Diary of a Small Business Owner

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Business Help and Resources for the Specialty Food Industry

This lens shall provide small business resources and an overview of business ownerships and what it takes to run a small gourmet food company. Furthermore, I intend to chronicle past and current business events: pratfalls, successes, trials and errors, and whatever will occur in my business life. Find food business news, food business reviews, business links, natural foods, salmon recipes, instructions for duck cooking, and small business help. As part diary, this lens will be an ongoing work of progress, so check back often and enjoy the ride. WorldClassMasterpieceBadge

My background 

I was born and raised in Munich, Germany, emigrating to the US in 1981. After a few years of line-cooking in restaurants, I decided to get a formal education. Upon my graduation from chef school in 1993, I specialized as a pastry chef for a number of restaurants and catering companies. In 2001, I made the jump into self-employment, starting my own company called "Sweet Venus Delights".

My first products 

My chocolate truffle cake has been a big hit during my restaurant days, so I decided to start my business with it. I made several cakes in my home kitchen, sliced them up, packaged them in "clam shell" containers, and called everyone I knew with my offer.

To make a long story short - all I gained from this was weight. For a while, I didn't eat much of anything else but my leftover product.

And I learned my first business lessons:

1. Other people are NOT automatically as excited about my product as I am.
2. Without proper calculations in terms of food cost, labor, packaging and advertising, I might not make any decent profit.
3. A food business needs to have a legal place of production and a number of licenses.

Start right - be legal! 

Here's a number of resource links to learn more about start-up planning, legal conditions and licenses needed for a small food business.
Small Business Administration
Small Business Administration (SBA) site with a wealth of info on business planning - a roadmap for starting your business.
Entrepreneur.com
Another resourceful site by Entrepreneur.com
IRS
Important IRS site about business structures, ID numbers, taxes, record keeping, etc.
Business loans
A good site to begin with your shopping around for a business loan.
Commercial kitchen
This is actually the site of a co-packer, which is another way to go with your product if you don't want to produce it yourself. Here's good info on professional kitchen requirements.
Gourmet Resources
This is my co-packer. Gourmet Resources not only produces my AGASWEET flavored agave nectar, they also work as my management and marketing company. And they're doing a marvelous job!
Search for kitchen space
Interesting blog about someone's experience with the search for commercial kitchen space.
Food manufacturer's license
Information for food manufacturers on the site of the Texas Health Department.
Liability insurance
This is important! Every food manufacturer should have liability insurance. When you start selling in the big leagues - Whole Foods Market, etc., theses companies won't accept your product without prove of insurance.
You need at least a 1 million/2 million policy and that can be expensive for a start-up. Some insurance companies charge $1,500 or more per year. I found a super deal with The Hartford Group, at $350/year!
Legal business name
Government guide to business name law.
Sales tax
Depending on your business, you might or might not have to pay sales taxes. Here's relevant info for the State of Texas.
Mobile vendor's license
If you want to sell from a cart, truck, or tent (at a farmer's market, for instance), you must have a current vendor's license. Here's an application for the City of Austin/Travis County.
Food manager certificate
This is a required food safety and sanitation training in all states. Here again, info from the TX Health Department.

Health Insurance for the Self Employed 

We all know that health insurance can be expensive. In my case - I'm almost 59, with a heart attack, 2 years ago - it's unaffordable. But if you're younger and in good shape, here are some links with good information for you.
Self Employed Web
Info on health insurance, savings accounts, retirement plans, and more.
National Assoc. for the Self Employed
Tax seminars, business resources, health center, legal help - lots of info.
American Diabetes Association
Individual coverage, high-risk pools, prescription assistance, etc. Many options even for older folks.

I hate to do this! 

The most annoying aspects of a small business

May it be book keeping, taxes, office work, running errands, customer contact - check out the list and vote up what you hate most about running your own biz!

1

Vote Up
Vote Down

IRS

Income tax, sales tax, self-employment tax, proper more...7 points

2

Vote Up
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Health insurance

Are you kidding?6 points

3

Vote Up
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Financial insecurity

Slow days are bad, for the bottom line and for the more...4 points

4

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Some people drive me nuts!

