We're getting ready to sign the lease (we hope) in the next week or so for an 1860 square foot space in a tiny little business/industrial park in the San Francisco Bay Area that we hope to transform over the course of the next couple of years into a successful fine chocolate (bean-to-bar) and artisan confection business.
Clay suggested the idea of starting a discussion thread here on Start-up Central as a way of sharing what we learn along the way with others either already involved in their own start-up or still contemplating jumping in. We really liked the idea -- it fits well with our commitment to always 'paying it forward' in life, and with the idea of one hand up, one hand down (one hand reaching up to accept the help/wisdom of others who have something to offer/share and one hand reaching down offering help/wisdom to those with whom we have somethign to offer/share). We'll share what goes right, we'll share what goes wrong -- open source, nothing held back or edited. We welcome your thoughts, questions and suggestions along the way.
Snapshot of where we are today:
- Custom molds are paid for (~$8k), but on hold until our trademark registration is approved (wouldn't be much fun to have molds that we can't use...). Hope to be cleared to move forward by January.
- $1400 trademark search with Thomson Compumark completed. The attorney has reviewed it and is now in the process of filing the registrations (another $1k +/-)
- We're a newly formed S-corp. (Total legal fees to date, including the above ~$4.5k)
- We've designed our packaging, but won't order it until our trademark clears.
- Leslie is going to be full-time, I'll be part-time (mainly on weekends) since I have a day job that (a) I like, and (b) will let us support/sustain the chocolate business through its first couple of years. We'll hire help as soon as the work load dictates.
- We subscribe to the Lean Start-up approach -- an iterative build, measure, learn process; pivot (change direction) when needed, etc. and to the idea (as articulated many times by Brad Churchill in his posts on this site) that making a profit isn't a 'nice-to-have', it is a 'MUST have'.
- Oh yeah, we make a pretty decent bean-to-bar chocolate. At least WE think so. And so do some (possibly biased) friends, family and co-workers. But we all think our own kids are cute, so just to be sure we're not kidding ourselves about where we really are, we're sending bars out this week for formal 3rd party evaluation (~$1k)
- We plan to spend a good part of the first year perfecting our systems. We're not going to scale to any kind of volume until we've worked the kinks out and are capable of delivering a consistently excellent (and profitable) experience to our customers.
- For manufacturing flexibility and resiliancy we plan on using multiple small scale pieces of equipment rather than single larger volume pieces.
- We know that we don't know what we don't know. We plan to contract with Clay for consulting services, both on the plant layout and on the business side.
- We're utilizing SCORE resources to learn more about the accouting, insurance, legal, and sales and marketing sides of the business, and to make contacts.
There's more, but you get the general idea...
Next major milestone for us is seeing if the landlord will accept our proposed lease addendum and mark-ups. That will be our next post...
David and Leslie
Haha, that's good to know : )
And what would be a good time to contact you about it, via any one of these methods?
Realistically, probably still a couple of months from now -- we need to get our molds and packaging, and we're holding off on launching those orders until we get our final permit. We had our building inspection late this afternoon and have a couple of (HOPEFULLY) minor issues to take care of related to the way that our two water heaters pressure relief valves are drained (specifically, where they drain to) and a permit that we need to pull for some work we did on the sink. Best case it's just some minor plumbing work, worst case it's cement cutting, construction and several thousand dollars.
Two steps forward...
Absolutely spent, in the best way possible, I poured myself off the plane in San Jose at about 1:30am last night (I guess that's technically this morning, not 'last night', right?) -- just back from what I believe was, and will remain, one of the most valuable and important experiences of our chocolate making journey and any future success we might be so fortunate as to enjoy.
