artwork Been there? Done that? Or one day I dream of starting my own fiery foods business?

Husker21

Husker21

I know there are lots of threads that focus on various aspects of the business.  Many thanks go out to Lucky Dog Hot Sauce and Salsa Lady.  I have been reading your content likes its gospel.
 
But I am really curious... How many of us have the dream to start a fiery foods business?  How many people have tried it and couldn't get past some early hurdles?  How many people tried and failed?  How many people have a small business plus a day job?  How many people are living the dream and do this full time?  What are your experiences and lessons learned if you care to share?
 
I am in a weird place right now.  lol  I have a friend who owns a restaurant.  I gave him some of my sauces and jams during the holidays and now he wants to put them on his menu starting around Super Bowl time.  I know I can use his kitchen to produce what he wants....  But I immediately started thinking past this one "order."  
 
What has me hung up is taking the leap.  I have 1 sauce that I think is ready to go to market.  I have two more that need a little fine tuning.  I also have a bbq rub and seasoning salt that I think are ready for market. If I make a business out of this my friend has offered to let me use his kitchen for FREE  I know securing a commercial kitchen can be daunting, but literally had one fall in my lap.  I have a good break down of all of the fees, licenses, regulations, and start ups costs.  I have identified a couple of farmer's markets I could sell at, a couple of vendors that would be willing to sell my products, and 2 restaurants that would be willing to place my sauces on the table of their establishment.  Financing is a big one.  I have a potential financial backer that will be sitting down with me this weekend to go over my business plan.  But as much as I am excited about this, I know there is a good chance at failure.  Right now I can make my hobby sauces and hand them out to friends  The kudos I get are awesome... But I fall into the go big or go home category.  If I am going to do this I need to be all in.
 
I am looking for any feedback or personal experiences that might sway me.
 
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Did my first "production run" under the new manufacturer's licence.  I was trying to keep it small to work out the kinks in the kitchen I am using.  I also had a small window of time since the place I am using does a  really good take out dinner business.  i pumped out 4 cases of the hab mango sauce.  Back at it on Monday to do a run of the BBQ sauce.  That should be enough to supply me for the farmers market next week.  Next time I do a large cook there I am doing it on a Sunday when the shop is closed.  That way I can do several batches with no one around. 
 
This experience solidified in my head the idea of using a co-packer.  I want to make up sauces and sell it, not be a cook on the manufacturing line! :)
 
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Husker21 said:
 
This experience solidified in my head the idea of using a co-packer.  I want to make up sauces and sell it, not be a cook on the manufacturing line! :)
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This is the trade-off I describe to people all the time.

It takes a hell of a lot of work to make small batch sauce - which is ok if it didn't also take 12-15 hours a day of work to sell sauce.

The equipment at a copacker is great for efficiency. To buy or rent all that stuff costs a fortune.

One day I'd love to have a manufacturing facility - right now I'm too busy hustling sauce, marketing, accounting, etc to be in a kitchen all the time.

That all said, make sure it's the right relationship - I get to go to mine and participate in the process, QC of ingredients, etc.

Sourcing ingredients is big for me too - very important to me to support local agriculture whenever possible. I've heard with some copackers you'll be very hands off the process, which isn't my style.
 
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Right On, Husker!  This is part of the growing cycle of your business.  Pack it yourself, use a co-packer......what to do.... ????
 
Get out there to the FM and Sell That Sauce!  Take it week-by-week and figure out your production situation as it goes. 
 
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SL that is what I was thinking.  If I get steady sales at the markets I can handle the load and be my own cook.  If a few of the distributor contacts I am working on pan out I need to co-pack.  There is a co-packer 20 minutes from my house.  They are an olive oil company but they are just starting their hot packing business.  They only have an 80 gallon kettle but I can source all of my own ingredients and bottle supplies and have them shipped to his facility.  He even planted a seed with me that they are always looking for good people.  He was impressed with all of the work I did before I sat down with him.  He said many people don't get past inventing a recipe in their home kitchen before they sit down with him.  He liked that I already took process school, had my process letters, marketing, web site, business cards etc.
 
LDHS, the entire time leading up to this launch I have always kept your question in mind, do I want to be a manufacturer or a salesman?  After splashing hab sauce in my eye, getting a 30 minute habanero steam bath on my forearm while I stirred, and all that clean up... I am leading towards the sales and business dev end of things.  :)
 
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I just read through this and there's lots of great info here. I too am getting started but not looking at moving as quickly as you did. I just have 1 question and a comment. 
 
Question is, has anyone found an example Business Plan for a Hot Sauce "Type" business upon which they based their plan on? Mostly I'm looking for something that is going to help me to not miss something that I need to have in there not having written one before.
 
Comment is, I have a background in Project and Program Management too and list are a true part of life, I don't like it when I miss things because I didn't write it down. Something that was recommended to be when I first started was to read "Getting Things Done", GTD, by David Allen. It's a great simple read with lots of good advice and there are more tools available for Computer/Tablet/Smart Phone that are based on GTD than you'd care to think about.
 
Also, for those of us that are number's people it can be hard to keep out heads out of the "What If Analysis" of business. It can be fun to play around with it some and it's not a bad thing to have some numbers readily at hand on for when those commercial/wholesale contacts come to knock at your door but as was said don't go getting your head wrapped around them till that knock comes. Just keep some simple information on hand so you have an idea of the economies of scale at the levels they want and can talk numbers with a little more accuracy. There are even some Excel "how to's" on the interwebs that you can read through, plug in some numbers and get what you need.   
 