Certain customers can be a pain in the neck. Your more...2 points

5

Vote Up
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Competition

As soon as I came up with this great product, anot more...2 points

6

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Long hours

I can't even remember my last free weekend!2 points

7

Vote Up
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Sales calls

I'd rather call my mother-in-law!2 points

8

Vote Up
Vote Down

Legitimizing my biz

Manufacturer's license, vendor's license, name reg more...1 point

9

Vote Up
Vote Down

Promotional expenses

I ain't making any profit if I have to pay for all more...0 points

10

Vote Up
Vote Down

Paid holidays, vacations, sick-leave?

Dream on.0 points

A new start with new products 

Sometime in 2002, a cake competition was held in Austin. I went and I had an epiphany! This is what I wanted to do: create beautiful cakes with elaborate sugar paste decorations. One of the judges at the show, Kerry Vincent, a world-famous sugar and cake artist, took me under her wings and pointed me in the next directions. There was so much to learn, and I absorbed everything I could for the following months. I even participated at the Sugar Art Show in Tulsa, OK, and went home with a 2nd and a 3rd place ribbon in my categories. While in Tulsa, I also took part in a 2-day workshop with the incredible Margaret Braun from NYC, a cake designer to the stars.

Along with creating cakes for weddings and other celebrations, I learned a lot about sugar paste (rolled fondant) designs and

Beautiful cakes 

The first 15 pictures show some of my cakes, followed by a photo of myself with Margaret Braun, and a few impressions from the 2002 Sugar Art Show in Tulsa, OK.

curated content from Flickr

Cake decorating: Fun with Fondant 

A great demonstration of how to use sugar paste to create a beautiful cake.

Cake Decorating: Fun With Fondant

FYI: I am making a DVD with Robin showing how to make all kinds of fondant cakes. If you'd like to know when it's available, send me a message thru my channel page. Thanks to everybody! =) Fondant adds a special zest to cakes, pastries, and candies. See for yourself as a cake decorator creates fun with fondant. Recipe from the episode: Chocolate Expresso Pot de Créme To see more stories, get recipes, and links to additional resources, go to: http://cookingupastory.com/

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Cake Books on Amazon 

I learned a lot from these books!

These great cake "bibles" have clear tutorials and lots of step-by-step instructions to make beautiful cakes and pastries. I've worked with all of them, with great results (I think).
Romantic Wedding Cakes (Merehurst Cake Decorating)
Romantic Wedding Cakes (M...
Cakewalk: Adventures In Sugar With Margaret Braun
Cakewalk: Adventures In S...
The Cake Bible
The Cake Bible
The Pie and Pastry Bible
The Pie and Pastry Bible
The International School of Sugarcraft: Sugar Flowers
The International School...

Expanding my business 

Yikes! I need more cash!!!

Maybe Austin was not the right place, at that time, for my cake creations, maybe I didn't market myself in the right way - I just couldn't generate enough income to make a decent living with my sugar art. I felt like I needed to add something - one or more popular items, and a new outlet to sell them.

We have one of the best farmers markets in the country, right here in Austin: the Sunset Valley Farmers Market. I decided to sell cakes, cookies, chocolates and seasonal pastries such as Texas Hill Country peach cobblers at our local market.

I needed a tent, tables, table cloth, signage, banner, and - a mobile vendor's license, a food manager certificate, a registered business name with the sales tax office, a manufacturer's license, and liability insurance (see the link module above). The market director charges $30 for a 10' x 10' spot, every Saturday from 9-1.

Soon I had a thriving weekend business with many regular customers. Sure, there are some bad days, depending on weather, competing events around town, or other factors. Overall, though, I could add between $1,000 and $2,000 to my monthly income. And a farmers market is a great place to try out new products and test their viability for whole sale to other businesses.

Canopy deals on eBay 

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eBay

A New Direction 

And a new product is born...

Many farmers market customers are very health-conscious. I heard quite often a request for sugar-free pastries. A college recommended that I try a new, natural and healthy sweetener - agave nectar. I followed her advice and offered peach cobblers and nutty energy cookies without refined sugar or artificial sweeteners. Agave nectar is very low-glycemic, which means it absorbs slowly into the blood stream and doesn't cause a sugar rush. Even most diabetics can use it for their sweetening needs. It's also 1.4 times sweeter than sugar, so you need less and you can save some calories and carbs right there. Sounds good? Well, it is! Really.

