Starting a Chocolate Business - Any suggestions

[Truffle Guy]

It's hard to believe only about 15 months ago I saw the "Chocolates with that Showroom Finish" thread and my life would take a turn. I had been dabbling in truffles (hence the name) for a few years but after seeing Norman Love's "G" series and then the thread, I was hooked.

A little background on me might help. I was a dot.comer in the late 90's through about 2001. I learned a lot in building businesses from new concepts and it was an exciting time. I co-founded one company and was a Director in another technology company that was in the USA Today as a "can't miss" business. We must have been part of that 5% error margin as we did miss. However, I do believe you learn more from failure than victory and I emerged with new skills and new experiences.

I moved from Atlanta to Tampa/St. Petersburg and started a new career in call centers. Within a few years I had received a couple promotions and was considered an "A" player in the organization. I was recruited by another large company, left for a great opportunity and then 5 months later was brought back to my original company to head a department of 100+ employees with revenues over 60 million. I guess for most that would be enough but through it all there was a passion burning in me to express myself through chocolate. I kept learning on my own and through this great site and then had a chance to spend some time with Chris Elbow. I can't say enough good things about him, his product is top shelf but it goes deeper than that. He loves what he does and instead of guarding the knowledge, his passion for his work makes him want to share with others, great guy!

I began doing charity events last summer, in essence paying people to eat my chocolates. I wasn't ready to incorporate so everything I did was a gift. I didn't make a cent, nor did I try. Much to my surprise, people really liked what I was doing and in Feb/March I did 4 events of about 1000 boxes and over 10,000 pieces. I supplied chocolates for an exclusive wine tasting hosted by a large, prestigious winery and have several large businesses eager to carry my product. Of course this was all done while working a very demanding schedule (I normally go to work at 5am and work 12-13 hours). Sometimes we find success, wealth, love etc. when we seek it but it is a unique and more powerful experience when without looking, it finds us. That has been my experience with chocolate/confections.

Now I'm at a cross roads. I have a partner and we have developed a business plan, financial model and offering memorandum that we feel is solid. He has been a CEO and raised millions for other ventures. I'm making more money now than ever, I'm in upper management for a large company and yet my dreams are of chocolate. That's where I'm at now. I have several "advisors" reviewing the plans and will send out the finished business plan and a box of chocolates to potential investors in the next few weeks.

I've done a lot of homework. I have pamphlets on many manufacturers of equipment (primarily enrobers) and have a nice budget to start (pending on investment). We are not looking to build slowly from the ground up, I know it can be done but it's not our preference. We are hoping to raise in excess of 500K. What I'm looking for in this thread is advice from those who are in a similar niche. Chocolatiers who have enrobers, cooling units, guitar cutters etc. who are able to do large production runs.

Looking back, what would you do differently?

What enrober would you choose?

What additional options would you purchase?

Would you choose a different location?

Would you have a different production process?

How did you deal with shipping?

How have you extended shelf life?

Who would you have hired/not hired?

If hindsight is 20/20...what would you have done differently and what really worked?

What books would you have purchased earlier?

Would you have hired a consultant prior to setup?

Did you price correctly?

I feel confident that my passion and ability to learn will lead me to become a very proficient chocolatier. I've read and experimented and my desire to learn and create is insatiable. I'm sure we all look back on our lives and say, "if I could go back in time, I'd have studied more in school, focused on my career earlier...etc." We never really get that opportunity, but now, for me...it does feel like I'm getting a chance to start again. I'm at the beginning of who I will be as a chocolatier and I'm looking to do things right, not have to look back in a few years and wish I knew then what I know now. I guess that is what I'm asking for from those who are well past their beginnings and whose experience can help me choose a better path. Any thoughts are welcome. Thanks All.

[Tweety69bird]

I can't offer you any advice since I'm behind you when it comes to developping my chocolate dreams, however I wish you the best of luck and I think it will be so rewarding to follow your dreams. It sounds like you have done your homework and will be off to a running start. I look forward to learning a lot from this thread! One question, what Norman Love thread are you referring to at the top, and what is the "G" series?

Thanks!

[dejaq]

There have been several posts (recently), concerning the do's and don't of kicking a Company off the pad. Beyond pastry, Chocolate and more over Confectionery is a bigger hurdle, be fully aware of what your getting yourself into, you have to know a lot, a hobby is simply just that, your just kicking it, a Biz, pays your mortgage and puts your children thru Medical School.

Michael

[David Lebovitz]

You might want to check out Ecole Chocolate, which is an online chocolate program. I've met several of the graduates, and a few friends took the course and were happy with what they learned. Aside from the chocolate work, I think there's business-plan materials as well. It may be a good place to start.

