A business question (OK GOP you shine here) (Full Version)

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housesub4you -> A business question (OK GOP you shine here) (6/25/2008 11:28:09 AM)

If you read my JNL's you will see I love to cook and bake.

Several years ago, I started using my Grandmothers recipes for canning Preserves and Chili Sauce.  These date back about 100 years, not that it matters

But everyones who tries them, outside of family says I should market them or sell them myself.

So how does one do that?  I looked into local fairs and such but I would be lucky to break even (with what they charge for space) so my questions is

Say I have about $10,000 to invest in the project, and space for the equipment, how do you find investors or a mass market?

Ok, for those of you with a business degree, I have a degree in Sociology so go easy on me.




Hippiekinkster -> RE: A business question (OK GOP you shine here) (6/25/2008 11:37:55 AM)

I once was urged to bottle up my salsas for sale, because they were killer (still are, really)(I know this because people used to buy gallons of them when I had my restaurant), so I investigated.

Find out what your local health department wants you to do so you can have your kitchen certified as a commercial kitchen. Then check out liability insurance.

Alternatively, you can use a contract bottler/canner.



mistoferin -> RE: A business question (OK GOP you shine here) (6/25/2008 11:39:03 AM)

The first thing that I recommend that you do is to make an appointment at your local Dept. of Public Health and find out specifically what their requirements will be. You will be amazed how fast their requirements can eat $10,000...not to mention the required liability insurance, especially when it comes to products that are potentially hazardous such as canned foods.



Owner59 -> RE: A business question (OK GOP you shine here) (6/25/2008 11:47:35 AM)

  Try contacting local restaurants and diners to set up on-going accounts,bring tons of samples.That`ll create a real income stream but will keep you busy.

Don`t borrow any money to buy equipment.Use what you have till you can afford professional tools and ovens,etc.Grow slowly at the pace you can keep up with.Don`t hire help unless you absolutely have to.

Put up a web site and make coupons to distribute around.

Keep at it and after a while,you`ll be as busy as you want to be.

Good luck.



slaveboyforyou -> RE: A business question (OK GOP you shine here) (6/25/2008 11:51:12 AM)

I don't know about the laws in every state.  But you can buy home canned foods at the local farmer's market here.  It doesn't cost them much at all to rent a stall.  I don't think they make tons of money off of it, but they must make some profit.  I see them there every year when the market is open. 



hizgeorgiapeach -> RE: A business question (OK GOP you shine here) (6/25/2008 11:59:19 AM)

Farmer's Markets are a great place to get started for small craft oriented businesses.  Stall rental is typically low, and as long as what you're selling doesn't have a Significant amount of same-type compitition in That market (like selling soaps or home canned preserves as opposed to selling garden produce) it can be quite a high return on the investment.  Depending on your local health laws, another venue to consider might be Craft Fairs on the local level - at the very least, if the particular faire allows that type of goods to be sold, it can be a great source of exposure when combined with a small website for special orders.
 
As Erin suggested, check with your local/state Health Department concerning their regulatory requirements.  You'll also want to have a look at the information to be gained talking to your local/state Tax/Revenue department.  Sales tax laws vary from state to state just like Health laws do, and with the type of business you're considering, both are a concern for  you.



DomAviator -> RE: A business question (OK GOP you shine here) (6/25/2008 12:11:32 PM)

I doubt owner59's suggestion would work as the food sold in a resteraunt etc MUST be made in an inspected commercial kitchen. (Which is really a joke because I have been in a fair number of commercial kitchens and let me tell ya, almost invariably my home kitchen is a hell of a lot more sanitary) I think slaveboy is onto something about the farmers markets... HOWEVER, I have to be blunt with you - nevermind equipment etc - I dont think $10,000 will cover your insurance premium! Remember if someone has a reaction to one of your ingredients, or if things dont get canned right and someone gets salmonella or botulism the lawyers are going to be coming for you an coming hard. You might be able to get a commercial cannery / bottler to do a short run using your recipie and private labelling - but your $10K isnt going to go far at all.  By the time you set up the legal organization, research and comply with labelling requirements, get an appropriate NDA for your recipies for the cannery, get distrubution agreements etc you probably have $20 K in legal fees before you put a single product in a can. Absolutely DO NOT do what owner said about a web site - the FDA will stomp the piss out of you if you violate any of a multitude of rules on listing ingredients, labelling with the USDA dietary info etc... If you can do it in a farmers market / flea market / small scale more power to ya - but if you are going to try to mass retail you are going to need tons of legal, insurance, dietary, and microbiological help.  



housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:27:55 PM)

Thanks mistoferin

I have applied for local state taught classes for fod and beverage dist.  I start next week.