Soon, my customers asked me to sell them not only my agave nectar sweetened products, but also the syrup itself. At a farmers market, one can usually only sell what one has grown or produced themselves, so I couldn't satisfy this customer request unless...I had an idea: What if I flavored the agave nectar and rebottled it for sale? I had just recently found out about the healthy qualities of essential oils, and certain varieties are even recommended for consumption. It seemed to be a great concept: take a natural sweetener and combine it with high-quality, healthful flavoring ingredients, for a superior taste experience. Well, as they say - the rest is history. My new product was born and I named it: AGASWEET flavored agave nectar. It was a huge success from the start.

Below you will find a short video with more in-depth info on my new product before I continue further down with my experience as a specialty food entrepreneur.

One-person-business success 

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AGASWEET on YouTube 

This is a brief introduction of Agasweet flavored agave nectar.

AGASWEET The Crash Course

Slide show with info about AGASWEET flavored agave nectar. What is it? How to use it, etc.

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curated content from YouTube

Agasweet 3-pack deal 

This is a good deal on 3 bottles of Agasweet with the option of buying both lots (6 bottles) for one shipping price of $8.95

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eBay

New Product - New Suppliers 

Resources needed to produce AGASWEET

First, of course, is the syrup itself. I needed a reputable purveyor of certified pure, organic agave nectar at a reasonable price: Madhava Honey. Next, I had to find essential oils suitable for consumption (GRAS). Then I needed containers: high-density plastic squeeze bottles and caps, resistant to any corrosion by the oils. I also needed to seal the openings to prevent leaking. Finally, I had to create an effective label displaying all the necessary product information and being in compliance with applicable organic label laws. I found a great label company here in Austin, TX: Hyde Park Label. They took the time to explain the printing process to me, so I could make a better decision in terms of colors and quantities. And - they gave me free barcodes with my order of 7 labels for 7 flavors. Oh, yeah - boxes! Here's a company I've worked with: Victory Packaging.

Any questions, so far? 

There is much more to come below!

Please leave a little note with any questions or comments you might have. If you are interested, further down is my diary with current entries, and all the way down you'll find my final guestbook and a link to "Isle of Squid" with my request for your review of this lens. Thank you so much for browsing and, hopefully, learning something you can use.

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Women in Business 

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Building the business 

The first 2 years

Now I had a professional-looking product in high demand, and my only retail outlet was the Saturday farmers market. Some shop owners would seek me out at the market and ask me if I would wholesale Agasweet, so they could carry it in their stores. I agreed, and soon I had a growing list of clients around town. Here are some actions I had to take to support my wholesale customers:

Samples Of course, people like to try before they buy. But they also like to handle a product, which meant in my case, squeeze a drop of syrup on a taster spoon, notice the viscosity and color of it, and sample the flavor. Customers always like to touch a product, look at it from different angles, press it - just like little kids. Some folks even try to open a sealed bottle. So, it's a good idea to give them something to play with - sample items.

Signage It's fairly easy to make card-size ("shelf talkers") or larger signs and posters with any word processor on your computer. These look even better when laminated.

Flyers/Brochures Also easy to do on your computer. Keep in mind the usually short attention span of busy people. Be concise and to the point. Provide directions to more info on your web site, but keep it brief on printed materials. Pictures and testimonials help a lot.

Customer Service Take care of your wholesale clients. Visit them often, develop personal relationships, exchange old product with new items, offer volume discounts, ask what you can do to support their sales.

Sample spoons and laminators on Amazon 

White Taster Spoon 3
White Taster Spoon 3" (70...
GBC Heatseal H400 6 1/2 Amp Laminating System (1701460)
GBC Heatseal H400 6 1/2 A...