[alanamoana]

One question, what Norman Love thread are you referring to at the top, and what is the "G" series?

Thanks!

←

I think the "chocolates with that showroom finish" is the thread that started the discussion. norman love is mentioned in that. the "g" series chocolates are chocolates that norman love did/does for godiva but only seasonally. i think he does them like once a year. don't know if he still does them. special flavors, special looks, etc.

[alanamoana]

Truffle Guy, I don't know if there's anyone here on eGullet who runs a business like the one you're interested in starting. Most of the professionals are working out of their homes (at least that's the impression I get). This doesn't mean that they don't have answers for you, but speaking for myself, it seems like you know what the hell you're dealing with better than anyone else .

"...took some time off and now I'm ready to start to think about beginning to plan to maybe proceed to open a restaurant"

This quote came from another thread on eGullet and although I was laughing really hard at the many ways the person was backpedaling in ONE sentence...I feel that it perfectly describes my attitude toward opening a business.

You're used to the long hours and hard work, but right now, you're the boss of 100 people. In the food business, you're going to want to control things more and everything comes down to YOU, you can't just delegate it away. You aren't going to be able to hire as many people as you'd like and stay profitable, so again, it comes down to YOU. I can't speak for your location, but even in New York, finding qualified employees is beyond difficult.

I'm not telling you anything you don't know. I wish you good luck and success!

Oh, and I do have some answers regarding shipping chocolates and stuff, so remind me to answer you on that when I have a chance!

[dejaq]

here is an edited response to someone who is also opening a Chocolate shop in Asia, he really is "with it" and I have a good sense his venue will be a huge hit, I am helping in anyway I can ( I have just sent except for the experimental untested stuff) 95% of my formula base to him. He also has, and is getting probably something on the order of over 100 hyperlinks of where to search for even more stuff. If anyone on this Forum, may seem curt with a response, don't take it that way, it just means they are redirecting you to what has already been discussed before.

this was my response to some of the same questions you and the Gentleman that I wrote to:

Those are some big questions my man, but let me shoot out some hinters based on what was right and what went wrong with Pirouette Confectioner. First of all we sold strictly wholesale to the Hospitality industry, although we had an E-Commerce fully functional Web site, back then we didn’t get to much traffic from that. We had an account with Sutton Place Gourmet and we did sell consumer direct. I attended trade shows, rented booths, gave out samples and listened in awe to people drooling over this stuff. Pirouette was incredibly well received, but undercapitalized we started with private funding for around 60K. I know I would still be in business if we had a brick and mortar site. The chocolate was that good, the formulas were all discrete and proprietary. A full-blown Chocolate “venue” will be revisited. But it will be marketed with special Iconology, a gourmet training center tie in, a webzine tie in, and nauseatingly high profile marketing coverage. I am not going to comment on any other “future” competitors, simply out of professional courtesy, but I do hear ya, actually loud and clear.

What does it take to be successful at Chocolate? Hmm, that’s a good one, let’s see:

Ompla Lompa’s that care.

An incredible sense of taste, style, esthetics, and panache.

A bitching Chocolate, better than anything you have eaten before, Sexy, unique packaging.

The “venue” or “salon” should stress catchwords like “designer” or Boutique.

Get a good lawyer.

Get a good CPA or use something like Peachtree, I guarantee you will not have the time to play with “cutting Checks”

Be involved with day-to-day production.

Trick out the shop, make it all look like jewelry, and don’t be afraid to charge for it.

As far as booze in the base, you do mean truffles not pralines made with booze, right?

Michael

Edited June 8, 2006 by dejaq (log)

[cocoa-lulu]

Something that hit me by suprise, you may or may not have considered. But worth mentioning is many larger upscale retail outlets pay "seasonally". The idea being products are to be paid for by the consumer first, then they pay you. Say you have a large order that will pay for itself in 90 days, yet most of your supplies will come with terms of net 12-30. Twelve days being the most common for food items. Can you carry yourself through these times and to what extent. The best of luck to you...dreams do come true.

[Truffle Guy]

Thanks, it is an exciting challenge. I didn't communicate very effectively in regards to a Norman Love thread. I had previously seen the "G" series by Godiva and was amazed by it and purchased some. Then.....a few months later I ran across the "Chocolates with that Showroom Finish" thread. That was the thread I was referring to.

I can't offer you any advice since I'm behind you when it comes to developping my chocolate dreams, however I wish you the best of luck and I think it will be so rewarding to follow your dreams. It sounds like you have done your homework and will be off to a running start. I look forward to learning a lot from this thread! One question, what Norman Love thread are you referring to at the top, and what is the "G" series?

