Starting a soup business is a rewarding venture that blends culinary creativity with smart business sense. The soup market is a multi-billion dollar industry, fueled by a steady demand for quick lunches, wholesome family dinners, and comforting meals.
This guide will take you through the practical steps of validating your business concept, obtaining necessary permits, acquiring equipment, and building supplier relationships to help you launch a successful soup business in the U.S.
Step 1: Plan and validate your soup business concept
Start by visiting local farmers' markets and grocery stores. Note which soups sell well and at what price points. You can also use Google Trends to gauge online search interest for "soup delivery" or "homemade soup" in your city.
Analyze your competition
With this information, you can analyze your competition. A frequent mistake is to only focus on other soup sellers. You should also evaluate cafes, delis, and meal prep services that offer similar lunch or dinner options in your area.
Use local chamber of commerce directories to find these businesses. For broader market data, check industry reports from Mintel or IBISWorld, which are often available for free through your local library's online portal.
Estimate your startup costs
A detailed budget helps prevent surprises. Your initial investment will likely fall between $3,000 and $10,000. Plan for licensing and permits, which can range from $300 to $1,000 for a business license and a Food Handler's Permit.
Renting a commissary kitchen might cost $25-$50 per hour. Basic equipment like stock pots, an immersion blender, and containers could cost $2,000-$7,000. Your first round of ingredients and packaging will add another $500-$2,000.
Here are 3 immediate steps to take:
- Visit two local farmers' markets to observe customer buying habits.
- Create a list of five direct and indirect competitors in your area.
- Draft a startup budget that includes estimated costs for permits and initial equipment.
Step 2: Establish your legal structure and get licensed
First, choose a business structure. You might want to consider forming a Limited Liability Company (LLC). It protects your personal assets from business debts and offers tax flexibility. Filing for an LLC with your Secretary of State typically costs between $50 and $500.
Permits and licenses
Once your business is registered, get a free Employer Identification Number (EIN) from the IRS website. You need this number to open a business bank account and hire employees. Your local city or county clerk's office will issue your general business license.
You will also need a Food Handler's Permit, which costs about $15-$25, and a Food Facility Health Permit for your kitchen space. This permit can range from $200 to $1,000 and take 4-8 weeks for approval from your local health department.
A frequent hurdle is assuming you can cook from home. Many states' cottage food laws prohibit selling perishable items like soup from a residential kitchen. This means you will likely need to operate out of a licensed commissary kitchen, a requirement your local health department will confirm.
Here are 3 immediate steps to take:
- Register your business name and structure as an LLC with your state.
- Apply for a free EIN on the IRS website.
- Contact your local health department to ask about their requirements for a Food Facility Health Permit.
Step 3: Protect your business with the right insurance
With your legal structure in place, the next move is to secure insurance. General Liability is your foundation, covering accidents like a customer slip. A $1 million policy is standard and typically costs $400 to $900 annually.
Key insurance policies
You will also need Product Liability insurance. This protects you if someone gets sick from your soup. It is often bundled with General Liability, so confirm it is included. For your equipment, Commercial Property insurance is a must.
If you hire even one employee, you need Workers' Compensation. A frequent oversight is to use a personal vehicle for deliveries without proper coverage. Your personal auto policy likely will not cover accidents during business use, so you need a Commercial Auto policy.
You might want to get quotes from providers who know the food industry, like the Food Liability Insurance Program (FLIP), Insureon, or The Hartford. They understand the risks unique to food businesses and can help you find appropriate coverage.
Here are 3 immediate steps to take:
- Request a quote for a combined General and Product Liability policy.
- Review your personal auto policy to confirm it excludes business use.
- Contact an agent from a food-specialized provider like FLIP or The Hartford.
Step 4: Secure your location and equipment
Find your kitchen space
You will likely operate from a commissary kitchen. These shared spaces are already zoned for commercial food production, so you do not need to worry about complex zoning classifications. Look for a facility that offers at least 100-150 square feet of prep space.
When you tour a kitchen, ask about booking off-peak hours. Many facilities offer a 10-20% discount for these times. You might also negotiate a lower rate if you purchase a monthly block of 20 or more hours upfront.
