Logistics of starting "healthy" dessert delivery business?

[Sarah]

It has been my mother's life-long dream to open her own bakery. I have a Business Management/Entrepreneurship degree and I am a new mom so looking for another option besides the 9-5 grind. She is a cancer survivor and we are both interested in healthy eating but have a lot of love for desserts. Mom works 40+ hours/wk plus 10 hours of commuting and makes a very small salary. She has been looking to leave her job but needs to have a "purpose" and something she can contribute to.

I am fortunate to live in a town surrounded by very affluent neighborhoods; health food, specialty and high-end food stores thrive here. Also, there is a local commercial kitchen that rents out space for about $20/hr. I did a detailed search and can't find any local delivery options for healthy, "homemade" desserts. I would have been interested in running the business from my home, but I wouldn't be allowed to sell to the public. We live in a suburb of Chicago (within 5 miles of city limits).

Besides my degree, I also have a background in advertising and graphic design, so I could cover the bases as far as web design and media for the business.

***The main purpose of my post is to gain as much information as possible so that I can try to determine if this business is a possibility or not***

***Please fill in the blanks of things I may be missing***


Needed to use commercial kitchen: business license, insurance, recipes, ingredients

Needed to start taking orders: menu/website, pictures of desserts, printed ingredient lists, business paypal account, quikbooks softeware?

Needed to start making deliveries: vehicle, packaging


If I can convince my husband that this is a worthwhile endeavor, I will most likely have up to $1500 of start up cash to use. I plan to use a social media approach to advertising, as well as advertisement in local businesses and print media. The short-term goal of the business since there are barely any $ heavy investments I need to make would be $1000 profit per employee per month, and then to expand from there. The goal of the business is to supply "homemade" gluten-free, low-sugar, fat-free as well as low-calorie options for local delivery. I initially plan to offer delivery once per week, which means that we would most likely need to rent a kitchen for about 8 hours overnight and then deliver the next day.


Any information you could add/share as well as possible pitfalls would be greatly appreciated!!
After reading contribution, edited to add: My mother receives her insurance through her husband and he is the main bread winner in their household, although her income does help them make ends meet. thank you for contribution!
Also, I am in the Air National Guard and receive my insurance through the military
I realized I left this out...the goal, since I would aim to deliver to these neighborhoods with very high expendable incomes, would be to have a subscription service. I worked for an organic grocer and they had one also. The idea being that you pay $20/wk or something (delivery included) for weekly delivery of 12 servings of desserts, or bi-weekly, etc. They would need to order over website and use paypal probably, because they will be billed once a month, because if they aren't home to accept delivery, how could i accept their credit cards?

[TRish]

You are off to a fantastic start for writing a business plan. I'm sure you learned about the importance of a good business plan in your entrepreneurship program. Make time for you and your mother to work on a plan together, and figure out whether this is feasible. From what you describe, I think it just might be. But your mother has a lot to lose at this stage of her life, and the business plan should take account of that. Certainly, she cannot afford to be without health insurance. While the business is in start-up, she may qualify for a subsidy to her premiums for a plan through the marketplace, but a different insurance plan may actually turn out to be better for her. (I have a marketplace plan, and it has been a nightmare finding in-network providers. That's not necessarily because it's through the marketplace, but because it's an HMO option with a company I had previously dealt with only as a PPO.)

Something to keep in mind as you rough this out on paper is that both of you would like something other than a 9-5 job with an employer, but actually starting up a business is going to be its own kind of "grind." It is hard work, and it can be stressful being at the stage where it is losing more money than it brings in. Be sure that you both have the resources (not just financial, but personal) to do this.

Most importantly, give special attention to how this may affect your relationship. You will need clear, written parameters of who will contribute what and of each partner's responsibilities and share of the rewards. When choosing between business and family, it's not even a contest; you'll have plenty of chances to start a business, if you wish, but you will never have another mother.

[i like turtles]

This is an interesting idea, but I think it has a lot of potential problems. First, you would have to cover that $20 per hour kitchen rental. If you are making $2 per dessert item, your first 10 items made every hour go toward that expense. Your mom would have to hustle to make 4 or 5 dozen of something per hour, so 20% is going toward rent. Also, I would offer healthy items but don't hang your entire business on that - to be honest, people who will buy desserts could give two hoots about healthy eating. And delivery is going to kill you - either you have to charge separately for it or build it into your prices. That will be tough unless you set a very small market area.

You have a pretty good start on planning, but you will need a true credit card capability, not just Paypal. That will cost you a monthly fee plus a percentage. There are little add-ons to smart phones that can be used to read credit cards so that isn't a big deal. In order to take credit cards you also need a bank account, and to open a bank account you will need to have an IRS tax number (easy to get, go to irs.gov) and a state tax number, plus be registered as a corporation or have a partnership agreement. I strongly suggest you become an LLC type corporation.

Good luck to you should you decide to move forward. But, to paraphrase a quote I've seen, "The most dangerous kind of idea is when you only have one idea." Try brainstorming with your mom and see what other ideas or twists to this one you can come up with.

Here is one idea: Find a locally owned non-chain restaurant, and have your mom offer to make homemade desserts in their kitchen to sell in the restaurant. She could sell them to that restaurant for a little over cost in lieu of rent, or make some deal with them. But part of the deal would be to operate her other business out of their kitchen. I know a restaurant in my area that does that, and the only reason people go to eat there is they have amazing, incredible pies.

[Mary]

I would suggest that you make a website right away, so that all advertising, business cards, etc. can include the site. Since you are good with graphics, that will be a big help to your website, a good website that attracts the visitor's eye will have lots of good pictures, and not too much text. There are numerous website builders available, I have used GoDaddy, but found it hard to use, and then switched to http://www.handzon.com, they have a great tutorial so it was easy for me to learn it. You can link your website to facebook, twitter, etc.

Handzon.com has a complete ecommerce package, that includes interfacing to PayPal. If you sign up for a PayPal Pro account, you can accept credit cards and/or PayPal payments thru your website. Having the PayPal logo on your site will give your potential clients a more secure feeling. You could then take online orders. It is quick and easy to get a PayPal account, it does cost a fee for any transactions tho, but it is cheaper than the bank or Authorize.net

Handzon will give you a free consultation, so it might be worth your time to talk to them about the website.

Also if you start your business as a sole proprietor, and have no employees, you do not need to get an EIN number. Your social security number is your federal ID number. You can check with your state on their requirements for business licenses. Your state may require a bond, and proof of insurance for your specific business. Check with your own insurance agent for help if that is necessary. As to delivery, consider using FedEx overnight, refrigerated. Get the costs from them and include it with the item price.

I would suggest starting at home, using your own kitchens, to keep costs down, until orders justify the expense of renting a kitchen. You will be delivering the items, not selling to the public from your homes.

Good luck to you and your Mom.

Mary Carmichael

[Jenna]

You might want to check out this service, they provide weekly gluten free meal plans! http://www.glutenfreemealplans.org