Quitting day job to run grocery supplied by my farm

[wberry85]

Here is my idea. I live in a small town with a main street and several small storefronts along the street. My wife works at an animal hospital on that street and her boss just bought one of the storefronts. I live on 11 acres. My thought is to rent the storefront from her boss and open my own small grocery. I can raise produce/meats on my farm and sell direct to consumer in my store. I realize my 11 acres will probably not produce all i need to stock my store so I would buy the rest i need from local farmers. Its a rural town so it shouldnt be hard to come by produce. There is also a very ritzy town about 30 minutes away. Lots of young rich moms that like the idea of organic foods and "country" lifestyle. Marketing to them would be a breeze as long as I can get them to drive out.

Obviously my main concern here is will this support me and my wife. Right now I am an IT manager making 60k. I have always been on salary and am accustomed to a paycheck coming in for the same amount twice a month. I take the security for granted. There are so many variables here so I know its a difficult question to answer over the internet, but can anyone give me any obvious reasons why they think this wouldnt work? Can I pull 50k a year?

[partndn]

What state are you in, and do you know what local and state guidelines you may or may not be required to comply with?
I think it varies a lot what will happen if you can operate under farmer's market guidelines or general business, which is very different in most places.

Have you evaluated the monthly expenses of power, refrigeration, accounting, etc. for the size and scope of the storefront?

Are you farming 11 acres of product now? If not, and you have to run the store, who will maintain the 11 acres of stuff.. do you have equipment for that, personnel you trust, etc.

Lots to find out, I think, that could get you a little closer to trying to see if your sales might meet a profit.

[Brighton]

My big question, I have thought about this same type of thing, is who runs the store while you are farming/gardening??

Also, what will you sell in the winter, do you have hoop houses on your land, meaning can you produce/grow lettuce even in the winter.

Knowing what area of the country you are from would be helpful.

[wberry85]

I am from Georgia, and no I have no looked into the legal ramifications of all this. I would of course before sinking any serious time into the idea. I have thought about hoop houses or some sort of greenhouse and the possibility of aquaponics to supply food during the winter. I suppose I would also have a higher supply of canned goods and jams/jellies etc during the winter months.

I am married and my wife could watch the store while I am maintaining the farm. She is a professional photographer so her hours are pretty flexible. I think that between the two of us we could manage. My parents also live close and I think they would love to help us out for free most likely.

[Bret]

It matters only what you believe. Make the decision. Then set about to making it the right decision. What if you exceed your wildest hope.

[bluemoonluck]

Honestly, I wouldn't quit a $60k/year job until the business was up, running, and profitable to that level first.

Get a short lease term. Hire someone to run the store for you. Get everything set up with other local farmers to make sure you can even get enough merchandise to adequately stock it (people aren't going to make a 30-min drive if your shelves aren't fully stocked). See how things go for at least a year, preferably two.

Then do some math - if you don't have to pay someone to run the store for you, and you step into that role, how much money will you clear? If it's enough to quit your day job, then go for it. If not, keep your day job and decide if you want to keep trying to build up your business to the point that you CAN quit, or if you prefer to keep it as a side-line to your current income. Or of course you can also choose walk away from it all and head back to the drawing board for other ideas.

[Yvonne's hubby]

Can you pull 50k a year out of a small grocery in a small town? Shouldnt be too hard, that only 1000 heads of lettuce per week. or say 500 heads of lettuce and a couple hundred dozen eggs a week. Of course that doesnt include overhead, which will require at least that much more. It takes some serious grocery shoppers to spend enough in the average market to produce a grand a week in profit. Yes, I know you are talking about a much wider variety of product, and less per item, but the concept is the same, it takes a lot of product to just pay the overhead, rent, utilities, insurance, etc etc, not counting what it costs to produce the veggies and get them in the store before you make the first penny to call your own. Can it be done? no doubt about it. Do you have, and are you willing to expend the money and energy required to do so? That lies entirely in your hands.

now, that being said, why do you think you need 50k a year to live on? set up your store, live off of whatever profits it brings in. That way you can do what it is you want to do for a living, without the anchor of a 9 to 5 around yer neck.

