Business Tip: Pretend You Are Bigger Than You Are

Business Tip: Pretend You Are Bigger Than You Are

Just like meeting a person for the first time, businesses often make judgments on first impressions. Here’s a business tip that you might want to consider- pretend you’re bigger than you are.

Have all your business formation information ready before contacting any suppliers. Make sure you have your EIN number, LLC documents, prepared W9, website and business email addresses prior to contacting vendors, suppliers, potential clients, or distributors.

Product and ingredient suppliers will often ask for this information prior to giving out bulk pricing for packaging and ingredients.  They often prefer that smaller companies and individuals go through a distributor. However, it is essential for your business planning to know what the bulk direct and distributor pricing will be—even if it’s unlikely that you will order from them for months or years. Make sure you ask the price per pallet, the price per truckload, and what the minimum order is.

The goal in your business planning is to determine if your business and product can be profitable 1 or 5 years from now. To do that you need all of the information, in order to understand where the price breaks are for ingredients, packaging materials, and manufacturing. If a truckload price doesn’t work in your pro forma, then you have a hobby, not a viable business. 

For example if you use sugar, a large company like Wholesome Sweeteners is not going to engage with you if you only want to purchase 50 pounds. Instead, they will direct you to a distributor. But if you say “ I purchase 6 pallets per quarter, what is your MOQ (minimum order quantity)”, then you will get their attention. 

Other businesses can be hesitant to give out information to consumers, so it helps if you can present like you are a larger more established business even if you are just starting out. 

This research will help you determine if your great hobby will also make a great business.






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Author: Mike Schwartz

After spending many years in kitchens in and around New York, and teaching at the Institute of Culinary Education for 12 years, Mike has moved on to his own business. Mike owns BAO Food and Drink, which makes 33 varieties of cultured vegetables, drinks and sauces and the Organic Food Incubator, which offers solutions to small food manufacturers. More importantly Mike is Gabi and Harry's dad and works hard to make sure that they are fed correctly.