Start up business funding advice needed

going2die_rich

Don't suppose your mum wants to invest in it? That way you have someone with the captial, but also an additional pair of hands. It would half your profits, but it would still probably have a greater chance of success with two people rather than just one.

Obviously way up the risks of, if you business wasto fail, where would that leave paying off the loan on your mums home.

richt71

Ruthibe73 wrote: »

I have got a business plan professionally done and printed out, and the company I've contacted about getting the toasty oven from claims a toasted sandwich costs 35p to make and sells for £2-£3 each and on eof their ovens makes 180 toasties in an hour!!

So in theory if we work 9 - 3 saturday and sunday thats a max of 1080 sandwiches (GULP!) costing £378 to make and £2700 if sold at £2.50 each (average prive of a burger/hotdog round here)

All the other figures have been estimated in the business plan.

Have you thought about offering a free trial to local offices and then offering to deliver? This might be a cheaper and better way to do things than to actually have a van.

motorguy

Ruthibe

Is this based on an undying urge you have to make toasted sandwiches, and you've found a company who will supply the means to do so, or have you been looking around for a business opportunity and have come across this?

If its the latter (and any company selling you gear like this will always give you the blue sky / worlds your oyster perspective and probably be able to pull out a picture of a bloke smiling and some vague figures showing hes making ££££'s), might it be cheaper and possibly more profitable to buy a second hand chip / burger van, then look to attend events etc with that to see how it goes? You could always offer toasted sandwiches as a side line in the van using a standard large home quality machine and see what the takeup rate is?

I'm just a bit concerned about a £12000 toasted sandwich maker van for the following reasons

(a) I dont think i've ever been to an event where i thought to myself 'id really love a toasted sandwich'
(b) your buying a van to house three people because it needs to hold three people when you dont know if there is the volume of work
(c) I dont forsee people queuing at a rate that would have an industrial speed sandwich maker a necessity
(d) I would struggle to see what quality ingredients could be bought for 35p all in and sold for a minimum of £2.50 - £3.00 that would also leave the consumer feeling they had got value for money.

Please dont feel i'm deliberately trying to kick you around here - i lost a very sizeable sum of money on a startup business by assuming if i bought the equipment / facilities for a successful business that the trade to support the business would follow - it didnt and my overheads greatly outweighed our profit. If we had started more realistically and on a small scale things might have been different. Not saying that this would happen to you but....

Chuzzle

The reason I chose Toasty Sandwiches is I feel there are too many hotdog/burger vans around this area and none of the events I've been to offer toasted sandwiches. I just thought (probably quite niavly) it was offering something slightly more healthier than burgers.

I realise that the figures we've been quoted are to try and entise us into buying their product and I am fairly sure we will NEVER reach these statistics!

Husband went to a 3 day music festival last year and spotted a toasted sandwich van there that always had a queue and this did start us off thinking.

Like I've said before I do appreciate all your input - it's given me loads to think about

Pennywise

pgilc1 wrote: »

(d) I would struggle to see what quality ingredients could be bought for 35p all in and sold for a minimum of £2.50 - £3.00 that would also leave the consumer feeling they had got value for money.

I would second that - I've a client who makes sandwiches to sell in local shops and tourist attractions who've been making huge losses over winter. I went in and did some costings and it turns out the cost of the basic raw materials is now very close to £1 following the price rises of almost every ingredient - they'd been working on it being about 50p per sandwich.

The reason that there may have been a queue is that it takes longer to make a toasted sandwich. It may not mean that there were lots of poeple wanting them, but possibly that people were in the queue longer, giving the impression it was busy.

I think you may be letting your heart rule your head. What is important with any fast-food outlet, is just that - fast - the way to make a profit is to get through as many customers as possible, giving them the product that gives you the most profit. £25k is a hell of a lot of money to spend on a whim. As someone else suggested, get a cheap second hand burger van. You don't need to use all its equipment - surely you could squeeze in a smaller/cheaper sandwich maker just to test the market - you could still sell other things as well, i.e. cold & hot drinks, possibly burgers, possibly hot dogs, possibly baked potatoes, possibly cold sandwiches. if it doesn't work out, you'd probably sell the burger van for a similar price you paid for it - no doubt someone else would want one to sell burgers! There is ALWAYS a cheaper way to start a business. Try to sell as many different types of thing as possible to attract as many customers as possible and extract as much of their money as possible.

If it is successful, you can then sell the van, buy a bigger car/trailer and your industrial sized sandwich maker - you'll have more luck getting credit if you've proved your business model.

What I also find happens is that however much someone has thought over their business plan, the reality is NEVER the same. There are obvious deviations, such as higher or lower sales/costs, but what is often a surprise is that the business heads off in a different direction, sometimes so extreme that the original product/service is abandoned completely. I once had a client who started a city-centre old fashioned sweet shop and ended up with a doughnut stall on the road outside - now that was a complete surprise to everyone but over time his original idea was proved to be flawed and he needed to sell other things to cover his costs - he thought a candy floss machine would help draw customers in which was so successful he got a street trading pitch outside to do it, then sold his shop, then decided to try donuts alongside candy floss which was more successful so he ditched the candy floss - that just shows how things can work out. Had another client who set out selling fish from the back of a van and ended up with a factory manufacturing sandwiches for Sainsburys! Flexibility is the key - never be blinkered in one direction only - the true entreprenneur is always looking for something else.

Savvy_Sue

Ruthibe73 wrote: »

The reason I chose Toasty Sandwiches is I feel there are too many hotdog/burger vans around this area and none of the events I've been to offer toasted sandwiches. I just thought (probably quite niavly) it was offering something slightly more healthier than burgers.

I am not a dietitian, but I can't see why toasties are inherently healthier than burgers: use top quality burgers to reduce your fat content, bung in a bit of salad and away you go! You don't need to butter the buns.

but with a toastie, you have GOT to grease the bread, and not skimp on the grease either. Can't put salad IN it, only serve it on the side, which people probably don't want with a take-away / walk and eat snack. Probably have cheese in most of them, not a lot of difference, is there?

This certainly needs more thought ...

dawn1977

Hi there, just had to join in on this thread. You have been told by lots of people on here that you haven't thought this through properly, and possibly I may agree. The thing is, I am almost ready to start trading in the same business!
I saw the same need for healthier food from these vans, so hatched the idea of home cooking for the van I was going to set up. We are planning on selling hotpot, chilli, spag-bol, curry... etc.
I told them at a job centre interview I wanted to do a health & hygiene course, and she put me on one. When I had done she read my notes, & I had said I wanted to become self employed. She then put me on to the local University, who were running a course, which is brilliant!
It is the N.E.S. scheme, I am not sure if It is only in the North West, or nationwide. It is run by business people, and really makes you think about the line of work you are planning to jump into! I will finish the course next month, and if Im sucsessfull will get £1500 to start me up! We have to create a viable business plan, do a qualification in I.T. (joy!!!) and it is a really good course!
I got my van trawling ebay for bargains (6x12ft) and all the equipment we need, for start up costs of maybe £2500 (loaned from my partner). The grant from N.E.S. will fully stock the van, and we are off!!!!
Point is, a little planning, maybe being more flexible with your ideas initially, accept that from little acorns, big oaks grow, and keep loans down as low as you can, you are on to a winner imho! Fingers crossed for us both!!!! :j

Chuzzle

Dawn - thanks for the advice I shall enquire at our job centre and see what comes up around here - good luck with your business

dawn1977

No problem, and the best of luck to you too!

Bismarck

good luck with whatever you decide....my tip would be start very small and if you make mistakes they won't hurt you as much!