"John A. Weeks III" <j...@[EMAIL PROTECTED]
> wrote:
> oprah.cho...@[EMAIL PROTECTED]
wrote:
> > How about if I wanted to buy a commercial
> > kitchen and mass produce the food, do I need additional licenses?
>
> There is probably a break point somewhere in your state between
> a kitchen level operation and a factory. A kitchen would need to
> be inspected. A factory would need a permit.
But LONG before you buy a commercial kitchen, just contract with one to
make your stuff. And I am not talking about the kitchen of your local
restaurant but one that is essentially a factory that does this for many
similar businesses like yours. They are all over the US and other
countries. You bring in your recipe, you work with their people to get
it just the way you want it made, and you place an order with them.
Start small. Don't let your dreams, ego, or praise from others set your
contract order. Find out what is the smallest amount the commercial
kitchen is willing to produce. Do NOT get worried that the cost per unit
is the highest. You need to move the product and if you cannot move the
product, the cheapest cost-per-unit is the most expensive cost-per-unit.
Let then actual demand dictate how fast and much your orders increase.
If your sales go through the roof, it might eventually make economic
sense to have your own factory, but that's quite a long ways down the
line. Until then, shop around. Get prices from many commercial
kitchens. If your food doesn't contain nuts, hunt for commercial kitchen
that do not handle nuts of any kind for any of their customers. If you
can find such, you then do not have to put the warning that your stuff
was made on machinery that also made stuff with nuts in it. This way
those with nut allergies will buy your food.
> > Last, how would I go about getting supermarkets to stock my foods?
>
> Payola. Shelf space is sold to the highest bidder. You pay, you
> get on the shelf.
However, initially, your local stores will very likely be willing to
carry you since you're a local business. I helped secure shelf space for
start-ups like yours and, most of the time, the local businesses are very
happy to give you a start. Even in a prime location and even New York
City. Join your local business associations and network. Join as many
as you can which will allow you to join.
Now from this small base, you can start to build your empire.
There are another routes though.
Can you sell your stuff by itself? For example, if your recipes are for
cookies, you can. If they are for salad dressing, you cannot. If you
can, look into getting a slot in your local shopping mall foodcourt.
This gets you out of the fight for shelf space atl grocery stores and you
get the full retail price instead of wholesale price for your stuff.
Can you sell it door-to-door? If you can, what you want to do is
establish regular customers whom you deliver your food to their door on a
regular basis. Fraternities and sororities are GREAT places to do this.
You go and talk to their officers to see if they're up for you coming
once (and only once) a week to their houses and selling your stuff in
their entryway (saying it has the space). I have encourages tons of high
schoolers to do this to make some money and all that have made a ton of
money. Chocolate chip cookies being what they would sell in baker dozen
bags for a fiver. When selling to fraternities, I always recommended that
if they were female and attractive, that they hop into a bikini to make
the sales. If they weren't both of those, they recruit their high school
friends that were and give them a sales commission. I have yet to see
anyone outsell a hot teenage gal in a bikini selling cookies in a
fraternity.
Still another route is nursing homes. They are always looking for ways
to spice up their menus and your food might just be that ticket. To
them, you deliver your food once a month. You then only need to line up
about twenty nursing homes and you're in business.
Or is your stuff healthy tasty kid's food? If so, look to doing the
above for day-care centers.
Or is your food something that hearty men would love to eat? If so, go
mobile and sell to construction work sites. Go and talk to your local
construction companies and get their permission to come to their
construction sites to sell your food. If they go for it, you can
probably even get them to structure their lunch hour for when you arrive.
One person that did this covered three lunch hours from three lunch hours
by being at each for the first half hour of their lunch hours and getting
three of them staggered so she could race from one to the next.
All the above is meant to get you to think outside the box. I don't know
what your food is so I can only toss out suggestions. If you tell us
more specifics, perhaps we can give you more specific help.
Now for my standard advice for wannabe entrepreneurs. If the following
advice doesn't precisely fit your situation, use your brain and make it
fit. Don't discount it because it isn't exactly customized to your
predicament. Again, it is standard advice that I have repeated so often
I have it in a file to copy and paste onto the end of posts like this.
So go and grab a cup of coffee, sit down, and let us begin.
The purpose of business is to make profits and only profits. It is not a
toy to play around with. It is not a social experiment. A business is a
business and a business is to make profits. Period. It is not to enable
you to be your own boss. It is not to enable you to stay at home. It is
not to give you better control over where your life is going. Those
might be nice side-effects but not what your business should be about or
for. Your business is to make you money and lots of it. That isn't
greed. That's what businesses are for. To have your business have any
other goal is only putting it at risk of failing. Only by it striving to
make as much money as possible does it have the best chance of surviving
and succeeding as well as providing you the life you dream about.
