My first business idea. Comments/criticisms?
Hey guys,I have a business idea that I am getting serious about. I know there are many experienced business owners on this board and I wanted to post my idea so that I can get some opinions about the potential (or lack of) this idea has.First some personal information about me: I`m going to school full time any will have heavy class loads in the future which will allow little time for me to devote to my business. (maybe 20 hours a week) However, I have more than enough startup capital ($18,000) and I believe my startup costs will be low so there should be no financial hassles to deal with. My main concern is if this idea will produce a profitable business that won`t consume all my time.Ok here is my idea: An online chocolate store that draws a customer base from the local area. I have noticed that online candy is much more expensive than the stuff you see at the checkout aisles. I believe this is because people are willing to pay much more for a candy that has some specialness to it. Maybe it`s specially shaped or has an exotic taste. Prices for 150 grams of chocolate or a box of pieces range from $3-$40 online.I want to sell stuff at the lower to mid end of that price range. At this price level I expect to retail my products for around 3 times my cost. I`ll show some examples:http://www.metrocandy.com/NONPARIELS-WHITE-CHOCOLATEThis candy is about $6 per lb. or $3 per 1/2 lb (which is about 225 grams or 4 hershey bars, the increment I think I`ll sell most of my candy in) I think I could sell this candy for $6-9 per 1/2 lb. http://www.metrocandy.com/MELTING-WAFER ... COLATE-50L B-CASEThis candy is about $1 per 1/2 lb and I think I could sell it for $6.http://www.metrocandy.com/CORDIAL-CHERRIESAbout $4.25/0.5 lbs and I think I could sell it for $10http://www.metrocandy.com/COCONUT-MARSH ... UARES-MILK$3/0.5 lbs and I think it could sell for $10-15Why do I think I can achieve those retail prices? Because candy on other websites is similarly priced. Also I think by adding some flare to the packaging the candy will look like it`s worth more to the customer.I plan to market my candy locally by making small sample packs with pieces of several of my candies. Each pack will cost a lot in products/packaging, probably $2-$5. To distribute them I`ll stay around a high traffic area preferably near some upper-middle class eating areas. This is where I think I can find my best target demographic: middle or upper middle class folks who "enjoy" food a lot. I believe these are the guys who will be willing to spend money on candies that appeal to them. Assuming a 10% hit rate it will cost about $20-50 to get a customer. However, I believe that I`ll have a high retention rate because people who develop tastes for my products will want to keep buying (hopefully they won`t wander off to a different candy website though). I imagine that in a few months I`ll have around 50-200 occasional customers who places orders infrequently, and maybe 10 regulars who buy stuff every week or every month. Since most customers will be local I think I can get away with sending packages via the slowest method and they will still arrive in a day or two.So that is my idea for a profitable business that won`t demand too much time from me. It will be my first business venture though, and I`m very nervous about overlooking some detail that will cripple the idea and leave me stuck with hundreds of dollars of candy in my garage. Any comments or criticisms you guys have would be greatly appreciated!Thanks in advance
Sign In or Register to comment.