Expanding My Empire – A Small Business Story

For the past few years, I’ve wanted to start up my own business doing something.  I’ve never really been able to figure out what, but I know I’d like to get some extra income coming in and find something that occupies my time and pays me a bit of cash.  Of course, I make a small amount of money from this website (I think my hourly wage is somewhere around 34 cents an hour) but I’d like to continue to expand my ultra micro empire.

I’ve been using the proceeds from this website to fund these ventures, so obviously I cant do anything too capital intensive.  I cant do anything too time intensive either, as I’ve got a wife, hobbies and a “real” job.  Basically, I was looking for something that wasnt all that time intensive, relatively high margin per unit, and didnt have high set up fees.  That essentially ruled out my preferred option of rental properties, as well quite a number of other things.  Also, while I realize that there’s plenty of opportunity to make a lot of cash online, I’m not exactly into that either.  I prefer to deal with real, physical products.    Given those preferences, I saw an opportunity as a small scale vendor selling extracts.  I noticed that these extracts were something that was found in lots of homes, widely used , and cost quite a bit in stores.  I noticed I could undercut the stores by about a buck a purchase, and still make a nice profit for myself.  No problem with that, I thought, so off I went.

First, I needed to find a market.  I thought about selling to friends and family, but decided that I couldn’t get the volume of sales that I’d like for the time involved.  There’s a commodities co-op in my area that has online ordering as well.  I looked into that and started to get geared up to sell there (making labels for product, taking pictures, etc) but never pulled the trigger and listed my stuff.  I got the impression that it was just sellers selling, and sellers buying (therefore, no one would really “make” money – they’d just trade it).  Finally, I decided to look into the farmers market.  My town has a winter farmers market that’s for baked goods, jams, and winter veggies.

After careful consideration, I applied to retail at the winter farmers market. and was put on the waiting list for the days that I selected.  Not bad, I thought – could be a good primer on how I figured that I’d do in future years.  At the suggestion of the woman that runs the market though, I put in a call to the state department of agriculture to make sure that I didnt need a food or sampling permit.  Who is going to sample extracts, I thought?  I called a lady at the state, and then my house of cards came crumbling down.  After I told her what I was planning on selling and the method of extraction, she sighed and said “that’s what I was afraid of”.  She then suggested that I call the feds and gave me a contact number of a person in St. Paul, MN.  Obviously, this was not what I wanted to hear.  I’m just 1 guy, working for myself, trying to make a few extra bucks where I saw a hole in the market.  The federal government is exactly the last entity that I want to deal with in this little side venture.  Ok, perhaps the greek government is, but that is not even remotely possible.

So, I placed a call to the Alcohol and Tobacco Tax and Trade Bureau (formerly the ATF).  I got on the phone with a nice agent, and again, I explained my process of extraction.  He confirmed my worst fears, and said that while he thought what I was doing was just fine, I needed to make sure that I get it in writing from the feds, so that I could provide it to the farmers market, the state and anyone else who asked.  He then pointed me to a section of the website that housed instructions for “non beverage alcohol” or something like that, and told me to poke around.  He was surely helpful, I just wished that he would have been completely able to answer my question and end this little goose chase that had started right there.

Unfortunately, I had to start poking around the CFRs (Codes of Federal Regulations) for the appropriate area.  It led me to a long form, lots of questions involving math that I thought I left behind in college, and of course, a whole boatload of federal paperwork.  While the form is “short” according to the feds, I’m just one guy.  Just trying to open a small roadside stand selling some stuff that I’m hoping people want to buy, and now I’ve got to deal with this.  Awesome.

Of course, I’ll update you when my situation changes, but right now I’m trying to figure out how to fill out the form correctly.

Readers:  Do you have any side businesses?  If you do, do you have to deal with onerous government regulation?  What sort of agencies have you dealt with, and how have you handled the problem?  Do you think I should go through with it, or find something else to do on the side?

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12 thoughts on “Expanding My Empire – A Small Business Story”

  1. I don’t have a side business but most of the people I know don’t even bother going that route. They actually open up shop like a roadside stand and see if there is a market for it. If it works then I think they go legal with it but if not why bother. Its like opening up a business account and getting incorporated and not having any business or money to put in the account.

    • Me applying to sell at the farmers market was my version of a “roadside stand”. I figured that I’d be able to sell there with minimal oversight and make some extra cash, but unfortunately I will not be able to do that. It’s an interesting predicament, because I’d really like to push forward with this, but I dont know anyone who can help me fill out the federal forms!

  2. What are extracts? Do you ingest them or are they more like perfumes? Anyway, I think it’s great that you’re trying something new. I need to find more side businesses once the little guy goes off to school. I have about 2 years left to figure it out. I guess if the websites take off, I can stick with that.

  3. Sounds like a great idea Jeff! Hope you can get the license issue resolved quickly so you get your business up and running. Have you thought about contacting SCORE for some free advice? I was considering this when we started our small business as they have volunteers that have entrepreneurial experience that are very helpful.

  4. Sorry no one is coming to mind about your paperwork. If I were you, I think I would see if there is any market for you and then worry about it. But I am lazy.

    There wasn’t much barrier to entry with blogging and blog advertising, although the umbrella policy and errors and ommissions insurance was a pain.

  5. In addition to my websites, I also have my flash mob business and do a bit of DJing. The money is not huge, but it adds up. My blog now covers my mortgage payment.

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