Thanks!

←

[Truffle Guy]

Alanamoana,

Thanks for the feedback. I'm actually a good producer and probably not the best delegator so that part will not be a shock. Both my brothers own their own companies, so I have some good resources to help me. One is a CPA with his own firm and that will bring other benefits. I will definetly follow up on the shipping when we get there....thanks.

Truffle Guy,  I don't know if there's anyone here on eGullet who runs a business like the one you're interested in starting.  Most of the professionals are working out of their homes (at least that's the impression I get).  This doesn't mean that they don't have answers for you, but speaking for myself, it seems like you know what the hell you're dealing with better than anyone else  .

"...took some time off and now I'm ready to start to think about beginning to plan to maybe proceed to open a restaurant"

This quote came from another thread on eGullet and although I was laughing really hard at the many ways the person was backpedaling in ONE sentence...I feel that it perfectly describes my attitude toward opening a business.

You're used to the long hours and hard work, but right now, you're the boss of 100 people.  In the food business, you're going to want to control things more and everything comes down to YOU, you can't just delegate it away.  You aren't going to be able to hire as many people as you'd like and stay profitable, so again, it comes down to YOU.  I can't speak for your location, but even in New York, finding qualified employees is beyond difficult.

I'm not telling you anything you don't know.  I wish you good luck and success!

Oh, and I do have some answers regarding shipping chocolates and stuff, so remind me to answer you on that when I have a chance!

←

[Truffle Guy]

Dejaq....thanks for the advice. Having come from a background of startups I know the number one problem for most new companies is being underfunded or improperly funded (too much debt, too early). Your experience with Pirouette sounds like it should be a book (hint). Sales/Marketing tend to drive a companies success and my partner has extensive sales/account management/channel development experience. Ultimately, it is rarely the artist that fails, it is the businessman....I'm trying to make sure we are strong in both areas. As I get closer to launch, I'd love to talk to you in more detail as you have valueable experience that could easily be consultive. I would like to follow up with you in the future if you are interested. Let me know. Actually....Truffle Guy was a first name but it has evolved into Bon Bon Guy....thats more the focus now.

here is an edited response to someone who is also opening a Chocolate shop in Asia, he really is "with it" and I have a good sense his venue will be a huge hit, I am helping in anyway I can ( I have just sent except for the experimental untested stuff) 95% of my formula base to him. He also has, and is getting probably something on the order of over 100 hyperlinks of where to search for even more stuff. If anyone on this Forum, may seem curt with a response, don't take it that way, it just means they are redirecting you to what has already been discussed before.

this was my response to some of the same questions you and the Gentleman that I wrote to:

Those are some big questions my man, but let me shoot out some hinters based on what was right and what went wrong with Pirouette Confectioner. First of all we sold strictly wholesale to the Hospitality industry, although we had an E-Commerce fully functional Web site, back then we didn’t get to much traffic from that. We had an account with Sutton Place Gourmet and we did sell consumer direct. I attended trade shows, rented booths, gave out samples and listened in awe to people drooling over this stuff. Pirouette was incredibly well received, but undercapitalized we started with private funding for around 60K. I know I would still be in business if we had a brick and mortar site. The chocolate was that good, the formulas were all discrete and proprietary. A full-blown Chocolate “venue” will be revisited. But it will be marketed with special Iconology, a gourmet training center tie in, a webzine tie in, and nauseatingly high profile marketing coverage. I am not going to comment on any other “future” competitors, simply out of professional courtesy, but I do hear ya, actually loud and clear.

What does it take to be successful at Chocolate? Hmm, that’s a good one, let’s see:

Ompla Lompa’s that care.

An incredible sense of taste, style, esthetics, and panache.

A bitching Chocolate, better than anything you have eaten before,  Sexy, unique packaging.

The “venue” or “salon” should stress catchwords like “designer” or Boutique.

Get a good lawyer.

Get a good CPA or use something like Peachtree, I guarantee you will not have the time to play with “cutting Checks”

Be involved with day-to-day production.

Trick out the shop, make it all look like jewelry, and don’t be afraid to charge for it.

As far as booze in the base, you do mean truffles not pralines made with booze, right?

Michael

←

[Truffle Guy]

Cocoa-lulu...we have anticipated that we will have a drag in accounts receivable. The larger the company, the longer the delay in payment. Makes it tough as we all want large clients with flush pockets. We have budgeted to be able to operate through the delays. Great point though and one I think is easy to miss. It's not just what you sell....it's what you get paid for.