JMHO :)
 
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LUCKYDOG said:
Husker where is your friends restaurant and when would it be available to pick up a bottle? 
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My friends restaurant is in Westchester County, NY.  I am going to be selling my stuff out of Butcher's Best in Newtown CT.  I will also be at the Southbury and Newtown Farmer's Markets.  I am in SW CT.  If you are interested we could even meet for a beer and I can save you $$ on shipping costs.  :)
 
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One resource for all new businesses to tap into is SCORE.  It's somehow affiliated with the SBA and small business resources..... can't remember how it all works...
 
I know of a SCORE advisor in our area who has helped lots of local businesses of all sorts.  SCORE advisors can help with most of the basic business anxieties and book-type issues businesses need to learn.  They are veteran business people who understand business and can look at your operations intimately and offer specific suggestion for "your situation".
 
 
They probably won't be able to help with a PA letter or what the FDA requires on labels, but they can help get you properly licensed, and help get your IRS-schtuff in line. Heck, maybe you'll get lucky and find a SCORE advisor who was previously in the food industry!  Double-SCORE!!!
 
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RocketMan said:
Question is, has anyone found an example Business Plan for a Hot Sauce "Type" business upon which they based their plan on? Mostly I'm looking for something that is going to help me to not miss something that I need to have in there not having written one before.
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IMO there is no "one size fits all" solution or plan. 
 
We all have our own expenses
We all have our family situations
Different weather in different places
Drive, passion, enthusiasm, sales ability - these are all factors to varying degrees. 
 
You need to evaluate what you need to sell to earn what you need. I know that's vague, but there's no other way. Taking business and accounting classes has helped me for sure. Working in supply chain has helped me for sure. 
 
But no book will know what your business model should be. I can work 4 markets a week year-round because we have great weather. Someone in Charlotte, NC has snow on the ground in the winter - they're note hustling at a farmer's market, so how does that guy make a living in January? 
 
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Wow.  Did my first few days at local farmer's markets.  So far so good.  The responses I have been getting and repeat customers are a great sign.  I am very much enjoying the sales end of it over the production.  I just committed to doing a run of 50 cases (25 or each sauce) with a copacker.  Hoping to use this production run to start filling some wholesale orders that I am trying to drum up in the coming weeks.  
 
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Holy thread revive!  Husker1 - just about 6 months later how is everything going?  Looking back how would you say it's gone versus how you thought it would go?
 
Any other info or lessons you (or anyone else) would care to share?
 
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SmokenFire said:
Holy thread revive!  Husker1 - just about 6 months later how is everything going?  Looking back how would you say it's gone versus how you thought it would go?
 
Any other info or lessons you (or anyone else) would care to share?
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Lessons learned (in no particular order):
 
- I need to be selling cases not bottles.  Farmer's markets and festivals are great.  Lots of exposure and schmoozing.  But I need to be selling cases cases cases.
 
- While farm markets and festivals will keep you selling and get you that immediate satisfaction of making a sale... It will take a lot of time and effort to get you to making it a full time business.  But it WILL also expose you to other people in the industry.  While vending I have met 3 distributors so far.  Two of them will be hoking my product for me in the new year.
 
- I have my tent/display dialed in; table config, table covering, signage, my "uniform", banners etc.  I was quite impressed with my set up but I have had numerous vendors approach me to start picking my brain about my set-up or labels or whatever.
 
- Be open with your knowledge (lesson learned from THP!).  I know there is still a lot for me to learn but I have had a blast meeting and talking to people about their business.  Even other sauce guys.  The camaraderie among vendors is awesome.  Everyone is always happy to talk shop or swap contacts for this service or that raw ingredient.  
 
- Version 2 of my labels will shrink down required elements (ex nutritional panel) to make space for a product description and uses section.  
 
- Hot sauce is a more labor intensive product to make than my BBQ sauce, rubs, and jams.  Since I am using a copacker I need to keep a close eye on labor costs to make sure I am not eating too much into my profit margin.  
 
- Support local!  By using local honey and garlic I have made some great connections.  These kind folks give me a reasonable deal and by using their products it qualifies my end product as a local product as well.  This is often important if a certain market will only take vendors that are selling local goods.
 
- Location location location.  Or maybe which market, which market, which market.  Not all markets are created equal.  I did a Tuesday market that was downright depressing.  The market in my home town was killer!  I would recommend people scope out their market options, talk to some of the vendors about the traffic at the market and how the market has evolved in recent years.  Often times if they aren't singing the praises of the market you are scoping they will let you know about a market a few towns over that is a mob scene.
 
- Really spend the time to calculate a reasonable case price.  In addition to all of your ingredients, glass, and labels you also need to account for labor/kitchen rental, bags, business cards, marketing materials, tester spoons etc etc.  It all adds up really fast.
 
- Be prepared for road blocks.  Just because you get bogged down on one task don't let it effect your motivation.  If its taking longer than you expect to get your process letter, don't wait on it until you start locating a copacker or a kitchen to rent.  There are lots of problems to solve.  Many of the tasks associated with starting up can be done simultaneously and independent of other steps.
 
- Be careful with your marketing dollars.  The BBQ contests we participated in were fun as hell.  I even got a pic with a Food Network star holding my hot sauce... But of instead spending money to compete in a contest, it is a better use of time to vend my products.  Yeah it would be cool to win some cash and add to the trophy case, but the right festival could lead to tons of sales vs loosing money if your competition BBQ doesn't yield a cash prize.  But since I love the competition side of it, I may keep competing but get my wife or brother to run run my vending booth.
 
- When its called for, don't be afraid to pay a subject matter expert.  My designer killed it from web site to labels to banners.  That is a task I would have struggled at for months.  I saved time and was able to present a great looking product because I trust a talented designer.  
 
This was all a quick brain dump.  I will try to add some other notes if they pop into my head.
 
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