[anniew]

From what little info we have, it doesn't sound feasible to make the same money. Plus, you said your wife works at an animal hospital. How is she going to work at the store also?
Maybe try growing enough to set up a CSA to start. You can run it while still holding your job, if you are truly ambitious and you and wife will work on the farm after work/weekends. A CSA is guaranteed income paid at the start of the season, and then you can see how much work it takes to provide for however many family memberships you get. After a season or two of that, you may have a better idea if something else might work that would allow you to leave your day job.

[wberry85]

The wife does work at an animal hospital but only two days a week to fill in the gaps when photography is slow. We dont need that income but its nice to have some extra (although hardly worth it at $10/hr).

I use the 50k as a general figure. I feel thats what it would take for me to live comfortably and not constantly be worried about how to make ends meet. Right now I make 60k and i am able to aquire toys here and there I am by no means rich. I think 50k is my goal where i would be able to make it and put a little money away each month for a rainy day. I am not aiming to live paycheck to paycheck til I die.

I think setting up the store and keeping my day job at first sounds plausible. Pretty difficult thought when my day job demands 50 hrs a week from me. Running a small farm with my job is difficult enough. Add a grocery store to that and I think it might be too much. I just thought the benefit of being able to grow your own food and sell at your own store presented an interesting symbiotic business model that might be the key to making decent money as opposed to focusing on one or the other.

[bluemoonluck]

Originally Posted by wberry85

The wife does work at an animal hospital but only two days a week to fill in the gaps when photography is slow. We dont need that income but its nice to have some extra (although hardly worth it at $10/hr).

I think setting up the store and keeping my day job at first sounds plausible. Pretty difficult thought when my day job demands 50 hrs a week from me. Running a small farm with my job is difficult enough. Add a grocery store to that and I think it might be too much.

To me the solution here is very evident. You don't need your wife's 2-day-a-week income from her vet job, and her photography business is flexible, right? So let HER set up and run the store, while you work your day job . Then if the store starts to take off and really earn the kind of money you think it can, you can quit your day job and join her. Until then, you'll still have the financial security of your salary to fall back on.

[Homesteader]

When doing your calculations, be sure you understand taxes. You will, as a self employed person, be paying that half of the Soc. Sec/Medicare that your current employer now pays (they take out half from you and they pay the other half). So that's another, what is it now folks?, 7 or 8%. Plus of course you'll have to hold out your own income tax, plus federal unemployment tax as I recall.

I used to just peel off 40% of every dollar to pay those. Your rent, cost of the farm, utilities, etc., is on top of that.

Of course you will have write offs against your income, but you will have to send these taxes in to the gov. before you get to write off your costs/write offs on your tax return.

[mnn2501]

Honestly, I wouldn't quit a $60k/year job until the business was up, running, and profitable to that level first.

As someone who has owned small businesses I agree with this. And have money saved up before you do.

[Yvonne's hubby]

Originally Posted by mnn2501

As someone who has owned small businesses I agree with this. And have money saved up before you do.

Yeppers, at least enough to live on for the first year until the store proves itself.

[wberry85]

Originally Posted by bluemoonluck

To me the solution here is very evident. You don't need your wife's 2-day-a-week income from her vet job, and her photography business is flexible, right? So let HER set up and run the store, while you work your day job . Then if the store starts to take off and really earn the kind of money you think it can, you can quit your day job and join her. Until then, you'll still have the financial security of your salary to fall back on.

I agree... I think this is a good idea.

[salmonslayer]

We have a small 21 acre farm where we sell plant starts, vegetables and fruits, berries, grapes, herbs, eggs, and we also sell hay and calves. We do on farm sales and sell through a local mom and pop store and we will be looking at making about 10k this year so to me your figures are overly optimistic.

You might do okay if you opened closer the urban area you mention but your going to have a real issue getting folks to make a 30 minute drive unless you have a unique marketing pitch. You also might want to check on the various permits you would need; even here in Hooterville it can add up if you sell through a store front.

[Explorer]

You need a written business plan!

Then your decisions will be easier to make.

[highlands]

Running a store is a more than full time job. Running a farm is more than a full time job. Or perhaps five full time jobs seven days a week in both cases...

