How To Start A Hot Sauce Business
You've stumbled upon the idea to build a hot sauce business and now you're ready to take the next steps.
There's a lot to think about when building a business, so we put together a guide on how to get started, launch, grow and run your hot sauce business.
We also provide you with real-life case studies and examples of founders running successful hot sauce business (and how much💰 they're making today).
💡 Introduction To Starting A Hot Sauce Business
Is Starting A Hot Sauce Business Right For You?
There are many factors to consider when starting a hot sauce business.
We put together the main pros and cons for you here:
Pros of starting a hot sauce business
• High customer retention rates
Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.
• Gain exposure and experience
This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you!
• Predictable income stream
Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!
• You can sell your product in various places!
There are various different markets to sell your product, which will help you reach different audiences and revenue streams.
• Simple business model
A hot sauce business has the advantage of a simple business model, which makes launching and building the business more seamless.
• Greater Income Potential
With this business, the sky is the limit in regards to your income potential.
• Ecommerce retail is growing fast
Ecommerce has been grown rapidly over the years and is expected to hit a total of 4.9 trillion dollars by 2021.
With running an ecommerce business, you provide your customers with alternative and more convenient shopping experience, which will ultimately drive sales.
• You can promote and sell your product on Amazon
Although there are some disadvantages to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.
• Results and revenue happen quickly!
Unlike other businesses, it can be relatively quick to start seeing results and revenue. As long as you follow all the steps to validate your idea before launch, you are likely to see quick results and ROI.
Cons of starting a hot sauce business
• High employee turnover
In the hot sauce business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.
As a hot sauce business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
• Niche Market
A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.
• Be prepared to get out of your comfort zone!
Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!
• Difficult to scale
With a hot sauce business, it can be challenging to find ways to scale. Check out this article that discusses scaling your business and the challenges that come with it.
• Learning Curve
When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.
• Equipment Breakdowns
Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.
- HotSauce (335K Alexa Ranking)
- TABASCO (403K Alexa Ranking)
- KPOP Foods (497K Alexa Ranking)
- Lillie's (536K Alexa Ranking)
- Cholula Hot Sauce (557K Alexa Ranking)
- KPOP Foods - Revenue $200K/month
- Frag Out Flavor - Revenue $125K/month
- Small Axe Peppers Hot Sauce - Revenue $85K/month
- Flaming Licks - Revenue $13K/month
- Trini Pepper Sauce - Revenue $2.25K/month
Let's take a look at the search trends for hot sauce over the last year:
How To Name Your Hot Sauce Business
It's important to find a catchy name for your hot sauce business so that you can stand out in your space.
Here are some general tips to consider when naming your hot sauce business
- Avoid hard to spell names: you want something easy to remember and easy to spell for your customers
- Conduct a search to see if others in the space have the same name
- Try not to pick a name that limits growth opportunities for your business (ie. if you decide to expand into other product lines)
- As soon as you have an idea (or ideas) of a few names that you love, register the domain name(s) as soon as possible!
Why is naming your hot sauce business so important?
The name of your business will forever play a role in:
- Your customers first impression
- Your businesses identity
- The power behind the type of customer your brand attracts
- If you're memorable or not
It's important to verify that the domain name is available for your hot sauce business.
You can search domain availability here:
Find a domain starting at $0.88
powered by Namecheap
Although .com names are the most common and easiest to remember, there are other options if your .com domain name is not available. Depending on your audience, it may not matter as much as you think.
It's also important to thoroughly check if social media handles are available.
As soon as you resonate with a name (or names), secure the domain and SM handles as soon as possible to ensure they don't get taken.
Here's some inspiration for naming your hot sauce business:
- Flaming check availability
- Hi Heat check availability
- Unbearable check availability
- Real Heat check availability
- Spice Up check availability
- Crushed check availability
- Jalapeno Bite check availability
- Melted Lava check availability
- Hurting Heat check availability
- Heated check availability
- Highly check availability
- Intensively Hot check availability
- Devil's Lava check availability
- Adam's Blood check availability
- Red Hot Sauce check availability
- Its Hot check availability
- Bright Red check availability
- Hot Dip check availability
- Really Spicy check availability
- Real Hot check availability
- Spice Dip check availability
- Pepperish check availability
- Spiciest check availability
- Overwhelmed check availability
- Spice Web check availability
- Ultra Hot check availability
- The Satan's Pit check availability
- Igneous check availability
- Feverish check availability
- The Hectic Dip check availability
- Red and Hot check availability
- Temperature check availability
- Kelvin check availability
- Summer Hot check availability
- Blazingly Hot check availability
- Above Normal check availability
- The Sour Dip check availability
- Hot Apatite check availability
- Heatly check availability
- The Wild Red check availability
- Spade check availability
- Extra Hot check availability
- Dripping Drip check availability
- Overheated check availability
- Tannour check availability
- Triple Heated check availability
- Hot Juice check availability
- Exotically Hot check availability
- Heat Shot check availability
- Flare check availability
- Heat Rush check availability
- Furnace check availability
- Boiling Dip check availability
- Sizzling check availability
- Burning Sensation check availability
- Dodging Hot check availability
- Dynamic check availability
- Dead Serious check availability
- Magnetic check availability
- Spiced check availability
- Hot Ice check availability
- Piercingly Hot check availability
- Contemporary check availability
- Radical check availability
- Lava check availability
- Molten check availability
- The Elite Sauce check availability
- Hot Desire check availability
- Allure check availability
- Thick Heat check availability
- Fierce check availability
- Intense check availability
- SuperSonic check availability
- Fire check availability
- Itchy Dip check availability
- Smooth Sausage Collective check availability
- Soft Warm Collective check availability
- PreciousSpice check availability
- Drear Heated check availability
- The Precious check availability
- Very Sizzling check availability
- Adjective Overheated Trading Co check availability
- The Fried check availability
- Sliced Capsicum Spot check availability
- Mash Collective check availability
- Dreadful check availability
- Peppery Spicy Collective check availability
- The Whilst Sizzling check availability
- Agreeable Flavoured check availability
- Boiling Co check availability
- Less Sweltering Group check availability
- Crushed Adventure Spot check availability
- The Vinous check availability
- Thingy Chilli check availability
- GoodFlavour check availability
- Ketchup Place check availability
- The Extra Torrid check availability
- Smooth Steak Sauce check availability
- The Red Warm check availability
- RedChilli check availability
- Boiling Group check availability
- Hellish check availability
- The Intolerable Heated check availability
- Acid check availability
- The Interior Boiling check availability
- Boiling Pro check availability
- Soy Spice check availability
- The Real check availability
- Chicago Spicy check availability
- Sweaty Heated Trading Co check availability
- Intolerable check availability
- SoftHot check availability
- The Distinctive check availability
- The Awful check availability
- Tasty Pro check availability
- The Oven Spicy check availability
- The Pretty check availability
- Thick Boiling Collective check availability
- NiceHot check availability
- The Yellow check availability
- Drear Scalding Pro check availability
- The Hellish check availability
- Hot check availability
- The Peppery Zest check availability
- The Awful Scorching check availability
- Little check availability
- Sticky Sweltering check availability
- Delicious Paste Trading Co check availability
- Adventure Trading Co check availability
Read our full guide on naming your hot sauce business ➜
How To Create A Slogan For Your Hot Sauce Business:
Slogans are a critical piece of your marketing and advertising strategy.
The role of your slogan is to help your customer understand the benefits of your product/service - so it's important to find a catchy and effective slogan name.
Often times, your slogan can even be more important than the name of your brand.
Here are 6 tips for creating a catchy slogan for your hot sauce business:
1. Keep it short, simple and avoid difficult words
A great rule of thumb is that your slogan should be under 10 words. This will make it easy for your customer to understand and remember.
2. Tell what you do and focus on what makes you different
There are a few different ways you can incorporate what makes your business special in your slogan:
- Explain the target customer you are catering your services towards
- What problem do you solve?
- How do you make other people, clients, or your employer look good?
- Do you make people more successful? How?
3. Be consistent
Chances are, if you're coming up with a slogan, you may already have your business name, logo, mission, branding etc.
It's important to create a slogan that is consistent with all of the above.
4. Ensure the longevity of your slogan
Times are changing quickly, and so are businesses.