Laminator demo 

GBC Laminator Speed Video

highlights the differnce in speed between a GBC laminator and a competitor machine

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curated content from YouTube

Food Business News 

The Next Level 

Entering the "Big Leagues"

In March of 2007, one of the largest grocery chains in Texas, Central Market, approached me with a request to carry Agasweet in their 8 stores around Texas. I had to make an important decision: Do I want to stay a mom & pop operation (with me being mom and pop simultaneously), or do I want to enter the "big leagues" with a whole new set of head aches, but also the possibility of great financial gains. You guessed it, I chose the head aches. Had to.

So far, my weekly production ran along 15 - 20 cases of product. Central Market wanted to start with 56 cases for the first of their 8 stores alone! That's when I decided to work with a co-packer.

I signed a deal with Gourmet Resources (GR) to produce, market, and distribute my Agasweet flavored agave nectar. GR would order the base syrup and the flavoring ingredients in large quantities, at a much better price than I could have gotten for my small operation. Then they would bottle 200 cases, or so, and charge me for the production. My cost per bottle used to be $2.80. now I could buy it from my co-packer for $2.25. I had to figure the management and marketing fees into this price, but I still got a good deal without any labor on my part. The marketing fees were $1,500/month for 6 months, and a percentage afterwards.

Central Market orders go directly to my co-packer and are handled all the way from there, including shipping and invoicing. There are some additional fees for warehouse storage, invoicing paperwork, and fulfillment. In the meanwhile, several other companies have placed direct orders with my co-packer.

3 months after the product placement with Central Market, we secured a deal with Whole Foods Market, for the entire Southwest and Rocky Mountain Regions. For this we brought in Tree of Life Distributors, who deliver to all WFM's and some 5,000 more accounts across the nation. As the largest distributor for natural and organic foods, ToL could be a powerful ally for us. Of course, with as many items as ToL has in their program, Agasweet has a hard time to break through to the top, unless additional marketing strategies are being applied.

Gourmet Resources participated in the Baltimore EXPO East, and the Fancy Foods Show in San Diego, CA. At these top trade shows, heavy-weight buyers from all over the country seek out new products for their companies. As only one of several co-packing customers of GR, the participation at these shows cost me $2,000/each.

eCommerce iNsights 

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Reality Check!

O.k., however good all this might look - selling in several states, through major grocery chains, etc. - the truth is: my finances are depleted by now. Co-packer fees, marketing expenses, product giveaways, long-term business strategies - all this costs a lot of dough! Something needs to happen soon! Additionally, my wife's year-long illness required major medical expenses, with the necessary surgery still out of our financial reach.

US National Debt 

Looking at these staggering numbers, I feel a little better about my almost maxed-out credit cards and business line of credit. But I think I still worry more about my debt than this government does about their's.

Please give me your opinion... 

A solid mom & pop operation could provide a decent living, although with certain earning limitations. Taking the risk of reaching for the "big leagues" could definitely open the doors to a major cash flow. On the other hand, anything can happen at any time, and the bubble could burst. At this point, I have almost maxed-out 3 credit cards and one LOC, and the cash flow is not very good. We're hoping for many orders from our food show participations, but the stress level is quite high, at the moment.

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Hey, whatever happens - don't give up!

So often in my life have I found myself in a desperate situation. I guess, I'm a risk taker by nature. What I need to remember is that every time something better came out of those challenges. I need to be positive and optimistic. I need to trust the process. I need to be persistent and continue to believe in my product. And everything will be alright.

Please Visit My Website ChefKeem.com 

More recipes, cooking instructions, fun videos and interesting food bits...

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Diary of a small business owner 

Adventures in the specialty food trade

Here I will report my upcoming business events as they occur. I'll update frequently to keep you informed on further experiences and developments concerning my product: Agasweet flavored agave nectar.

Please come back visit and favorite this lense to receive possible squidcasts. Lensroll and rate the lens, and email it to people you know who might benefit from the info above. Leave me a blurb in my guest book with questions or comments. I will answer all inquiries. Have a great life, y'all... - Chef Keem.

3/3/08
Gourmet Resources announced their new business relationship with a brokerage for TX and OK. They will call on accounts that are nor addressed by our huge, national distributor, Tree of Life. Fees for their services shall be paid by GR, my management/co-packer/marketing company.