Acquire your production gear
Start with the basics. A 40- to 60-quart stock pot ($150-$300) and a commercial immersion blender ($300-$800) are your workhorses. Some new owners try to save money with residential appliances, but they cannot handle the volume and will burn out quickly.
You also need NSF-certified food storage containers, like Cambros, and a digital scale. For sourcing, check out WebstaurantStore or get a free membership to a local Restaurant Depot. They have no minimum order quantities, which helps manage cash flow when you start.
Here are 3 immediate steps to take:
- Tour two local commissary kitchens and compare their off-peak hour rates.
- Price out a 50-quart stock pot and a commercial immersion blender on WebstaurantStore.
- Sign up for a free membership at your nearest Restaurant Depot.
Step 5: Set up your payment system
You need a way to accept payments, especially for in-person sales at markets or for delivery orders. Most customers will expect to pay with a card or digital wallet, so a cash-only approach will limit your sales from the start.
Look for a payment solution with low transaction fees and no monthly contracts. Many new owners get locked into systems with rates of 2.5% to 3.5% and clunky hardware, which is not ideal for a mobile setup that needs to stay lean.
Accepting payments on the go
For a soup business that needs to accept payments on-site or on the go, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone. At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for quick sales at farmers' markets.
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done, no waiting for bank transfers.
Here are 3 immediate steps to take:
- Compare the transaction rates of two different mobile payment solutions.
- Download the JIM app to see how it works on your phone.
- Decide on your payment process for both online orders and in-person sales.
Step 6: Fund your business and manage finances
For initial funding, you might look at an SBA Microloan. These loans range from $500 to $50,000 and are offered through nonprofit lenders. Lenders will want to see a strong business plan and a decent credit score, with interest rates typically between 8% and 13%.
In addition to loans, explore grants. The USDA's Value-Added Producer Grant is a great option if you plan to source ingredients from local farms. The application process is competitive, but it can provide significant funds for processing and marketing your soups.
Plan your working capital
With funding in mind, let's talk about cash flow. You will need enough working capital to cover your first six months of operations. For a small soup business, this usually means $4,000 to $8,000 for kitchen rent, ingredients, insurance, and marketing before sales become consistent.
Some new owners get caught off guard by fluctuating ingredient costs, especially for seasonal produce. To avoid this, you should build a 15-20% cost buffer into your monthly budget. This gives you breathing room if produce prices suddenly spike.
Here are 3 immediate steps to take:
- Research two SBA Microloan lenders in your state.
- Check the next application deadline for the USDA Value-Added Producer Grant.
- Create a six-month budget with a 15% buffer for ingredient costs.
Step 7: Hire your team and set up operations
Build your kitchen crew
You will likely need a Prep Cook first. This person handles chopping vegetables and portioning ingredients. Expect to pay between $15 and $20 per hour. Remember, anyone who touches food must have a Food Handler's Permit, so build that into your hiring process.
A frequent misstep is hiring friends or family without clear expectations. To avoid confusion, you should draft a simple job description that outlines specific duties, hours, and pay. This sets a professional tone from day one and prevents misunderstandings down the road.
Streamline your daily workflow
Once you have a team member, you need to manage their schedule. You might want to use a scheduling app like 7shifts or Homebase. Both offer free plans for small teams and make it easy to communicate shift changes directly from your phone.
As you grow, keep an eye on your labor costs. A good target for a food business is to keep labor between 25% and 35% of your total revenue. This ratio is a key indicator of your financial health and helps you stay profitable as you scale.
Here are 3 immediate steps to take:
- Draft a job description for a Prep Cook, including pay and required permits.
- Sign up for a free account on 7shifts or Homebase to see how they work.
- Calculate your target labor cost based on your initial sales projections.
Step 8: Market your soup and find customers
Build your online presence
Start with a strong visual presence on Instagram and Facebook. Post daily stories that show your fresh ingredients and the cooking process. This builds trust and makes customers feel connected to your brand. High-quality photos are key.
