Good idea?

[HarryF1]

Hi all, I am currently working on starting an online bakery totally gluten free I already have the web page built, products tested, marketing plan in place and sufficient funding. I have the opportunity to rent a small premises in an industrial estate which I would make into a small kitchen with everything I needed (I would need to buy all the equipment as well.) Is it wise to take on the rent of a place and all the bills that come with it before I even have a customer? I have a job at the minute also which I obviously won't leave yet so I will have some form of income coming in to start with. Any advice would be appreciated

 

[iArtist]

Will someone else be working in the unit as you have a job?

 

[HarryF1]

Not to start with it will be just me evenings and weekends

 

[KeithP]

Is it wise to take on the rent of a place and all the bills that come with it before I even have a customer?

In my opinion, no.

Who are you hoping to sell to? Supermarkets, other businesses, consumers?

 

[HarryF1]

To start with consumers through the website and I will look to sell wholesale to other companies also

 

[businessfunding]

What research have you done?

What is your customer base (accepting the obvious)?

Have you done any cashflow projections?

 

[rayvellest]

I would seriously consider trying to get some B2B sales, such as it was suggested by KeithP above. If that's not possible, try to get some letters of intent of a reasonably big purchase before moving into a new rented building, that makes a lot more sense.

 

[HarryF1]

I have done research and identified the specific customers as well as the market as a whole, I have also started monitoring all cash flow and budgeted for the next year.

I think getting a deal to sell B2B would be a very good idea I have enquired with a few companies already I just need to keep on with it I guess it's hard to find someone to commit so early at this stage.

 

[Andre1122]

Hi HaryF1

Congratulations. You are at least now taking the first steps to be your own Boss.

I have seen to many eager Business People spending and burning cash during startup. Optimism and enthusiasm takes over and the cheque book start vibrating like a valcano.

Your biggest exspence wil be:

1. your place of work, monthly lease, dreaded business rates (do not know why you have that fee, you are getting nothing in return apart from garbage removal)

Once you have signed the lease you are bound - eeven if you are closing down later

2. Equipment: bakery equipment is dear to buy but worth nothing when you want o resell it.

3. Your time: Time is the most precious of all, doing your day to day and then bake in the evenings, early morning up to go and do B2B deliveries, handling packing and delivery for your website sales.

Do not read the above as being negative - please read on:

Maybe a different way to look at the venture? Maybe renting time at another bakery in the beginning or sub contract your orders for the time being while you are building up your customer base. Granted your profits might not be that high right now but remember you are playing for the long haul.

It is always prudent to start within a radius of 3 miles around where you are. If possible without the headache of the above exspenses. Design a nice menu and deliver that to homes around this area.

People love fresh baked produce and if you can deliver at the same prices it will cost for them to go and buy (let say bread) they rather have it delivered in the morning. Now you are killing a few birds at the same time, you are building a customer list, you are developing your bakery alythough for now the baking is done by someone else, You have time at home. I am certain between all your customers their will be clients who works at restuarants, sandwich bars and so on. The word will get around and beforeyou know it you will have your first B2B customer.

Now you can decide to take up rent and other things and bake yourself. You have a stable rounds with your clients, and now you have B2B, you will quickly see when you reach that break even point - sales, potential overheads, costs for material and profit. Now you can decide to start out on your own

This is just an idea

 

[HarryF1]

Thanks! I am currently enquiring at local places to sell my products which will help in the long run to build up a customer base. Concentrating on areas 3 mile from me is a very good idea saves all those sky high next day courier costs!

 

[Mike W]

I have the opportunity to rent a small premises in an industrial estate which I would make into a small kitchen with everything I needed (I would need to buy all the equipment as well.) Is it wise to take on the rent of a place and all the bills that come with it before I even have a customer? I have a job at the minute also which I obviously won't leave yet so I will have some form of income coming in to start with.

Where will you bake in the meantime? How long can you cope there before larger premises will become necessary?

If you can cope for a while, I wouldn't consider it. If you can't then clearly you have to. Whenever you do though, whenever that is, make sure you allow enough time to enable you to move without interruption to the business.

 

[HarryF1]

Hi HaryF1
I have seen to many eager Business People spending and burning cash during startup. Optimism and enthusiasm takes over and the cheque book start vibrating like a valcano.

Couldn't agree more, that's why I needed to set a proper budget or it would have got out of control

 

[HarryF1]

Where will you bake in the meantime? How long can you cope there before larger premises will become necessary?

If you can cope for a while, I wouldn't consider it. If you can't then clearly you have to. Whenever you do though, whenever that is, make sure you allow enough time to enable you to move without interruption to the business.

From home to start with but its a bit restrictive with space, its definitely big enough to work in just not that much spare room