Looking for a mentor for food business

[keelba]

Hello all. I am now attempting to start my 4th business after 3 failures. I came up with the idea for this business after reading MJ's book. I know it is not the most preferred type of business he recommends but I think it still fits the model of selling lots of product to lots of people.

Anyhow, I have what I think is a good product and a framework for a business plan I have a lot of holes in my plan that I need to fill in. I have posted some questions here on the forums hoping to get some guidance but I am also hoping I could find someone to help me with the things I don't even know to ask about yet.

I tried looking into SCORE but it doesn't seem there is anyone available who knows the food industry. I am currently reading a pretty decent book (GOOD FOOD, GREAT BUSINESS: HOW TO TAKE YOUR ARTISAN FOOD IDEA FROM CONCEPT TO MARKETPLACE by Susie Wyshak) but as I am reading I am getting more questions than answers.

Does anyone have any advice on this issue? Am I going to have to go through the school of hard knocks or is there a better way?

Thanks,
--Kevin

 

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[Scot]

What exactly are you trying to do in the food industry?

I'll tap @MidwestLandlord in here as he has direct experience, but if you're looking into restaraunts, stop. If you're asking for mentirship, that's a pretty good sign that you don't have the experience in the restaraunt industry to successfully start a business in this space. Margins are horrible and failure rates are astronomical.

As far as food products go, it's difficult.

Give us a little more info here and we can try and help out.

Restaurant? Food product? Energy drinks? Frozen steak salesman?

 

[Waspy]

Another one.

Am I going to have to go through the school of hard knocks

Yes. It is the best school around.

 

[fhs8]

You need a mentor because you have no idea what you're doing. You wouldn't open a construction company when you don't have a clue about construction so you shouldn't open a food business when you don't know much about food. Fact is that real successful people won't be trying to make a living by mentoring people with few exceptions.

I would avoid opening a business until you know enough that you no longer need a mentor.

What sector were those 3 business failures in? Please don't tell me it's food...

 

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[G-Man]

I'm part of a packaged snack food company, and I can answer basic questions - if it's packaged food. Restaurants, etc, are a different animal.

Food is a difficult business to make your bones in, but the high barriers to entry mean that the people that do well at it often sell out at very high multiples. I'll tell you, I've been involved in several completely different industries, and the grocery business has the most brutal cash cycle I've ever seen. Food distributors like Kehe and C&S are pirate ships, and no bank wants to use your branded food product as collateral for an ABS product, which means you have to look for expensive sources of capital.

If you want to do it because you see a play in the market, a need that isn't being met, there is a lot of opportunity. Just want to make sure you're looking at it with both eyes open.

Good luck.

 

[MidwestLandlord]

Susie Wyshak's book and blog are about packaged food being taken to market via grocery stores or ecommerce.

She has an article about Amazon's snack line here: Amazon Primed to Take a Bite Out of Snacks | FoodStarter Food Business Strategies & Stories (@G-Man might find it interesting)

So I am assuming this is not about opening a restaurant?

 

[G-Man]

Susie Wyshak's book and blog are about packaged food being taken to market via grocery stores or ecommerce.

She has an article about Amazon's snack line here: Amazon Primed to Take a Bite Out of Snacks | FoodStarter Food Business Strategies & Stories (@G-Man might find it interesting)

So I am assuming this is not about opening a restaurant?

OP has some other posts. He's planning to start a branded pickle product.

Had to know Amazon would start private label foods once they got Fresh into enough markets. I think in 10 years you'll be driving down the road in your Amazon private label hybrid car, talking on your Amazon private label cell phone, discussing dinner plans with your Amazon private label android girlfriend.

 

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[keelba]

No I am not opening another restaurant. I've learned my lesson on that one. That was the first business I started.

Second business was a real estate investing business focused on sub2 properties. That didn't go so well. I ended up only buying one house and that ended up costing me so much I could never acquire the next one. That lasted from 2008-2011 when I finally threw in the towel.