When coming up with your slogan, you may want to consider creating something that is timeless and won't just fade with new trends.
5. Consider your audience
When finding a catchy slogan name, you'll want to make sure that this resonates across your entire audience.
It's possible that your slogan could make complete sense to your audience in Europe, but may not resonate with your US audience.
6. Get feedback!
This is one of the easiest ways to know if your slogan will be perceived well, and a step that a lot of brands drop the ball on.
Ask friends, family, strangers, and most importantly, those that are considered to be in your target market.
Here's some inspiration for coming up with a slogan for your hot sauce business:
- Hotness overload
- Are you up for the challenge
- For a fiercely hot tongue
- Spicy and strong
- Putting spice on your foods
- The ultimate spicy challenge
- For the coldest climates, pour this sauce
- The spicy sauce that bites
- We live and breathe spicy foods
- To the next level of sizzling hot
- The best spicy sauce on the planet
- The spice that bites
- The spicy sauce that you'll never forget
- Make your favorite foods spicy
- The epitome of spicy sauces
- Unleashing the spicy version of your foods
- Experience the sizzling hot enjoyment
- Spicy sauce at its finest
- Get the best spicy feeling
- The sauce that burns
- Not for the fainthearted
- Expected the unexpected spiciness
- Spicy and fine sauce for you
- The spicy sauce that you'll love
- Experience the hottest sauce
- Sweaty eating feeling
- Keep that fire burning in your mouth
- Just the right hotness
- Real spicy for all levels
- The sauce that will never let you down
- More than just a hot sauce
- Unleash the spicy feeling in you
- The real taste and feeling of hot sauce
- Chili everywhere
- Your number one source of hot and spicy taste
- White Overheated, Excessive Sweltering
- Commit Of The Overheated
- From High Temperature To Gelid
- Spicy Hot, We Take Care Of You!
- A Different Kind Of Company. A Different Kind Of Flavour.
- We're With The Hot.
- You Can On A Hot, Can Do!
- Hot, Not That Other Crap.
- Little Boilings Are What We Do
- The Best Part Of Waking Up Is Hot In Your Cup.
- Mixed Curries Are What We Do
- There Is No Sore It Will Not Heal, No Hot It Will Not Subdue.
- Work Hard, Baking Harder
- Order Of The Scorching
- Excessive Hot, Take A Seat
- Don't Play With Fire, Play With Hot.
- Mild Green Hot Liquid.
- Make It A Hot Night.
- Because Hot Can't Drive.
- Endless Possibilities With Spice.
- Work Hard, Savour Harder
- Welcome To Hot Country.
- Sun Overheated, Sun Spicy
- Sun Sweltering, Spicy Blistering
- We All Adore A Hot.
- Chilli Is Crazy Good.
- Hot - Now!
- Food Or Hot? I'll Have Hot.
- Work Hard, Sweltering Harder
- Monsieur, With This Hot You Are Really Spoiling Us.
- Hot Comes To Those Who Wait.
- Work Hard, Boiling Harder
- Ho Ho Ho, Green Hot.
- Hot The Only Way To Go.
- I Feel Like Hot Tonight.
The eCommerce Business Model
One of the main benefits of operating online is that you are exposed to the entire world, versus just one local area. Rather than depending on foot traffic, you have all the tools at your disposal to create exposure for your store online.
Additionally, there are much lower costs to operate an online store - fewer employees, you can operate from your home, and you get to create your own schedules (yes, holidays included!)
Although you are operating online and have the ability to connect with people all over the world, it's important to consider that you will need to invest marketing money upfront in order to promote your store to the right audience.
Gia Paddock, founder of Boutique Rye explains the 3 reasons why she decided to build an online store:
I wanted to find something I loved but also allowed me to stay home at the same time. While I was working at this local boutique, I realized that there was a lot of sitting around during the day when other people were out working. Therefore, an online business seemed like the best route for a few reasons:
- We didn’t have the extra funds sitting around to pay sign a year or two-year lease at a brick & mortar location.
- I realized the opportunity to reach a wider audience online compared to the audience of this small local boutique. For us, it seemed like hitting two birds with one stone.
- And finally (maybe the most important of all), running it as an online-only business would allow me to stay at home with Riley!
Learn more about starting a hot sauce business:
Where to start?
-> How much does it cost to start a hot sauce business?
-> Pros and cons of a hot sauce business
-> Other hot sauce business success stories
-> Examples of established hot sauce business
-> Marketing ideas for a hot sauce business
-> Hot sauce business slogans
-> Hot sauce business names
-> Hot sauce business Instagram bios
-> Hot sauce business tips
-> Hot sauce business hashtags
-> Hot sauce business calculator
🎬 How To Start A Hot Sauce Business
How Much Does It Cost To Start A Hot Sauce Business
If you are planning to start a hot sauce business, the costs are relatively low. This, of course, depends on if you decide to start the business with lean expenses or bringing in a large team and spending more money.
We’ve outlined two common scenarios for “pre-opening” costs of starting a hot sauce business and outline the costs you should expect for each:
- The estimated minimum starting cost = $62
- The estimated maximum starting cost = $103,961
|Startup Expenses: Average expenses incurred when starting a hot sauce business.||Min Startup Costs: You plan to execute on your own. You’re able to work from home with minimal costs.||Max Startup Costs: You have started with 1+ other team members.|
|Office Space Expenses|
|Rent: This refers to the office space you use for your business and give money to the landlord. To minimize costs, you may want to consider starting your business from home or renting an office in a coworking space.||$0||$5,750|
|Utility Costs For Office Space: Utility costs are the expense for all the services you use in your office, including electricity, gas, fuels, telephone, water, sewerage, etc.||$0||$1,150|
|WiFi & Internet: Whether you work from home or in an office space, WiFi is essential. Although the cost is minimal in most cases, it should be appropriately budgeted for each month!||$0||$100|
|Total Office Space Expenses||$0 (min)||$7,000 (max)|
|Employee & Freelancer Expenses|
|Payroll Costs & Fees: Payroll cost means the expense of paying your employees, which includes salaries, wages, and other benefits. This number depends on if you decide to pay yourself a salary upfront and how many employees you have on payroll. At first, many founders take on all responsibilities until the business is up and running. You can always hire down the road when you understand where you need help. Keep in mind, if you do plan to pay yourself, the average salary founders make is $50K.||$150||$250|
|Employee Hiring Expenses: Apart from payroll and benefits, there are other hiring employees costs. This includes the cost to advertise the job, the time it takes to interview candidates, and any other turnover that may result from hiring the wrong candidate.||$1||$2|
|Employee Rewards: It's vital to acknowledge and reward workers, whether they hit their goals or do a great job. This does not have to be costly. In fact, simply taking workers out to a meal or giving a gift or bonus is among the many ways to show how the worker is valued!||$0||$100|
|Total Employee & Freelancer Expenses||$151 (min)||$352 (max)|
|Website Builder: The cost of your website will vary depending on which platform you choose. There are many website builders on the market, so it's important you choose the right one for your business and overall goals. To learn more about your options + how to build a great website, check out this article.||$10||$500|
|Web Designer: Web design includes several different aspects, including webpage layout, content creation, and design elements.If you have the skills and knowledge to design your website on your own, then outsourcing this to an expert may not be necessary. There are plenty of other ways you can design a beautiful website using design tools and software.||$200||$6,000|
|Domain Name: Your domain name is the URL and name of your website - this is how internet users find you and your website.Domain names are extremely important and should match your company name and brand. This makes it easier for customers to remember you and return to your website.||$12||$200|
|Business Email Hosting Service: An email hosting runs a dedicated email server. Once you have your domain name, you can set up email accounts for each user on your team. The most common email hosts are G Suite and Microsoft 365 Suite. The number of email accounts you set up will determine the monthly cost breakdown.||$1||$15|
|Website Hosting Costs: Server hosting is an IT service typically offered by a cloud service provider that hosts the website information and allows remote access through the internet. A hosted server can help you scale up and increase your business’s efficacy, relieving you from the hassles of on-premise operations.||$0||$300|
|Website & Live Chat Tool: If your business values high-end customer service, you must consider utilizing a website chatbot. Website chatbots play a pivotal role in converting site visitors into long-term customers. Typically, there are different tiers of pricing and features offered by Live Chat service providers.||$0||$200|
|Total Website Costs||$223 (min)||$7,215 (max)|
|Business Formation Fees|
|Small Business Insurance: Depending on which state you live in and the business you're operating, the costs and requirements for small business insurance vary. You can learn more here.||$500||$2,000|
|Permit and License Fees: Depending on your industry, there are certain licenses and permits you may need in order to comply with state, local, and federal regulations. Here is an article that goes over all the permits and licenses you may need for your hot sauce business.||$50||$700|
|Trademark: Filing trademark registration will protect your brand and prevent other businesses from copying your name or product. USPTO has several different types of trademarks, so the cost to apply can vary (typically anywhere from $400-$700).||$0||$700|
|Lawyer Fees: Although you may want to avoid attorney fees, it's important that your business (and you) are covered at all costs. This comes into play when creating founder agreements, setting up your business legal structure, and of course, any unforeseen circumstances that may happen when dealing with customers or other businesses.||$0||$1,500|
|A Patent: Patents provide protection against others stealing or selling your idea.Securing a patent can be very valuable, but it's important that you are 100% sure this will be a smart business move for you, or if this is something to consider down the line.The process of securing a US patent can be both lengthy and pricey, and typically includes filing an application with the USPTO.||$5,000||$15,000|
