Lately, if been sacrificing a lot of my free time in pursuit of something fun, challenging, and strangely fulfilling: I’ve been cobbling together a real-life side business.
I believe that entrepreneurial thinking has always come naturally to me, but because working for other people is so comfortable, I’ve never really put forth the effort and started a business. I was intrigued as a kid by many of the “small business” books my dad read, and I’ve had an itch to try my hand at starting a business for a long time. My family (on both sides) has a rich history of hanging out a shingle and making a living operating successful small businesses.
All of my past business ideas have been nothing more than fun brainstorming exercises, or at best, small website projects. Things might have gone on like this for the next 10 years, but thankfully I have a very engaging and encouraging co-worker at my day job who inspired me to actually just try something for once. He inspired me to actually throw my efforts behind an idea, and push it to success (or failure). Either way, it will be a fun experience, and will bring a lot of practical knowledge and skill to my life.
So, what’s the business? I will be selling ready to cook oatmeal mixes directly to consumers via the web. The project was initially inspired by a discussion thread over at the Mr. Money Mustache forum. There’s definitely a “subscription box” craze sweeping the country, and I hope to make monthly gourmet oatmeal delivery an option for folks who are willing to trade dollars for the convenience & novelty. While most definitely “antimustachian,” there is a huge audience ready and willing to pay for this type of product. The MMM discussion thread, combined with my love of oatmeal, gave me the idea, and I’ve just been running with it.
You might be thinking, “starting a business is expensive!”, and for some people and some businesses that may be true. Part of the reason I am attracted to this idea is that it’s inexpensive and easy to get started. I am trying my hardest to approach things with as much pre-planning and frugal thinking as possible. My goal is to get everything launched and profiting for less than $1,200. If I fail miserably, I’ve put a very minor dent in my progress toward financial independence; if I am successful, I’ve added a nice boost to accelerate the growth of my net worth.
Here are the costs I’ve incurred so far:
- $20 – Registered trade name with state
- $5 – Bought website domain
- $275 – Ingredients for samples/test batches
- $20 – Food serving training class
- $79 – Packaging
- $35 – Kitchen supplies
I should also note that I am putting in the sweat equity of building my own website and ecommerce store, and I have arranged a trade for my logo; these are two costs that usually tally up significantly, and I’ve been able to avoid them.
At this point I am technically up and running, and ready to sell as a “cottage foods” retailer in Colorado. Because I do want to sell nationwide, I will have a few more hurdles and costs in the near future – so here are my estimates:
- $100 – Health department “retail food” application fee
- $100 – Commissary commercial kitchen deposit
- $60 – 4 hours of kitchen time at commercial kitchen (this will be recurring)
- $65 – Additional kitchen supplies
- $50 – Packaging heat sealer
- $50 – Social media advertising
- $150 – additional ingredients
This gives me a few hundred dollars of wiggle room before I hit my $1,200 start-up cost ceiling, and I am sure I will run into some unplanned costs. I’ve calculated a projected profit margin of 50% and I am excited to see how everything unfolds as I sell my first bag!
I’m sure there’s a lot I still don’t know, or that I am totally forgetting and overlooking, but it’s been a fun hobby so far, and I am learning a lot. What side (or not-so-side) businesses have you successfully started? What lessons did you learn?