Just an Idea....

Dyce51

Dyce51

Ok as many of you guys know I have trying to commercially produce my sauces for quite some time now. The big problem I have is funding! I have other priorities that take pretty much all my money......3 kids, car payments, utilities, house, and the ever rising gas prices just to name a few.... Needles to say at the end of the month there is no extra cash to put towards my sauces. Now I do have a growing demand for them....(Guys I work with buy them from me but now the demand is growing and I need to up my production)

Here is an Idea I have come up with to get the funding I need to produce 1 of my hot sauces commercially and let the sales from that batch finance the next and so on.

I am thinking of doing a pre-production sale! You see the small batch they will make is 100 gallons that's like 1600 8 ounce bottles. Your average sauce price is around $4.00 for a 5oz. bottle. I figure to $4.00 for an 8 oz bottle I could sell them pretty quick to get the funding to produce and then ship all them out...

You guys think this would work or am I still just trying to keep a "pipe dream" alive??
 
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I really cant see people parting with thier cash in this manner but i could be wrong. Another thing is that it is a lot for you to wear if things go pear shaped. Jmo and the best of luck getting your bizo up a running.
 
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I'd order one to support you ! I don't think its stupid, and also for $4 you can't go wrong. We know how it is starting out and getting the initial capital! Let me know if you end up doing this and I will paypal you (or send a check, whichever you prefer)

xo Nicole and Johnny
 
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So you would need to collect $6400 before making a batch of sauce? I think you would need a deadline for your customers, even if it meant making a 2 gallon batch. It sounds good on paper, but if you are just starting out as a commercial sauce maker, 1600 bottles might not sell as fast as you hoped. I think most people will probably want one bottle to try. I know a lot of people produce things to meet the demand, but you need the demand first. I wouldn't start collecting money from customers without a shipping date. It could be a slippery slope. The phrase "pipe dream" you used leads me to believe you don't have buyers for 1600 bottles. Just my $0.02, and I wish you the best of luck! :cheers:
 
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What you are proposing is called crowd funding, and you can use sites like http://www.kickstarter.com
 
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muskymojo said:
So you would need to collect $6400 before making a batch of sauce? I think you would need a deadline for your customers, even if it meant making a 2 gallon batch. It sounds good on paper, but if you are just starting out as a commercial sauce maker, 1600 bottles might not sell as fast as you hoped. I think most people will probably want one bottle to try. I know a lot of people produce things to meet the demand, but you need the demand first. I wouldn't start collecting money from customers without a shipping date. It could be a slippery slope. The phrase "pipe dream" you used leads me to believe you don't have buyers for 1600 bottles. Just my $0.02, and I wish you the best of luck! :cheers:
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The sauce is going to cost right around $2500 to produce so I need to sell around 600 bottles to pay for the batch. By "pipe dream" I mean it seems every time I have had the money and was about to do it....something unexpected would happen and the sauces gets pushed off again.
 
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Dyce51 said:
The sauce is going to cost right around $2500 to produce so I need to sell around 600 bottles to pay for the batch. By "pipe dream" I mean it seems every time I have had the money and was about to do it....something unexpected would happen and the sauces gets pushed off again.
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Cool. I know how it goes trying to save money and such. I'm REALLY bad at it! I wasn't trying to be discouraging BTW. That site THP posted actually looks pretty cool. It might be tough for a food product though, because people would want to try it first. Good luck!
 
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From experience from starting other small ventures, my advice is not to overspend at the start (and $2500 is overspending imo if money is tight). Buyers are not going to materialize out of thin air to buy 600 or 1000 bottles from you - you're going to have to go and find them (at farmers markets / food fairs etc) and this costs money. You're going to need to keep some cash in reserve to pay for farmers market stands, promotional materials etc. Don't spend it all on inventory.

Finance folks talk about "customer acquisition costs". To be an entrepreneur requires great optimism, and a very strong belief in how much customers will love your product. Unfortunately this same attribute can also lead you to believe that customers will beat a path to your door to purchase your product, which often cause you to grossly underestimate the cost it will take to acquire customers.

Don't be discouraged - just be careful and conservative. Isn't there a way you can increase production in smaller steps?
 
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Like I said...it's just 1 idea.... I almost jumped at another opp. where it turned out the guy was trying to "steal" my recipes. I figured the Hot Sauce is cheaper to produce than my BBQ sauces are. The sauce has won awards already, so I know it's good (not just saying that cuz I make it either) I do make small batches all the time and they sell real fast....(they are home produced so are sold as "collectables" not for consumption to keep it legal)....There is another guy that I work with who has shown some interest in helping me out with it as well so we'll see!!
 
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Dyce51 said:
Like I said...it's just 1 idea.... I almost jumped at another opp. where it turned out the guy was trying to "steal" my recipes. I figured the Hot Sauce is cheaper to produce than my BBQ sauces are. The sauce has won awards already, so I know it's good (not just saying that cuz I make it either) I do make small batches all the time and they sell real fast....(they are home produced so are sold as "collectables" not for consumption to keep it legal)....There is another guy that I work with who has shown some interest in helping me out with it as well so we'll see!!
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That "guy" didn't claim to own a few resturants, a hot sauce factory, & many other things & just happened to be from
Ohio too, was he? First name started with a H?
 
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Tigahb8 said:
That "guy" didn't claim to own a few resturants, a hot sauce factory, & many other things & just happened to be from
Ohio too, was he? First name started with a H?
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He sold BBQ sauces at "Outdoorsman Shows" and had a kitchen just outside of Toledo, Ohio to make sauces in. and yes his first name did begin with a H. I was told that he passed away last year though.
 
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Hello Dyce,
There's many options other than a $2500 co-packer! It's been posted in other threads about starting up a HS business. Look around for a commercial kitchen to use and do it yourself to start. When driving through town, just look at all the building that have kitchens, many of which you can probably rent. Community center, church, fire hall, VFW/Eagles/Lodges, grange hall, restaurants after hours...

I just cringe at the thought of forking out all that cash until you've done some public markets and get some sales under your belt. Remember your business licenses, insurance, health licenses, product testing, etc, etc,

I'll see if I can find that other thread.

Good Luck,

SL
 
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