|Set up business: LLC & Corporations: The first step in setting up your business is deciding whether your business is an LLC, S Corp or C Corp. The cost for this depends on which state you form your business and which structure you decide on. We put together an article that goes over the 10 Steps To Setting Up A Business.||$50||$500|
|Total Business Formation Fees||$5,600 (min)||$20,400 (max)|
|Equipment & Supply Expenses|
|Cleaning Supplies: Cleaning supplies are essential products we used daily at home and in almost all places worldwide. These items are used to effectively and safely remove dirt and germs to control allergens and prevent the spreading of contagious diseases, helping us stay healthy.||$63||$200|
|First-aid Equipment: First-aid kits can be bought as a set if not gathered one by one. These are vital in all places of work, homes, and even in cars, especially when you plan to travel or go camping. So, to protect your workers, clients, and kinsfolks, you must always keep a well-stocked first-aid kit handy.||$3||$500|
|Total Equipment & Supply Expenses||$66 (min)||$700 (max)|
|Retail Business Expenses|
|Shop Decor: If you plan to operate a physical store, you may want to consider decorating the place with wall decor, furniture, plants etc.||$0||$5,000|
|Utilities (storefront business): This refers to the cost of monthly utilities for your storefront location, which is typically based on a per-square-footage rate.||$0||$1,000|
|Building improvements and remodeling: If you plan to operate a physical location, you may find yourself dealing with building improvements and remodeling costs. Even if these costs are minimal, this is something to consider when renting/buying a physical location.||$0||$950|
|Storefront Property Rent: This refers to the storefront space you rent or buy for your business. The cost depends largely on the city and the size of the space. Keep in mind that other costs may be involved with your base rent and your lease will define additional expenses you are responsible for.||$1,250||$3,500|
|POS System: Gone are the days of cash registers! Many businesses now use point-of-sale systems for their checkout needs and to track sales and inventory. Here is a list of the best POS systems for small businesses!||$0||$1,200|
|Total Retail Business Expenses||$1,250 (min)||$11,650 (max)|
|Upfront Costs For Inventory: This includes all upfront inventory you will need in order to launch. Be sure to compare prices of wholesalers to ensure you're getting the best deal and margins remain high.||$300||$5,000|
|Inventory Storage: If you decide to have a physical space for your hot sauce business, whether it be used for inventory or as a showroom, you may have monthly rent payment or a large down payment associated with renting/buying the space.||$0||$5,000|
|Package Design: Packaging refers to wrapping and protecting products during distribution, shipping, and sales.Your package design is your customer's first impression of your brand, so it's important you spend some time and energy to get this right from the start.Many businesses design their own packages using design software and tools. There is always the option to outsource this to a design expert, but that route tends to be much more expensive.||$50||$3,000|
|Shrinkage: Shrinkage refers to the loss of inventory at any point between the purchase from your supplier and the purchase by your customer. Although you will try to avoid this at all costs, this does happen sometimes (especially in the learning stages of your business), and it's important to plan ahead financially in case this happens. Fortune states that retail shrinkage costs U.S. retailers approximately 1.4 percent of their total sales.||$0||$1,000|
|Distribution costs: Depending on what distribution plan you choose, expenses such as renting vans, hiring delivery drivers and gas costs can add up. If you are looking to save money upfront, you may want to consider conducting distribution on your own.||$0||$750|
|Total Inventory Expenses||$350 (min)||$14,750 (max)|
|Food Business Expenses|
|Kitchen Appliances: This includes but is not limited to: pots, pans, containers, oven/stove, fridge, freezer. You may have the option to lease or purchase these items, in which case the cost can vary.||$2,000||$25,000|
|Food Licenses: To start your hot sauce business, you will need to get the proper food licenses to operate. You can learn more about the requirements here||$100||$500|
|Kitchen Facility: Depending on the type of food business you are starting, you may not need to operate a separate kitchen facility from your own home. If you decide to do this, or if you are required to, the costs may vary depending on your location and the size of the space you need.||$0||$10,000|
|Initial Ingredients: To get your hot sauce business started, you will need to purchase initial ingredients to test recipes and eventually create your final product.||$25||$500|
|Total Food Business Expenses||$2,125 (min)||$36,000 (max)|
|Design Programs & Software: These programs might include the Adobe family of design tools: Photoshop, Illustrator, InDesign and others. This is typically a monthly subscription ranging from $10-$50/mo.||$0||$50|
|Email marketing tool: If you plan to grow your email list and email marketing efforts, you may want to consider investing in an email marketing platform (ie. Klaviyo, MailChimp). We put together a detailed guide on all of the email marketing tools out there + the pricing models for each one here.||$0||$100|
|IT Support: IT support installs and configures hardware and software and solves any technical issues that may arise.IT support can be used internally or for your customers experiencing issues with your product/service.There are a variety of tools and software you can use to help with any technical issues you or your customers are experiencing. This is a great option for businesses that do not have the means to hire a team of professionals.||$150||$2,000|
|Accounting & Invoicing Software: It's important to have an accounting system and process in place to manage financials, reporting, planning and tax preparation. Here are the 30 best accounting tools for small businesses.||$0||$50|
|CRM Software: CRM (customer relationship management) software system is used to track and analyze your company’s interactions with clients and prospects. Although this is not a necessary tool to have for your business, implementing this, in the beginning, may set your business up for success and save you valuable time.||$12||$300|
|Project Management Software: You may want to consider using a project management and collaboration tool to organize your day-to-day. This can also be very beneficial if you have a larger team and want to keep track of everyones tasks and productivity. For a full list of project management tools, check out this full list here.||$0||$25|
|Internal Communication Tool: If you plan to have multiple members on your team, you may want to consider an instant message tool such as Slack or Telegram. The cost is usually billed per month (approx $5/user/month) or there are freemium versions available on many platforms.||$0||$20|
|Social Media Management Tools: If you plan to do social media marketing for your hot sauce business, you should consider investing in a social media automation or publishing tool. This will save you time and allow you to track performance and engagement for your posts. Here is a list of 28 best social media tools for your small business.||$0||$50|
|Payroll Software: The main purpose of payroll software is to help you pay your team and track each of those payments (so that you don't have to do it manually). If you do not have any employees or have a very small team, payroll software may not be necessary at this stage. Here are the 11 best payroll tools for small businesses!||$0||$200|
|File Hosting Service: It's important to make sure the information for your hot sauce business is stored and protected should something happen to your computer or hard drive. The cost for this is affordable and depends on how much data you need to store. To learn more about the different options and pricing on the market, check out this article.||$0||$299|
|Total Software Expenses||$162 (min)||$3,094 (max)|
|Advertising & Marketing Costs|
|Business Cards: A hot sauce business involves quite a bit of customer interaction, whether that is attending tradeshows, sales calls or simply having face to face interaction with prospective clients. Business cards are a great way to stay front of mind with your clients.||$0||$50|
|Customer Research & Surveys: Many hot sauce business's conduct industry and consumer research prior to starting their business. Often times, you need to pay for this data or hire a market research firm to help you in this process.||$0||$300|
|Direct Campaigns, Printing and Mailing: Although it may sound old-school, traditional marketing methods can be a cost-effective way to drive awareness for your brand. This includes flyers, postcards, sales letters, coupons, special offers, catalogs and brochures.||$0||$300|
|Affiliate Marketing Commission & Fees: If you want to increase revenue for your hot sauce business, affiliate marketing is a great way to promote your product to a new audience. When determining affiliate commission rates you will offer, you will want to take into account the price and margin for your product to ensure affiliate marketing is worth it for your business. According to Monitor Backlinks, the average affiliate commission rate should be somewhere between 5% to 30%. To learn more about how to set commission rates, check out this article..||$0||$250|
|Influencer Marketing: Partnering with like-minded influencers is one of the most effective ways to grow your social media presence. Many small businesses simply gift a free item in exchange for an influencer post, or pay the influencer directly.||$0||$750|
|Press: If your business and story is unique enough, press and media attention may come to you, but odds are, you may need to do your own outreach and budget for this. We put together a guide here that discusses different press opportunities (both free and paid).||$0||$500|
|Google Ads: With Google Ads you have the ability to control how much you spend by simply setting a monthly budget cap. Additionally, with these ads you only pay for results, such as clicks to your website or phone calls! It's okay to start with a small budget at first and make changes accordingly if you see valuable returns.||$0||$300|
|Facebook & Instagram Ads: With Facebook and Instagram ads, you set your budget and pay for the actions you want (whether that be impressions, conversions, etc).You can learn more about pricing based on your impressions here.||$0||$350|
|Total Advertising & Marketing Costs||$0 (min)||$2,800 (max)|
|Total Starting Costs||$62 (min)||$103,961 (max)|
Raising Money For Your Hot Sauce Business
Here are the most common ways to raise money for your hot sauce business:
You may not need funding for your hot sauce business.
