[Tytalus]

Hit me hard guys. I've got some agribusiness ideas and need to build a factory. How do I do this?

I mean I know some of the very very basic concepts of what I need to (That are probably wronng or the wrong priority or order of events) like:

Identify a market: tick.(Not telling)

Identify a country of operations: yes. Family in the third world that would be willing to help me out.

Friends who have owned a factory and know some logistics and willing to mentor me: Yes to the former and maybe to the latter.

Money: A big weakness here. Not much.

Can I outsource his idea: No. There exists a market A that likes goods from Country B. Family is in Country B.

Am I in over my head?: Without a doubt. My background is in statistics and data science.

Am I only asking for ideas here on RooshV? Nope. Brother in law is bright MBA type and loves to talk business ideas. Different side of the family is in Country B.

Can I scale up? Possibly. Could start with selling in Country B to tourists as a cottage maker and scale up to selling to market A.

Is language a problem? A considerable issue for selling to Market A. I have friends that speak the language and might be able to help out. Country B has some English but I would benefit by learning at least one of the three local languages.

[SamuelBRoberts]

I mean this could potentially be a pretty good idea, but isn't there a smaller scale way to start?
Do you have the huge amount of capital required to build a factory?

I mean you're asking for serious business advice in the "Everything Else" section of a pickup forum. That kind of suggests to me that you'd be in way over your head and shouldn't even try.

[Tytalus]

I'm not expecting expert manufacturing advice from here. Hopefully pointers to good resources on how to start a business. There's lots of shit out there or advice for other types of businesses.

Of course I'm in over my head. That goes without saying.

I'm completely sick of being a cubicle drone and sick of living in Canada. I have had a family member over in country B giving me ideas for years and always felt it was just impossible to even try and never bothered considering it.

After reading the story of the quadrapalegic who moved to Mexico I thought "What the hell, why Not?"

If I'm ever going to get out of this frozen country and make a new life it isn't happening if I just sit here.

[Cr33pin]

[Elster]

Uh I'd suggest heading over and catching up with the making money threads in the lifestyle section, some real gems that have helped me and many an aspiring entrepreneur.

The other thing I d suggest is dont get head over heels, risk but don't gamble all in one roulette spin?

[Tytalus]

Any suggested threads?

[Elster]

^
I'd start with this one:
thread-54749.html

[Repo]

Not having alot of money is a huge weakness that it seems you may be underestimating. You need to pay for the factory, you need to pay for the workers and related work costs, you need to pay for your inventory, marketing, and even if you make a sale you have to have enough money to hold you over till you collect A/R, WHILE also still pumping out more inventory and paying overhead and marketing costs. In my humble opinion, you need to start on a much smaller scale unless if you can find a gullible investor willing to pay the startup costs and not take a huge percentage of equity.

[SamuelBRoberts]

There was a guy I knew once who was convinced that the way to win fame and fortune was to buy a vending machine. He was seriously going to buy some Japanese vending machine, and put it in downtown San Francisco, and he was convinced this was his path to riches.
He actually called up a Japanese vending machine company to try and buy one of these things. Dude was broke, just out of college, didn't have any contracts with anybody, and was going to spend thousands of dollars on this vending machine, not even knowing what he'd stock it with.

Since he didn't speak any Japanese, he wanted me to write him out a script to follow when he was on the phone with this company. (I'm not sure how he was planning on answering any questions they might have had.)

I told him this was a stupid idea, possibly the dumbest idea I'd ever heard. I told him that he'd need supplier contracts. He'd need to negotiate with a property-owner for the use of his property. He'd need to stock this thing, and keep it safe. There were a million things to think about, and the time to think about them was BEFORE he plunked down 15,000$ he didn't have for a fancy Japanese vending machine.

Of course, he ignored me, and kept demanding that I write this script anyway. So I did. It began something like this, (In japanese, which he couldn't read...)
"Hello, I'm John Dumbass with the United States Federal Bureau of Investigation. I'm calling to talk to you about the illegal importation of vending machines that your company has been involved with..."

They hung up on him after the first line.

He hated me after that, but I still think I did him a huge favor.

Anyway what I'm trying to say here is that large capital investments when you have no experience in a field are stupid, and people will laugh at you as you lose all your money. The desire to get out of the rat-race is a good one, and if you have a background in data science, you're clearly not stupid, so you might want to think this through a little more.

Is there a way you can execute this idea of yours by maybe partnering with some locals? Hiring some people part-time to work at home?

[Tytalus]

Great points about the startup costs. I do think I'm underestimating it, my main struggle would be to get the funds for larger scale industrialization. In fact figuring it out at a very small scale and building up may work better in the long run.

