Starting a business in San Diego... (Sacramento, Escondido: rental, loan, house)

[jeweloflight]

I currently live in the Raleigh/Cary area in North Carolina. I will be graduating from nursing school in the spring of 2010, and am contemplating whether I should move out of this area or not. For one, the nursing pay here is squat, plain and simple. I lived in Atlanta before I came here, and the nursing pay is not much better there. I briefly considered going back though, just because my family and some of my friends are there, and it's warm and familiar, and would be an easy transition, but not really where I ultimately want to be. I really want to be in California.

The thing is I want to start a business completely unrelated to the field of nursing, as nursing is something I like because I love people, but I don't love nursing. Nursing was always meant to be a means to an end; and if worse comes to worse, and the business fails, I can always come back to medicine. So nursing is really my back-up plan.

While I would love to move to California next year, I recently decided to go for it with the business pretty soon after I graduate; like, within a year of it. But I don't want to move there with dreamy expectations and get the shock of my life. I'm already well aware of the living cost in California, as I follow it like a religion, as well as all things happening in California because I just love it there and lived in Sacramento for about six months back in 2004. I'm not however, aware of what starting a business there would be like. For instance, commercial rental space, hiring people, license, zoning and fire laws, California business taxes, what the laws are for food-based home businesses, you know, just the ins and outs of being a business owner in the food industry.

O.K., with that backdrop, the idea is all organic speciality baked goods. I would start out of my home until I outgrow it, and into another space at the appropriate time. Somewhere in between baking from home and getting a space, I would outsource the labor to a company to bake for me and give them a fee, as a home size oven/double oven will not be sufficient for long. I really think eventually I will get into manufacturing. The first retailer I will petition will be Whole Foods. I want to get my products into health oriented retail establishments, and grow out from there, so a retail space may never happen. After being a baker for Whole Foods in Atlanta, I know a lot about how they do business. They are very open minded and grass roots, always welcoming new products and business.

So this is my ultimate dream. I was a baker for 6 years before going back to school to do nursing. I got tired however, of working for other people. I promised myself I would never go back to the culinary world unless it was on my terms, and my terms meaning my own business. I'm plain sick of working for other people.

I used to do wedding cakes, worked for whole foods, did catering, was a head baker at a presbyterian college in Tennessee, and worked for two different vegetarian restaurants. My baked goods will be classic american desserts with a healthy twist. Whole Foods initially hired me in 2003 to help develop their vegan dessert line because they couldn't keep up with the demand. I have a lot of experience with vegetarian/vegan cooking and baking, and got hired on the spot. Here in North Carolina, they recently opened a 10,000+ square ft. bakery dedicated to strictly gluten free baked goods because the demand is so high. I intend to get in on these trends with my experience as soon as I possibly can.

I just can't seem to figure out though how to juggle supporting myself off of savings and working part time as a nurse, and have time to get the business off the ground, especially in a place like California, where everything is sooooo expensive. And at what point do I let go of nursing completely and just throw myself into my business and still survive financially? California would be great for the type of business I'm trying to do, but do I need a business loan? And in this economy, who's handing those out? I'm thinking maybe venture capitalist, or private investors. I thought by starting out of my home, I could cut down on initial overhead cost. Are there any other establishments in San Diego other than say, a Whole Foods, that would even be interested in my products?

Or maybe Northern California is more of my market? I'm confused....

Any, and I do mean any, input would be much appreciated, as I feel my head is spinning!!

[sandiegogolfer]

I think you may want to start a small bakery first and then expand from there.

I think there is a dearth of bakerys that are good here and the ones that are here are doing well.

Or maybe a personal chef?

The personal chef business originated here.

If you want to go into the manufacturing business Nevada is way more business friendly as is Idaho.

A lot of businesses have left California for many reasons.

It just is not very friendly to do business here.

[Kasey77]

Well, I know sqaut about business here. But, I do know that people are into health here. I would imagine with the right marketing something very tastey would take off. People love to eat! Look at Paula Deen. She used to peddle lunches from business to business! Wish I could give you a definitve answer. Would hate to discourage someone from following there dream. Also lived in Northern California. I could see this being successful there, too. But, again I really do not know the business environment.

Why not take a trip up and down the coast (never know you might discover the perfect spot for you...have you ever thought of Santa Cruz?)

Good Luck and let us know where you are so we can come buy some healthy bakery!

