We made it! One year in business. Crazy to think that a year ago today we launched the website, and went full scale after spending close to 6 months getting the foundation for the business in order. I am so proud of what we have accomplished so far and have SO many ideas for what we still want to accomplish.
Through one year in business, we are now in 11 farmers' markets locally, in our first subscription box, wholesale to several local co-ops, and have an amazing customer base across the country. When I first started, I honestly didn’t imagine it would grow so fast. It started as a hobby and love for fermenting my own sauces, but it soon grew and exceeded even my own expectations.
But that does not mean there weren’t hiccups and learning curves along the way. There are many things I learned along the way that I feel can really help someone follow their own dreams of starting their own hot sauce company.
Legal Stuff Up Front:
Running a food company, in general, requires a lot of certifications and licenses. Those certs, also vary from state to state. But several things that do not vary are Servsafe, an LLC, Liability insurance, and initial startup cost. That is your first step. Research the cost and estimates to run your business safely and legally. Your actual permit to process your hot sauce is going to vary based on state laws, as well as your recipe and process for making the sauce.
To figure that step out, you need to lock in your recipes, make sure you can scale them, and submit them to a process authority. Every state has one. That will determine if your food is acidified or not. If it is, you will either need to run it through a co-packer, or you can start your own cannery (which costs 10’s of thousands a year to operate). There are some loopholes you can utilize to avoid co-packing, but that requires a vast knowledge of culinary processes as well as fermentation science.
Make Sure Your Shit Is Good:
Test markets are key to knowing if you have a winning product or absolute flop. A great way to do this is with friends and family. Gauge interest and see if they are roaring back for more. Legally you can’t test your product sales-wise in certain markets without having the proper certifications.
What differentiates you from other hot sauces? There are tons of craft hot sauces out there now. It’s a very saturated market. But what makes yours stand out, and makes customers want to buy it? Find your distinction and your image.
Nail Down Your True Cost Of Goods:
Anyone can buy certifications, make a recipe, launch a product, and get it out to market. But what separates a thriving business from a flop is cost management. If you cannot control your admin, food, labor, packaging, shipping, etc costs, you will be on the next episode of hot sauce nightmares hosted by Gordon Ramsey. This can be managed by several things.
- Find suppliers: Bottles, food, labels, etc. Consistency is KEY. As a business starting out, you lack the power to negotiate as much. But as you grow so does your negotiating power. Shop purveyors, get better prices as your demand increases, therefore reducing your costs to scale.
- Spreadsheet everything: Make sure you have a good grasp of what it costs. Time, labor, supplies, advertising, rental space, market fees. Everything counts.
- Gotta spend money to make money: To grow, you need to be reinvesting. Plan to not take a salary for at least a year to start. Scaling up your business takes a lot of up-front costs to maximize your best price points. Buying in bulk is always a better option.
A Good Staff Can Make Or Break You:
Starting out, you won’t have much of staff as your main concern is controlling costs and doing a lot of that grunt work yourself. But as you grow and scale, getting the right people in place is key to having the machine running as you’re out handling the business side of things. What’s the best way to get good staff? PAY THEM WELL. It’s tough as a small business to keep up with corporate benefits, and other attractive things larger companies offer. Plus, you’re starting out, it’s not as easy to incur those costs.
I am never shy about how much we pay our employees to start. A few dollars above minimum wage, plus a 5% commission on sales, for an entry-level job. We do not require any sales experience prior. What we look for is personality. Make sure the person you’re hiring can match the energy level of you and your brand. No one sells your hot sauce the way you do, it’s that simple. But getting someone who’s 90% of your energy and knowledge of your product is paramount to maintaining increased revenue. That extra sales commission also incentivizes sales and increases their hourly wage.
Running a business is a stressful but rewarding experience. The feedback from our customers daily at the markets, emails, and consistent re-orders, motivates us to be better every day. A lot of what I laid out are bullet points that require a lot more research and discussion to fully encapsulate. I’ve had 15+ years of culinary experience and 10+ years of culinary management experience that gave me the confidence to run my own company and grind for myself. Here’s to one year in business, and hopefully many more to come!
If you want more information, or want more details about these bullet points I’d be happy to help and you can send an email to firstname.lastname@example.org