to be creative is my success.n Always happy to support others on their "journey". Mimi

Mimi;

I'm curious to know how many hours a week you work? Is your presence required for the business to run smoothly? How much time off have you taken in the past couple of years? On any given Wednesday, can you wake up and say "I'm going away for next 4,7,10 days." and do so with a clear conscience. Can you enjoy those days away from the business truly knowing your business isn't going to suffer? Was your presence required during the past Christmas rush? Is your presence required today, Valentine's Day?

If youhave to be there to operate the business, then it owns you. You don't own it.

You may disagree with what I've written above, but I guarantee that while encouraging your staff to be creative as you mention in your post above, at the end of the day they still need to produce enough product to justify their wages, cover your overhead, and yes.... put money in your pocket too. I guarantee that the moment money stops landing in your pocket things will change. Havingsaid that, whether you do it on a large scale, or small scale, the underlying principles I outlined above still apply.

That doesn't mean you can't enjoy doing what makes you money. It just means that you don't have 100% freedom todo everything you want, because as you know, some of it will cause you to lose money.

In the end though, in my opinion,true freedom is defined by going into your place of business and working because you WANT to, not because you have to, and that ability comes from working smart, not hard.

Brad.

Hi Brad et all,

I work about 35 hours a week and this number is much less that two years ago. The business is in my head most of the time but mostly happy thoughts. I take 3 or 4 one week ( 10 days usually to Ecuador) vacations plus about five 3 to 4 day weekends off in a year and my crew is consistently amazing and do a great job in my absence. If I was not at work most of the time I would not feel part of the team and enjoy the business the way I do. Every day I think of the magic of what we produce, the great South American chocolate, my travels here and the collaboration with so many local food producers. I do not aim to make a lot of money- My experience that money pollute many people's minds. My model of business is just another kind than the one you are describing and there is no right or wrong.

Happy Valentine's Day to all! Always happy to discuss and support others. Great website Clay. Thanks!! MImi

Thank you for asking this question! I too started my business in 2008. This has been the hardest thing I have ever done...because I am an artist...not a business person...but I sure have learned a lot! I appreciate hearing what everyone has contributed because I am SO ready to step out of production and start making money. I have spent most of my time getting the business started over the last 3 years...very long hours...making mostly all of my product myself (until recently hiring a small staff), trying to sell and reach out to new customers, dealing with most customers face to face... I joke about how I have aged myself 10 years in 3. I am a very hard worker...and it is really hard for me to turn over my recipes and techniques to others, although I am extremely grateful for help! It has been 6 months since I hired my staff and things are getting easier...but I have a really long way to go! I poured my life into the business...and I feel like it owes me something now. I'm ready to grow and get my life back! I will NEVER give up working with chocolate! It is my passion and I have no desire to work with anything else...but I want to be able to enjoy life too... SO, I too, am eager to hear more responses from others of how they "did it". I love my shop, we are doing really well and I believe in our products. I have faith that all of my (and my husband's) work will pay off. Any suggestions and advice are much appreciated. Sometimes I feel like I need a coach...or a consultant... Don't you sometimes just wish that someone would just tell you what your next move should be? (SIGHhhhhhhhh) I do enjoy the challenge... but I want to bring home the bacon sometime soon! Clay, Brad, and Mimi...I LOVE hearing your thoughts! I wish Daniel luck in success as well! ~Wendy

Wendy;

A few moments ago I was lying in bed, and brought up your post here on my blackberry. I had to come downstairs to my computer and write you a reply. Here is a GREAT opportunity for you to read your post back to yourself while keeping in mind the three golden rules I wrote in bold earlier on.

You say "I'm a very hard worker..." I say "Work smart not hard."

You say "I'm an artist...not a business person..." I say "Business is about one thing: money"

How do you work smart and not hard? Well, the first thing you need to do is come to the realization that your recipes probably aren't unique, and that someone somewhere has most likely already created what you have. LET GO!!! In all honesty, it'sa very liberating and rewarding feeling to share your "creations" with those around you who are interested. ALL of my recipes are available if people ask. In fact I post our chocolate recipe right on our bars. Just this month I've started hosting truffle making classes, and actually TEACH people how to make the truffles we do in our shop. They have a wonderful time and will always be our customers, even though they possess my "secrets".

The second thing in working smart, not hard is to understand that the best manager/coach is someone who teaches those around them to be BETTER than they are. Think about it: If you can teach 4 staff members to ice cupcakes to a higher standard than you, not only does the quality of your product increase, but you have in essence quadrupled production without ever icing a single cupcake!

LET GO! Become the coach. Your staff will respect you more for your ability to guide and teach them, and WANT to please you.

Now for the business end of things - the "business is about money" part of it. Develop, test, and marketa line of products that become your business's bread and butter - products that sell every day regardless of season. These products should have a "fresh" aspect to them, should appeal to your customers and NOT necessarily you, and should generate high profitability (food cost around 15%, and labour cost around 20%). The "fresh" aspect is what will have your customers returning for more, regularly, because the product isn't shelf stable. They NEED to come back.

Never release a product until it's been thoroughly tested with customers and focus groups, and a thorough cost analysis has been done to determine profitability. How long does it take to make the product from start to finish in terms of manhours? What's your food cost? What's the top price thresh-hold? How can this be marketed?