Capitalism is a positive to society. History bears this out. And before
you start working on your business plan, you need this philosophical
mindset. I strongly recommend you read "The E-Myth" by Michael Gerber,
"Capitalism: The Unknown Ideal" by Ayn Rand, "The Virtue of Selfishness"
also by Ms. Rand, "The Double Win" by Denis Waitley, and, whether you're
an American or not, "Restoring the American Dream" by Robert Ringer.
After reading these, you will have the philosophical foundation for
becoming a successful entrepreneur. And when you read Michael Gerber's
"The E-Myth", be honest with yourself. That book's real value is helping
you determine if you're a Technician, Manager, or Entrepreneur. If
you're a just a Technician and/or Manager, save yourself grief and don't
start a business and instead just hunt for a better job and/or company
for which to work.
After you read the above books and thoroughly understand their messages,
work on a business plan. Regardless if you're going to get a business
loan or not. Or buy an existing business or start one from scratch. A
business plan forces you to think of all aspects of your business.
Question every aspect of it. Think how you can do it better, cheaper,
and faster. Always remember to K.I.S.S. it. Keep It Simple, Smartass.
[Yes, I know it is usually said as "Keep It Simple, Stupid", but it is
the smart***** that make things more complex and difficult than they need
to be. Stupid people keep it simple (usually too simple) because they're
stupid.] And forever keep in mind that this is a business you're
starting and a business is to turn a profit. It doesn't turn a profit
and it's just an expensive hobby of yours. Your goal should be for the
business to work for you and not you work for it. Your end goal should
be that you don't have to even show up at the business for it to turn a
profit. Golf, anyone? If you need to always be at the business for it
to turn a profit, the only thing you've made is a job for yourself. If
that's all you want, don't start a business (and all the headaches it
entails) and just go work for someone else.
As for what to put into the business plan, go to your public library and
pick up a book about writing a business plan. Skim through it to see if
they give a comprehensive example of what a business plan's Table of
Contents should look like. Look it over. Does it match your business
plan's needs? If you're unsure about a section title, read the book's
section on it. The book I like using ... though it has a corny title ...
for its Table of Contents example is "Business Plans that Win $$$:
Lessons from the MIT Enterprise Forum" by Stanley R. Rich and David E
Gumpert (Harper & Row, 1985). Their Table of Contents example is on
pages 32-33. Then you simply open up a word do***ent, copy the Table of
Contents into it, and start throwing your business ideas into the
appropriate sections. Don't worry about form, flow, or organization at
this stage. Just throw all your ideas for your business into the
appropriate sections. Once you have drained your brain dry of all your
business ideas (which you might be surprised at how few you actually
possess), start working on the business plan to make it readable by
others. You will find holes in it that need filling. Fill them. Don't
leave a section untouched. Address all aspects of your business.
Address possible problems (focus on the likely ones) and tell how you
will deal with them (a.k.a. develop contingency plans). This isn't a
thought exercise. This is a blueprint of your business' success. Treat
it seriously.
As for how much time to invest into your business plan, studies have
shown that those that work less than six months on their business plan
have a 90% failure rate. Those that work six months or more on their
business plan have a 90% success rate.
Once you get your business plan done, it isn't done. Far from it. It is
just the beginning. Next take it to a general business consultant. Have
him look over the business plan and tell you what he thinks. What you
want him to focus on is the soundness of your basic concept. After him,
take it to a consultant that specializes in the industry of which your
business will be part. Is someone already doing what you think is
something only you have thought up? Has someone already tried and failed
doing what you think will be your competitive edge? This consultant
might be a cold splash of water in your face, but that's great. Better
learn that now than later after you have risked your child's college fund
on the business. If the industry consultant thinks you might have a good
idea, jump for joy and head off to the next consultant. Next up is a
marketing consultant for marketing is the most im****tant thing to any
business. It doesn't matter if you have a better mouse trap if no one
knows you do. Marketing gets everyone to know you do. After the
marketing consultant has helped you improve it as much as he can, take it
to an accountant and have him run the numbers and compare them against
the norms of your industry, area, and so forth. Will there be a profit?
Your accountant will tell you. If he says there won't be, don't think
he's wrong. He isn't. Go back and work on your business plan. If you
can never get your accountant to tell you that you will make a profit,
kiss him. Yup, right on the lips. I don't care if you're a man or a
woman. Give him a big sloppy kiss. He just saved you from bankruptcy.