Something that hit me by suprise, you may or may not have considered. But worth mentioning is many larger upscale retail outlets pay "seasonally". The idea being products are to be paid for by the consumer first, then they pay you. Say you have a large order that will pay for itself in 90 days, yet most of your supplies will come with terms of net 12-30. Twelve days being the most common for food items. Can you carry yourself through these times and to what extent. The best of luck to you...dreams do come true.

←

[dejaq]

Dejaq....thanks for the advice.  Having come from a background of startups I know the number one problem for most new companies is being underfunded or improperly funded (too much debt, too early).  Your experience with Pirouette sounds like it should be a book (hint).  Sales/Marketing tend to drive a companies success and my partner has extensive sales/account management/channel development experience.  Ultimately, it is rarely the artist that fails, it is the businessman....I'm trying to make sure we are strong in both areas.  As I get closer to launch, I'd love to talk to you in more detail as you have valueable experience that could easily be consultive.  I would like to follow up with you in the future if you are interested.  Let me know.  Actually....Truffle Guy was a first name but it has evolved into Bon Bon Guy....thats more the focus now.

here is an edited response to someone who is also opening a Chocolate shop in Asia, he really is "with it" and I have a good sense his venue will be a huge hit, I am helping in anyway I can ( I have just sent except for the experimental untested stuff) 95% of my formula base to him. He also has, and is getting probably something on the order of over 100 hyperlinks of where to search for even more stuff. If anyone on this Forum, may seem curt with a response, don't take it that way, it just means they are redirecting you to what has already been discussed before.

this was my response to some of the same questions you and the Gentleman that I wrote to:

Those are some big questions my man, but let me shoot out some hinters based on what was right and what went wrong with Pirouette Confectioner. First of all we sold strictly wholesale to the Hospitality industry, although we had an E-Commerce fully functional Web site, back then we didn’t get to much traffic from that. We had an account with Sutton Place Gourmet and we did sell consumer direct. I attended trade shows, rented booths, gave out samples and listened in awe to people drooling over this stuff. Pirouette was incredibly well received, but undercapitalized we started with private funding for around 60K. I know I would still be in business if we had a brick and mortar site. The chocolate was that good, the formulas were all discrete and proprietary. A full-blown Chocolate “venue” will be revisited. But it will be marketed with special Iconology, a gourmet training center tie in, a webzine tie in, and nauseatingly high profile marketing coverage. I am not going to comment on any other “future” competitors, simply out of professional courtesy, but I do hear ya, actually loud and clear.

What does it take to be successful at Chocolate? Hmm, that’s a good one, let’s see:

Ompla Lompa’s that care.

An incredible sense of taste, style, esthetics, and panache.

A bitching Chocolate, better than anything you have eaten before,  Sexy, unique packaging.

The “venue” or “salon” should stress catchwords like “designer” or Boutique.

Get a good lawyer.

Get a good CPA or use something like Peachtree, I guarantee you will not have the time to play with “cutting Checks”

Be involved with day-to-day production.

Trick out the shop, make it all look like jewelry, and don’t be afraid to charge for it.

As far as booze in the base, you do mean truffles not pralines made with booze, right?

Michael

←

←

One other key note, and this is very important,

Don’t be a renovator, be an innovator.

Just because a current trend may dictate the usage of swirled” moulded/colored” chocolates, which admittedly have a gorgeous appearance, have you done an A-B comparison between a hand crafted -hand dipped (no manufactured shell allowed here) variety lately?

In order to be successful at Confectionery, it isn’t just about the packaging(although Americans seem to be sold on just that) it’s about the under the covers/under the wrappers, granular “black box” stuff that will catapult you forward. Look at the palate of the tongue, see the regions that are affected by acidity, alkalinity, sweetness, sourness, and saltiness. What about the interface of when you bite into a bon bon, how does it strike you, what’s the impression, the aroma, is it crunchy, waxy, gritty, the releasing agents used in commercial truffle shell production have a lot to be desired, in my opinion.

When you “Engineer” your line let me know, and I will be honored to help, this is not Rocket Science, it’s just a passion of something very dear to me, that I have always considered a “specialty” even before I played with sugar, I considered Chocolate a more eloquent medium.

I very highly doubt Notter has the ability to run his fingers thru a dew moistened morning lawn blade of grass, and sense the delicacy of it’s texture, nor does a person whose neuro sensors (fried to smithereens) at the tips of their fingers have an appreciation of the incredibly soft Nature of caressing a woman’s face while kissing them. You get the idea.

who is the bigger fool, the fool, or the fool that follows the fool. Quote from “Star Wars”.

Set your own trends-build it as well as it can physically be designed, don’t compromise, forge your own path.

Michael