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
I don't remember if we've had this conversation, but I am not a fan of the phrase "bean-to-bar" because it unnecessarily narrows the scope of your business activities. There are so many more opportunities out there for craft chocolate beyond chocolate bars.
I have been using "from-the-bean" chocolate maker to describe what it is that people do: they make chocolate from cocoa beans. What they do with that chocolate can (and should) be anything and everything, not just chocolate bars.
Very good point and an important distinction that I will, indeed, incorporate into my messaging and thinking! Thanks, Clay!!!
This has been amazing to read through. I have loved following your journey! My husband and I would like to start our own "second life time" chocolate company some day as well, maybe sooner than we have grandkids, even (we recently got married and are just starting our lives together). We've gotten started by experimenting at home and are loving every moment! You can check out our blog at www.rootchocolate.com.
We live in the Bay Area and would LOVE to visit your site and learn from your experiences. Would you be willing to show us your space and teach us a thing or two? Please private message me to connect! Either way, this has been very educational and eye-opening for me!
The pleasure was all ours Landen -- we look forward to keeping in touch, and to growing and learning right along side of you and Richard!
It's been a long road, and there's a lot more in front of us (at least we certainly hope that's the case! ), but we wanted to share that we reached an important milestone in our journey this last week -- our first sale! It was a very modest sale, and wasn't
the craft dark chocolate that has figured so prominently in all of our well laid (but very flexible and negotiable) plans -- it was ciocolata calda -- our dark chocolate that we blend with a couple of other ingredients to make a mix for a sinfully good Italian interpretation of hot chocolate. Very, very happy for the order and the official start of business!
On the traditional dark chocolate bars side of things, our packaging arrived two weeks ago, and we're very pleased with it. We learned a couple of things that we'll adjust when we reorder, but on net it turned out great. We should get our final bar mold prototypes from Micelli this week, and following that the molds themselves around the end of October or beginning of November.
Our plans are still to ramp slowly in order to learn what we don't know and be able to make adjustments in a controlled manner without too much panic or drama. That's the plan anyway...
...AND we just got a re-order on the ciocolata calda!!!
Areté Fine Chocolate is a LONG way from being in the black (a VERY LONG WAY), but we sold enough to pay our internet bill in September!!!