Then in 2011 I learned about Bitcoin. I fell in love with the concept and saw it then, and still see it now, as a technology that will eventually take over the world. I created a business based on a few hour long class where I'd teach people all about Bitcoin, what it is, how to use it, where to use it, how to set up a wallet, etc., etc., and afterward I'd offer to directly sell them Bitcoin at a 10% markup. I did a test run and with little effort and in a short amount of time, managed to get 5 people to show up and in the end, sold $2,500 worth of Bitcoin and made $250. And then I learned about money transmitter laws, which put the k'bosh on all my plans. That was business number 3.

In 2013 it looked like the real estate market had taken a turn and I decided to give it another run. I managed to flip one house but never found another property to buy.

Then several months ago I read The Millionaire Fastlane and spent several months tried to think of a business I could start that I felt passionate about and could grow into, as opposed to, say, a restaurant which I had to quit my job for and spend my entire life savings on. I decided that I wanted to make and sell pickles, not just any old pickles, though. My brother is an excellent foodie and together we have come up with some very interesting flavors, things no one has ever tasted before.

So to answer your question, no this is not a restaurant business, it is a packaged food business. I do realize that the grocery business can be a nightmare to deal with. This is why I need a mentor. Long term, I either want this product on every store shelf in America or at some point I'd accept an offer for a fair buy out. A restaurant takes a huge investment and a commitment at such a high level just to get started. With this business, I can grow in phases. It shouldn't take very much of an investment in money or time to create this product and start selling locally. The cottage food law in Texas will help tremendously with that. Once we've refined our systems we can try to get to the next plateau. But I still think I need a mentor to help avoid the pitfalls I don't even know of yet and how to deal with those pirates in those infested waters.

Thank you all for your replies so far.
--Kevin

 

[Justin W.]

Hey keelba, have you made much progress since your last post? I'm interested to see how your business is doing.

Edit: Most counties have a local Small Business Development Center that might be able to help you.

You also mentioned the book "Good Food Great Business: How to Take Your Artisan Food Idea From Concept to Marketplace" by Susie Wyshak, I was wondering if it helped you at all, since you mentioned it raised more questions than answered.

 

[Scot]

Hey keelba, have you made much progress since your last post? I'm interested to see how your business is doing.

Edit: Most counties have a local Small Business Development Center that might be able to help you.

You also mentioned the book "Good Food Great Business: How to Take Your Artisan Food Idea From Concept to Marketplace" by Susie Wyshak, I was wondering if it helped you at all, since you mentioned it raised more questions than answered.

Not sure he's coming back. He hasn't been around here since January. I'm in the food business now ironically, so if you want to chat, let me know.

 

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[Justin W.]

Not sure he's coming back. He hasn't been around here since January. I'm in the food business now ironically, so if you want to chat, let me know.

I'm wondering how to go about producing my first prepackaged food product to bring to the market. I have a great idea, I've studied the market for my product which is virtually untapped since nobody is producing anything close to what I want to make, and what little does come close isn't very good. My idea isn't new, it's just a unique spin on a time-tested product (Think energy/protein bars).

I've been watching @juanalou 's thread on his Satisbite company based in France, I've been wondering how to bring my idea to fruition in the US. Once I have a good name for my product I'll file for S or C corp paperwork and build a website for it, hopefully find some investors via Instagram & other sources (still researching those other sources), and I plan to sell to Gyms, Yoga studios, corporate cafeterias such as Google first, then I'll try and hit the natural food stores such as Whole Foods, and eventually the grocery & drug stores, such as Albertsons, Safeway & Rite-Aid. Based on my market research, if I can grow the company quickly enough I could have 7 digits in sales by year 3 and at least double it every year, and that's precisely what I aim to do.

In regards to producing my product, should I just fine-tune the recipe in my own home kitchen, or hire a lab like juanalou did? Are there other options I've overlooked? How might I go about finding a company to produce the product when I have a final recipe?