At this point, either think of a new business to go into and start the
process all over again or just continue to be an employee and build your
wealth one paycheck at a time. If the accountant does say your numbers
are sound and it looks like you should make a profit, have a business
lawyer glance over the do***ent. Even if your business is a corner
hotdog stand, get the lawyer to give you his nod that no legal troubles
(like a permit to use that corner for your hotdog stand) is waiting in
the bushes to attack you.
All the above will cost you money but it will be money well spent. This
is not the time to pinch pennies. Do so at your peril. After you do the
above (which should add another month or more to the whole process), you
now need to get the best advice possible. The above just made sure
you're not making a mistake. What I tell you next will make you a
success.
What I recommend you do is determine what your sales territory is.
What's its radius? Double that and add a healthy 10% more distance then
go and talk to people out that distance that are in the same business you
want to start up. Literally drive there. Do not do the following over
the phone or email or through snail mail. Show up on their doorstep
during the slow time of their business day. Tell them that you want to
start up a similar business at such-and-such location and if they would
consider you competition. If they say you would be, drive further away
from your proposed business location until you find a business that says
you won't be. If you have to go to a different country, do so.
If your business' sales territory is theoretically the world (i.e., a
mail-order catalog or an online-only business), forget about the
territory stuff above and simply look for businesses that are doing
business HOW you're going to do yours but NOT selling the same thing(s)
as you. For example, if your business is a mail-order catalog that sells
special dusters for silk top hats, go and talk to people that sell shoes
by mail-order but not anyone that sells anything to do with the head.
Hunt for them, find out their cor****ate addresses, and go visit those
closest to you IN person.
HOWEVER, do not interview franchisees. They are following a very
detailed plan on how to run their businesses. These plans are very good,
but franchisees have done nothing to write those plans up and literally
just bought them ... thus are useless to you and your pursuit of
knowledge. Franchisees are a murky mutant between an employee and an
entrepreneur. Their franchiser is the one that figured out how things
can be profitably done and the franchisee is just following suit. As for
franchisers, don't talk to them either or you will have just given them
their next expansion location. HOWEVER, this does not mean you shouldn't
consider becoming a franchisee. It should always be an option you should
consider. Not the only option, but one of them. But even if you know
deep down that you'll eventually be a franchisee, you need to still do
the research I'm laying out here so it is an informed decision. And if
after doing all the following, you (still) decide to become a franchisee,
interview ALL the different chains for your type of business you want to
start up and LOTS of franchisees in each chain to find the one that's
best for you. But that's after you do the following and let's now get
back to that.
Once you find a business that says your two territories won't overlap,
ask if they wouldn't mind answering some questions about how to start and
run a business like theirs. Play to their egos and they'll love to talk
to you. Everyone likes to feel im****tant and worth listening to ...
especially business owners when it comes to their businesses. Have a
list of questions written out on a notepad, but do NOT write down their
answers. Instead, bring a tape recorder (yes, put it right out in the
open ... no need for spyware ... and besides it plays to their egos as
their words are being treated as worthy of being recorded) and
concentrate on getting as much information out of them as possible ... as
well as picking up the other half of the answers they give in body
language. If they say something you don't understand, speak up and ask
for clarification. Let them wander off your list of questions since to
where they wander might be a place about which you never thought of
asking questions and should have been. However, keep an eye on the
questions you've written down and try to ask them all before the
interview concludes. Of course, always yield to customers that come in,
but, naturally, try to continue the interview after the customers leave
so you get answers to all your questions.
After you've interviewed one owner, don't interview another but go home
and digest what was said. Listen to the tape on your way home. Think it
over. Adjust your business plan accordingly. Adjust the questions on
that notepad and then on your next free day (or the following day if
you've got both off), head off in another direction and do the same
thing. Try to interview at least twenty businesses. A hundred
businesses would be ideal. Interview the good, the bad, and the ugly.
If you're lucky, you'll interview one that is going out of business or
has just went out of business so you can hear about the dark side ... as
well as possibly pick up good equipment, inventory, and supplies for a
song. Likewise, interview those businesses you think are bad. Keep in
mind that since they're still in business, they are probably doing
something right ... if just being the only game in town for your
products/services.
Share as you give. Let them know what you think is a good idea and they
may tell you their own gems. Don't get paranoid that they'll steal your
good idea. They will! Or rather, you should HOPE they will as that
means your ideas are actually good ones. These are the individuals that
are the best judges of your business ideas. However, you'll never know
if your business ideas are good unless you tell these business owners
them ... or blow a ton of money actually doing the idea and thus finding
out the hard way. Also, if you're not willing to share, don't expect
them to as well. In fact, it will likely take you telling them your best
idea for them to tell you theirs. Also, ask them to read over your
business plan right there before you. Naturally, don't leave a copy of
it behind. What one of these business owners is going to tell you will
be better than ALL the advice from ALL the business professors on the
face of the Earth. Even from the ones that are going out of business!
