So I've started what I call two "mini" small businesses. One was all online, mostly just me being in the right place at the right time in a really niche industry. I had a nice set of clients and at it's height I was basically pulling in 20-30k a month. It was almost too easy, as I never really had to worry about keeping expenses down and being decent at accounting so I feel like it formed some lazy/bad habits. I was working with easy 300-400% margins so the pressure was off on keeping expenses down.
After some major pitfalls I saw the writing on the wall and got an Airbnb up and running, which was a little bit more in the "reality" direction after my first stroke of luck. Some slight challenges and a learning curve, but running it by myself keeps all my bills paid and some money in the bank – but it's not really cutting it in terms of growth for me and I don't want to expand that business much further for a number of reasons so income has plateaued.
So this has led to my third venture. It started the first time I had a cannabis drink, I loved it so much I decided I wanted to create my own. Long story short 2 years have gone by and I abandoned it. 2 times I had a full business plan based around having a great product that undercut all my competition in price with great branding and great taste – only to get fucked by my state changing the rules with no warning. I decided to pivot since the space had now become oversaturated by even local/regional businesses with far more money then I could dream of. All was not lost, I've learned a lot about the beverage industry in the last few years and made some pretty decent connections. I had outstanding branding thanks to one of my friends being a bit of a marketing/branding savant (she works for a firm doing all sorts of work for Fortune 500 companies, she just did a pitch to Apple last week – she's legit.)
So my copacker who's been working with me on a THC drink gave me the idea of getting into the adaptogenic/functional beverages space. I was skeptical at first but after doing some research I went for it. Our first SKU is going to be an Ashwagandha/Magnesium Glycenate product marketed towards being a "social tonic" or a alcohol alternative.
Not gonna throw my whole sales pitch in here about it, but I feel like the branding is half the battle in this space and ours is very strong. The drink itself tastes great and has a unique/cool flavor combination. It doesn't get you fucked up the extract combination is very relaxing and not overwhelming. There's basically zero local/regional competition in this space so I'm hoping early expansion will not be the battleground I assumed the THC drink would be. I'm hoping I can get use my start up cash (around 25-30k overhead for the first few orders, branding, marketing, etc.) to create a small functional beverage business starter kit I can pitch to investors
Just kind of looking for general opinions or sentiment on this idea. Or any general advice from anyone in this space. I've grown to love the beverage industry and I've been enjoying working on this project and I'm just waiting on my first pallet to get here from the copacker – so I figured I'd run this idea by some strangers while I'm at it.
I've had great success with my first two businesses and I'm ready to take the plunge into something more legit – but I've never had real employees or had to be more accurate and efficient with my accounting before so I'm just a bit nervous about getting this off the ground and not sinking the ship before I can get real cash flow going. All opinions welcome.
I've started two mini-small businesses, nervous but excited about my next venture. Just looking for general advice.
byu/dontdxmebro inEntrepreneur
Posted by dontdxmebro
5 Comments
Is there a question in there?
Dm me I can help you
You’re really gonna wanna invest on marketing much more than you needed to for your other businesses. Branding is just Step one. Now your Brand has to take action. Your previous businesses were either an easy niche or you were piggybacking off of a big company that did your marketing for you but now you are going to compete directly with billion dollar beverage companies.
Obviously, it can be done because there are lots of small brands, but it’s a whole different ballgame. Market market market. But you’re gonna have to be creative since you can’t just buy a Super Bowl ad with big actors in it and get on every shelf in the nation. Do things the big guys can’t or won’t do .
If you need help with understanding and implementing these ideas hit me up.
drink business is a whole different level compared to online businesses and Airbnb. the difficulty isn’t even comparable! It’s such a competitive market; I can’t even imagine!
Is it the U.S. market? That would put a lot of financial pressure on you, unless the factory is your partner.
About 6 months of last year I was involved in founding a functional beverage with kava as The functional ingredient.
I’d really only run online and consulting businesses before so it was a huge change to do a physical FMCG D2C product.
Winners in this space need to have three things down pat
– a strong standout brand
– amazing distribution partnerships and channels
– really clear pricing and cost model
One of the reasons I stepped away from this business is that it became apparent that even the simplest launch would need a million dollar budget for the thing we were trying to do. And we weren’t trying to go big. We were simply trying to launch in small college towns where our Target market was. Think Bellingham or Asheville.
We had deep expertise in product and beverage marketing our supply chain was sorted and we were sure we had a good chance of winning.
However.
The cost of manufacturing is low but the amount of time money and effort it takes to do packaging and distribution and the fight for shelf space is exhausting.
Having said that I believe that this is the market that is ripe for growth. Functional beverages that can replace alcohol in a social setting for young people. If you give this a crack my good wishes are with you.