I showed up at Alan "Patric" McClure's shop in Columbia, MO this Saturday morning, and for the next two full days, went through every detail of craft chocolate making imaginable (equipment, process, chemistry, food safety, organoleptic evaluation, business, packaging, consumer expectations...more...) -- with a specific focus in my case on flavor and flavor development. Alan was an amazing host, he held nothing back, and showed me things about chocolate and the chocolate making process that would have taken me years (if I ever would have figured some of it out) to learn on my own. I've felt for a long time that Patric stands at the very top of the list in the craft chocolate world with regard to flavor (with both single-origin darks and flavored chocolates) -- and as soon as I discovered that he offered consulting services (thank you Sunita!!!) my bags were packed. The experience far, far exceeded what I had even dared hope for.
Head still happily spinning, I've already got my first batch of beans after getting back in the melanger, with a mountain of reading waiting for me and a to-do list that seems to grow by the minute as I continue my post-trip debriefing.
Not enough hours in a day, not enough days in a lifetime,
Will this be our lucky week?? We're down one single item -- finding a solution for the water heater (2.5 gallons!) over-pressure relief pluming that will meet with the inspectors approval. Our contractor has a meeting scheduled for Monday morning with the inspectors supervisor to see if we can figure out what they want. Aside from that we are fully permitted and ready to go.
In the mean time we've been working with our packaging company on our design and expect to have prototypes in hand this coming week. As soon as we lock that down, especially the graphic design (as opposed to the mechanicals) we'll launch our bar molds.
Meanwhile...back at the ranch...we've been working with some really fun beans from Brazil, Nicaragua and Peru. One or more of these will be among our first offerings -- can't wait to finally be able to share some of what we've been working on!
We're very happy to report that as of today we are fully permitted and street legal! We still have a couple more months before we sell our first bars -- we were holding off on ordering our packaging and molds until we knew for sure we would get all of our permits. We've already started working with the designers on the packaging and hope to get protos this week or next. Once we finalize the packaging design we'll launch our bar molds. If all goes to plan we'll have bars ready to go by the end of August.
Now the fun part -- deciding which bar or bars to offer at launch!
Thanks, Gap -- it's been a long road. We're not across the finish line yet, but we're really thrilled to have the regulatory hurdles behind us. Now on to the fun part!
Wow - where'd the time go? It's been a while (too long) since we last posted. It hasn't been for a lack of interesting things to share -- just a lack of time to do so. All of our permits are now in place -- last week we received our organic registration -- that was the last one we were waiting on.
Right now we're focused on packaging and molds. We've already approved the mechanicals for the packaging, and tomorrow (Monday) we should get the graphics (rev 2) for review. We're hoping to approve the final version this week or next.
We'll be sending out our new drawings for our molds this week. We're getting a hundred polycarbonate molds from Micelli. There is a 3D rendering approval to be done, followed by a prototype approval, then manufacturing the final molds. All told we're looking at about 12 weeks beginning to end. That is the last major gate before we can have our launch party.
Things will be anything but quiet between now and launch. We're going to be building up and ageing inventory of our launch bar (or bars -- still deciding on which ones are going to make the cut).
Off to the airport now to meet with a man about some beans...for real!
David and Leslie
It's kind of funny how things go sometimes. Our 'official' plan was (and still is) to make craft bean-to-bar dark chocolate -- but that may not be our first sale. Or even our second or third or fourth! So far we've been asked to develop and provide an Italian hot chocolate mix to a local coffee shop, to come up with a mix for something like Starbuck's Frappucino (working on that later this month), to quote panning some beans for a (different) local coffee roaster, and for vegan and gluten-free biscotti (we already have several recipes for some REALLY mean vegan biscotti, but haven't tried gluten-free before...off to the test kitchen again!). Somewhere along the way we hope someone wants to buy a bar or two of dark chocolate!!!
Sounds like you're doing the right thing - take cashflow early on and keep the bean to bar chocolate dream alive. A business is about making money by supplying what customers want - otherwise it's a hobby (paying to do what you enjoy). You never know where you'll end up when you start walking down a road - you can only follow it :-)
And it sounds like you might have a few avenues to "incorporate" your own bean to bar chocolate blend as well (even if it isn't in bar format at this stage).
Best of luck!!
Thanks, Gap -- well said!