In fact, many entrepreneurs take this approach when starting their own business, whether they have a little amount of cash or a substantial amount to get started.
So what exactly does the term "bootstrapping" mean?
This method essentially refers to self-funding your businesswithout external help or capital and reinvesting your earnings back into the business**
Bootstrapping means building your company from the ground up with your own, or your loved ones, personal savings and reinvesting all earnings back into the business
Here are some tips to consider when bootstrapping your business:
- Use your savings as your capital - one of the best ways to bootstrap your business is to collect your savings and use them as startup capital. This will also help you avoid using your personal or business credit cards when getting started.
- Determine exactly how much capital you need and how much capital you have to get your business off the ground. Generally, when bootstrapping your business, you may want to consider starting a business that involves less startup capital.
- Consider starting a business that will generate immediate returns so you can put money back into the business
- Be as lean as possible - this refers to cutting down expenses as much as possible, such as payroll, fancy software tools, unnecessary travel, renting an office, etc
- Consider outsourcing instead of hiring - in the beginning, you may not need to hire someone permanently to help run your business. It tends to be much less expensive to outsource work to a freelancer and hire someone permanently down the road!
Want to learn more about bootstrapping your business? Check out this article
What Skills Do I Need To Succeed In Starting A Hot Sauce Business?
As a hot sauce business, there are several essential skills and characteristics that are important to identify prior to starting your business.
Let’s look at these skills in more detail so you can identify what you need to succeed in your day-to-day business operations:
Customer Service Skills
Friendly communication with customers and the ability to address service issues is a critical part of the job.
Here are some customer service skills you may want to consider prior to starting a hot sauce business:
- Professionalism: The way you act, present yourself, and respond to situations all leave an impression on your customer. It's important to stay professional at all times when handling customer requests or issues.
- Problem-solving: When issues arise, it's important that you are able to think quick on your feet and address the situation with a calm and clear solution
- Friendly-manner: This is an obvious one, but customers truly appreciate someone that can respond in a quick, efficient, and friendly manner.
- Proficient in writing: These skills include the ability to write well-crafted emails, service tickets, and any other programs used by the business (ie. chat functions, SMS texting)
Business Savvy Skills
When starting a hot sauce business, there are a few fundamental business skills you will want to learn in order to be successful:
- Leadership and training skills: A great team starts with YOU. Make sure you have all company policies and training procedures in place prior to hiring your team
- Decisive and self-confident: Over the course of your career, you will need decisions that could impact your business significantly. It's important you are able to think clearly and rationally about these decisions.
- Ability to understand the financials: You don't need to be an accountant, but it is important that you are able to clearly understand and define metrics such as expenses, revenue, profit, margins, COGS, etc.
- Strategic Thinking: Setting clear goals and benchmarks, identifying opportunities, risks. Ability to effectively communicate these insights to your team.
These are a few of many business savvy skills you should have (or work on) when starting a hot sauce business.
For a full list, check out this article here.
Advice For Starting A Hot Sauce Business
We've interviewed thousands of successful founders at Starter Story and asked what advice they would give to entrepreneurs who are just getting started.
Here's the best advice we discovered for starting a hot sauce business:
James Bryson, founder of Flaming Licks ($13K/month):
The biggest learning on our business journey has been around the need to test ideas before committing your most precious resources: time, energy and money.
Read the full interview ➜
Theo Lee, founder of KPOP Foods ($200K/month):
I think a really important concept, especially for when just starting out, is being comfortable with launching things quickly.
Read the full interview ➜
Mustafa, founder of Trini Pepper Sauce ($2.25K/month):
We launched a Kickstarter campaign that successfully raised over 32K, surpassing our 25K goal.
Read the full interview ➜
Mustafa, founder of Trini Pepper Sauce ($2.25K/month):
It’s okay to set large goals but break them out into smaller goals and milestones. It’s okay to take breaks!
Read the full interview ➜
daniel fitzgerald, founder of Small Axe Peppers Hot Sauce ($85K/month):
Ask any small business owner and they will tell you that cash flow is a perpetual challenge. Sure, having more orders than you can fill is a good problem to have but it is always a challenge to make sure we are always in stock in the 4 to 5 thousand retail outlets that we currently sell in.
Read the full interview ➜
Write a Business Plan
Writing a business plan from the start is critical for the success of your hot sauce business.
Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.
For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.
You may want to consider expanding upon these sections in your business plan:
- Executive Summary: Brief outline of your product, the market, and growth opportunities
- Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
- Products and Services: Specifics on the products and services your business will provide
- Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
- Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
- Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
- Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
- Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
- Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.
Learn more about how to write a business plan here
Determine Which Business Bank Account You Need
There are hundreds of banks out there, and it can be overwhelming to find one that's right for your business.
Here are some factors you may want to consider:
- Location - Is your bank close enough that you can easily make deposits or get cash?
- Low Fees - Make sure to understand any and all fees associated with setting up and maintaining your bank account. Ask for a list - banks usually try to keep this hidden and in the fine print.
- Online Banking Services - Make sure you can easily navigate through your online portal and you have easy access to everything you need.
- Line of Credit - What do your options look like (even if you don't need this now, you may need this down the road).
- Every bank has something that differentiates them from the rest, so make sure whatever that is applied to your needs and values.
Check out this list of the 13 Best Banks for Small Business in 2020 and what makes them so unique.
Setting Up Your Hot Sauce Business (Formation and Legal)
When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.
The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.
These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.
- LLC: All income and expenses from the business are reported on the LLC personal income tax return.
- S corp: Owners pay themselves salaries + receive dividends from profits.
- C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.
Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.
Learn more about securing the right permits and licenses ➜
Need to start an LLC? Create an LLC in minutes with ZenBusiness.
How Do I Pay Myself As A Small Business Owner?
Most entrepreneurs start a business to do something they love- but at the end of the day, you still have bills to pay (maybe now more than ever).
But it's important to strike the right balance - if you pay yourself too much, you could be putting your business at risk.
There are two common ways to pay yourself as a business owner:
1. Owner's Draw
Many entrepreneurs pay themselves through an owner's draw. This means that you are technically sean as "self-employed" through the eyes of the IRS and are not paid through regular wages.
At the point that you collect money from the draw, taxes typically are not taken out - so make sure you are prepared to pay these taxes once you file your individual return.
As an owner who takes a draw, you can legally take out as much as you want from your equity.
This type of compensation is suited for Sole props, LLCs, and partnerships. If you’re an S corp, you can pay yourself through both a salary and draw if you choose.