Edit: I didn't mean to hijack this thread, I just can't figure out how to send private messages yet
Oh and if juanlou reads this, please don't freak out, my product shouldn't compete with yours as I'm not making a vegan meal replacement.

 

[Scot]

I'm wondering how to go about producing my first prepackaged food product to bring to the market. I have a great idea, I've studied the market for my product which is virtually untapped since nobody is producing anything close to what I want to make, and what little does come close isn't very good. My idea isn't new, it's just a unique spin on a time-tested product (Think energy/protein bars).

My first thought is, does the industry need another protein bar? What steps have you taken to study the market? Have you actually talk to people who are potential he buy your bar? Not just friends but random people?

I've been watching @juanalou 's thread on his Satisbite company based in France, I've been wondering how to bring my idea to fruition in the US. Once I have a good name for my product I'll file for S or C corp paperwork and build a website for it, hopefully find some investors via Instagram & other sources (still researching those other sources), and I plan to sell to Gyms, Yoga studios, corporate cafeterias such as Google first, then I'll try and hit the natural food stores such as Whole Foods, and eventually the grocery & drug stores, such as Albertsons, Safeway & Rite-Aid. Based on my market research, if I can grow the company quickly enough I could have 7 digits in sales by year 3 and at least double it every year, and that's precisely what I aim to do.

Woah, slow down there killer. You're thinking way too far down the road.

Do you want to have an idea of what your company will look like in 5 years? Yes. But don't try and achieve that from day one.

Don't even think about investors. You're not a tech startup. You're a protein bar. If your company cannot survive by bootstrapping, it won't magically survive with investor capital.

Back to my earlier question. How do you know people in gyms and yoga studios will want to buy and eat your product? Also, getting into retail stores with distribution is extremely hard and extremely complicated. That does not need to even be close to your focus right now. Also, you probably don't need to worry about incorporating right now. Starting with an LLC will most likely be easier and make sense of all the company is small.

For me right now, I haven't even started the paperwork for an LLC, a bank, or even a PO Box. Why? Because there's no point in bogging myself down with all this administrative stuff if I don't actually have a product to put in people's hands yet.

In regards to producing my product, should I just fine-tune the recipe in my own home kitchen, or hire a lab like juanalou did? Are there other options I've overlooked? How might I go about finding a company to produce the product when I have a final recipe?

Edit: I didn't mean to hijack this thread, I just can't figure out how to send private messages yet
Oh and if juanlou reads this, please don't freak out, my product shouldn't compete with yours as I'm not making a vegan meal replacement.

You don't have the money for a lab. I'm being honest. Most food scientist won't talk to you unless you're willing to spend at least $10,000 minimum per product.

It all depends on what your product looks like. It would be a good idea to get your recipe as close to perfect in your own kitchen as possible. However, you won't be able to actually make the final product in your home kitchen. There may or may not be cottage laws in the state where you live, but most cottage laws only apply to anything below $15,000 in annual revenue. That is not your goal.

Most likely, you will finalize your recipe, and need to find a commercial kitchen to produce it. I would recommend starting by producing it your self in a commercial kitchen. You do not need a copacker and less you have massive scale or it is a product that is not easily made it by hand.



The first thing you really need to do, make some test runs of your food. Go rent a booth at a local farmers market, and get out samples or even trying to sell them. If you go to a gym, talk to that manager and see if you can hand out samples there. Essentially, go to where you think your customers live, and try and sell them your product. You need to have real interaction with customers to find out if they like it, what you can improve, and if people are willing to buy. Once you have solved this problem, then you can worry about scaling.

 

[Justin W.]

My first thought is, does the industry need another protein bar? What steps have you taken to study the market? Have you actually talk to people who are potential he buy your bar? Not just friends but random people?

