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Lander, WY | Couple big points:
1) it's a full time job, and people will want feed when they want it, not when you are available.
2) you will spend lots of $ up front for equipment and set up, or fight less than optimal layout/equipment and spend lots of time per load. Spend $ up front or time (and therefore $) with each load.
3) insurance can be tough to get as a start up. We had one insurance company give a quote, all others no quoted... price wasn't bad, but make sure you can get coverage (actual quotes, not your agent saying they can, our agent thought it wouldn't be a problem, but 3 companies had some feed mill losses recently and wouldn't quote a business with no history)
4) we didnt have to do the FMSA training, we were partnered with a larger mill owner so he had the training. The practice was same as what insurance required.
5) a/r and cash flow is a major deal. Cash or credit card at pickup!!! Don't charge based on commodity feed costs, if you are selling 2000lbs or less base price off bags of Tractor Supply feed, and be higher than that if you have good, custom feeds. A big feed mill that won't sell less than 3 tons isn't your competition, tractor supply is, and their feed is generally crap.
6)it's a full time job, and people will want feed when they want it, not when you are available.
We made decent money, but the $ per effort and headaches wasn't in line, looked to set up to make batching and dispensing into customer containers easier, and move off the farm (people knocking on the door Sundays got annoying... lost one customer when he wasn't happy with my response one Sunday he showed up asking for feed).
We figured $500k to get a place and basic equipment/storage upgrades, closer to $1mil to do it "right", but we are in an area that a place would have been a lot of $. Anything with a building that you could work on a truck was $200k or more with oilfield companies looking, and upgrade to 400 amp or more three phase... The county said we need customer bathrooms etc for "retail sales"... plus permits, and electricians are impossible to hire to do the wiring (industrial so can do the work yourself), started looking at an employee, first one would add $10-20k in insurance and employment costs IF you can hire someone...
My opinion, don't do it at your place, and you need to go all in, or don't start...its not a sideline business. Email is good if you have more questions. | |
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Starting a Custom Feed Mixing Business