If you decide to pay yourself a salary, you will receive a set and recurring amount. This will be taxed by the federal government and the state you reside in.
The reality is that it can be really complicated to set your own salary, so we have some tips for you to consider:
- Take out a reasonable amount that allows you to live comfortably but also sets your business up for success
- Consider the number of hours you are working weekly + the type of duties you are performing.
- Set your salary based on your industry-standard, location, and profits (or projected profits)
- Look at your P&L statement: Deduct your own pay from that amount. This is important so you can first tackle important business expenses, and then pay yourself from the amount leftover.
- Pick a payroll schedule (and stick to it)! In the US, it's most common to pay yourself and employees twice a month.
To learn more about how to pay yourself and what is a reasonable amount, check out this article.
How To Price Your Hot Sauce
One of the most challenging aspects to starting a hot sauce business is determining how much to charge for your hot sauce.
When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.
Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.
On the other hand, when businesses over-price, this tends to be just as damaging to the business.
When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.
Here are some factors to consider when pricing your product:
Understand your customer
It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:
- Customer demographic: Age, gender, location, etc.
- Buying habits of your customer: What they buy + when they buy
- Level of price sensitivity with your customer
All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.
Understand your costs
When pricing your hot sauce, it's critical that you first identify all of your costs and consequently mark up your hot sauce so you can factor in a profit.
The actual cost of your hot sauce may include things like:
- The actual cost to make the product (ie. raw materials, supplies, manufacturer).
- Shipping + overhead fees
- Operating costs to run your business
You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.
Create revenue goals
When determining the price of your hot sauce, you'll want to create goals for revenue + how much profit you want your hot sauce business to make.
This process is simpler than you may think:
- Think about your breakeven cost (by completing the above step).
- Create a revenue goal based on your break-even cost
- Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
- Divide your revenue goal by the number of items you plan to sell
This figure will help determine your estimated price per product in order to meet your revenue goals.
Evaluate your competition
The last piece in determining how to price your hot sauce is by simply looking at your competition.
The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your hot sauce fits best in the marketplace.
All of these factors play an equal part in pricing your hot sauce, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.
Understanding Your Costs
Example from Ishan, founder of Ugly Duckling
First objective: profitability
Our profitability is OK at this point but definitely not where it should be yet. To this day I have not paid myself a regular salary yet...and it’s been 4 years!
The problem is not the cost of goods which are well under 20% of sales, which is good by any standard. The problem is fulfillment costs. In 2018 we transitioned from our first fulfillment company to a much bigger company. We did this because we wanted to provide faster shipment speeds and a better quality of packaging. In hindsight, we chose a company which would have been more suitable for a larger company with bigger volumes. We ended up being tied in with some pretty large minimum monthly payments. So currently fulfillment costs are currently around 45% of sales...way too high.
We are now looking to transit to another fulfillment center. Our target is to get our fulfillment costs down to around 30% of sales which I believe from what I have researched, is possible.
Just to be clear, when I say fulfillment that includes transportation costs also - FedEx, USPS, etc. Not just storage, picking, and packing. I am pretty sure that it is possible to get fulfillment costs down even lower, and I suspect that some large pro sellers on amazon.com work with around 20-25% of sales.
So our target P+L for 2020 looks something like this:
- Cost of goods, including inbound freight and clearance - around 22% of sales.
- Fulfillment - around 30% of sales.
- Digital Advertising & Promotion - around 15% of sales.
- Other marketing and office costs, including salary costs - around 10% of sales.
- That would leave us around 23% of sales - enough to pay me a liveable salary and for the company to make a profit and finance future growth.
That's the first objective for 2020: to right-size the P+L so that we are profitable at our current sales level
Gross Margin Calculator: How to Calculate The Gross Margin For Your Hot Sauce
Our calculator is designed to be simple and easy to use.
The goal is to help you set realistic expectations and understand what is considered a healthy gross margin for your hot sauce business.
Calculate your gross margin and profit margin here.
What Type Of Customers Will Buy Your Hot Sauce
It's important to first establish who you will be selling to, whether it's to businesses or consumers.
Typically, in this industry, products are sold to B2C markets (business-to-consumer).
Let's take a look at what this means for your hot sauce business:
B2C (or business to consumer) is a transaction where businesses sell their products or services to the consumer directly.
In this market, consumer behavior is the primary driver for your business decisions - so it's important that you truly identify who your customer is, and what their buyer habits are when building your product/service.
B2C is that you are able to cast a very wide net when targeting your customers. Your product may interest a large number of consumers or a specific niche.
B2C is that consumers hold all the power - so if your website is not the most user friendly, or does not rank in the top search results on Google, chances are, your customer is going to shop elsewhere.
When building your hot sauce business, it's critical that you hone in on who your target audience is, and why they need your product over your competition.
Here are some items to consider when identifying your buyer persona:
Design A Prototype
Turning your idea into a reality can feel like a daunting task - but it's critical that you have an idea of what your product will look like (even if it's just a sketch) prior to finding a manufacturer.
Here are some common ways you can design your prototype:
- Draw Your Initial Design on Paper
- Form pieces of fabric together
- Consider Taking A Generic Product And Putting Your Own Brand On It
- Try Making the Product Yourself
- Consider Building A Prototype With A 3D Printer
To learn more about how to design and prototype a product, check out our latest guide here.
Mustafa, founder of Trini Pepper Sauce dives deep into the process of designing and prototyping their product:
I was fortunate enough to have a baseline recipe from my grandmother to start off with. So, the first thing I did was beg and plead with my grandmother to share the family recipe with me.
I knew initially that I wanted the product to be made at a mass scale for retailers. So we called a couple of co-packers, contract packagers, that informed us of all of the requirements to produce and bottle Trini Pepper Sauce.
A co-packer is a company that provides manufacturing and/or packaging service for products. These services may be beneficial if you want to produce items on a large scale and/or don’t have the required facilities to manufacture your product for retailers. It is important to have a transparent co-packer and a great working relationship since they will be scaling up your recipe and will become your largest expense.
So, after running an initial large scale production of my sauce, it was paramount that I was satisfied with the color, texture, and taste of the sauce. It might take several runs before the co-packer meets a client's product specification. Once, the sauce's large scale recipe was perfect, I was able to place orders for additional product while being minimally involved during the manufacturing process.
This may or may not be of interest depending on the scale desired for a product launch, or cost and availability of facilities and certifications required for manual production. The most important requirements for my co-packer encountered were: scalable recipe with exact quantities, business license, liability insurance, and the tax number.
Look at your business endeavor as journey instead of a job. Embrace the succession of good and bad experiences. I look at it as the painting of the abstract of my life.
First, I got all the ingredients and general process together and I adapted it to fit the FDA guidelines. This involved a lot of small batch making in my apartment to the disdain of my roommates. I created a couple of recipes with exact quantities and sent them off to a food laboratory to get our recipe and process approved. We needed to have a certain pH range, temperature, bottling procedures, and ingredient list. This was an iterative process with the food laboratory. After we had our final recipes approved we got our FDA process letter and nutritional facts.
Once I had the nutritional facts and ingredient listing I could start work on the packaging. I encountered a BBQ sauce and really loved their packaging design. I reached out and got put into contact with a graphic designer.
Part of the creative process was forming a general idea of how we wanted the product to look and the inspiration behind the product. We wanted to showcase the look of the sauce and have a general island vibe that wasn’t too gimmicky.
We provided the dimensions, sample bottles, UPC codes to our designer to work with. There was a lot of collaboration with the designer, co-packer and label manufacturer to get the packing done. Approvals for artwork and machining requirements to name a few.
The next step was selecting the right co-packer. The recipe is very unique compared to other hot sauces on the market. I solicited a lot of different companies but ended up choosing one close in proximity to where I lived. I worked with them to develop the large scale recipe based on the small batch recipes we made previously.
This was a bit of a challenge as some of the ingredients are quite unique and aren’t readily available in large quantities or distributed by food/ingredient vendors. We attempted to substitute some of the ingredients with more readily available ingredients but ultimately I wasn’t satisfied with the product. This was almost the ending of the venture until I started to explore importing.
