Cookies Business – Update
I’ve been busy last few weeks. Besides doing my thinking (and planning) for 2006, reflecting back on 2005, and helping my wife with her cookie business. Toss in the fact of I having some flu like headaches and fever, I’d guess you can say I had an interesting start to 2006, to say the least.
Well things are a little better now & I’m back. First up, let me update you what I learned from helping in the cookies business. I blog about this cookie business in the last post. Now that all the cookies have been safely delivered, I have a bit of time to write about it. I’m sure all would like to know if we make a lot from this experiment? Sorry to report, NO. But we learned a lot.
Lesson 1 – Getting into the act.
I learned that no matter how much you think about and research a business or money making opportunity, there is nothing like getting in and getting first hand experience. From this small, risk free business experience, I learned a bit about purchasing, manufacturing, packaging, man power, and delivery. Every step was an experience.
Let’s talk about the challenge of volume. To make sure customers came back next year to next time, we figured to make quality good tasting cookies, so they’d sell by themselves. This required good quality ingredients. To get the most profit, we have to get them at lowest price.
The challenge is, the cheapest quality ingredients we needed are found in different stores, located at a distance from one another. Now, if she as making cookies for own consumption, then, we’d get them all at one store. We would have paid more in fuel and time cost to buy them at the different stores. But as the quantity required is quite big, it made financial sense to get them from different stores. So time and fuel was required to go buy the items.
This brought on the next problem, which is storing the items we bought. Our home is of fair size, and our refrigerator is way bigger for a small family. So, we didn’t count on our home becoming somewhat messy, to say the least. Even then, we had trouble storing all that necessary stuff. Another unanticipated problem was storing the cookies after they are produced. We never thought that cookies would take up that much space. After a week of cookie production, we have a small mound of cookies jars in the corner of the living room. So this venture affected our home life. The lesson here as with many small business owners operating from home is the challenge of business intruding into your personal life. If there were kids around, our home could have been a war zone.
For us, it was a short term venture so I didn’t mind the temporary mess. If it is for a longer time, I don’t think I’d want that that. Remember to consider this point. Your business can cause resentment in other family members. Further more, I can image the challenge we would have faced if we have to ramp up production. Luckily the orders weren’t bigger than we could handle. It dawn upon me the requirements that I had not anticipated. The second lesson here is that, you’d never be able to think of all things, unless you get started.
The next challenge to produce large amount of cookies or anything for that matter is having effective production process. If the margin and sale price per item is high, then we need not worry about this. But cookies are labor intensive. We needed tools and equipment to stream line the process. Our experience had shown that certain tools need modification to suit the condition. So being DIY is useful. Secondly, some tools just are not built for heavy duty production and naturally failed. Naturally, it happened at the most critical moment.
Don’t count on just one method or tool or whatever. Have back-ups. Especially if having back-ups is cheap. Extra equipment that can be borrowed, bought or kept on standby. Have extra supplier, extra everything as long as you don’t have to pay a high price. Now this might not be feasible if the equipment is expensive, but keep this in mind.
Lesson 2. Shipping and delivery was another thing we did not consider was delivering all the cookies to the customer. Even though majority of the customers are at one location, carrying all those cookies were hard work. We would have had a big challenge if the orders came from all over.
In summary, volume changes the game. Not having the volume is a challenge to any business, but having the volume is also a challenge many business face. In fact, I think it is a major challenge.
So here’s the first section of the cookies entreprise. Hope the points here benefit you and others.
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