These business owners are DOING IT RIGHT NOW ... whereas business
professors live in the fairyland of academia. Oh, and that smack-down
goes the same for SBA's Small Business Development Centers (which are
manned by business professors and burnt-out business executives) and
SCORE (which is an abbreviation of the Latin phrase: "Grumpy Old Men
Waiting To Die").
And don't stop doing this after you open your business. At least once a
month (if not once a week), visit still more businesses. And for one
afternoon, make this part of any vacation or business trip you take
anywhere. In fact, you'll very likely get more out of these interviews
AFTER you open your business than before you did. After you open your
business, you can really start to talk shop since you're now currently
running a shop. This worked great for a little-known starting-out pizza-
parlor owner by the name of Tom Monaghan ... the founder of Domino's
Pizza.
And don't forget these individuals after you interview them. Once you
get home from interviewing them, send them a nice thank-you snail mail
letter for taking the time to answer your questions. When your business
opens, send them an invitation to come and see it. Ideally, hold a
special Grand Opening dinner and invite all the good business owners you
interviewed to it. Give them a group tour of your business (no matter
how small the shop is ... even if it is a desk and a computer in a
corner) and then treat them to a nice meal. I'd recommend a barbeque at
your house/apartment so it is informal and relaxed. Do NOT drink alcohol
or do drugs at this dinner. Do NOT tend the grill but have your spouse
or a caterer do that for you. Listen, listen, and listen some more.
You've got the most valuable think tank right there eating your steaks.
They'll just naturally talk shop and focus most of that talk on YOUR
shop. The only downer of all this is that it would be bad form for you
to tape record it. However, you can put a small notepad in your back
pocket and when someone tells you something good, whip it out and write
the thing down. It will again play to their ego and will actually get
the other business owners there to open up as it plays to their egos and
competitive spirit. Oh, and if they argue, you just sit along ringside
and listen. Do not inject anything since you don't know anything worth
injecting into their argument. After the argument, there will rarely be
one clear winner but that's what you have your brain for. Think over
what both sides (and there can be as many as there are those in
attendance) and try to figure out what would work in your situation.
Now if you want to really succeed, see if the good ones are also willing
to sit on your Board of Directors (or Board of Advisors, if you don't
want to give them any control power). The rest of your Board of Directors
should be made up of marketing consultants (at least have two) and one
and only one accountant. I'd recommend the board number nine. Your
Board of Directors will help you keep the big picture in mind and an eye
on the future. And pay them! Pay them handsomely. Tell them what
you're willing to pay if they'd sit on your board. Do not ask for
charity since if you get them on your board for free, their commitment to
it will be about as deep and long as a fat person's commitment to a diet.
Oh, and if you pay really handsomely, drop me an email (stj [at] nonesuch
[dot] org) and I might be willing to be one of the marketing consultants
to sit on your board.
If you need major outside financing (a.k.a. venture capital), you will
need to assemble a top-notch management team, add them to your business
plan's "Management" section, and their resumes to the plan's appendix.
Sorry, but this isn't the time to bring on your best buddy or that cousin
that needs a job. Your management team needs to have a track record of
actually doing what you need them to do for your company. They also need
to give your company what you lack. If you're not good at marketing, you
need to get yourself a great marketer. Hate doing the books? Get
yourself a great CFO. This is where your best buddy might actually come
in handy. Have her/him tell you what are your weak spots. What you
lack. What you're not good at. When you go into that general business
consultant (mentioned earlier), have that person interview you and point
out your weak spots. Once you know what you're weak in, fill those spots
with people who not only have the work experience to do their jobs but
who are excited about working for an explosive growth company. Just to
give you a heads-up. Few CFOs like working for start-ups so you'll need
to do a really good sales job to get a great one to come onboard. And
how you sell them all on joining you is your business plan. Let them
read it. Discuss it with them. If they point out a fault in it in an
area that they're the expert, don't argue with them but ask how it can be
overcome. If they point out something wrong in an area in which they're
not an expert, calmly address that concern and how you think you're right
about it. Do not use emotion to win the day but cold hard fact-based
logic. Emotion only wins you the moment but will lose you that person
once they're away from you and the emotional plea will then be viewed for
exactly what it is. Once you have assembled your A-Team, take your
business plan to a broker and have them put you in contact with venture
capital firms, hedge funds, and so forth.