I researched the requirements for importing fresh produce into the United States. You are limited in what is approved to import and the origin country. Luckily, Trinidad and Tobago was approved and I had family connections to steer me in the right direction to placing a large order. I needed to get an import permit, customs broker, commodity forwarder, and exporter lined up to make the large scale batch possible.
The large scale batch was quite a feat as it was my first time doing it. There are a lot of moving parts to the operation. We ran into a couple hiccups such as ingredients not being sent, shipping delays, product sourcing, and timing. The timing had to be precise because we use only fresh ingredients. The batches were delayed a couple of times to get the timing down correctly.
The day of the batch I had to be there to taste and approve the final recipe. This can be a little difficult because you can always add but cannot subtract ingredients. And when doing it on a large scale you don’t want to end up with 55 gallons of product that you cannot use. It was quite a relief when the final product was finished and ready to sell.
How To Find A Supplier For Your Hot Sauce Business
Here are the steps to consider when finding a supplier/manufacturer:
Know your design
One very critical step to finding the right supplier is having an initial idea of what your design/product will look like.
Sketching is one of the most simple ways to get started in the design phase.
What's great about sketching is that you can practically do this anytime, anywhere - even on the back of a napkin.
To get started, all you need to do is pick up a pen and paper and start drawing - or if you are working on a virtual/software product this can be a diagram that outlines the user interface or experience.
Decide your supplier type
You'll want to identify the type of supplier you are looking for.
Here are some questions you may want to ask yourself prior to searching for a supplier
- Are you looking for a manufacturer to produce your product idea?
- Do you want to find a supplier that can simply purchase existing products for you?
- Do you want a drop-shipper to supply and fulfill orders?
- Do you want a domestic supplier or an overseas supplier? Read more about the pros and cons of each here
Where to start your search
Once you have an understanding of what type of manufacturer/supplier will be best to bring your idea to life, there are several areas you can start your search:
Manufacturing Your Product In House
It's also very common to manufacture your hot sauce on your own - either from your home or in a commercial space.
In order to get the product right, you may want to consider experimenting with different designs and recipes until you find the perfect one.
Some founders choose to manufacture their product in-house so that they can control quality, manage costs, and easily handle production/logistics.
Down the road, you can always choose to outsource your hot sauce.
Leslie Eisen, founder of AlmondClear discusses how to manufacture products in house
If you want to start a line of unique products, then you have two basic options: you can make them yourself, or you can find a manufacturer to work with that creates custom formulations for their clients.
I knew that I was trying to build a larger-scale business and that the home-made model wasn’t right for me, so I had to find the right manufacturing partner. It took a lot of research, phone calls, and emails before I found the laboratory that met my needs.
I wanted to create unique products (as opposed to private label), so I worked with the manufacturer’s chemist who specializes in skin care formulations. This process takes some time!
First, you have to tell the chemist what kind of product you’re looking for, the ingredients that you want to include or leave out, and what you want the final product to look like/feel like/smell like, etc.
Then, the manufacturer sends you the first sample, you try it out or give it to others to try, and then provide feedback for revisions. In my case, the first two products came together fairly easily because I only needed to make small changes to stock formulations.
There are many, many rules and regulations around cosmetics and skin care products. If you want to sell products that contain FDA regulated ingredients then you have to register and get a permit.
My products aren’t FDA regulated, so I didn’t have to go through this step, but I did have to be aware of the many guidelines and standards around labeling and safety warnings. Some people hire a lawyer to help them through this process, but my manufacturer was able to guide me through the regulatory process.
The entire process, from researching labs to work with to having the first finished products shipped out to me, took around six months.
Purchasing Inventory For Your Hot Sauce Business
When first starting out, it's important to start small with your overhead to get a gauge for what people want.
Just remember - if you order a line of items that don't sell, it's nearly impossible to recoup the money lost.
Buying the right inventory takes research and planning in order to get it right.
- Identify your target audience: Identify the age, gender, annual income that you will be selling to. This is a defining factor in ordering the right inventory that will sell.
- Research your competition: Conduct market research and identify the different types of styles, price points, and materials being used. This will help you see what's trending and ways that you can improve/stay ahead of the competition.
- Create an inventory wishlist: Identify what you need for the launch of your business and create a budget that you will stay within. Remember, it's okay to start small.
- Find a supplier Make sure to first compare prices and analyze different options.
- Delivery timing: Schedule the inventory delivery to match with seasonality and trending buying seasons
Pro-tip: It's easy to become biased based on your own fashion preferences on what types of shoes/apparel to purchase. This is where a lot of fashion businesses go wrong. It's important to base purchase decisions on current buyer behavior, trends in the market, and specific to your niche.
Erin Hooley, founder of Bailey's Blossoms tells us how poor inventory projections led her to lose over $2M
When we first launched Peyton Bre we did so in a social or direct sales model.
Through poor inventory projections we were forced to change models but only after losing $2 million dollars.
It was a devastating time for us and one we were not sure we could survive.
I have since become very intentional about the way that we project our inventory needs and we continue to refine that quarterly and even monthly. We have created a KPI for the cost of goods sold to help us hold ourselves accountable.
Ultimately, the better we manage our inventory the less we have need to discount and the healthier our profit margin becomes.
This is, of course, a very high-level overview of the importance of inventory control.
To see the full breakdown on how to manage inventory, check out my guide over on my blog..
Licenses and Permits
When starting a hot sauce business, it's important to identify the type of space that you will be preparing your products.
Before launch, you may want to consider preparing products in your own kitchen (or a friend) to test different recipes and processes so that you can ensure everything is in place once you launch.
In this stage, as long as you are not selling products- the experimental phase can be done in the comfort of your own home without a heal department to approve the kitchen.
Health Department Approval
Once you're ready to launch the business, there are a few boxes to check in order to ensure you are health & safety approved.
The most common question is whether you can operate a hot sauce business from home or if you need to rent a kitchen facility to prepare and make your product.
As long as you are FDA approved, you have the ability to operate out of your own kitchen. However, you may need the proper equipment in order to make that happen, and a commercial kitchen facility may be better suited for you.
For a full list of FDA requirements to get your food business set up, read more ➡️ here.
Michael Martinez, founder of Eat Clean LLC explains his experience renting a commercial facility:
The business was started with three of my long-time friends and just $3,000 (which was all that I had in my savings account at the time). That money was used for kitchen hours in a commercial kitchen, food and our original website.
By our third month, we were delivering to over 100 customers each week and we then had to lease a space and build our own kitchen. Initially, our customer base was family, friends, local gyms, and sports teams.
The space we leased was a pizza restaurant that we had to tear down and build it to our requirements. Later on, we then leased the two locations next to us for additional space to prepare our meals.
🚀 How To Launch Your Hot Sauce Business
Build A Website
Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).
- Pick a domain name that's easy to remember and easy to type
- Choose a Web Hosting Plan (ie. Shopify, Squarespace)
- Make sure you choose the right theme and design
- Implement the proper page structure (ie. about page, contact page, pricing etc)
To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.
Once you have chosen the domain, web hosting, and platform, it's time to get started with the design phase.
Themes are a great way to produce the fundamental style and identity of your website - this includes everything from your font design to your blog post styles.
One of the best ways to get started is to simply explore the various themes (free or paid depending on what you're looking for) and test them on your site.
If web-design really isn't in the cards for you, you may want to consider outsourcing a web designer to help bring your vision and brand to life.
Launch Strategies For Your Hot Sauce Business
There are various different ways you can launch your hot sauce business successfully.
Here are a few different strategies to get customers excited about your hot sauce business.
- Build hype with a landing page: you can effectively do this through waiting lists, discounts, countdown timer etc
- Create a teaser video: even just a 30 second video is a great way to exposure for your hot sauce business, and possibly even go viral
- Reach out to influencers: The right influencer for your product has the ability to reach your audience with just one post, and because of their loyal following, this could lead to a big return for you.
- Get Press: Whether you plan a PR stunt or get exposure through a popular news outlet, this is a great way to attract initial customers
- Launch on popular sites: A great way to get buzz about your hot sauce business is to submit your launch to popular startup sites.
Here are a few popular sites to launch on:
Learn more about how to launch your business successfully ➜ here
Mustafa, founder of Trini Pepper Sauce dives deep into the process of launching the business:
I decided that we were going to do a Kickstarter to gain funds for the product launch. The first batch we made sample bottles and had a sample campaign to build momentum. We made 1 fluid ounce bottles and gave them away for free.
