How to Start a Cold Storage Business

Monday, August 5, 2013

How to Start a Cold Storage Business

Starting Your Own Cold Storage Business

The cold storage business has been around since the 1800s, but during that time the only industry using it were the breweries and they mainly rely on the unsanitary practice of ice-harvesting. By the 1900s, the idea of cold storage has seeped into the meat packing business, until finally in the mid 20th century; these refrigeration facilities have been installed on trucks which were used to

transport perishable foods to long distances.

Nowadays most companies prefer to outsource their cold storage facility to relieve themselves of the trouble of having to construct and maintain their own cold storage facilities. This is where independent refrigerated warehouse owners can come in.

Steps to Start a Cold Storage Business

Here is a step-by step procedure that you can follow to start your own cold storage business:

Determine which industry or industries in your area need cold storage and how much of these need s have already been supplied. If you realize that there is still a demand that has not been supplied, and then fill that void. Make a careful study on how to go about your plans and execute them. You can seek advice from other people who are in the same business and get good ideas.
Once you determine that you can make it, you can test run by starting small. For example you can purchase a freezer van to be used as bait storage and cater to commercial fishermen and other small-scale companies. This test does not involve a very high financial threat. But take into consideration a slightly higher initial operational expense. This can be expected for all start-up businesses, because the operations are not that efficient yet.
Your test run should give you an idea if you want to go on full scale or not with the cold storage business.

Should you decide to continue, you can now try to secure a means to fund or finance your venture. You can choose to stick to your initial market base or expand to cover more.
A crucial part of the business is marketing. You need to recognize your base market as well as your competitors. So who is your market? The first could be the fishermen who were your sole market during your testing phase. You can expand your market by selling what your customers are selling. You can not only store merchandise but also package them and then sell them depending on what the demand is. This way not all your eggs are stored in one basket and you remain in a competitive edge.

References

How to Start a Cold Storage Business

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AnonymousAugust 30, 2013 at 1:19 PM
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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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Monday, August 5, 2013