SamBRoberts, that's a funny story and a good point. The cost of labor is low and perhaps a simpler method using some local know how could work.

I have spent $0 I'm this idea so far, So nothing at risk yet.

[SamuelBRoberts]

(12-30-2016 07:57 PM)Tytalus Wrote:  

Great points about the startup costs. I do think I'm underestimating it, my main struggle would be to get the funds for larger scale industrialization. In fact figuring it out at a very small scale and building up may work better in the long run.

SamBRoberts, that's a funny story and a good point. The cost of labor is low and perhaps a simpler method using some local know how could work.

I have spent $0 I'm this idea so far, So nothing at risk yet.

Yeah, you might do better to ask a different question. If your question is "I think I have a good business idea involving agribusiness, that involves a foreign country where I have ties, where do I go next, and what are some common pitfalls I should avoid?"
You'll get a lot more valuable advice than "Should I build a factory?"

[kmhour]

Start small. Scale up as you become more successful. Not only is it basically a requirement as it sounds like you have limited resources, but it also naturally limits your exposure should something go wrong. And it sounds like there's a decent probability of that.

Not trying to discourage you - if you have a good idea and connections and can put in the hard work to get it off the ground, and you're a young guy with nothing to lose but a year or two on your CV? Why not take a shot.

I do know a guy who got out of the rat race by starting a small business importing stuff from China and selling it in the US. Found a niche and grew it into a big operation - last I heard he had 50+ employees and was doing very well. Obviously success stories are the exception that proves the rule, but you never know.

[Thomas the Rhymer]

(12-30-2016 06:10 PM)Tytalus Wrote:  

Hit me hard guys. I've got some agribusiness ideas and need to build a factory. How do I do this?

I mean I know some of the very very basic concepts of what I need to (That are probably wronng or the wrong priority or order of events) like:

Identify a market: tick.(Not telling)

Identify a country of operations: yes. Family in the third world that would be willing to help me out.

Friends who have owned a factory and know some logistics and willing to mentor me: Yes to the former and maybe to the latter.

Money: A big weakness here. Not much.

Can I outsource his idea: No. There exists a market A that likes goods from Country B. Family is in Country B.

Am I in over my head?: Without a doubt. My background is in statistics and data science.

Am I only asking for ideas here on RooshV? Nope. Brother in law is bright MBA type and loves to talk business ideas. Different side of the family is in Country B.

Can I scale up? Possibly. Could start with selling in Country B to tourists as a cottage maker and scale up to selling to market A.

Is language a problem? A considerable issue for selling to Market A. I have friends that speak the language and might be able to help out. Country B has some English but I would benefit by learning at least one of the three local languages.

A big big warning sign in your post is that you mention nothing about your cash flow projections.

If you had to start your factory today - what's your cash flow forecast like for the next 12 months and what's your breakeven point?

How would you structure your business in your home country in order to minimize tax obligations?

Don't think of starting a business until you know how much money you need it to make, and how quickly, in order to not go broke.

Another thing that I think is useful is to find and study businesses that failed in your sector. You can learn a lot from seeing how other people crashed and burned.

[Kona]

With this attitude of yours, I don't think you should build a factory.

You need to think positive. Get you a hammer and nails and start building the damn factory. You are hating on yourself.

Go down to the architect school in your area and have the students start a contest to draw it up. Tell them the winner gets future shares of stock in your company.

The rap guy would say "they didn't want me to build a factory, so I built a factory" whereas you need to say "I didnt want to build a factory, but I knew I should, so I built a factory."

Now build the factory.

Aloha!

[911]

You might want to keep your cards close to your vest if you're building an app, or an internet business that's based on a specific idea or an unfulfilled niche, but In your case I'm not sure if you should worry too much about disclosing information about a manufacturing project overseas, especially if you'd like to receive useful advice, or perhaps build future partnerships or distribution/marketing channels.

It might be a good idea to disclose at least your target countries, as there are some country-specific issues associated with starting and growing a business that some RVFers can help you address.

[Sancho]

Read the $100 startup.
It will show you what you need to do to start a business.

The great thing about it, it actually shows examples of people making it big with little startup.
I believe all or most are recent, so you can look them up online to confirm.

I'm still going through it and I already have some business ideas that could possible work if I actually put some to work.