Plan out your Kickstarter campaign thoroughly. Don’t be afraid to wait to get everything right before launching.
We designed our initial website and funneled the free sample sign up there. The sample campaign we made a survey to get things like mailing addresses, product feedback, and to create an email mailing list. We posted the sample campaign on reddit and other forums. The post went viral quickly with the sign-ups and we hit our cap of 10,000 samples rather quickly in a matter of minutes. What we didn’t think of beforehand was how expensive the shipping would be for all the samples. We ended paying for all the samples, packaging, and shipping as well as all of our other start-up costs.
The next step was creating the Kickstarter campaign. We needed a really well put together campaign to recoup our sample campaign cost.
We studied all of the very successful kickstarter campaigns and deduced the common ideas among them. Some of the Kickstarters that were the most helpful were: caps. hot seven, FYM Hot Sauce, and Red Hot Motor Oil.
All of these hot sauces had an awesome intro video and different levels of rewards. Furthermore, we learned from studying these Kickstarters that around 90% of the campaign rides on pre-campaign preparation and that money can be lost by not pricing rewards with shipping cost in mind especially international shipping.
Since the product was a family recipe the story was already there for the most part. We hired a videographer and flew to Trinidad and Tobago to shoot the video. We involved family and really immersed the videographer in my family and the culture of Trinidad and Tobago so he could get a feel for the vibe we were going for. That in turn led into an awesome video which surely contributed to the success of our campaign.
We researched hacks to make our campaign go viral and to be selected as a kickstarter favorite to be promoted. The hacks included doing a promotional free sample through reddit. We learned from caps. hot seven that a four month buffer period between the initial promotional post and kickstarter post on reddit is effective in generating Kickstarter traction and we learned from FYM Hot Sauce that cross posting between subreddits also helped in drawing additional demographics to the Kickstarter.
After the kickstarter page was finished we launched the product by email blasting our list that we obtained from doing the sample campaign. People loved the product from tasting the samples and were waiting to order as soon as we launched. Our campaign was quite successful and we used all what we learned from the sample batch to produce our subsequent batches for our kickstarter backers.
Some of the biggest lessons learned from the launch is to plan out your campaign thoroughly. Don’t be afraid to wait to get everything right before launching. Make sure you have enough margins and include shipping costs separately from the product cost. I would limit international orders as the shipping can prove to be difficult and expensive. Before your launch you should have all the processes in place to make the product in large quantities before taking the pre-orders on kickstarter. We already had all of this in place beforehand and still ran into some difficulties fulfilling by the correct date. We ended up having to ship out two different batches as some of our pre-orders were Christmas presents.
After, our kickstarter campaign was fulfilled the website was launched. We got some of our first online store customers from repeat buyers, word of mouth from the sample and kickstarter campaigns. It is important to maintain momentum and have a plan for the future after the kickstarter campaign has ended. You should always be planning for what’s next with as much foresight as possible.
Make Sure You Get The Package Design Right
The way you package your hot sauce business is often the first impression your customer has - so it's important to get it right.
You may want to ask yourself these questions:
If my product is on a shelf next to hundreds of other similar products:
- Will my hot sauce business stand out?
- Will the branding/packaging create a connection with my customer, and hence, lead them to buy?
There are hundreds of tools you can use to help with packaging and design:
- Canva - Allows non-designers to create beautiful Instagram/Pinterest posts, flyers, business cards, etc.
- Stickermule - High quality custom stickers you can include on or in your packaging.
- Noissue - Custom tissue paper and compostable mailers
- Rollo Label Printer - A great tool to print all shipping labels at home
Sheets & Giggles explains the motive behind their "Premium Unboxing Experience"
I had a particular vision for our packaging centered around one goal: because we were a DTC company and wouldn’t do physical retail in year 1, we needed to focus entirely on an incredible unboxing experience that made the product feel as premium as possible.
Outside: a white box, nice wax coating, logo front and center with no other copy, easy to open, nice and sturdy.
Inside: make people smile from the get-go, have a social call-to-action, include free extra surprises (a knapsack that wraps the sheets and an eye mask), put funny copy all over the place, and add a donation bag that people could use to donate their now-defunct cotton sheets (sheets & blankets are the #2-most-requested item at shelters behind socks).
Get Press Coverage For Your Hot Sauce Business
The more buzz around your brand - the more the phones ring, the more traffic to your website, and the more customers as a result.
Here are a few ways you can get press for your business:
Press releases are a great way to share big announcements or news, but in order to get any traction, you'll need to find a way to make your press release stand out amongst others.
Try to convey a story that really matters, not just to you, but to the reporter and to their audience.
Here are some things to consider when submitting a press release:
- Craft a catchy subject (keep it short and sweet).
- Acknowledge the journalist's past work and interests - this is key!
- Include the main point of the story in the first paragraph, heck, even the first sentence. Reporters want to hear the juice first and foremost.
- Focus on the facts and try to limit the amount of jargon used.
- Pitch yourself! Help them put a face to the story.
- Make sure your topic is newsworthy. If it's not, find a way to!
- Try not to include any attachments of your release!
Email is one of the most effective and preferred way to send your press release, so as long as you keep your pitch brief, interesting and personalized (no cold emails), you should stand a chance!
Get Press Using HARO
HARO, otherwise known as "Help a Reporter Out" is an outlet for journalists to source upcoming stories and opportunities for media coverage.
The best part is, HARO is free to use! There are, of course, premium versions you can purchase, but the free version is still an accessible way to get press.
Once you set up an account, HARO essentially will email you based on stories (that are relevant to you) that need to be covered where you will then have a chance to essentially "bid on the story."
Here are some tips when crafting your pitch:
- Discuss your experience and expertise in the space. Make sure it's obvious why you're relevant to this story.
- Answer the question in 3-4 sentences. Try and be as direct as possible
- Offer to provide the reporter with more information and make sure to give them your contact info
Plan a Publicity Stunt
Planning a publicity stunt is an effective and quick way to raise awareness for your brand and gain some traction from the press.
If you're looking to plan a stunt, the objective should be to be bold and create something memorable
However, being bold has a fine line - it's important that you consider the timing of your stunt to ensure you don't come off insensitive or unethical. For example, timing may not be in your favor if you plan something during the general election, or in most recent cases, a global pandemic.
In order to measure the success of your stunt, it's important that you first determine your end goal, for example:
- Is the stunt aimed to raise money for your business or a particular organization?
- Is the stunt aimed to drive more traffic to your website?
- Is the stunt aimed to get more followers and engagement on Instagram?
Here are a few tips for creating a great publicity stunt:
- Research to ensure that there haven't been similar stunts done in the past by other businesses - this could easily turn off journalists and your audience.
- Make sure you can explain the stunt in one headline - this will help grab the media's attention. In other words, simplify!
- The stunt should be related to the product you are promoting. Even if the stunt is a success in terms of viewers, but it doesn't tie back to your original goal, then it's not useful.
- Keep the stunt visual with videos/images.
- Leverage the internet and social media platforms for your stunt by sharing your message across a variety of audiences. This will help with word of mouth and the overall success of your event.
To learn other strategies on how to get press, check out our full guide here.
Cameron Manesh, founder of Cameron's Seafood was able to land in the New York Times just by sending a cold email:
I started calling all the large newspapers pitching their food critics, their startup business writers and even pitched the angle of immigrant-run companies.
My first hit was with the New York Times. "I googled “New York Times Food" and learned Florence Fabricant was their critic. I then googled “Florence Fabricant email” and asked her to sample our food.”
I read she is a stern critic so we were worried but to our surprise she loved the food and when the article came out we did close to $40,000 in sales in three days and could barely handle the volume. That was an intense week but made it happen.
To read the exact email we sent to get in the NY Times, check out the full story ➡️ here
To contact the press, I recommend:
- Targeting macro press (i.e. USA Today).
- Google indirect competitors or vertical companies (ie. Hello Fresh) to see who wrote their articles
- Google the writers contact info and send an email introducing company
- Offer samples, be personal, discuss your food, follow up!
🌱 How To Grow Your Hot Sauce Business
Consider Selling On Amazon
In addition to selling your products directly on your site, you may want to consider selling on Amazon to reach a wider audience and attract new customers.
