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!!!
We’re really glad that we planned for a slow ramp – it seems like every week we’re learning something new that we wished we already knew. Lately it’s been a blessing in disguise called the “Making Chocolate in the Winter in an Unheated Building Blues”. Our chocolate has been getting better over most of this year and we were starting to feel like were actually starting to get this chocolate making thing down. Enter the first winter in our new building sans heat. All of a sudden we started to notice some distinct (and that’s key…distinct) off-flavors in all of our builds – Madagascar, Peru, Ecuador, Ghana, you name it. Long story made short, we figured out that we weren’t getting hot enough during our refining and conching process to drive off all of the nasties. Good record keeping, retained samples of older batches, and some quick A-B testing helped us narrow the problem down pretty quickly.
The reason we say it’s a blessing in disguise is that we weren’t 100% happy with the consistency of our results all along – and we had been attributing most of it to roast optimization (or lack thereof). We would build batch after batch trying to dial it in with the roast profile, not knowing that there was another important uncontrolled variable messing us up. Going back and tasting retains from older batches, though, and filtering out the ones that had varying degrees of this under-conching flavor let us better (re-)assess our roast profiles and finally figure out where we really wanted to be. The other thing that was pretty exciting about this speed bump is that we learned how important and potent temperature control during refining and conching is. We were able to take batches of finished chocolate that had the aforementioned off flavors and rehabilitate them quite nicely by conching again at a higher temperature.
Meanwhile, back at the ranch…
We sold a little more in October than in September (our first sale month), and a little more in November than in October – a trend we’d like to keep going. So far it’s all been Cioccolata Calda mix (Italian hot chocolate) and bar chocolate for cremena (think Frappuccino) for a local start-up coffee shop that we helped with the recipe. In December we’re hoping to add a couple of our single origin bars, as well as our gianduia spread and gianduiotti. The gating item on the bars is still the molds – we’re hoping to see them this week or next – and on the gianduia spread it’s labels for the jars (also expected this week or next).
Lots of engineering projects we’re working on that we’ll share more on in the coming months – integrating our grinding and winnowing set-ups (including motorizing our grinder), installing and evaluating a new 65 kg grinder, remote temperature monitoring and control for our melangeurs, building a chest freezer cooling tunnel, and hopefully building a couple of small temperature-controlled rooms for different process steps. Time is in short supply and funding is finite, so it may take us a while to get through the full list, but as we do we’ll make sure to share the results and what we’ve learned along the way.
David and Leslie
How are you planning to do the chest freezer cooling cabinet? This is something I've often thought about, but have never figured out how to best load and unload the chocolate molds into/out of it.
We bought a six for long chest freezer, and we're planning on opening the lid (we were going to take it off or raise it, but now I think we're going to just leave it in place) and build a simple raised box/lid that will sit on top of the open freezer. There will be a small rectangular opening at both ends for the molds to enter and exit. Transport inside will be on two pieces of angled rail spaced just wide enough for the molds (and adjustable). We'll manually move the molds through the tunnel by pushing the next mold in. It will have a bank of small fans sitting on the bottom of the freezer for air circulation. We have a Johnson Controls thermostat that will maintain the temp where we want it.
Always happy to 'crowd source' improvements(!) -- any thoughts?
So the molds won't ever actually enter the freezer itself? They'll just slide along the rails inside the box on top, right?
What were the factors that caused you to decide on the freezer instead of an air conditioner or other cooling device? It seems like a freezer is a very large device if most of the space it takes up is going to be unused (space utilization is a very big concern for me).
I meant to add that I think the idea of the box with the rails and pushing the molds through is a good one. Something like that, with an a/c unit mounted underneath the center is on my list of projects.