entrepreneurial type question...

[lartinos]

If someone has an idea to make an existing product better by say adding
something simple that anyone has access to, such as someone who hypothetically came out with a new flavor of cookie that no else has thought of could someone be successful with launching their own product on limited funds. Is getting an investor the only way? Say someone had only 50,000 to invest could it work out? Even if it sold well in the limited areas that person could get this cookie distributed to, what would stop one of the big companies from just ripping you off selling their own version and destroying your business before it ever has time to grow?

 

[Razorguns]

If someone has an idea to make an existing product better by say adding
something simple that anyone has access to, such as someone who hypothetically came out with a new flavor of cookie that no else has thought of could someone be successful with launching their own product on limited funds. Is getting an investor the only way? Say someone had only 50,000 to invest could it work out? Even if it sold well in the limited areas that person could get this cookie distributed to, what would stop one of the big companies from just ripping you off selling their own version and destroying your business before it ever has time to grow?

Thank the feds, the borrowing like water phase is now over. Saving is discouraged.

Until you demonstrate a clear revenue stream or guaranteed demand - you'll spend more time 'convincing' then signing contracts. So until you can put up a flea market stand, sell your cookies, and there's a line of 100 people waiting to buy - then you can send out invitations for investors and execs to come down and have a 'talk'.

Otherwise, put yourself in their shoes: 'why should they even listen to you?'

r

 

[mrplunkey]

If someone has an idea to make an existing product better by say adding
something simple that anyone has access to, such as someone who hypothetically came out with a new flavor of cookie that no else has thought of could someone be successful with launching their own product on limited funds. Is getting an investor the only way? Say someone had only 50,000 to invest could it work out? Even if it sold well in the limited areas that person could get this cookie distributed to, what would stop one of the big companies from just ripping you off selling their own version and destroying your business before it ever has time to grow?

You can get fairly far along with a garage setup. Either do that or partner with a local company. As far as capital, the best way to manage your needs is to:

1) Be your own, only employee and forego a salary for now (don't quit your day job).

2) Don't rush into an office or plant. Use your home or another local business that might help you.

3) Work with your customers on the front-end with cash flow. Working capital hurts or kills lots of companies. Your customers will often understand when you explain "I'm a one-man show operating this on a low budget. Could you possibly pay me in 5 days instead of 30?".

As far as protecting your product... Intellectual property is tricky. First of all, patents are expensive and time-consuming to a new business. Now if you have something truly unique, go for a patent for sure. As far as something incremental, you're going to have a tough time. Recently (last couple of years), the patent office has gotten even more stringent on what's called "obviousness". So if you add one good thing to another good thing (i.e. an existing flavor to an existing cookie), your patent will probably fail when you try to enforce it even if you get it issued. (Remember too, you can get a patent issued but it still not work for you when you try to enforce it).

Having said that, consider trademarking or copyrighting anything you can. That can actually help you at least locally if people associate your new product with a name. A local guy here in Knoxville trademarked the term: "Knox Vegas" (referring to Knoxville, TN) several years ago and managed to get a small revenue stream from companies that used the logo on cups, shirts, coozies, etc. etc.

Hope this helps!

Edit: Think of investors as a necessary evil and avoid them unless you reaaaaaally know what you can do with their money. If you've got a successful but small going concern and want outside money to accelerate your growth, then great. I personally don't care for deals when they are raising money to test an idea or start something from scratch.

 

[Bikini Mod]

Do you know about the cookie business or is this something that you *think* you know?

I am not knocking you. Lotta people *think* they know something about what it means to be self-employed and never realize all the overhead and behind the scenes that goes into something as simple as figuring a unit price. <---- how you gonna approach potential investors unless you know the nuts and bolts of the process.

Not to mention what are the risks involved with YOUR project and what will you do to minimize those risks?

What are the strongpoints/selling features of your project?

It doesn't matter WHY you want to borrow the money. A saavy investor will want to know these things. Besides, how much money will you need for start-up and why (meaning specifics)? Regardless of the dollar amount you need you had better well have sat down and figured out how much. If you don't then you run the risk of not getting enough and failing before you ever get your idea off the ground. If you can't tell an investor how to justify that number then you run the risk of sounding unintelligent.

If you truly believe in your project then you will find a way to come up with a proper business plan so that you can present it to whomever (YOU should know for your own edification as well) and get the funds you need for start-up.

Welcome to the world of raising funds for start-ups, which is what my husband and I do.

On the one hand... EASY. But when you really sit down and think about it, it ain't so easy afterall.

Best I can tell you if you REALLY believe then pray, believe, receive and you will find your way.

