A new business without track-record?

owen22

Bit of a chicken and egg situation and would welcome any advice/ideas...

I have a business idea and the normal advice to allow you to show potential (to grant holders, business loan organisations etc.) seems to be to start start small and show that it can be profitable and then to demonstrate how you think you can scale it with extra funding.

The problem I have is that the business I want to start requires a HMRC licence in order to manufacture the end product. To even 'practice' your business requires this licence whether or not you sell anything (or even give away for free / use for personal consumption).

Part of the licence also requires a proper place of business which meets it's particular requirements.

My question is how someone (without the total funds to hire premisis and purchase manufacturing equipment in order to demonstrate to HMRC that you can comply with the licence) might start from scratch.

Anyone?

Pennywise

This scenario is quite common in the health supplements market due to the materials traceability and product testing requirements. The way that people deal with it is to go into joint ventureships with existing producers many of whom are open to suggestions of some kind of future profit share if the product works.

An alternative may be to try to getting a working partnership with a local university, some of which have laboratories etc and may be keen on getting a new product for their students to work on.

owen22

Thanks for the advice Pennywise however that isn't really a route I can take...

I don't really want to give too much away but my (prospective) business involves the production, or at least re-distilation, of spirit alcohol so I'm not sure the assistance of universities will be an avenue I could explore!

paddyrg

vitamins and similar formulations in this country are largely made by just a few white label manufacturers, you provide the recipe and branding, they do the rest. Any help?

paddyrg

Is it booze-based? I'm sure there are bonded white-label distilleries around, the guys who make Londis own-brand vodka, etc.

owen22

I see what your saying paddyrg but there's two problems:

1) I really want to make the stuff myself, not just have a 3rd party use my recipe and me have not control over the process. I'm wanting to make an 'craft' alternative to current mass-produced brands so getting someone else to make the product would essentially nulify this.

2) The USP for my brand would involve using equipment not traditionally used in the trade so a 3rd party 'white-label' distillery would not be able to replicate the process I want to employ.

paddyrg

Hmmm sounds somewhat like you'll need to set up a bonded distillery or whatever then, and pay for it. Getting distillation wrong can as you know lead to blinding people, so I can see why there's a hurdle to entry to be frank.

owen22

paddyrg wrote: »

Hmmm sounds somewhat like you'll need to set up a bonded distillery or whatever then, and pay for it. Getting distillation wrong can as you know lead to blinding people, so I can see why there's a hurdle to entry to be frank.

My business would involve being granted a excise licence for the purposes of 'Rectifying or Compounding of Spirits' rather than Distilling (although it's technically the same licence which covers both).

The product can be made from commerically produced neutral grain alcohol so I will not be physically producing any alcohol from scratch (so there's no risk of blinding anyone!) just re-distilling it with additional, non-alcoholic ingredients.

The business premisis will need to be bonded however, as alluded to in my original post.