I have now been running Bearded Brothers, and organic energy bar company since March of last year. We have been very successful with getting our product in stores around Austin, where we are based and a few locations outside our area as well. We are currently making profit, thought are about to have to finance some equipment.
The problem is I'm not currently getting paid and scaling the business is a pretty big task. I've done some minute number crunching and have a number in my head of how much product we would have to produce to start pulling an income, and it doesn't seem possible right now because we are pretty much breaking even every month.
One thing we are about to do is raise our prices for the second time. This will help some, but not enough to give myself an income with the current production level. We need to start paying employees to produce the product so we can grow the business ANd so we can meet the demand needed to start getting paid.
My question is, do we consider investors, or keep trying to boostrap this thing. It's VERY evident to me we are going to have to scale things fast if we are going to make a living off of this. We could go on forever with our current level of production and be "successful" and never draw an income.
It's tiring working for now pay, and I'm currently not doing the aspect of the business I like because I'm stuck in a kitchen for most of the day making our product. I want to be out networking and building the business, buts this can't happen until we start to pay somebody and our production level goes up enough to pay that person and myself.
Any, thoughts on how we can scale our business on the fast track? We want to avoid investors if possible and don't want to finance much if possible. But at this point we are going to be more open to investors so we can scale faster.
Could be a pricing issue, Caleb. One problem you might run in to is that if you increase production, your expenses also rise. You may have to hire more folks to help you run it and you're back in the same postion; not getting paid.
You could bring in investors, but you'll loose shares of the company. They're looking for somewhere in the neighborhood of a 20% return within the next 2-4 years. Think they'll get that from you?
They'll also be throwing money in so you can pay employees, but that doesn't change the fact that you're not as profitable as you need to be.
I've worked with companies with similar problems. I don't know your product or your pricing, but increasing prices could help. If you have a high value product (or can add value) there's no reason you shouldn't be charging for it.
Macs don't really cost more to produce than PCs but they usually cost 4-6 times more. They have a lot more value and people are willing to pay for it.
Scaling a food venture can be a challenge, because most people just franchise, and your USP means that you're going to want to control quality and keep it in house (I think).
If you can add some value to the product, it makes sense to raise prices, or reduce sizes of the bars, which appears to be exactly what Odwalla just did (both actually).
It will be impossible to compete (pricing) with Larabar (for example) because General Mills is manufacturing these bars with all the scaled food industry platforms of a gazillion dollar enterprise...but that doesn't mean you can't exploit the differences...like the fact that you're truly raw.
Also, if you get some friendly faces behind the product, the tribe will grow: especially in the raw food community.
Caleb, You have already received some good infomation. You can only shrink the bar and/or increase your price so far....
Most people today are looking for quality.......so how are you getting the word out?
Social media is certainly a good avenue. Groups like LinkedIn, Facebook and Twitter can help if you can reach a large group.
Another option would be to establish an affiliate program. By doing so you can contact local High School booster organizations and offer to give them a percentage of all sales. It will place boots on the ground for you, it will help increase sales, and a target audience.
If you need specific business resources you can find them on our site. Http://RealBusinessSolutionCenter.com
Hope this helps!