3/7/08
Thinking about bringing investors into my company, I found great info right here on Squidoo, of course. Here's a great lens on angel investors.

3/12/08
Well, it's been quiet for a few days. I spent many night (and day) hours learning about affiliate marketing. Mr.LewisSmile has great lenses on this subject, and then there is the Squidoo Affiliate Marketing Group. I signed up with ClickBank and placed my first item on my Agasweet lens: The Mediterranean Diet. I'm planning to educate myself intensively on the aspects of internet marketing through Squidoo.

3/15/08
I found a great new tool: Google Suggest. Here you can find out the number of searches for any key words you type in the box. Google suggests similar search words and shows their search numbers. I applied all the new info and updated the tags in my lenses. I also adjusted the text entries in my intro modules and included some of my new key words.

3/18/08
We're working on a custom box for 3 bottles of Agasweet. Some large retailers like Neiman Marcus and the TJMaxx Corp. won't carry a specialty food item unless it comes in some kind of a gift box.

3/25/08
Good news today! Amazon.com has announced their intention to carry Agasweet.

6/5/08
Oops! It's been a long time...
Well, we're restructuring the business. I was apparently underfunded and my management company didn't really consider that in their strategies. I'm starting anew with new partners.

To be continued...

Buy and Sell a Business 

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Fun with Chef Keem in Alaska 

Silly games and antics to entertain my guests at the Driftwood Lodge in SE Alaska.

More of the "Rooster"

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The Rooster

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Chef Moosehitler

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Cooking instructions for duck and wild salmon 

From my Alaska lodge kitchen...

How to cook wild salmon

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How to cook wild duck

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One of my favorite books... 

I love all books by Anthony Bourdain, but this one I couldn't put down. What a great read!
The Bobby Gold Stories: A Novel

The Bobby Gold Stories: A Novel

by: Anthony Bourdain

Amazon Price: $8.64 (as of 12/20/2009)Buy Now
List Price: $12.00
Used Price: $3.00

Release Date: 12/31/1969

Avg. Customer Rating: Amazon Rating

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Some of my many favorite cook books 

These are books that I use often for inspiration, education, and entertainment.
Anthony Bourdain's Les Halles Cookbook: Strategies, Recipes, and Techniques of Classic Bistro Cooking
Anthony Bourdain's Les Ha...
The Cake Bible
The Cake Bible
The Pie and Pastry Bible
The Pie and Pastry Bible
The Professional Chef
The Professional Chef
The Advanced Professional Pastry Chef
The Advanced Professional...

Absolutely Great Cook Books 

Here's a list of outstanding cook books. Let me know which ones you like by voting on their ranking.

Business Help on Squidoo.com 

By some of my favorite lensmasters!

May I have your attention, please?

Have you had some fun, so far? Did you learn something? Got a few useful tips for your own biz adventures? If so, please give this lens a star rating of your choice, lensroll it, favorite it, vote in the polls, and leave a blurb in my guest book. Thank you, Chef Keem

Have you heard of the "Isle of Squid"? 

Featuring the best of Squidoo...

Check out this great site with only hand-picked quality lenses. Add your review for your favorite lenses and submit your own work.

Please use the second link to review this lens. Thank you for taking the time. All the best, -Chef Keem
Isle of Squid
Excellent lenses in all categories, selected by expert staff and waiting for your personal review.
Diary of a Small Business Owner
Please be so kind and review this lens. Thank you so much.

Dear fellow squidooloonies! 

May I ask for your star rating on top of this lens? Did you like it well enough to lensroll and/or favorite it? Would you like to leave a comment or question? I appreciate it all.
Thank you,
-Chef Keem

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About the Author of this Lens... 

Lensmaster chefkeem has been a member since January 29 2008, has rated 2,716 lenses, favorited 2,126, and has created 134 lenses from scratch. Achim Thiemermann donates their royalties to Squidoo Charity Fund and Operation Helmet. This member's top-ranked page is "Best Tres Leches Coconut Macaroons". See all my lenses

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by chefkeem

Hello - I am Chef Keem, creator of Agasweet flavored agave nectar.
Born and raised in Munich, Germany. First career in pop music as A&R Director and r... (more)

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