Stay true to the product lines you create. I can't stress enough that as a general rule, people don't like change. If they buy something today and like it, they want to come back tomorrow and buy more, and will most likely tell their friends about their purchase too, prompting their friends to come in looking for it. If you disagree with this, why do you think that the Baby Ruth,O-Henry, Coffee Crisp, and Kit Katchocolate bars have been around for so many years? How do you think the term "comfort food" came to be?

While keeping your regular "tried and true" product lines, you can delve into your personal creative side by offering your return customers with "Wendy Buckner Specials" - limited edition creations that you have put your personal touch on. This allows you to continue developing your skills and recipes, while at the same time determining if the techniques used to create your new confections can be taught to your staff and can eventually become part of your regular product offering. Essentially in this regard you are being paid by your customers to experiment and further develop your skills.

By building your business in this fashion, you are training your staff to be able to operate the business independently of you. If you decide to take a month off, well... next month you won't be offering any "Wendy Buckner Specials". But that's ok, because your return customers will still have the "tried and true" products your staff have been well trained to make, to purchase. This model allows you to play with chocolate at your leisure, and still have a life.

In closing, always ask yourself, "If I can't be here tomorrow or the next day, or next week, who needs to know what, in order for this business to continue to grow?" Answer the question, and then ensure the right people are taught what they need to know. It will give you immense peace of mind.

Hope this helps.

Good Night.

Brad.

Thanks for asking the question. Reading the various answers has given me a lot to think about. Just last night I was saying to my husband "I just want to make the chocolates! I'm only selling them because I don't want to eat them all and you can't make just one truffle. I don't want to think about the business stuff--I want someone else to think about it for me and if they say I need to make x amount of this and x amount of that, that's fine, I just don't want to think about it!" But really, right now it's all me, so I guess I don't have that luxury.

Thanks to everyone who has responded to this discussion so far! I especially appreciate Brad and Clay's insight into how one can build a successful business. I am still recovering from a busy Valentine's Day. Like many chocolatiers who visit this site, I did a lot of work all by myself. Brad, you are an inspiration. Thank you very much for sharing the importance of "letting go" . I imagine that you are an amazing manager. The confectionery world is traditionally very secretive. I appreciate your philosophy of not holding on to recipes so tightly and being able to delegate tasks so that employees feel empowered.

As for me, I am still figuring a lot of things out. I greatly enjoy my work and would love for my business to grow. I would love to hear from others how they keep their business alive during the summer months. Thanks for a great forum where we can share our dilemmas and successes!

Hi Brad,

Have you read the book "The E-Myth"? From what I read (not finished yet), your ideas seem to follow along the same principles in the book. I think this book is a must-read for anyone starting a business! Anyway, I'm actually looking to open up a chocolate shop by the fall. I'm currently on maternity leave and plan to get everything ready for when it's over. I'm working on a business plan because I need start-up funds, but sometimes I find it overwhelming.Do you have any advice on where to start?

Thanks so much!

Ev

*And good luck to everyone and their business adventures!

It seems the real question hasn't been answered, how do you survive and thrive in this business. Of course a business is about making money, but how are you doing it? Marketing, PR, strategic relationships, wash rinse repeat.

Marketing--paid for or your time, traditional to social media-- word of mouth is gold but to expand the circle requires marketing.

PR--are you working with your local magazines editorial cycles and pitching ideas, are you talking to local tv stations about coming to the shop for live feeds or going into the stations to cook on tv? Are you at local festivals on the cooking stage with samples?

Strategic relationships--member of your local chamber? Get biz journals and mine their lists? Corporate orders don't grow on trees.

We're not perfect on all of these points but I work hard to get the word out. Do a little bit, baby steps are still steps. It takes time to get to Brad's exodus from the shop. New businesses have a certain inertia that hold you to the mast but you can break free of it with a plan. Build a plan, work the plan, re-evaluate, adjust, and continue.

Brad, how much of Tim Ferris' skin have you donned? Reading you reminds me of reading him. Totally agree on a lot of points. Come skydive with me on the weekends.

Andy;

I've been invited skydiving before. My propensity forpushing the envelope and trying stupid things while performing any particular sport has me thinking that after a jump or two, what's left of me would need to be shovelled into a bucket after I hit the ground. At least when I crash my dirt bikes (and I DO crash a few times a year), it's some bad bruises and the occasional broken bone. A skydiving crash would have me looking like I've gone through a wood chipper. No thanks! Haha!

Cheers.

Brad

Lol, do some research and you'll find driving is more dangerous. After 5 years I've never broken anything but vertical speed limits. I call it my psychologist visit--keeps me centered and focused. Anyhow, good things. Work hard, play hard.

A lot of deep thoughts going on here. I started my wholesale oriented chocolate business last Spring and am nearing completion of the first Holiday season. My schedule this first year has been nothing short of insane. I find myself counting the days down to Easter and the 2 week vacation I am going to take. I am supervising and most of the time participating in production. Almost all "items of increased difficulty" are produced under my direct supervision. I am slowly and patiently teaching my staff but its a long process. In addition all of artistic, packaging and other necessary logistic elements of the business are handled by me plus the sales. I find myself being a "jack of all trades". Do I love the chocolate life? YESSSS. Can I handle many more of the seasons like the one I currently bringing to a close? Def Not.

So thank you everyone for the wisdom that you have shared. A lot of truth has come from everyone in this discussion. Especially Brad, you have opened my eyes to a few things that I knew were there, but was sort of refusing to see.

Evelyn,

Thanks very much for making us aware of the book, The E-Myth. I just got it and am half way through. It's very fascinating!