A frequent mistake is to only post finished soup photos. Instead, you should show the journey from farm to bowl. You can also run a poll asking followers to vote on next week's soup flavor. This simple engagement can boost visibility by 20-30%.
Engage your local community
You might want to partner with local offices for a "Soup of the Week" lunch delivery. Offer a sample tasting for the office manager. You could also supply soup to local cafes that lack a full kitchen, offering them a 30% margin.
For metrics, aim for a Customer Acquisition Cost (CAC) under $25. If you spend $100 on a local flyer campaign and get five new weekly subscribers, your CAC is $20. This tells you the campaign is effective and worth repeating.
Another great strategy is to offer a loyalty program. A simple "buy five soups, get the sixth free" punch card works well at farmers' markets. It encourages repeat business, which is far cheaper than finding new customers.
Here are 4 immediate steps to take:
- Create an Instagram business profile and plan your first week of content.
- Design a simple "buy five, get one free" loyalty card.
- Identify three local businesses or offices to approach for a partnership.
- Set up a spreadsheet to track your marketing spend and customer acquisition cost.
Step 9: Price your soup for profit
Calculate your cost per serving
First, figure out your Cost of Goods Sold (COGS) for each soup. Add up the cost of all ingredients, packaging, and direct labor for one batch. Then, divide that total by the number of servings the batch yields. This gives you your cost per serving.
For example, if a 10-gallon batch of tomato soup costs $100 in ingredients and packaging and yields 160 eight-ounce servings, your cost per serving is about $0.63.
Set your menu prices
With your cost per serving calculated, you can set your prices. A standard approach is cost-plus pricing. You multiply your COGS by a markup factor, typically 3 to 4. This aims for a food cost percentage between 25% and 33%, which is a healthy target.
Some new owners only use a 2x markup, which leaves very little room for profit or unexpected cost increases. For that $0.63 soup, a 4x markup results in a menu price of around $2.52. You might round this to $2.75 or $3.00 for simplicity.
Also, look at what competitors charge. If similar quality soups sell for $5-$7 at your local market, pricing yours at $3 might signal lower quality. Do not be afraid to price according to the value you provide, especially for unique or premium recipes.
Here are 3 immediate steps to take:
- Calculate the cost per serving for your most popular soup recipe.
- Visit a farmers' market and note the prices of at least three other soup vendors.
- Apply a 3.5x markup to your cost per serving to determine a starting price.
Step 10: Maintain quality and scale your operations
To keep your soup consistent, create a "gold standard" recipe card for each flavor. This should specify exact ingredient weights, cook times, and final yield. You must also maintain a holding temperature above 140°F for hot soups to meet food safety standards.
Track your quality and growth
You can track quality with a simple system. Aim for a customer complaint rate below 1% of total orders. You might also create a short feedback survey with your online orders. This gives you direct data on what works and what needs improvement.
With quality under control, you can plan for growth. Consider your first hire when you spend more than 20 hours per week on prep alone. When you consistently sell out before the end of a market day, it is a clear signal to increase your batch sizes by 25-50%.
A frequent challenge is a drop in quality when production increases. Standardized recipe cards are your defense. They ensure anyone, from a new prep cook to yourself on a busy day, can replicate the soup perfectly. This removes guesswork and protects your brand.
As you grow, managing inventory becomes more complex. You might want to use a system like MarketMan or the inventory features within a restaurant POS to track ingredient costs and usage. This helps you maintain your target food cost percentage as you buy in larger quantities.
Here are 3 immediate steps to take:
- Create a detailed recipe card for your best-selling soup, including weights and temperatures.
- Set a weekly sales goal that, once met, will trigger the hiring process for a prep cook.
- Draft a three-question customer feedback form to include with deliveries.
You now have the roadmap for your soup business. The secret ingredient is consistency, from your recipe to your service. Protect that gold-standard flavor above all else. With a clear plan, you are ready to turn your passion into a profitable venture.
And when you make your first sale, keep the payment process simple. A solution like JIM makes your phone a card reader for a flat 1.99% fee, no hardware needed. It helps you get paid easily from day one. Download JIM and get ready.