[HectorLavoe]

Why not source a commercial space to lease where you can test whether or not the business is actually viable first and scale from there? Buying land and building a factory from scratch, you will be looking at waiting a few months to a year to start production with a ton of up front capital investment. I think that is best left for down the road when the business is viable and bringing in cash flow. Also as the other posters have stated get your numbers right, the costs of labour, facilities, cost of goods, pricing/margins, available markets, cost of obtaining customers. logistics. I wish you all the best.

[H1N1]

- Access to money is the biggest barrier to success for most businesses.
- Fortunately for you, banks are far more enthusiastic about lending to people who want to put the money into capital assets with a resale value than they are about lending to people building software or other intangibles with limited recoverable value.
- You say you want to build a factory. Why can you not buy one from a company going out of business, or buy a warehouse and repurpose it? Unless you are manufacturing chemicals or have very specific logistical needs, insisting on building what most likely already exists is adding another barrier to your chances of success. If a bank lends you the money to buy a factory worth $1million, they can be reasonably sure that if you go bust they will be able to recover that money in the resale. That's a more attractive pitch than insisting on buying something.
- You've mentioned nothing about plant and machinery. A factory is just a building, how much money needs to go into kitting it out?
- You've not mentioned anything about your intended production cycle, how long from factory completion (including installation and testing of equipment) do you need before you are producing goods you can sell? Is the product innovative - ie, is there going to be R&D involved in producing machinery before you can produce the goods?
- How much more money do you then need to invest in stock?
- How much do you need to finance the day to day sales, office costs etc?
- How long until you are profitable?

More generally:

- How big is the international market for your product? 'Cottage industry' is a phrase that will make every lender or investor run for the hills.
- Downtime is a killer in manufacturing - what else can this factory do to ensure it is running as close to 24/7 as possible? Can you produce goods for other people too?
- Do you have any sales experience? If you have no manufacturing experience, and no sales experience, then it is going to be much harder to persuade someone to back you on this.
- Write a business plan, even if it's on the back of an envelope. How much is this going to cost, for how long? How much do you need to spend to turn a profit, when will that be, and what kind of profit will you be making in 5 years?

[not-a-pua]

Men should encourage other men to get involved in business. I have no idea what you produce and what volume etc etc.
So it's hard to answer this. But, I think capital will be your biggest problem. The machines will be very expensive probably. I guess you should focus on finding an investor and making a great pitch.

[roberto]

Presumably this is some sort of 'value added' agricultural product. I find it hard to imagine that there's a market for a standard agricultural product that is so undersupplied that a new factory for it is a lucrative goldmine.

I'm presuming you have specific knowledge of something that is cheap to produce in 'Country B'. Have you looked into import costs? Where do you expect to sell this? Worldwide? How is 'selling to tourists as a cottage industry' remotely related to an agribusiness needed a factory?

As such, I would start by contracting an existing factory to produce it, and focus on marketing. I don't see why you can't outsource it this way. You have to shift huge volumes in traditional agri business to make money, which means laying out huge amounts up front in material, holding and haulage costs. Much easier to be the middle man. How dirty do you think a grain merchant gets when he sends a bulk tanker full of millions of dollars of wheat across the ocean?

We can help, but we're going to need a few more specifics.

[Tytalus]

Great points guys. I started his thread on a whim of an idea that has been rolling around in my head for a while but had not thought through (obviously).

It is an agricultural product that can have very high margins, and can be made in your house by yourself, at the cottage level all the way to a factory (which is the most common thing).

This thread has been enormously helpful to me.

Market A is China. There is a huge demand for foreign food products as they do not trust their own food manufacturers/producers.

Country B, has a good name in China. The good is not terribly unique and high demand in China.

[n0000]

Doing business in China is a whole ball of wax. From what I have heard the government pairs you with a Chinese company who tries to copy your product. Also the pegged exchange rate really screws things up but keeping the RMB low. There is a reason why the trade deficit is so large. You need large machinery and engineers who know how to produce the product and you need to comply with food regulations in both countries.

[polar]

You are trying to get a loan in Canada / USA, build a factory in market B, and ship to China?

I have an idea of what you are interested in, anything small enough in scale to do from home won't have large scaling costs...

I think you're going to have problems getting a bank, or most investors, to fund construction in a potentially unfriendly country with different laws, especially when inventory will sit in China - another unfriendly country.

Marketing / sales, as well as raw product sourcing, would be most of your problems. The market I think you're looking at is small for a reason.

[Chauncey]

If market A is China, why not just get a Chinese factory to manufacture your product for a year or two until you know if this is a profitable/long term venture?

Isn't this what most people who "manufacture" things to sell do initially?

[username]

I was thinking you were going to open a cigar factory in Cuba to import into USA. Didn't think it would be importing into China.