Uncle Stephen’s Blog

In  a previous post I mentioned using personal money to produce a test batch of sauce with my co-packer, then sending it out for free to the market. We set aside about $1000 of personal money to do this. Read the original post to understand the plan in more detail.

A couple things need to be done before a test batch with the co packer is produced. Of course, they all take more money than originally budgeted for. Anyhow, here are the legal things that need to be done before talks with the co-packer begin:

• Register a parent company (I decided on an LLC)
• Register a Doing Business As (DBA) name
• Obtain a Registration Certificate from the Texas Department of Health, Division of Food and Drugs.
• Register a UPC Bar Code for my sauce.
• Get Liability Insurance.

So this realization throws a curve ball our way, to get everything done it will take more than $2000.00 to do (a guesstimate). That’s more money than we originally set aside. Not to mention, about $1000 that is still needed to run a test batch with the co-packer. I am beginning to think that my “give free samples over Memorial weekend” plan may not happen.

Anyhow, this post is going to discuss the 5 steps highlighted above to get the company up and running. Below are some thoughts on each topic and links to resources that I’ve come across.

Registering a Parent Company

We’ve decided that we will register a Limited Liability Company (LLC) to be the parent company over Uncle Stephen’s Sauce. An LLC has the same personal liability protection as a corporation with less of the formalities, making it is the desirable business structure for the parent company.

Related links:

• Comparison chart of Sole Prop vs C Corp vs S Corp vs LLC
• Selecting a business structure
• Comparison of Corporations vs LLCs by LegalZoom.com
• Information on forming an LLC in Texas
• Texas Secretary of State (Contains info on how to register a LLC in Texas)

Estimated Cost: $300.00

Registering a DBA name / Assumed Name Certificate

A  DBA will be used as the public facing name for selling the sauces. I need to use Form 503 to register the DBA with the Texas Secretary of State. I am not sure If I can do both the LLC and DBA at the same time or if I need to do the parent company  (LLC) first. Does anyone know?

Related links:

• Form 503
• Selecting a business structure

Estimated Cost: $25.00

Registration Certificate from the Department of Health

I need to register with the Texas Department of Health because our business deals with food products. I am not to sure what this entails, I just know it is a requirement because of the nature of my business. Hopefully the interaction with the Department of Health will be minimal seeing how the sauce will be manufactured by my co-packer, and will just be stored in our home.

Related links:

• Texas Department of State Health Services
• Food labeling
• Determination of the need for a permit
• Good Manufacturing Practice
• Licensing of food manufactures, food wholesalers and warehouse operators

Estimated Cost: $250 for a two-year license (For a business making $25,000 – $99,999.99)

UPC Bar Code

UPC stands for Universal Product Code. These are the bar codes that can be found on every product. Guess what? I need one for every type of sauce I plan on selling. This has to be printed on the label of the bottle.

Related links:

• GS1 US Bar Codes Home page
• Online application for Bar Codes
• What is a Bar Code?
• Bar Codes FAQs

Estimated Cost: $700-$1200

Liability Insurance

Insurance is a basic necessity for all companies. Being a food oriented company, we definitely need it. I will look at both local and national insurance companies for quotes. I have a contact at The Hartford for a business insurance underwriter . I’ve already recieved a quote from him and will discuss it in more detail in a future post.

Estimated Cost: $500 – $900 (yearly)

Closing Notes / Updates

I am still unsure of how we are going to fund Uncle Stephen’s. What I do know is however it’s funded, having this information researched and documented can only be a good thing.

Until next time,

Take Care and thank you for following us in the journey.

I’ve done countless Bar-B-Q’s using my sauce for family, friends, friends of family and families of friends. Needless to say, the response to the sauce has been phenomenal. Now it’s time to take that feedback to the next level and quantify it. Having this data will do a tremendous amount for my business, especially if I plan on looking for investors.

How am I going to do this?

I plan on doing a test batch with my co-packer to see if we can reproduce the recipe on a larger scale. The minimum run for a test batch is 80 gallons and cost anywhere from $300 – $800. I am going to assume that everything will go well and the batch turns out as expected. I will then take the 80 gallons and send it out for free to any and everyone over the Memorial weekend. In return for supplying the Bar-B-Q sauce at your Memorial party (for free), I will ask that everyone who has tasted it fills out an online survey.  This will enable me to finally gather the facts that I need in the most unbiased manner.

I think the key information that I need from a survey is:

• Demographics
• Print Point
• Sauce qualities (good / bad etc)

I’ve put together a short survey using Google Docs. It can be found by going to the following web address:

http://betasurvey.unclestephens.com

What do you think of it? Is it too long, too short? Is anything offensive or unclear? Am I missing anything?

Last thing, if you are interested in having free Bar-B-Q sauce for your grub over Memorial weekend please let me know via the comments. I will contact your with more details as soon as I have them.

As usual, thanks for taking the time to read this and a big thanks for all the positive feedback so far.

This is our basic outline on how we are going to sell our first bottle of Uncle Stephen’s Bar-B-Q sauce. I have had many ideas running through my head for a while, but this will be the first time actually putting it on paper. To give some perspective, we’ve had a desire to start this business many years ago, but every time Vanessa and I decided to pursue it, we always seem to get distracted. This blog is the furthest we’ve taken the business, and I plan to follow through until either success or failure.

First off, Vanessa and I have agreed upon the following in order to begin business:

1. I will not leave my full time job. I must also maintain the same level of performance. This is imperative since we live off of my income,  and don’t have enough savings to take a hiatus from my 9-5.
2. It has to be feasible for Vanessa to handle the day to day operations of the business, seeing how we can not afford employees.
3. The sauce can not be made in our kitchen. In my opinion this is a perfect recipe for failure. We need to do this in a commercial kitchen that has more quality control and equipment.
4. We need to be able to run the business from our home. In our situation it doesn’t make sense to spend money on renting an office when we can be just as effective from a home office.

And now my thoughts on how we will run the business (in no particular order):

• Because I build and create web sites for a living, I will first launch an online store to sell our products.
• We will use a professional co-packer to manufacture and bottle the sauce. We will store our sauces and run the day to day operations from our home.
• To start we will be giving out samples of our sauce to local markets, competitions and community events etc. I believe my sauce will become successful when it is sampled. My sauce will be # 7,479,783,982 of available Bar-B-Q sauces in today’s market, which means I can’t rely on “chance” to sell a bottle. I have to prove myself through samples and rely on word of mouth.
• People have to be willing to pay more than $2 for my sauce. This will only happen if my sauce is GREAT. As of right now I don’t know how much it will cost to make a bottle, but I know that I will not be competitive with the $1.99 bottles of Kraft B-B-Q sauce.

So what do you think? I need suggestions on additional ways to draw attention to the sauce. This blog will hopefully be one way. Please leave any feedback you might have in the comments section.