How to Start a Seafood Business

Sunday, July 7, 2013

How to Start a Seafood Business

Because of the unique nature of seafood and its elevated risk of food-borne illnesses and spoilage, the seafood business requires extra care on the part of its workers and managers, and attracts extra attention from state and local regulators. However, seafood remains a key source of protein in many markets, and a popular food item among all consumers along all price points.

Step 1

Form an entity. Any food service-related business involves a substantial risk of lawsuits from a variety of sources, whether you are starting a wholesale business or simply opening a restaurant. Workplace injuries, accidents and allegations of food poisoning can lead to lawsuits. By forming a limited liability company or a corporation, you can insulate your personal assets from your business. Otherwise, your home could be at risk over a business dispute. To form a business entity, file articles of incorporation for a corporation, or articles of organization, with your state department of corporate services or state secretary of state.

Step 2

Attend safe food-handling workshops. Generally, your state, city or county requires your management and staff to attend one or more workshops on safe food handling. This is usually among the requirements before obtaining a food service license. This is a particularly acute concern in the seafood business, because of the potential for spoilage.

Step 3

Locate a suitable facility. Whether you are opening a restaurant or wholesale seafood distributorship, you need a climate-controlled facility with adequate lighting and drainage, including sewage capacity to handle waste water runoff. You also need to ensure that no particles are falling from the ceiling or walls that could contaminate food. The state or local health inspectors will visit your facility before issuing a license.

Step 4

Obtain necessary business licenses, clearances and tax registrations. These requirements vary by jurisdiction, but generally, you will need a business license or business tax receipt from your county or state government. You should also check zoning requirements in your area to ensure that local ordinances allow you to operate a business of your type in your neighborhood. You can generally do this by contacting your city zoning commission, or, if you plan to locate in an unincorporated area, your county zoning commission. This is particularly crucial for seafood wholesalers, who must generally only locate in commercial areas, because of the large amount of truck traffic they can generate.

Step 5

Secure clients, customers and vendors. Every market is different, but every seafood business must generate a steady stream of customers to sell to, as well as a network of reliable suppliers. Introduce yourself to restaurant owners and seafood vendors in the area, including fishing boat operators. If you are opening a restaurant, you should have an advertising and marketing plan as well. Have a backup supplier in case the first supplier has a hard time filling your order.

Step 6

Finalize your health licensing. As a seafood business, you must comply with federal as well as state regulation. At the federal level, you must become familiar with the Food and Drug Administrations' inspection and sanitation requirements specific to the seafood industry. At the state or local level, you must complete an on-site inspection by state health authorities before license issuance.

References (5)

Resources (1)

"Seafood Business" Magazine

About the Author

Leslie McClintock has been writing professionally since 2001. She has been published in "Wealth and Retirement Planner," "Senior Market Advisor," "The Annuity Selling Guide," and many other outlets. A licensed life and health insurance agent, McClintock holds a B.A. from the University of Southern California.

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1 comment:

Seafood BusinessMarch 1, 2014 at 9:33 AM
How to Start a Seafood Business, Seafood, Seafood Business
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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Sunday, July 7, 2013