My wife Dianne and I are in the same position. We have located a 1200 sq ft space in a shopping center with good foot traffic due to the county library located just a few doors down. People have to go past the shop to get to the library. Our model is currently focused on wholesale with a retail kicker ( 80% wholesale/ 20% retail). The reason we went to a more retail type space was because of the commercial real estate market. Vacancies are up and prices are relatively low. We can get into this space for a slight premium over a commercial kitchen space. We were also able to work with the landlord on some of our required buildouts which include a grease trap. This may be something that you want to discuss with your broker.
We are meeting with our designer (a friend that is doing the design for chocolate) to develop the retail space and the kitchen space. We are using the landlord's architect to assist with the county regs and codes. If you are interested we will keep you informed of our progress.
This is a really exciting time for us and we know it will have its issues but we are getting closer to our dream with this process. Hope you are pumped and ready for the challenges.
I was in the same position with you and Andy and recently opened a shop. I have a similar plan for the revenue source (wholesale > retail) and I am wondering what wholesale sources you are considering. Is it more like corporation gifts, wedding, or catering or actually selling chocolates to other retail sellers? I think probably it depends on state or city and sometimes the zoning for whoesale is different from retail stores. It might be a considering point for the location for Andy.
We do both. We do corporate sales to firms in town looking for special/promotional/loyalty/gift/sales programs. We also do retail/wholesale to local markets (small specialty indie grocer-types), wine shops, etc. We sought out these revenue streams in addition to our market sales as a way to go ahead and get us mobile. We see a new client come on about every other month at this point and know we can accelerate this once we have a shop of our own.
The shop we are working on now is to be our production center and chocolate showroom. We've been finding a number of places from the 980-1400sft and there are lots of nice amenities and upfit allowances out there now so we're hoping to get most of our buildout paid for.
I've found very little help online for best practices for building out a shop. In the end I think it will be our workflow + designer + architect that does it but I was hoping to have some good prior art per-say to start the process on a more solid foundation. Cest la vie.
I don't think we'll run into anything too special for our region since the kitchens we currently work in are up to health code/inspections and our shop will follow the same guidelines. Although I am hoping we end up more in the agriculture dept than the health dept but that just depends on who gets our case and how well we explain things.
We're currently getting our plan & finances reviewed by peers, SBA, & SCORE so in the next few weeks I should have a good gauge on whether we are ready for this step or have to go to an ancillary plan.
We are also interested in targeting the corporate gift market in our area and possibly also local restaurants. I'm sorry -- I'm still so naive -- but how did you go about breaking into your local corporate market? We are meeting with someone from SCORE today to give us some guidance about our plan and finances, perhaps some guidance also about real estate -- what ever he can help us with. We aim to open with a strong business plan, so everything I am finding on this whole site has been terrific.
This is a fun and interesting question, in part because there are a lot of issues that are overlooked. I've seen people work in space as small as 350sf so I know it can be done. It depends on volume of production, the number of different types of products being made, and the variety of packaging options. The smaller the space it's important to think about a smaller product range and fewer packaging options.
Unlike a home kitchen, you're not interested in creating a work triangle in a commercial chocolate kitchen. What you need to do is accommodate a number of different functions going on more or less simultaneously - usually by more than one person at a time.
Key concept #1 ) Concentrate on workflow from the point ingredients come into the kitchen until the point that finished work leaves the kitchen. You might also want to consider whether people using the kitchen are left handed or right handed. Paying attention to handedness can improve workflow dramatically. I've seen many kitchens that were optimized for lefties but staffed by righties and productivity suffered.
Key concept #2 ) Pay a lot of attention to temperature, humidity, and refrigeration. If you can, have your sink and dish/warewasher as far from from your production space as possible - the heat/humidity can ruin work. If you can, use tabletop induction burners and electric convection ovens (ideally one that ventilates as little hot air into the space as possible, e.g., Montague). You don't want to invest in the building (i.e., fire suppression and ventilation) where you don't have to. Make sure the AC system is sized correctly and get a dehumidifier.
Key concept #3 ) A major bottleneck is crystallizing the chocolate. Investing in a purpose-specific chocolate holding cabinet can double or triple production in the same space. It's worth every penny you spend - and spend to get a good one that also enables you to control humidity within the cabinet. Speed racks are inexpensive but they are also very slow and unpredictable as the rate of cooling depends on ambient temperature and humidity and how many trays are in the rack. A good cabinet might cost $8-10k. I can't stress this enough ... it's worth every penny and the ROI is incredibly fast.
Key concept #4 ) Opt for under counter refrigeration whenever you can. There is no such thing as too much countertop work space. Vertical units may be cheaper and take up less floor space, but they make the workspace seem a lot smaller and more cramped and the space above them is wasted. If you do go vertical, get narrow equipment and double doors or you are going to learn to hate walking past them.
