Well, it's a sad thing to say, I saw it coming a year ago and now it's here... I'm doing my homework (with my partner in crime, Dave) and going into business with a hot product (3 to start out with). Now since I don't have the $5,000 or so to start the ball rolling, I will need investors. Any tips or hints?
The Almighty $ or How to get Investers
- Thread starter imaguitargod
- Start date
As ashaimed as I am to say this...we might go with rich friends for the money (that's the nice thing about living in Hollywood, you get to have some rich friends sometimes).
make sure you feel right about it..thats all
You happy - we are happy for you..!!!
You happy - we are happy for you..!!!
Ya, it's a hard decission, but it's down the road a bit so I have time to wrestle with other ideas.marcosauces said:
Oh, thank you. It's nice to have supportive people.marcosauces said:
Continues the thread, I've heard that you have to show that you actually need money when you do the bank loan/start up business loan. From what I have heard that consits of copies previous tax fillings to the IRS(which would be a problem for Dave and I)...what information did those that went this route have to show?
Not necessarily the case. The economy is doing quite well, and has been for some time. This being the case, banks have become a bit more lenient towards start-up companies in general. They will require a detailed list of what the funds will be used for, which is nothing out of the ordinary.
I may be chiming in on this one a lil late but you could also try finding a commercial kitchen. I originally found one but I thought it was to far to drive so I searched and found one closer to where I live. I met with them. We signed confidentialty agreements anf I gave them my recipe. I give them $1,000 down payment (make payments on the rest), we then set a production date and I have to be there for it to test the sauce to be sure it is to my standards. They run a 1,000 bottle batch of the product, keep a couple of small bottles for testing. They test it for ph, nutritional values, and longevity (shelf life). Then I meet with the design people and develop a label. You see (at least here in Ohio) there is specific information that needs to be on the label and needs to be in certain areas. The put me in touch with some really great discount label printers (they deal with us small guys) We get the label delivered to the kitchen and as the batch is bottled (fully automated) the bottles are filled, sealled, washed and labeled. This is all done for me for the cost of $.271 an ounce or $2.17 a bottle (finished product).
I tried the idea of making it myself at home and the Federal Department of Agriculture and the FDA had a realllly BIG problem with that. They said that your facility must be FDA, DoA, EPA, and Health Department approved, inspected and have a Canning license. If you try to get around this and you do produce it on your own I was reassured there are big big fines and possible jail time.
I also have a few dry products (rubs and spices) that I have made. Again they must produced in a certified facility. Noe the kitchen I use for my sauces does not do dry products, they put me in touch with a local spicer that is certified and is quite reasonable on pricing. When you use a spicer you can get considerable price breaks on the spices due to the large quanities they deal in and you are buying unpackaged spices (bulk form) that do not have all the added packaging expense added into it.
Now I am still in the process of all the other legalities and insurance BS so I can't really comment on the expenses of that yet.
I tried the idea of making it myself at home and the Federal Department of Agriculture and the FDA had a realllly BIG problem with that. They said that your facility must be FDA, DoA, EPA, and Health Department approved, inspected and have a Canning license. If you try to get around this and you do produce it on your own I was reassured there are big big fines and possible jail time.
I also have a few dry products (rubs and spices) that I have made. Again they must produced in a certified facility. Noe the kitchen I use for my sauces does not do dry products, they put me in touch with a local spicer that is certified and is quite reasonable on pricing. When you use a spicer you can get considerable price breaks on the spices due to the large quanities they deal in and you are buying unpackaged spices (bulk form) that do not have all the added packaging expense added into it.
Now I am still in the process of all the other legalities and insurance BS so I can't really comment on the expenses of that yet.
Dyce51 said:
Gotta love the FDA. I appreciate them looking out for JohnQ public, but I got inspected 3 times within 2 weeks last August - the city, the state and then the FDA. They said they do opposite years of the state but since they where there might as well inspect me. It can be a big hassle...but I am glad, so far, we still do all. Once you get threw FDA red tape it's not too bad.
I moved the posts pertaining to bar codes to this thread.. http://www.thehotpepper.com/showthread.php?t=1336
Great info!! Check it out for bar code cost and other useful information. Thanks all for the helpful input!
Great info!! Check it out for bar code cost and other useful information. Thanks all for the helpful input!
$5000 would be a very bad amount to get from investors. Sophisticated investors aren't interested in a deal that small because it's not worth their time. Unsophisticated investors aren't worth your time.
$5000 is way cheap for a specialty products startup. It's quite easy to spend $20K just to get the first bottle of sauce off the assembly line. Then you start on sales and marketing.
$5000 is way cheap for a specialty products startup. It's quite easy to spend $20K just to get the first bottle of sauce off the assembly line. Then you start on sales and marketing.
Start Small
I would echo the fact of starting small and debt free. I have not been doing this for long and I am in no way even close to some of the other guys in size. But I am Debt Free, which I value even more. I started with doing it at home and with my product, Ranch Hand Candy, I can for now. It falls in the range of a cottage industry. I got an awesome website designed by my sister in law and I do craft shows for most of my sales. I have been going for over a year and I am still debt free. Beware getting investors or partners. Better to start slow and build up than sell your soul away for aquick turn around. Remember the tourtoise and the hair. The slow poke wins in teh end.
Also, have to plug Dave Ramsey, for Debt free advice.
www.DaveRamsey.com
I would echo the fact of starting small and debt free. I have not been doing this for long and I am in no way even close to some of the other guys in size. But I am Debt Free, which I value even more. I started with doing it at home and with my product, Ranch Hand Candy, I can for now. It falls in the range of a cottage industry. I got an awesome website designed by my sister in law and I do craft shows for most of my sales. I have been going for over a year and I am still debt free. Beware getting investors or partners. Better to start slow and build up than sell your soul away for aquick turn around. Remember the tourtoise and the hair. The slow poke wins in teh end.
Also, have to plug Dave Ramsey, for Debt free advice.
www.DaveRamsey.com
I made the best move (I think) yet in my adventure. We are about 2 weeks away (if all goes as planned) from our FIRST COMMERCIAL BATCH!!!! I have a friend of mine and fellow business owner with lots of connections working for me as a Sales Rep. He is making some great contacts and we are about to close on our first "Big Deal". It has taken me almost 3 years to get to this point because of financial reasons. I have bought as I needed instead of dumping a butt load of money all at once. We are just waiting on a few legalities and then we're off to the races!!!!!!!!!!!!!!!