[Oerdin]

The competition for office and retail space can be fierce as can the regular business competition from other bakeries. That said if you make a good product then you can succeed but right now the economy really sucks so it will be doubly as hard to get a business off the ground. Take your business plan and double the amount of money you think you'll need and expect to lose money for at least two years before you build up enough regulars to start making a profit.

[jeweloflight]

I wanted to interject at this point, so that everyone is clear. I'm looking to manufacture baked goods, not have a store front. I don't want retail. I don't want to be a slave, and I don't want fierce competition. I want to put my products in retail establishments. I think I said in my initial post, Whole Foods would be my first target store. The only space I would need in the future would be a building to make my products in larger quantities as I will hopefully outgrow a home business. Then I would have to buy much bigger equipment, and would be on a whole other level at that point. Again, retail bakeries are not my main competition.

[Oerdin]

Just about all the supermarkets around here already have their own in house bakeries and that includes whole foods. That might be a tough market to crack depending on exactly what you'll be baking and selling.

[NYSD1995]

Originally Posted by jeweloflight

I wanted to interject at this point, so that everyone is clear. I'm looking to manufacture baked goods, not have a store front.

You can certainly do that in San Diego in any number of commercial and light industrial areas. There are a few in San Diego itself (Kearny Mesa, Logan Heights) but most are in the eastern suburban cities, i.e. Spring Valley, El Cajon, Escondido, about 20 minutes or so from downtown.

Given the nature of that business I am not sure labor and rent costs are really going to be all that much more expensive in CA than they would be in somewhere like UT or NV.... commercial rents here tend to be low for CA and labor I would imagine will be 10 bucks an hour no matter where you go.

I can tell you there has been an explosion of artisan cakes and bakeries in recent years. There are several concentrated around Hillcrest and North Park. There is also one right near my house (far east side of the city) which is excellent. Most have a retail store and cafe-type setting with the bakery in the back. Some places like the French Gourmet in La Jolla have world-class clientele. I think you will have some established competition in the major retail outlets. I think there is only one Whole Foods in all of San Diego County so I would plan on a national or regional marketing effort.

That said you are also going to be paying CA rents and taxes, which may or may not actually be a problem for you depending on your lifestyle. If you do decide to rent light industrial space in El Cajon, for example, it would be relatively inexpensive to live nearby.... the question is.. will you want to. Cary NC is a very cheap, safe and clean place to live... you will find that California is a very different situation.

[jeweloflight]

Originally Posted by Sassberto

You can certainly do that in San Diego in any number of commercial and light industrial areas. There are a few in San Diego itself (Kearny Mesa, Logan Heights) but most are in the eastern suburban cities, i.e. Spring Valley, El Cajon, Escondido, about 20 minutes or so from downtown.

Given the nature of that business I am not sure labor and rent costs are really going to be all that much more expensive in CA than they would be in somewhere like UT or NV.... commercial rents here tend to be low for CA and labor I would imagine will be 10 bucks an hour no matter where you go.

I can tell you there has been an explosion of artisan cakes and bakeries in recent years. There are several concentrated around Hillcrest and North Park. There is also one right near my house (far east side of the city) which is excellent. Most have a retail store and cafe-type setting with the bakery in the back. Some places like the French Gourmet in La Jolla have world-class clientele. I think you will have some established competition in the major retail outlets. I think there is only one Whole Foods in all of San Diego County so I would plan on a national or regional marketing effort.

That said you are also going to be paying CA rents and taxes, which may or may not actually be a problem for you depending on your lifestyle. If you do decide to rent light industrial space in El Cajon, for example, it would be relatively inexpensive to live nearby.... the question is.. will you want to. Cary NC is a very cheap, safe and clean place to live... you will find that California is a very different situation.

Thanks Sassberto for the advice. You make some good points. The only rent I'm thinking about though, is the rent where I will live, since that's where I'll be starting, from home. And in this area, by North Carolina standards, Cary is considered "upscale" and "expensive," not many people buy in this area cause they can't afford it, but I'm sure you meant in comparison to Cali.

[f_m]

My original post got lost, but it's definitely possible to do this, but you have to be willing to work and work. A relative did this with a startup, they got into small local stores then more and more regional, then Whole Foods, etc... Eventually the company was bought up by one of the major food companies, in less than 10 years.

[mlarsen23]

There are two Whole Foods - one in Hillcrest, one in UTC. And I think another one is opening or has opened in Encinitas.