Key concept #5 ) Keep things off the work surfaces as much as possible. Nothing kills productivity like having to move stuff around constantly to change from one task to another. If you do have something that needs to be moved (e.g., an induction burner, blender, food processor) make space for it on a shelf directly above where it will be used to minimize moving it around.
Key concept #6 ) You want all of the tools - and only those tools - you use all the time in the kitchen and you want them exactly where you will be using them. If you have to cross the room repeatedly to use a piece of equipment or get a tool it's not in the right place. If you only use something once a month, quarter, or year - think three times before making space for it in the kitchen.
Key concept # 7 ) Build all the way to the ceiling making sure to keep delicate stuff away from air being blown directly out of HVAC ducts. Way up high is a good place to store packaging. At the beginning of the day, pull down what you need to take care of the production you've got planned for the day. Any dust that settles can be wiped off before production begins.
Key concept # 8 ) In the kitchen, the only built-in should be the sink. Everything else should be easily movable.
Key concept # 9 ) Forget what code says about the spacing of electrical outlets. You want one GFCI-protected quad outlet, above the work surface and on its own breaker, for every four linear feet of countertop. Place others where you need on the wall above the baseboard for the refrigeration, dishwasher, etc.
As for the retail space ... that requires knowing more about the image of the company and I can't comment on that here.
Thanks for the great insight. As I had mentioned awhile back, we are in the same situation as Andy in developing our plan for the production kitchen/showroom. We are meeting with the landlords on Thurs to finalize the lease agreement. Like Andy we are working with and architect, the landlord and a designer group. Fortunately for us, the designers are friends and will work for chocolate, so we are leveraging off of that.
Bcause we could not find an existing commercial kitchen, we are going to have to do our own buildout with grease trap, three station sink, hand sink, washable surfaces, etc. We were looking at a 900 sq ft space but were afraid that after we made the investment for the kitchen that we may outgrow it in a relatively short period of time. We opted for the 1200 sq ft space for both the additional space and for the better foot traffic. Even though we are focused on wholesale, it's not a bad thing to have good foot traffic going by the front door.
Here in Tucson the commercial real estate market is in tough shape so we were able to negotiate a deal that would not have been possible a few years ago. This is also true with the buildout. We are finding the contractors willing to work with us on what use to be considered a small project. For these reasons we went for the larger space and are anticipating opening the shop late summer, early fall.
We are now in the process of looking for our production equipment. We will be doing both molded and enrobed ganaches, so we are looking for a guitar, molds, etc. This seems to be tougher, because of the small market and whenever we see anything its usually already been snatched up by someone. We'll keep banging away at it.
Andy, we will keep you informed as we go through our process and we wish you all the luck.
Thanks for the thoughts Clay. We've been discussing a lot of what you bring up and you've got some great solutions that we were puzzling out.
One thing we had question for you is the use of Lowboys. Bill and I are both around 6'3-6'4 and find that the consistent use of Lowboys to be a pain. You also have to step clear out of the way of the doors to open them, no cracking it while you work in front of it to grab things.. While it may obviate 6 steps towards an upright is the time saving that much more critical? We haven't been able to wrap our head around that.
Work surface is always at a premium and while it may not seem like a lot, let's say that it takes an extra 30 seconds per mold to put things down, move across the room, open the door, put the mold in, and return to the work area. Now multiply that by 100 molds a day. That extra hour can be put to good use doing other things - especially with looming deadlines.
It takes a lot less time to step back, open the door in front of you, and put the mold in.
If the counter height is too low for you, then put the cabinet on blocks to raise it.
This all makes a lot more sense in a small confined space with ceiling heights under 9 feet. Vertical units just make the space seem even smaller - and you can't efficiently use the space above them.
You know, it all really depends on the space you have. If the ceilings are low and there is a lot of equipment and the aisles are narrow, then anything big and tall in the space will make the space seem even more cramped - especially if the big, tall, object is dark (including stainless steel).
I personally don't like working in spaces that seem cramped, where movement is impeded. Not only does productivity suffer but I find that after a while I am reluctant do go to work. You should do everything you possible can to avoid this.
There are ways to compensate. More space (expensive and a recurring expense) and natural light (could increase utility costs) are two of them. A well designed task-lighting plan to supplement ceiling (probably fluorescent) fixtures is another, but this will probably also affect utility costs. Keep in mind that you want to do as little as possible to the space that you can't remove and take with you when you outgrow the space. Spend as little as possible on built-in improvements.
The point is to carefully consider workflow and placement as well as the impact on capital costs versus operating costs. It makes NO sense to work hard to save $1000 in capital expenditure if it means increased operating costs of $100/mo. In less than a year you're underwater on that decision.
I am presently trying to put together a business plan. At the moment, I am pricing equipment. However, I am having a hard time finding suppliers of chocolate holding cabinets. Could you please suggest where I might look for items such as the lowboy holding cabinets, induction burners, enrobers, that sort of thing. Are there suppliers who specialize the the kind of equipment chocolatiers use? many thanks!