Thread: Making Bacon
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Old 04-12-2013, 12:57 PM   #2
erandolph
Knows what a fatty is.
 
Join Date: 12-07-11
Location: Newburgh, NY
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If you are dealing with a lawyer then hopefully he/she has made it known that a butcher permits/inspections fall under the jurisdiction of the dept of agriculture and smoking meats/selling finished products falls under the scope of the department of health. I should say at least in NY it does. While the laws and requirements are mostly the same there are some differences. Make sure you have both bases covered.

Business plan is a bit confusing you are setting up an llc but going to split profits. is the butcher going to be a member of this LLC? If yes then are the profits being split evenly? I'd think the butcher has more skin in the game and would require a much larger portion of the profits. kudos to you if not. If setting up the LLC and the butcher is not a member then it gets murky. He will have to carry the cost of the product and you carry the cost of the service to smoke it. The sale will go through the butcher so you will have to invoice him for your service otherwise the sale will generate phantom income for him. An even bigger issue is you state you hope to open your own brick and mortar business. Who has ownership of the bacon/smoked goods. The butcher could argue it is him as you could as well. Spending much needed start up capital for legal fees will be painful.

If you are really thinking of having your own place then you need to work on your idea now and avoid potential future headaches. If you have a tight bond with the butcher this would be my recommendation. He sells the raw product to you at wholesale. You work your magic and sell it back to him on consignment or as any vendor would. This price would be less than retail so he can mark it up and make a few bucks. If he gets pork belly for $2/lb you smoke and sell it back to him at $5.50 lb, he then in turn sells it retail for $8lb. You will have to take a little haircut as goodwill to him to allow you to use his kitchen, packaging, etc. This allows you to get your feet wet with little exposure but more importantly you have full control over your product, brand and future. Might think it is pie in the sky thinking but what if you sell 1,000lb's of smoked items and want to take your product elsewhere. You think the butcher is going to let you walk if you are partners. zero chance without compensation.
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