Good luck!!!

 

[lartinos]

Thanks, really good info here. I understand investors, even if you get one can be trouble and I'd obviously like to avoid them if I could atleast for now. I have already spoken to company that can help me with developing my product which is actually closer to an energy drink than a cookie lol. They can also find me manufactures and distributors of my product. They said the low end cost could be as little as 40,000 to get get started. I'm not sure what the operating costs going forward would be though.
I know I have a family member who can give me more than double the startup costs for sure. I came up with my concept recently and am in the begininng phase of researching what the best way to do this is. I believe in my product, just am nervous of it being copied and also of how much it will really cost for me to get it into stores.

 

[txbondsman]

You can get fairly far along with a garage setup. Either do that or partner with a local company. As far as capital, the best way to manage your needs is to:

1) Be your own, only employee and forego a salary for now (don't quit your day job).

2) Don't rush into an office or plant. Use your home or another local business that might help you.

3) Work with your customers on the front-end with cash flow. Working capital hurts or kills lots of companies. Your customers will often understand when you explain "I'm a one-man show operating this on a low budget. Could you possibly pay me in 5 days instead of 30?".

As far as protecting your product... Intellectual property is tricky. First of all, patents are expensive and time-consuming to a new business. Now if you have something truly unique, go for a patent for sure. As far as something incremental, you're going to have a tough time. Recently (last couple of years), the patent office has gotten even more stringent on what's called "obviousness". So if you add one good thing to another good thing (i.e. an existing flavor to an existing cookie), your patent will probably fail when you try to enforce it even if you get it issued. (Remember too, you can get a patent issued but it still not work for you when you try to enforce it).

Having said that, consider trademarking or copyrighting anything you can. That can actually help you at least locally if people associate your new product with a name. A local guy here in Knoxville trademarked the term: "Knox Vegas" (referring to Knoxville, TN) several years ago and managed to get a small revenue stream from companies that used the logo on cups, shirts, coozies, etc. etc.

Hope this helps!

Edit: Think of investors as a necessary evil and avoid them unless you reaaaaaally know what you can do with their money. If you've got a successful but small going concern and want outside money to accelerate your growth, then great. I personally don't care for deals when they are raising money to test an idea or start something from scratch.

I'd find a way to have my product developed, find a small market niche and work my way up. Be ready to deal with 'corporate" if you sell to a chain. Smaller stores, mom& pop stores, etc, won't have that to deal with, that's your starting point for immediate cash flow. I'd drop by every gym in a 100 miles and give them a sample for starters....
Just some ideas....
good luck

 

[mrplunkey]

I'd find a way to have my product developed, find a small market niche and work my way up. Be ready to deal with 'corporate" if you sell to a chain. Smaller stores, mom& pop stores, etc, won't have that to deal with, that's your starting point for immediate cash flow. I'd drop by every gym in a 100 miles and give them a sample for starters....
Just some ideas....
good luck

Yup. Go slowly and run off your own steam if you can. As an investor, when someone comes to me with only and idea and wants money up-front (no prototype, no pilot customers, etc. etc.) I usually smell a scam.

 

[PICK3]

2 brothers bought a truck and went to the docks to buy bananas for $1/bunch

They went down the road and sold bananas for $1/ bunch

After a few weeks one brother turned to the other and said "I don't think we're making any money" to which the other brother replied, "I told you we should have bought a bigger truck"

 

[Creepusmaximus]

BASF

They don't make the products,
they make the products better.

LOL.

 

[SpyWizard]

2 brothers bought a truck and went to the docks to buy bananas for $1/bunch

They went down the road and sold bananas for $1/ bunch

After a few weeks one brother turned to the other and said "I don't think we're making any money" to which the other brother replied, "I told you we should have bought a bigger truck"

The IRS called, now they own the truck...

 

[lartinos]

I honestly don't see the humor in this. So the point is that I'm selling banana's and not making money?
I guess you guys just went off into a strange tangent....

 

[Razorguns]

Thanks, really good info here. I understand investors, even if you get one can be trouble and I'd obviously like to avoid them if I could atleast for now. I have already spoken to company that can help me with developing my product which is actually closer to an energy drink than a cookie lol. They can also find me manufactures and distributors of my product. They said the low end cost could be as little as 40,000 to get get started. I'm not sure what the operating costs going forward would be though.
I know I have a family member who can give me more than double the startup costs for sure. I came up with my concept recently and am in the begininng phase of researching what the best way to do this is. I believe in my product, just am nervous of it being copied and also of how much it will really cost for me to get it into stores.

you're concentrating on the wrong part of your formula. no one cares about an "idea" that isn't "proven" to make anyone money. big whoppee.

