BREAD! Part Deux: Gettin' and Spendin'

BREAD!  Part 1 Update

So, in part 1, I talked about my obsession with finding a loaf that comes as close as possible to the poor boy loaves of New Orleans.  I've spoken to the head baker of Allessio, who is charming and enthusiastic about working with local restaurants and carts.  Working with them to supply custom loaves seems very doable, since they only require orders of about $15-20 each (about 3 doz. rolls).

He indicated that it is more difficult to produce a poor boy loaf here since we lack NOLA's heat and humidity, so we'll need to compensate (I've seen several references to this theory on-line, but according to bakers in New Orleans, it just requires a commercial oven that can inject steam).   In just over a week I'm going to do a test bake of two credible recipes I've found, as well as a technique for generating the right moisture in a home oven.  If I get results that seem hopeful, I'll ask Allessio to do a test bake at my desired dimensions (24" long, about 4" wide and 2-1/2" high).  According to the baker, it usually takes about three iterations to get to the final product.

Bread!  Part 2 

This post is about some of the questions I need to answer on the business side.   

What type of business entity do I want?

I did a fair amount of research on this topic.  And after reviewing multiple sources, I was reasonably sure I should establish the business as an LLC (Limited Liability Company).   It seemed to be the in the middle ground between Sole Proprietor or Partnership and full incorporation.  Protection from personal liability but with a less onerous and expensive process both to establish and manage.

Everything I've read says you should engage a local lawyer to determine what type of entity to choose, however several credible sources also identify reputable online services (one was recently acquired by Intuit) that will prepare and submit the paperwork required in one's state at what I expect is a fraction of the cost of engaging a local lawyer once the preferred structure is identified.  

My wonderful husband suggested that we see if Jimmy P., a friend and CPA, might have a lawyer to suggest.  I was skeptical, but Mario pointed out that, being Catholic, he must know lots of lawyers (rim shot, please!).  Jim's retort to our inquiry was that I don't need a lawyer.  He patiently explained the advantages and disadvantages of an LLC vs. an S-Corp, made a compelling case for the latter, and convinced me that I (with his help) can easily get the process done without paying a lawyer or a service.   He also provided additional debunking of some of my research findings based on his experience.

Plan is to pull the trigger and file as an S-Corp this Friday.  Yep, this is for real, folks!

Jim was also very helpful on the topic of planning for hiring employees re:  payroll requirements, i.e. FICA withholding, workman's comp,  doing payroll myself vs. using a service... I know!  Invaluable.  I think we might need to put a Jimmy poor boy special into the rotation.  Lotsa meat and sauce, and extra cheese.

Raising Capital: To Crowdsource or not to Crowdsource?

I've also been doing research on the possibility of using Kickstarter or the like to raise a portion of the start up money for the cart.   Most food businesses I've looked at either get all or nothing.  That is, they get between 0-5% of the total request, or they get the full funding.

I like to think that I have a network of well-wishers who might be willing to take out a second or third mortgage and throw the proceeds at the business, or perhaps more likely, pledge a some small amount in return for goodwill and tangible rewards (bumper stickers, t-shirts, gift certificates, a poor boy a week for a year, catering, season tickets to the Saints*, etc).   It would greatly help with the launch costs if I could raise somewhere around $10K (which is a fairly standard amount for successful cart Kickstarter campaigns, I've found).

I've heard some negative rumblings from friends about crowd-funding fatigue, and if it comes to that, I'd rather not do a drive than fail, that would be a major momentum kill...So if anyone has thoughts pro or con, please speak up.   Also, if you're pro-Kickstarter and can point me to compelling campaigns, well, choose the cosmic Brownie points of your preference.

I have many more business questions to investigate, that's for another post.

* These are only examples and no promises either explicit or implicit are to be inferred, esp. re: Saint's tickets.