Yea, 10 grand does not go far these days I'm finding



housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:29:24 PM)

Hey Owner59

No way I will borrow money, learned that lesson in college.

Thanks for the suggestion of local diners, I never thought of that



housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:31:12 PM)

slaveboyforyou;

I looked into local markets, I looked in Chicago..Ok big mistake, now I will look at county fairs and church events.




housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:33:45 PM)

hizgeorgiapeach;

I hope my product will be something one looks forward to enjoying. 

It will be a seasonal treat to begin with.




housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:38:32 PM)

To those who have been so kind to offer their advice, drop me a line on my profile with your address and I will send you a sample when they are ready later this year.

I make a Peach/Orange Preserve from France and a Chili sauce about 100 years old from Guatemala.  The influence of 2 Grandmothers



pissdoll -> RE: A business question (OK GOP you shine here) (6/25/2008 12:41:32 PM)

In addition to receiving your food handler license, you will most likely have to work out of a certified kitchen.
Google your area for "shared" or "commercial" kitchens.
They come with Dept of Health certification.  You will pay for your kitchen time in hours or blocks of monthly time.
Many times, they provide you with a business address and can help you obtain all of your business licenses and certifications, and they usually give really good advice and have "connections."
The kitchens are equipped with all of the appliances you would ever need.

(edited for spelling)



housesub4you -> RE: A business question (OK GOP you shine here) (6/25/2008 12:46:15 PM)

pissdoll

I never even thought of that

Thank you very much

add yourself to the list



Hippiekinkster -> RE: A business question (OK GOP you shine here) (6/25/2008 1:55:42 PM)

There's always good old fleaBay, too.

There is a LOT of used equipment for sale out there. There are three dealers that I know of within 10 miles of me (Atlanta). You'll be using a pressure canner a lot, so don't stint on quality. A really good source of info on maintaining sterile conditions is
http://www.shroomery.org/ . Don't ask me how I know this. [sm=hippie.gif]



farglebargle -> RE: A business question (OK GOP you shine here) (6/25/2008 3:52:36 PM)

0) Talk this over with your CPA and Attorney.

1) Create an Artificial Legal Entity.

1a)*POOF* 'Your Snappy Business Name' is now in existance.

1b) Get a mailbox at the post office in "Your Snappy Business Name"'s name ( and your own. -- The Post Office will want to link it to your driver's license address btw... )

1c) Register "Your Snappy Business Name, LLC" with the Secretary of State's office, and create an instance of your artificial legal entity. *** You *might* want to check out their website FIRST, because they *MIGHT* have a tool to eliminate existing ALE names, btw... ****

2) Get a bank account for Snappy Business Name, LLC at your local credit union. Inquire about "Merchant Services" accounts, too.

3) Get permission to collect and remit sales tax. Itinerant vendors *might* have slightly different requirement.

4) Use Snappy Business Name, LLC's checkbook to buy a PC and a copy of QuickBooks.

NOW, that 'You're Someone', you can Rock and Roll.

Consult an Attorney before actually doing this, of course, but that's pretty much the basics... Now, making and selling FOOD, that's another bunch of questions and permits... Everyone's told you to hit the Dep't of Health... The City departments might be useful, to ... And the Cooperative Extension, too.

If you got a local 'Business Improvement District", then they might be a good resouce. And... By joining your local Chamber of Commerce, your business can usually offer its employees GROUP HEALTH INSURANCE!



