How to Start Up a Freezer Warehouse Business

Monday, August 5, 2013

How to Start Up a Freezer Warehouse Business

Refrigerated warehousing is a growing industry with a demand that continues to increase. Businesses such as fast food restaurants, florists and even hospitals need to store valuable items in low temperatures; therefore, the need for quality freezer warehousing stays strong. If you are considering starting a freezer warehouse, take steps such as building a business blueprint to ensure a better chance at success.

Business Blueprint

Building a detailed business blueprint will help you determine which facet of the cold storage business your niche falls under. Outline within your business plan your mission, vision and goals. List your required supplies, capital and number of employees if applicable. Although writing a business plan is intimidating, it is important, according to the U.S. Small Business Administration, because your business idea is expressed in a plan -- a living document that outlines every critical aspect of its operation.

Licensing

Once you know the path of your cold storage business, you can register your business, and apply for your Employer Identification Number and any licenses associated with owning a freezer warehouse. The Illinois Department of Agriculture Bureau of Warehouses requires a license for anyone operating a refrigerated warehouse. Check with your local and state government offices for any license requirements. Visit IRS.gov for your tax information and establish what type of business entity you're starting.

Information

You have varying degrees of refrigeration to consider when starting your freezer warehouse. High-temperature warehouses range between 5 degrees and minus 5 degrees Celsius, and are intended for storage of items such as vegetables, wood and floral products. Medium temperature storage warehouses range from minus 10 degrees and minus 18 degrees Celsius, which is ideal for items such as meats. Low temp freezer warehouses have temperatures between minus 23 degrees and minus 28 degrees Celsius for the purpose of storing items such as ice cream. Ultra low freezer warehouses maintain temperatures equal to or below minus 30 degrees Celsius, which is mainly used for industrial storage, blood banks and various medical items. Incorporate into your business plan which level of refrigeration will fit your needs.

Location

Location and construction are a vital aspect of starting a freezer warehouse. Depending on the temperature of your facility, you will need a certain type of foundation. DeHart cold storage construction company, a builder and facilitator of freezer warehouses, states that one of the most important things to consider when constructing a warehouse for storing frozen goods is which concrete floor to use. Collaborate with your real estate agent and contractor about your refrigeration plans when investing in a location for your freezer warehouse.

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Shaundra Robinson is a full-time writer with over 15 years of experience. She's well versed in a variety of writing styles including SEO articles, fiction, nonfiction, poetry, and business writing. Shaundra has a Bachelor of Arts in management with a minor in English (creative writing emphasis) from Saint Leo University.

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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