You make money by 1) increasing someone's revenue or 2) providing a value which cut costs, thereby increasing revenue.

Can you prove either of those in 30 seconds? If no, then you are just a dreamer of your own conclusion like everyone else out there. And thus, get treated like everyone else out there.

Read some entrepreneurial books out there. Real ones like think and grow rich, winning with integrity, not the scam crap that wants to make money off your enthusiasm.

r

 

[lartinos]

you're concentrating on the wrong part of your formula. no one cares about an "idea" that isn't "proven" to make anyone money. big whoppee.

You make money by 1) increasing someone's revenue or 2) providing a value which cut costs, thereby increasing revenue.

Can you prove either of those in 30 seconds? If no, then you are just a dreamer of your own conclusion like everyone else out there. And thus, get treated like everyone else out there.

Read some entrepreneurial books out there. Real ones like think and grow rich, winning with integrity, not the scam crap that wants to make money off your enthusiasm.

r

like i stated earlier i am looking to avoid investors right now, starting small is just fine with me.

 

[Bikini Mod]

bump for update.

I know it's only been like what... 2 weeks? But I would be curious to see what direction you are headed.

 

[roadwarrior]

bump for update.

I know it's only been like what... 2 weeks? But I would be curious to see what direction you are headed.

me too... I didn't see this thread at first. I have experience writing the b-plan and raising an additonal $25M as part of an existing company and as part of a team writing plan to do rasie up in small start ups. In the second case, we did prototype, focus groups, full plan, and had initial users with beta before going to investors. Now it is harder due to current climate and post web crash that you need actual revenue. Investors invest to make money not to help you. When you take their money, they own a piece of your company. Valuation is key else they own majority and you work for them.

Our current company was founded byt the 4 of us with $250k investment each and no paycheck for the first year. We now have 52 employees 4 years later and healthy partner income. We still work 70+ hr workweeks.

S

 

[Grumpy Old Man]

I have to people I know that wanted to start an energy drink company, they have distribution channels in Vegas and LA, they have spent 750k so far each and they have not sold one can. The same concept is shared by both and they both have great products.

I wish him luck

 

[lartinos]

i'm taking it slow and reading a book called "the switch effect", the guy basically did what I am trying to do as my idea is not too much different. I don't have 750,000 to start off, but if I can start as small as possible I am totally cool with that. Not sure if it is possible, but I'm gonna find out.

 

[mrplunkey]

i'm taking it slow and reading a book called "the switch effect", the guy basically did what I am trying to do as my idea is not too much different. I don't have 750,000 to start off, but if I can start as small as possible I am totally cool with that. Not sure if it is possible, but I'm gonna find out.

Take comfort in the fact that you don't have 750,000... just start grinding it out one drink at a time.

 

[heavy_duty]

1-Marketing
2-Marketing
3-Marketing
Even low grade products with great marketing make a lot of money for their investors.
Amazing products with shitty marketing make nothing.

Study as much as you can about sales and marketing and dedicate the proper amount of funds for that part of the plan.


ps. How's the praying working out?

 

[lartinos]

Thanks for all the help and encouragement. My product can actually be directed toward two different groups, both of which are untapped markets.
This is why I am confidant in my idea, the hard part is going to figure out what is the best way to reach these two demos of the population. Its just something I need to take my time with to make sure I have a concise plan of action and that I'm not just jumping into this just because I know the product is good.

 

[heavy_duty]

Trade Shows

 

[lartinos]

Trade Shows

yeah I know bro, the day after I had this whole idea I looked on the net and they had just had one the day before in NYC. Bad timing lol, cuz I don't know of another one coming up.

 

[heavy_duty]

where do you live?

 

[Bikini Mod]

May I ask what it is that is so revolutionary about YOUR energy drink?

Not being a wise-ass. I am just a bit surprized by this. The market is so saturated already with new ones coming out every day yet when I think energy drink, I immediately think "Red Bull." What is your product going to do to change that?

 

[lartinos]

May I ask what it is that is so revolutionary about YOUR energy drink?

Not being a wise-ass. I am just a bit surprized by this. The market is so saturated already with new ones coming out every day yet when I think energy drink, I immediately think "Red Bull." What is your product going to do to change that?

Its not an energy drink at all, lol. I just used that as an example, there are way too many of those out in my opinion to tell u the truth.

 

[rudeboyja]

If you have a solid business plan, and credible partners.. And know someone at Goldman Sachs......