There isn't an energy/protein bar like this in the industry that is either marketed correctly or does it well. I've researched very similar products, including recent companies that have almost pushed the quality to where I want mine to be at. One company in particular grew their sales to over $30 million in 5 years, but they didn't push their quality far enough. I have made my product before, I've sampled it to people, they tell me it's fantastic. This has only been very few people, but everybody can't get enough. They would love to have that quality available to them in the marketplace. Not only that, there are loads of blogs out there of people making this in their home, and the good recipes are all 5 star rated.

Don't even think about investors. You're not a tech startup. You're a protein bar. If your company cannot survive by bootstrapping, it won't magically survive with investor capital.

The reason I mention investors is because one similar company mentioned that if they had not found investors during peak growth periods of their company, they likely wouldn't have been able to grow exponentially the way they did.

Back to my earlier question. How do you know people in gyms and yoga studios will want to buy and eat your product?

There isn't anything like this available to them. They rely on what is marketed to them as energy & protein bars, which usually end up having more sugar than protein. People need quality protein but they can't get it off the shelves. My bar is based off quality protein and no added sugar. I intend to deliver it in an attractive package, a quality product that tastes good to everyone, and can easily be snacked on anytime. I'm a health-food junkie myself, I've been rather irritated that I can't get what I need from the stores, or even online. If I had something like this available post-workout, it would make life much easier.

For me right now, I haven't even started the paperwork for an LLC, a bank, or even a PO Box. Why? Because there's no point in bogging myself down with all this administrative stuff if I don't actually have a product to put in people's hands yet.

It all depends on what your product looks like. It would be a good idea to get your recipe as close to perfect in your own kitchen as possible. However, you won't be able to actually make the final product in your home kitchen. There may or may not be cottage laws in the state where you live, but most cottage laws only apply to anything below $15,000 in annual revenue. That is not your goal.

Most likely, you will finalize your recipe, and need to find a commercial kitchen to produce it. I would recommend starting by producing it your self in a commercial kitchen. You do not need a copacker and less you have massive scale or it is a product that is not easily made it by hand.

Thanks, I'll have to finalize my recipe & make it in a commercial kitchen, as cottage food laws in my state prevent me from selling this product at all. I sincerely appreciate your help!

Edit: I might have to make certain varieties that are "No sugar added." I'll know for sure when I finalize a first recipe

 

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[juanalou]

I'm wondering how to go about producing my first prepackaged food product to bring to the market. I have a great idea, I've studied the market for my product which is virtually untapped since nobody is producing anything close to what I want to make, and what little does come close isn't very good. My idea isn't new, it's just a unique spin on a time-tested product (Think energy/protein bars).

I've been watching @juanalou 's thread on his Satisbite company based in France, I've been wondering how to bring my idea to fruition in the US. Once I have a good name for my product I'll file for S or C corp paperwork and build a website for it, hopefully find some investors via Instagram & other sources (still researching those other sources), and I plan to sell to Gyms, Yoga studios, corporate cafeterias such as Google first, then I'll try and hit the natural food stores such as Whole Foods, and eventually the grocery & drug stores, such as Albertsons, Safeway & Rite-Aid. Based on my market research, if I can grow the company quickly enough I could have 7 digits in sales by year 3 and at least double it every year, and that's precisely what I aim to do.

In regards to producing my product, should I just fine-tune the recipe in my own home kitchen, or hire a lab like juanalou did? Are there other options I've overlooked? How might I go about finding a company to produce the product when I have a final recipe?

Edit: I didn't mean to hijack this thread, I just can't figure out how to send private messages yet
Oh and if juanlou reads this, please don't freak out, my product shouldn't compete with yours as I'm not making a vegan meal replacement.

Hi, we didn't hire a lab, we partnered with a bio tech team in Spain (the country next to France, where I am from ). Our product is not a vegan meal replacement, just a meal replacement, it being vegan is just an added value, not our main marketing point.

I would suggest you make the recipe and fine tune using your kitchen and then find a manufacturer that can make it for you. Good luck!