So why am I telling you about this? Well they just “happened” to be cooking burgers at the event and I just “happened” to have some Bar-B-Q sauce with me , see where I am going? When the initial lunch crowd died down, a friend and I jumped into help cook the last couple of burgers and clean up. I was able to cook about 12 burgers with my sauce and asked for feedback on it. I got an overwhelmingly good response about my sauce. Some people even asked if I planned on selling it, and said that they will buy if I do.

Well, that’s all for now. I’ve been a bit quiet recently but I plan on writing a couple blog posts this week. I have a lot to update you on as well as some decisions I need to make. Make sure to spread the word and check back for updates! Alternatively, you can keep up to date with us via RSS or follow us on Twitter. Thanks for all the support!

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’m going to keep this one short and sweet. I need to document my start up cost for Uncle Stephen’s. I need to do this for two reasons:

1. To be organized for myself.
2. To be organized in case an investor comes along or I try to get a loan.

I’ve started a document to keep track of the items needed to launch the business (or at least what I think is needed). This is a link to the document. I will continue to fill it out as time goes on. My goal is to have it complete by 03/30/2009 for the latest.

Please feel free to review the document and share your feedback (both positive and negative) via the comments below. If you know were to get any of these items at better prices please let me know.

As usual, thanks for following a long with us!

-Stephen

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.

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.

Originally from Trinidad and Tobago, I moved to Southern California at the age of 18 to pursue a degree in Advertising. I met Vanessa in  California, where we eventually dated and got married. We went a whole 2 month of being newly weds and found out that Vanessa was pregnant (so much for our 5 year plan). We now have a beautiful, strong-willed, lovely daughter, Trinity. Fast forward to now. Vanessa currently stays at home with Trinity, volunteers in the community and is pursuing a degree online in Psychology.  I currently work as a Member Experience Architect (think Web Producer for multiple channels such as phone, web, mobile etc) for a Fortune 200 financial services company. I love my job, family, motorcycle (now sold) the Internet and life in general; I would definitely consider myself blessed. However, there is one thing missing. I am an entrepreneur at heart. I want to dream, create and make things successful.

I’ve always had a dream of opening a restaurant, I’m not sure why but I just want to. It’s a good thing I enjoy cooking. Realistically I am not (can’t afford) going to do it now. However, I do make several sauces that I think (of course I do) are the best in their respective category. I would like to begin selling them as a first step to opening a restaurant. This is why I am here. Vanessa and I are putting all the puzzle pieces together to start this company, once and for all.

So what’s this blog and open source business stuff all about?

We would like to invite the entire world to journey with us. I have a strong respect and enthusiasm for the open source methodology and would like to found my company on those principals. An open source business? What does that mean? Well it means the following:

• Everything to do with our business will be open and available to the public (except for the sauce recipes). This means all our decisions, business strategies, financials, successes and failures.
• We accept and encourage feedback from anyone that chooses to journey with us. We will  implement things suggested to us, defend our crazy actions and scream for help at any given moment.

Why am I doing this?

• First and foremost, let me make it clear. I want my business to be profitable (I told you I would be transparent). I want to sell enough products to make a living off of it an have it fund future ideas.
• I want to interact with you. I want to hear ideas, I want to learn from you and  implement your solutions. This after all is an open source company, isn’t it?
• I want to document a journey in which young entrepreneurs can read our mistakes and successes in years to come. This is a huge motivation for me. As you get to know us better you will learn that both my wife and I are givers. We enjoy giving to people. This is one way to give back to people who want to start their own business. Whether it becomes a success or a failure this journey can equip someone with knowledge.

What do I plan on giving back?

• Vanessa and I will blog as much as possible and be as transparent as possible as our company grows.
• Whether successful or a failure, I will keep this blog up for as long as humanly possible so people can learn from it.
• If I am successful in the venture, I will put aside $15,000.00 to invest in someone else who has a dream. The only condition I will have on the investment will be for them to invest in someone else if they become successful.
• My company will routinely give money to a non-profit organization. If we ever  become a large, multi-person operation I will encourage employees to be active in their communities.

OK, I’m done (for now), finally.

I am pretty sure that you now have an understanding of what my intentions are with this business. I hope to interact and read comments from many of you in the up coming months.  Until the next post, see ya!

P.S. – The name of the company is Uncle Stephen.