Owner59 -> RE: A business question (OK GOP you shine here) (6/25/2008 8:21:50 PM)

Question,why is the GOP any smarter about business than anyone else?

The last 20 years have proven that myth wrong and we have Reagan`s debts still to remind us just how wrong.



JulieorSarah -> RE: A business question (OK GOP you shine here) (6/26/2008 1:23:42 AM)

quote:

ORIGINAL: housesub4you

If you read my JNL's you will see I love to cook and bake.

Several years ago, I started using my Grandmothers recipes for canning Preserves and Chili Sauce.  These date back about 100 years, not that it matters

But everyones who tries them, outside of family says I should market them or sell them myself.

So how does one do that?  I looked into local fairs and such but I would be lucky to break even (with what they charge for space) so my questions is

Say I have about $10,000 to invest in the project, and space for the equipment, how do you find investors or a mass market?

Ok, for those of you with a business degree, I have a degree in Sociology so go easy on me.


Donot spend a cent until you have done

a business plan
what's that?

is what you want to do doable?

crunch some numbers, how much will it cost you to make an amount then 2 times that and say 3 times, 10 times.

If you started tomorrow how much could you produce in a day.  Could you keep that up 5 days a week.  How will that impact on the household.  Wastage?  Lifespan of the product.  How do you store it.
Costs of doing all of this per unit.  How big is a unit?  What do you sell it in?  Glass, paper, box ... presentation? What do you sell it for? Ask a neighbour/friend would they buy it.

What is required in your area/state
to sell self-prepared food
to sell through restaurants.

who will buy your product, from where in what?

Think about the practicalities of purchasing the raw materials, storing, preparing the product, packaging, delivering. costing it all from when you start to buy the raw materials to the consumption of the product by the end user.
factor in everything.  Your time, electricity, wear and tear on your kitchen, what is tax deductible what is not what records/validations do you need to have.

Does the end use pay on delivery/sale, do you keep accounts for customers .. do you only sell to a select few restaurants and them become a 'branded' excluive product or only to individuals. 

Think it all through, plan it and like a carpenter measure twice and cut once.

Most business fail because the owners did not think all the problems through first,
it's an old adage don't have a plan then plan to fail.

good luck



Hippiekinkster -> RE: A business question (OK GOP you shine here) (6/26/2008 1:45:53 AM)

Goddam, people, he's not trying to compete with Kraft or whatever; this is just a simple little project for now. Leave all that MBA business plan, Mission Statement, IPO shit for later. Figure out how to make the product without Botulism blowing up the jars first.

I can almost tell by the responses who has had the Uni classroom "experience" and who has actually had a small business that had something to do with food.

"Weeeel, first ya gotta have a snappy corporate logo. Then lawyer up. Pro-formas for the next 5 years. European distribution rights. Hire some consultants. Gotta have a website. Oracle or SAP software.  Management compensation. Product placement in movies."

Hahahaha right. /sarcasm



mistoferin -> RE: A business question (OK GOP you shine here) (6/26/2008 5:58:50 AM)

housesub4you,

I'm sure all this info is a bit daunting. If this is your dream, your PASSION though....it will be worth all of the hassle to make it come true. Yes, there will be some of what you perceive to be stumbling blocks along the way...but the difference between stumbling blocks and stepping stones is how you choose to use them.

You have received some really good advice here...and well, some that is not bad but not well informed. Excellent advice is that your first step should be writing a business plan. Without that your chances of success are significantly slimmer. Not to mention that if you are considering a financial institution for help with financing...they won't even look at you without a business plan. There is a ton of info on the web with detailed instructions to help you write one. There is also an organization called S.C.O.R.E. that can provide you with a wealth of info and assistance. It is made up of retired business owners who volunteer their time to help people in the business start up process. I would also check into programs through your local unemployment agency and local colleges. I found a great deal of assistance through those sources...and it was all free.