Do note that the above paragraph was placed AFTER you have taken around
your business plan to business owners and assembled your Board of
Directors (Advisors). That was on purpose. One of the things you can
get from your board is referrals to people that would make excellent
additions to your management team.
Lastly, if you're not willing to do the above, you don't have what it
takes to start and succeed at your own business. Period.
Also...
The lifeblood of capitalism is communication between businesses and their
customers/clients. Yes, this means advertising, but that's just one
aspect of the communication I'm talking about. There's also public
relations (such as appearing on local radio talk shows), business image
(everything your customers see), and, most im****tant of all, word-of-
mouth. Approach all expenditures on such communications as simply an
investment. Track how much you spend and what profits it generates for
you. Be always willing to experiment with new approaches but discontinue
unprofitable ones once they've shown themselves to be this. If you
employ a marketing firm, hold them accountable. Ditch them if they don't
produce profits for you after six months. Don't let emotion decide their
fate. Let's the cold hard facts of accounting be the heavy. And nothing
gets a marketing firm to work hard for you more than them knowing you
expect results and will ditch them if they don't produce.
As for what gets you the best bang for your advertising buck, that would
be postcard advertising ... as long as you have a message that can be
relatively short and concise. The key to postcard advertising is the
mailing list. The fresher the list, the better. You want to target
those who will most likely become your customers/clients. Spend a lot of
time thinking over who this might be. Once you're in business, find out
the demographics and psychographics of your customers and market to
those. As for the postcard itself, EVERY single word on it should be
carefully chosen. The goal of the postcard is to get its recipient to
take some form of action. That action could be calling and/or visiting
your business or visiting your business' website. The best way to get
them to visit your physical location is to make the postcard a meaningful
coupon they can use. Use color, bold, and all caps in the text of the
postcard sparingly and to just give impact to key words. ALWAYS send out
two differently designed postcards. One to one half of the mailing list
and the other to the other half. Design them so you can track results,
such as giving different telephone numbers to call. If one pulls in more
than the other, try to figure out why that happened and test that theory
in your next dual mailing. Advertising should always be considered to be
fluid and not etched in stone. Adjust with the times, be topical, and
always be willing to experiment.
Now if you put up a website for your company, do NOT take the attitude of
"If I build it, they will come." That only works in Hollywood movies.
Instead, work to get your website high in the results generated by search
engines for keywords that potential customers might enter into a search
engine to find your business type. To get a high ranking on such search
engines, you need links linking to your website. One way of doing this
is by posting a lot to newsgroups and online forums with a link to your
website in your post's signature. If you post to newsgroups and online
forums whose topics of discussion involve your business in some way, you
might also be able to directly get customers that way. However, this is
very time consuming and requires you to be a good prolific writer. If
you're not or don't have the time to spare to do this, hire a service
that will work to get your website a high ranking in results generated by
search engines. You pay them a small monthly fee and they work to keep
your ranking near or at the top. For if you don't work/pay to get your
website high in results generated by search engines, don't bother putting
up a website. That would make as much sense as putting up an unlit
billboard in a dark alley.
And finally to more points...
Barter, barter, barter! Almost all businesses can barter with other
businesses. This is a great cheap way for you to get something (product
or service) you need for your business for a fraction of its cost ... if
not essentially free. Think what other businesses have that your
business needs. Not wants, but NEEDS. Don't overdo barter or you'll be
strapped for cash. Now think what they (or their family members) might
need or want from you. Note I also said "want" this time. If they
foolishly use barter for their desires, that's up to them. Don't you
make that judgment call for them. One person's desires can be another
person's needs. Now go and talk to them about a trade.
Lastly, ONLY buy used. Never buy new anything that doesn't ABSOLUTELY
have to be new. All it has to look like is being in good condition ...
and not even that if it's in the backroom and your customers will never
see it. Go to sheriff auctions, business liquidation sales, and garage
sales; scan the classified ads in newspapers; browse the online auction
sites (like eBay); and hunt for bargains. Find a place to store these
bargains during this collection phase. This collection phase usually
takes about six months ... which is just fine since that's the minimum
amount of time you should be working on your business plan anyway. One
of the keys to being a business success is keeping your start-up and
expansion expenses as low as possible and buying used is one of the best
ways to do this. [The other way is barter.] If you do buy something
new, it should be with a great deal of thought on why it has to be new
and not used. Again, if the customers see it, it only needs to LOOK like
it is in good condition and that's it.
Good luck!
Scott Jensen
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