Up and coming Reddit Entrepreneur /u/Taq_ took the advice of Reddit’s entrepreneur community last week and it has paid off spectacularly. When the Newzealand based astrophysics student posted his troubles to the community, which has grown to nearly 360,000 members, they gave him the push he needed to take the first steps to creating a soup business from a family recipe.
One week later, the user returned with a new problem – he had taken the first steps and it was going ‘waaaaay better than expected’. Not sure what to do, the Reddit entrepreneur returned for advice on what he should do next.
The Reddit community’s response is packed full of useful advice on achieving startup success. Here is a breakdown of the story, the idea, and the advice that helped his success.
Reddit Entrepreneur: I keep creating excuses, how can I overcome this?
Reddit user /u/Taq_ posted to Reddit’s entrepreneurship community last week when he asked ‘[I’m] having troubles taking the first step, how did you overcome this?’
He offered no specifics on what his idea was, just stating that he had wanted to start a business for a while, knows that it can do well, even has adequate funding, but just can’t stop making excuses.
The Reddit entrepreneur community responded with some tough love and some tips on how to stop procrastinating. One user said ‘Fear is a bitch. Take small steps. Keep your hands busy doing something towards your goal.’ They finished up with ‘You got this’.
Fear is a bitch. Take small steps. Keep your hands busy doing something towards your goal. You got this.
Other Reddit entrepreneur’s said that he should ‘Stop thinking so much. Take one small step at a time. Like, even a really small step.’
Consistent work is what will pay off. Fake it til you make it baby. – Kobra-22
The Reddit entrepreneur stated that after he posted about his troubles and received the motivation from the community, he got up the next morning and started working at it. He said ‘I could never muster up the courage until I asked for help’.
Success: What do I do now?
The Reddit entrepreneur returned 5 days later with updates and a new problem – it was going too well.
In his next post, he detailed what had happened in the 5 days following his first post.
Taq_ set up a soup delivery business to take advantage of his mum’s ‘amazing’ family recipe. Very different from the tech startup that we have covered previously, this entrepreneur is following in the footsteps of other businesses built on family recipes (such as Barnana the dehydrated fruit company which gained $5.3 million in funding earlier this year).
How it started
After figuring out the initial costings per batch and quantities required to maximise profits, the Reddit entrepreneur started with the classic freemium model.
On “the first day”, he said, “I made three batches and walked around the neighbourhood asking my neighbours if they wanted to try a free container of the soup. And [in case] they wanted more, I wrote my name and phone number on the container.”
“[I] gave away about 45 free containers on the first day.”
On the second day, he went to other neighbourhoods to continue spreading tasters around, giving away another 30 along with his contact details.
The calls start flooding in
Later that day, the calls started flooding in. “On day two, I got 27 calls.” That’s over half of the people who got the free sample the first day and a 36% return rate overall.
On the third day, he stopped giving out free samples and instead prepared for more calls. He received a further 23 calls that evening, 15 of which were repeat customers – a healthy customer base for a first product.
On day four, he took to the streets again, got another person to help with cooking the soup, and gave out samples to more local neighbourhoods. This time, he received 45 calls, 30 of which were repeat customers.
This pattern continued to the fifth day when the young entrepreneur received another 37 calls – and this is when he returned to the Reddit entrepreneur community for advice.
This soup ‘business’ is getting a bit too out of hand for me and I am horribly prepared for something to this scale. I wasn’t expected more than 10 calls on day 5.
Not a bad situation to be in during the first week of business.
The Reddit entrepreneur when on to request advice on how to maintain this level of growth, how to efficiently deliver to everybody without high petrol costs, and how to get stocked in local supermarkets.
What advice did the seasoned entrepreneurs of Reddit give?
The post became the top thread on Reddit’s dedicated entrepreneur community’s page. Here is some of the top pieces of advice he was given:
“Take it easy. You are five days in. You are not ready to supply a supermarket yet. You don’t have the capacity nor, I expect, have you met the appropriate regulations. Stop attempting to acquire more customers if you can’t supply them. Consider raising your prices, but make sure customers that have bought at the previous price understand why you have done this (because you can’t meet supply).”
“First off, congratulations on getting off your butt and doing something. This right here is what entrepreneurship is all about. Hustling smart. Secondly, the panic is understandable. But there really is no need to. You are doing exactly what you set out to do. Even if you didn’t realize it the first time around. A lot of people would give up their left nut to be in your situation.”
“Lastly, if you really do want to downsize (after 3 days of operations – which should make you pause and rethink) it’s not that hard. You double your prices. When it comes down to it, I believe everything is a cost/benefit analysis. Just to make it clear, would you hand deliver one soup if they pay you $1,000 per day? I bet you would. Would you hand deliver 100 soups @ $10 each? Not that easy is it? So that’s what you need to do. Find the price point that will make your delivering soup profitable (enjoyable if you want) to you.”
“I would highly suggest giving your customers the option of picking up the soup at the same price as before, and adding a delivery charge. This way, you get to eat your cake and have it too.”
1) “Now that the product is validated, you need to start making a legit business. You need a brand, logo, printed material (flyers, labels, biz cards, etc). Web site for ordering, and some basic accounting package such as Quickbooks or something online.”
2) “Depending on where you live, common requirements include getting a business license from your city, a resale license from your State, and getting certified for food prep and handling via your county or the like. Your local city office should be able to guide you on exactly what you need in all of these areas.”
3) “What is your price? You should be making at least 100% profit on every sale… probably 200-300% taking it door to door yourself. Generally you wholesale to groceries and all at 100% markup and they in turn mark it up again. Make sure you’ve included the cost of the jar and label.”
4) “You need to start considering and working on a viable plan for growth. Certainly people love the convenience of getting hot soup delivered directly to them… even more so if they can order it online. But is it still worthwhile at current prices and when adding in costs of hiring delivery people, including insurance, mileage costs, etc? It certainly could be, but then is that price point worth it to the customers vs say a lower price offering it in higher quantity and shipped cold for the microwave to reheat, or say a tiny restaurant? Perhaps have both: a tiny restaurant PLUS delivery available, but with a delivery fee added? Perhaps tune your logistics such that you deliver to certain neighborhoods on certain days of the week? Consider your time and cost of hiring: is it worth you doing everything, or perhaps you should be out selling the product via samples, and others should be taking phone/Web orders and delivering the product? Delivering by yourself works fine for a short time, but it sounds like you should focus on a better solution ASAP.”
Good luck for the future
What a story from the Newzealand entrepreneur. The strength of online communities such as Reddit Entrepreneurs has really shown in this example, there are stories like this posted regularly – it is a great place for wannabe entrepreneurs to learn from each other’s mistakes and get advice from those with more knowledge.
We hope to hear updates from Taq_’s business in the future, all the best!
The post Reddit entrepreneur seeks advice on his new food startup and turns it into a huge success. appeared first on Centre Mindfulness.