We farm, no employees - we do all the work ourselves. I would not want to add running a store to our work load because while 'storing' I wouldn't be able to farm. We sell the vast majority of our product direct wholesale to local stores and restaurants. I appreciate that they take care of stocking it, manning the stores, handing the retail sales, etc. We do a little bit of retail and CSA at the farm gate (ordered ahead) or delivered on our regular weekly route while delivering to the stores and restaurants but we have no farm store, no place to browse, nothing we have to man waiting for customers. This works for us as we're off the beaten path.

No matter what you do I urge you to do a very careful business plan for it. Estimate very high on your expenses, low on your production and income. You won't jump to a take home pay of $50K/year in the first year, or the second, or the third... It may never happen. Or it might. Probability is not though. It will take time and money to get to any profitability, to build up the infra-structure, customer base, learn the lessons the hard way by doing, etc. If you're making a profit in three years you'll be doing very well. Five years is more likely but still no guarantee.

I have seen many people try to do the idea of selling the products of other farms while they get the store going and their own farm's production up to par. I can only think of one success at this and they got the farm running first to a CSA level, then added the store in a really good location outside of town where commuters go twice a day, then continued expanding the farm to try and fill the store (still haven't yet after 30 years). They have quite a few employees and sound a bit ragged.

Speaking of employees, one thing to watch is your labor budget. Employees tend to be a big expense for businesses, and a farm is a business as is a store. Employees are not as efficient as you are doing things yourself. I've seen a lot is people who hire employees long before they are earning enough to pay themselves. Then they end up working another job to support their store or farm so they can keep their employees. It becomes a vicious downward spiral. Beware this trap.

Grow slowly.

[FarmboyBill]

You could mount refrigerators, and buy bottled milk from a dairy farmer and resell it in your store. You mightr even buy it in bulk, to get a good price and bottle it in your store at slow times.. Mount a separator, and a big butter churn and you've also got cream and butter to sell. Lehmans shows a 2 big ice cream churns running off of a one lunger engine that amish take to sales, parades, steam shows, ect. you could do that to make ice cream.
Make sure you have, as was said, hoop houses so as to run through out the winter.

Sounds like youd be stretching yourself PRETY Thin to be farming a 3 or 4 acre garden, traveling to get the rest of your produce, and your time at the store. Might have to hile help in the garden. Starting to sound like a job again.

[po boy]

Originally Posted by wberry85

Here is my idea. I live in a small town with a main street and several small storefronts along the street. My wife works at an animal hospital on that street and her boss just bought one of the storefronts. I live on 11 acres. My thought is to rent the storefront from her boss and open my own small grocery. I can raise produce/meats on my farm and sell direct to consumer in my store. I realize my 11 acres will probably not produce all i need to stock my store so I would buy the rest i need from local farmers. Its a rural town so it shouldnt be hard to come by produce. There is also a very ritzy town about 30 minutes away. Lots of young rich moms that like the idea of organic foods and "country" lifestyle. Marketing to them would be a breeze as long as I can get them to drive out.

Obviously my main concern here is will this support me and my wife. Right now I am an IT manager making 60k. I have always been on salary and am accustomed to a paycheck coming in for the same amount twice a month. I take the security for granted. There are so many variables here so I know its a difficult question to answer over the internet, but can anyone give me any obvious reasons why they think this wouldnt work? Can I pull 50k a year?

NO!
Dollar wise, what are you producing on your own??
Look at how much markup you need if you have to buy produce???????????????
What kind of traffic can you get? What will that traffic cost you in advertising cost etc?

[Limon]

Just some numbers to consider: Grocery stores survive as a volume business; they have a very low profit margin. The figure ranges from 1 to 3 percent. Assuming your idea of selling upscale works, that might put you in the 3 to 5 percent profit margin range. At a 5 percent profit margin, you'd need to sell $1,000,000 worth of goods to clear $50K.

Is the upscale area big enough to drive that sort of business? If, by pricing for that group, will you discourage a larger, local market? Can you supply that much goods? How much debt will you have to assume to get started? (Refrigeration units, licenses, permits, scales, etc.) There are a lot of variables that come into play. It's certainly possible to make a profit, but I wouldn't count on $50K in the short-term.