Quitting day job to run grocery supplied by my farm

texican · #41 06/22/13, 02:48 PM

Both of these operations appear to be full time occupations. Unless you have a very large family, or don't require sleep, I'd concentrate on one or the other.

One, the farming end, means you'll be buying supplies retail and be selling your finished product wholesale... even if you sell to yourself. On the grocery end, you'll be buying wholesale and selling retail.

bigjon · #42 12/18/13, 07:53 PM

local store owner (not grower)makes 20cents out of every dollar sold.Don't quit your day job!

Lazy J · #43 12/18/13, 08:18 PM

If you want to take home $50,000 then you probably need to GROSS between 200,000 and 330,000 per year. This assumes a profit of 18 to 25%.

am1too · #44 12/18/13, 08:43 PM

Quote:

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?

Way more risk than I'd take.

am1too · #45 12/18/13, 08:54 PM

Quote:

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 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.

Sell the toys and put your money into the dirt to grow the produce. You won't have time for them anyway.

am1too · #46 12/18/13, 08:58 PM

Quote:

Originally Posted by 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.

Only if you owe anything when you do your taxes. Otherwise all they can get you for is your current half the other half your employer now pays. It doesn't matter if you make a profit or not.

DAVID In Wisconsin · #47 12/18/13, 09:10 PM

Most small businesses are hard to start and can take a few years to show any profit much less 50 grand. I have been there. For years I worried about getting paid. Don't quit your day job until you feel comfortable supporting your family with out it. I have seen friends jump in feet first and lose everything. And every once in a while I have seen friends jump in and do OK. I wish you the best.

am1too · #48 12/18/13, 09:17 PM

Quote:

Originally Posted by wberry85

I would love to but I live so far out that marketing would be a huge obstacle. The location of the store I have in mind is the first building on main street as you enter the town. Main street sees a lot of traffic and the curb appeal I think would be a huge benefit.

Another thing I have working in my favor is there are no grocery stores in the town at all. Everyone has to drive several miles to get to a walmart or dollar store but there is next to zero fresh produce available for a good ways. I have no competition for miles. There are also several restaurants on the street as well.

The locals will drive miles before buying good vegetables, eggs and meat. They buy beer, cigs and stuff found in convenience stores.

If you had a convenience store first then add the good stuff, it might work. Family Dollar and Dollar Stores dabble in food stuffs besides their other junk.

WJMartin · #49 12/18/13, 09:21 PM

Please read, "Mud Season" by Ellen Stimson. It is the true story of a family in Vermont who try to farm and run a small town grocery store.

am1too · #50 12/18/13, 09:23 PM

There is a farmers market in my county close to a town of 40,000. I wouldn't go there to sell. Instead I'd go to the town (100,000) in the neighboring county with a snootville, intelligencia attitude where they'll pay for it.

texican · #51 12/18/13, 09:58 PM

Quote:

Originally Posted by wberry85

I would love to but I live so far out that marketing would be a huge obstacle. The location of the store I have in mind is the first building on main street as you enter the town. Main street sees a lot of traffic and the curb appeal I think would be a huge benefit.

Another thing I have working in my favor is there are no grocery stores in the town at all. Everyone has to drive several miles to get to a walmart or dollar store but there is next to zero fresh produce available for a good ways. I have no competition for miles. There are also several restaurants on the street as well.

I'd not want to bet the farm on starting a business going head to head with a Walmart store just down the road a piece.

You're talking about two full time businesses, farm and a store...

IF you were selling produce at your farm, or had a CSA and you were out of tomatoes, I'd still come back next week, thinking you'd have more then...

If you were operating a store, and you didn't have tomatoes, or had empty shelves... I'd get something else, pay you, and never come back... as I had to go to another market for my 'basics'. It is rare that a regular grocery store has empty shelves (storm shutting down roads...) or is out of the 'basics'.

I'd recommend keeping the day job... the 'best' farms are the ones where one partner has a full time job off farm. Maybe cut back on the day job hours, farm on the side, and sell at a farmers market, Or, out of the back of your truck (zero overhead).

Shygal · #52 12/18/13, 10:51 PM

Everyone mentions the expense of running the store, but what about the expense of also running a farm at the same time? Machinery and fuel and seeds and labor and all that, you need to add that in too.

Sawmill Jim · #53 12/19/13, 12:23 AM

Did i miss the up date on this thread the OP started this thread 06/20/13, 02:40 PM and a growing season has come and gone .

So what did the OP do ?

wberry85 · #54 12/23/13, 06:43 AM

I havent made a move yet. The storefront I was looking at got rented by ANOTHER antique store (thank god, there is only 10 other ones within 1/4 mile

). I had just bought the place last March, so I didnt have much time to get anything into the ground. However, barn is finished and fencing is just about done. Getting married, renovating the house (wifes priorities) would have kept me from doing anything meaningful this year, but next season I am hoping to put it in gear.

I still have high hopes and believe a grocery store would be possible. I figure I will let the place grow up a little bit, see how the soil turns out for me, put some animals out and maybe in a year I will know what I can actually produce and how fast. After I know my potential I can see if a grocery makes sense. I also had the idea maybe to keep my job, start an LLC for the store, and pay someone else to work for me so I can keep my reliable job til I know what I can make.

okiemom · #55 12/23/13, 08:26 AM

start small with little overhead and then add products. weekends only and no long term lease of a building. and then see how it goes you will be marketing to high end customers who want something better than walmart. do not go all in on the traditional grocery or it will eat your lunch. the value added products are the only way you will be able to have a higher profit margin. getting a business plan in writing will help. do not quit your day job. taxes and insurance will have to be paid profit or not.

see if there is a business model similar and how they are doing it.

Lazy J · #56 12/23/13, 09:20 AM

Being Devil's Advocate here.

If mom and pop IGA could not survive in small town America what makes you think that you can start a grocery store where they failed?

Jim

HLGRAY · #57 12/23/13, 03:36 PM

Been there, done that.

Keep your day job.

It is simply impossible to do what you are contemplating.

You will lose your wife, your 11 acres, everything you now have for the sake of the grocery store.

Why?

Too many expenses, too many places to be at the same time, no experience in running a grocery store., too many government regulations in operating a retail meat market/grocery.

All of the advice given by the other forum members applies to your idea.

My advice is to START SMALL with a small farm stand or sell at a farmers market. Work the farm and market by your self as you find time and learn what sells and how to operate without incurring any expenses that do not have a direct sale to pay as you go.

Rent, sales taxes, liability insurance. equipment costs, equipment maintenance, cost of buying shelves, buying refrigeration equipment, buying cash registers, paying employees, buying produce, replacing rotted produce, buying meats, replacing meats which have spoiled, REPLACING STOLEN GROCERIES, and on and on WILL EAT YOUR LUNCH in a retail grocery store.

mmoetc · #58 12/23/13, 04:44 PM

There are people going back in time and modernizing the old tradition of the peddlers carts common in many cities in years past. They convert a delivery van type vehicle into a mobile grocery giving them the opportunity to go where the people are, not wait for them people to find them. Might be a thought for you.

Rose1317 · #59 12/23/13, 05:00 PM

The first question I'd be asking is, how much do you grow or raise now?
There's kind of a learning curve when beginning to grow crops or livestock, the
experience you've had in those areas will be important.

BigHenTinyBrain · #60 12/24/13, 07:38 AM

How much excess produce do you grow each year NOW? Or were you hoping to strt from scratch and begin growing full marketable crops of stuff, enough to feed yourselves and sell, in your first year?