I have two food related businesses. One is a catering company and believe it or not, it was MUCH easier to set up than a retail food business. Basically in that business the kitchen is what gets all the scrutiny by the Health Dept. and MUST be licensed. The other is a mobile retail business that does have a few lines of food products. Now mind you, these are products that are for the most part, dry goods or commercially made specialty foods that are all sealed and produced under strict conditions that comply with all health codes. BUT...if you want to sell gourmet or specialty food products you MUST provide samples of those products in order to sell them because they are impulse buys. If people can't taste them, they won't buy them. So if you open a product for sampling by the public...or mix a dry ingredient with a wet one to be sampled...you then have to follow and implement all of the procedures required by the Health Codes. There are several Health Codes that you will likely have to adhere to. There is the U.S. Health Code, your local state Health Code...and if you are selling your products at various venues such as fairs or farmer's markets...the U.S. Dept. of Agriculture Codes. The last one is a bit easier but there are still MANY regulations that must be followed.

You will see lots of folks at those types of venues that are selling products....many of them have not gone through the proper channels and are doing it without proper license. Some will tell you that going through the proper channels is a waste of time because they have been doing it for years and have never been caught. To this I say...it only takes once for an inspector to catch you....and the penalties are stiff. It only takes once for someone to become ill and sue you. Not a risk that I think is worthwhile, but you will have to make that decision for yourself. Can it be done? Lots of people do it.

So what do you have to do to be in compliance? First of all you have to find an approved facility. Difficult unless you own one yourself but it can be done. As your product is not time sensitive, meaning that it's not something that you prepare and must have served within a time frame of hours such as I do in my catering business...it opens up the possibility of finding someone more willing to share their kitchen with you. Your products can be prepared at "off peak" hours in a commercial kitchen and you can work around busy dining hours. Halls would be a good place to start. They are generally rented for the most part on weekends and sit empty throughout the week. Hall owners would likely be glad to have some income coming in from times when they generally would have none. The problems associated with that are the storage of your foods and equipment. They are not likely to want you using their pots, pans and utensils...so you will need to have your own and they may or may not have lockable storage for those. As for your food products, it can get very confusing (and many of them can come up missing or get used) if you are storing them there in a hall setting where many different people have access to them.

Obviously, the best scenario is to have your own kitchen. Building one from the ground up is REALLY costly so it is probably more cost effective to purchase an existing one. If you decide to do this at some point there are a few things to watch out for. The Food Codes have recently undergone some major changes and many existing restaurants and commercial kitchens are operating because they are "existing". However, if they are sold the new owners will be required to make some updates. The biggest of these is in the ventilation system "make-up air unit". These are costly. Depending on size the cost would start at about $20,000 for the unit and installation. The next concern would be in the plumbing...obviously that could turn into another huge expense. Finally, the cold food holding temps have changed so you would want to make sure that the refrigeration equipment is capable of keeping foods at those new lower temps....generally 40 degrees. Just things to look out for if buying is an option you are considering.

The Health Dept. or Dept. of Agriculture will require that you write Standard Operating Procedures (SOP's). These are very detailed and time consuming to write...the good news is that you only have to do them once. In them you have to detail every step of your process and how you will deal with any possible variances from those or problems that arise. They have a lot of written guidelines that are helpful in this process....but I am not going to lie to you, writing them is tedious and frustrating. Some things that you should consider if you will be marketing at different venues is that you can not just open a jar and sample. You must have procedures and equipment in place to keep your foods at proper temperatures, be able to keep them safe from the elements or insects and you must also have proper equipment for sanitation such as proper handwashing on site, water for use and also storage and disposal of wastewater.

When you have them done you will be required to have a plan review and inspection before your license will be issued. You have to pay for those and the cost varies but isn't astronomical.

Liability insurance is a MUST. You don't want to risk everything, especially today when there are so many people who are sue happy and looking for an easy buck. You don't want to consider any policy that offers you less than $1 million dollars in protection and coverage for injuries and also for your inventory and equipment. That may sound like a lot but policies for that amount can be had for $1,000 or less yearly.

Any way, I got pretty long winded but these are some of the things off the top of my head that you will need to consider and plan for. I've likely missed a few....like deciding how you want to structure your business...but I do hope these things are helpful. It is a complicated process but not an impossible one...and it certainly is worth it all in the end to realize a dream. Good luck and if I can help further please feel free to contact me.



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