Starting a business, trying to figure a few things out...

[TEA-Rex]

So I'm in the planning stages of starting a small food business. The long term goal is to be able to invest in a food truck, or an actual location, and have it be successful enough to be self-supporting and for me to be able to live off the profits. I'm planning on starting at farmers markets and food festivals, basically selling a high-tea service to go. You get tea sandwiches, salad, savory pasteries, scones, lemon curd and devonshire cream and a great cup of tea, to go. From there I'm planning on doing some catering and party services (I'm also very crafty, and am thinking about contracting/hiring people I know to help with the decorations, serving, etc.), and once that is going well, looking into moving into a gourmet food truck or an actual tea shop. But that is all much later.

Right now, I'm working on my business plan and my budget. My dad is willing to partner with me, basically being a financier and silent partner, which I know could go badly, but it could also be fantastic. I'm willing to take that risk, that's been decided. I have a lot of the things i need priced out. I know that i need a temporary food facility permit, risk 2 if i'm just doing sandwiches and salads, risk 3 if i'm also doing the baking myself, and also if i'm doing the baking, then i need a processed foods permit, as well as a business license.

What I need to figure out, and would appreciate any assistance with, is finding insurance. I need a product liability policy to sell just about anywhere. One of the markets I'd really like to do requires $500,000 worth. I don't have the first clue how to go about looking for insurance, and would appreciate any pointers on this issue.

Thanks!

[Harold Mansfield]

So I'm in the planning stages of starting a small food business. The long term goal is to be able to invest in a food truck, or an actual location, and have it be successful enough to be self-supporting and for me to be able to live off the profits. I'm planning on starting at farmers markets and food festivals, basically selling a high-tea service to go. You get tea sandwiches, salad, savory pasteries, scones, lemon curd and devonshire cream and a great cup of tea, to go.


What country are you in? If U.S, what state?

[Freelancier]

Basically, you're looking for an insurance broker in the area where you want to locate that handles commercial lines of insurance. Shop around, because there are big differences between policies and vendors when you look at the fine print.

[Steve B]

Google "Business Insurance (name of your town and state)".

Are you sure we can't talk you out of going into business with family? :)

[huggytree]

dont you know some other business owners? ask them who they use

i use a broker and he handles all the different types of insurance i use.....he may even be able to help you with the details of what you actually need

thank your dad for helping you and make sure you work very hard....if you get lazy it will effect your relationship....he's trusting you

[nealrm]

There are several methods to finding broker. Ask other small businesses. Ask the agent that does you home insurance if they do or partner with other that provide business insurance.

As for partnering with you father. Lets say you do everything correct yet the business still fails. How would you feel sitting down to Christmas dinner and looking him in the eye???? Also, please let me he is NOT using his retirement funds.

[TEA-Rex]

First things first, my dad and I have had a very frank discussion about this. We have talked about what happens if it fails, what happens if it is just barely holding on, what happens if it succeeds, what happens if I decide im done, what happens if he decides he's done, amongst other things. I know it doesn't work for every father/daughter relationship, but it works for us. He isn't spending his retirement fund, or money he doesn't have. We went through several ideas of what this is going to be before we decided to go with this. Part of why this is so great for me is because my dad has a pretty good idea of what can happen, and kind of expects the worst. H has invested in family businesses before, and has had failures, and the family is still a unit. I know it can go bad, but the hope is that we are planning for growth slowly enough that it doesn't go that bad, that fast, out of the blue.


I'm in California, Santa Clara county, san Jose to be more specific. Are there things that -sound- good but are actually really bad that I should be careful of? We've at least touched on everything else I've encountered in classes, but not on this.

[Harold Mansfield]

Are there things that -sound- good but are actually really bad that I should be careful of? We've at least touched on everything else I've encountered in classes, but not on this.

Do you mean with insurance or in starting up a business in general?

[TEA-Rex]

With insurance in particular, though if you have some piece of wisdom that I probably don't know from my business degree, I would be happy to hear it.

[Harold Mansfield]

... if you have some piece of wisdom that I probably don't know from my business degree, I would be happy to hear it.
Expect the unexpected. It's not like the American Express commercials.

A business degree doesn't teach you how to think on your feet, or how to stay in the game mentally when things aren't going right and money not coming in as you expected. There are going to be many things that you can't plan for and almost all of them will cost more money than you budgeted.

In the beginning things are exciting, but once you are open very few people can take the change in lifestyle that it requires before the money starts rolling in.

No one EVER imagines the lean times. Everyone always imagines the upside...phone ringing off the hook, taking weekdays off, running thier business on a tablet from the beach. They never imagine that there may be few Top Ramen days. Or weeks. Or that you may go months without a cold beer, or a Friday Happy Hour ( oh the horror). Or sacraficing a dinner out with your wife or girlfriend so that you can purchase a new piece of equiptment or software.

That's when you know what you're made off. When things don't go well and you have to make sacrifices in your personal life and the way you are used to living because you believe in what you are doing and know that you can make it a success. I've known a few entrepreneurs with the "I'm not going to stop living just because I started a business" attitiude. They failed.

How long can you last before it takes off like the gangbusters you've envisioned? 1 year? 2? 5?
How broke are you willing to be? I don't mean can only have steak once a week broke. I mean Hot Dog a day broke. And for how long?
How much are you willing to learn so that you don't have to pay someone to do everything?

When things get tough, the weak start talking themselves out of it. Start second guessing everything and eventually come up with all kinds of reasons to throw in the towel.

You said that you have all kinds of contingency plans on what to do if things don't work out. I never had those. I went into business much the same way I used to go into my 2 weeks out in the bush every summer with the Army Reserve: "It's going to suck. It's going to be dirty. I won't get much sleep. I'm going to go days without a shower and when I do get one it's going to be cold. The food is going to be horrible. The coffee will be worse. I'm probably going to have to arrest someone (Military Police). Probably get into a fight or two. And I'll probably injure something. Can't wait. Let's do it!"

It was going to work. Period. There was no plan "B". But, I also started with no family, no responsibilities, kids, mortgage and so on...so I could commit like that. I know everyone can't do that when they have people depending on them.

[Fulcrum]

Well said Harold, and have you been hanging around my shop lately without telling me?

To add to what Harold said, figure out exactly what you need financially to survive and just survive. Assume that your expenses will be 20-25% higher than expected while your income won't be able to support a fly on a horse farm. Also, it may not be a bad idea to have your dad as more than just a silent partner.

I don't know the area your in, nor the viability of a roach coach with tea foods, but I would almost consider dropping the truck idea and start the catering side first. If you find you have leftover foods from dinners and parties, then consider the truck to move the leftovers before they go to waste.