Here are some pros and cons of selling on amazon:
- Easy and seamless process to get your product listed on Amazon
- There are roughly 100 million thoroughly committed prime customers, so you're bound to tap into new business
- Can help grow your business exponentially and reach new audiences
- You may encounter some "copycats" and counterfeit products
- Amazon owns the relationship with the customer (you lose control over product reviews + customer service)
- If you already have a low-markup, amazon may not wrth your while and you could end up losing money
- Commissions and listing fees are high - it's easy to lose control of your offering
Follow these instructions to get your product listed on Amazon or check out the video below on how to get started:
Cory Stout, founder of Woodies ($250K/mo) provides us with specifics on how to rank better on amazon:
Our main product is walnut wood sunglasses that I sell for $25 on Amazon and Woodies.com.
I dedicated myself to becoming an Amazon expert. I listened to all the podcasts and read all the blog posts I could find. Shoutout EcomCrew I took the basic fundamentals that are out there and I added a couple of my own twists.
Amazon brings me, 100 brand new customers, every day for very little acquisition cost. If I tried that on my own, it would take a TON of work and it wouldn’t be nearly as effective as Amazon, so I took the easy road on this one.
Here's an article I wrote on how to rank better on amazon (30+ Tips):
- Beautiful images (minimum 5 images) especially lifestyle images I use UpgradedImages.com for product photography (hey Ken!)
- Keywords in your title (but it still needs to sound human)
- Competitive price (contributes to high conversion rate)
- NOT having 1-star reviews
- DON'T STOCKOUT: it's such a killer and if you DO stockout, definitely DON'T raise your price right before you do, if anything LOWER your price for the last 10-20 units before you stockout, each ASIN has a 'memory' for when you do get back in stock so that will help you regain ranking quickly
- DON'T VIOLATE AMAZON TOS: just don't
- Perform QC on your stock before you send it in (I sent in a wrong box once and I had to 'remove' over 3,000 pieces so I could sift through them and remove the 150 contaminated pieces 0/7 would not recommend
4/5: Pretty Friggin Important
- Minimum 10 5-star reviews (do this before you do anything below this)
- Well optimized PPC campaigns (could do a whole post on this, keep ACOS under 40%) here's a screenshot of some of my campaigns I use a combination of manual campaigns with exact phrases and high bids...and auto campaigns with a broad range of products and very low bids
- Turning on FeedbackGenius for auto review requests (it's not as good as it used to be, but it's still worth it)
- Get a trademark and get Brand Registry, this protects you from hijackers and other unscrupulous sellers
- Quick response to customer messages (under 12 hours) here are my stats my mom does all my customer service "Employee of the Year" status
- Drive outside traffic (amazon loves outside traffic because they don't have to spend so much to acquire customers) Facebook, Instagram, and Google Adwords are the usual suspects
- Use ocean shipping to save mucho $$$ on unit costs (use flexport)
Read more about amazon tips here.
How To Market & Sell Your Product To Grocery Stores
The goal for most hot sauce businesses is to be able to sell their product in grocery stores and other marketplaces.
With a bit of time, research and energy, you can make this a reality for your hot sauce business!
Here are the steps you should consider taking when you are ready to market your hot sauce business to grocery stores:
1. Permits: Make sure you have the right permit by contacting city and state officials
2. Creative label and packaging design: Your packaging should be functional, creative and also meet all U.S. Food and Drug Administration labeling guidelines
3. Price your product appropriately: Make sure your product pricing is fair but also allows for you to make a profit. Check out what other hot sauce business's are selling for at grocery stores in the area.
4. Create a target list: Conduct research in the area and decide which grocery stores you would like to sell your product to.
5. Contact stores and present your product: Introduce yourself and request a meeting with the grocery stores on your list - bring a presentation with the market research you've conducted and samples of your product.
Consider Working With Instagram Influencers
Partnering with like-minded influencers (within your industry) is one of the most effective ways to grow your social media organically.
Industry influencers already have an established and loyal following. With one post, your product immediately establishes a connection with a brand new audience. It's that powerful.
When finding influencers to promote your product, do your research and make sure that their following will actually be interested in your product.
It's easy to be blinded by any influencer with a huge following, but if those followers don't resonate with your product, there may not be any value there... so make sure you do your research!
Evan Marshall, founder of Plain Jane discusses how "micro-influencers" have impacted his business:
Influencer marketing has been huge for us. Our approach is pretty simple. We give out samples of our products and ask people to post about us on social media aka a micro-influencer strategy.
We really like this approach because we get authentic stories and content. We cannot really control the messaging so the product has to speak for itself. We don’t really take product photos at all. Our customers take the photos and we ask to reuse them.
With any influencer strategy, you have to be very sure you’re targeting the right people and engaging with them. You can make sure you’re targeting the right influencers by looking through their posts and then looking through the profiles of their engaged followers.
It takes more time per influencer but the payoff is certainly worth it. Make sure their followers look like your existing customers.
It takes a ton of time and work to grow a social media following this way but it’s worth it. Other accounts have tried to grow themselves through botting or other manipulations. As a CBD company, we didn’t want to give Instagram any reason to shutdown our account so we’ve done everything through content and real engagement. It’s not magic to make this happen. You just have to post consistently and then reply or like every single comment you get. It takes months but it works
Experiment With Pay Per Click Ads (PPC)
Pay-per-click (PPC) is a performance-based marketing method that allows you to show specific ads for services or products oriented to a very defined target, with the goal that the user visits your website or landing page.
Here are some tips to consider:
- Consider connecting the ad to your corresponding landing page so that the audience receives the necessary information after clicking on the ad.
- Conversion Tracking: When running PPC campaigns, be sure to run the ads with conversion tracking.
- Focus on quality keywords, even if there are few as this will save you time and money. When assessing the performance of a keyword, it's important to track the expense, conversion, and cost per conversion, as well as the ROI.
PPC advertising can be a very important lead generator as long as it's done properly. Your PPC campaign is intended to drive traffic to your website and help the business scale.
Additionally, if the campaign is not having the desired results, you can make the necessary changes immediately to improve them.
Ryan Schortmann, founder of Display Pros talks about their investment in PPC Ads:
My name is Ryan Schortmann and I’m the founder of Display Pros. We are a custom trade show display booth company offering easy to use portable display “kits” for small and medium businesses wanting to get into the trade show game.
It did not take long to come to the realization that to compete at any reasonable level, we were going to need to take the plunge and invest in Pay Per Click ads and display.
From experience, I know that it is important to give Google’s hivemind some time to settle in before each campaign starts seeing consistent results (this is largely dependent on budget).
A certain amount of PPC budget must be viewed as a “marketing research” expense and then you can look at the analytics data and make informed decisions on where to refine, tweak or plain scrap an idea.
Google Shopping was an entirely new concept for me. You can’t assign keywords to products so at first, I was asking myself “How the hell do you refine these?”. Then I found some good reading material and courses and learned of some advanced methods that the pros are using. It turns out you can utilize negative keyword lists combined with the priority setting on each shopping campaign to “shape” the keywords that are coming in and how much you are spending on them.
To learn more about PPC Ads and Google Shopping, check out this video to learn everything you need to know!
Improve your SEO
SEO is not just about driving traffic to your site, it's about driving the RIGHT traffic to your site, and ultimately, converting leads into customers.
One of the most important aspects of SEO is understanding what your customers are searching for, otherwise known as "keyword research."
Here are some tools that can help you choose the right keywords for your hot sauce business.
- Google Ads Keyword Planner invaluable for discovering search trends.
- Google Search Console is very helpful once your website is up as it shows you what words/phrases are generating traffic.
- Ahrefs and SEMRush are paid tools that allow you to look at results of your competitor's website.
Publish Great Content
Finding keywords is an important piece of the puzzle, but Google also ranks your site based on the actual content you produce, as this is what your customers are reading and engaging with.
There are various different "forms" of content that you may want to consider diversifying on your sites, such as blog posts, articles, studies, and videos.
So let's discuss what google considers "good content:"
- Length - This will vary depending on the page, however, generally having a sufficient amount of content helps search engines recognize that your site is a good source for a specific topic
- Engagement - The longer people stay on your website to read your content, the higher Google will rank your website. It's important to have informative and "thick" content that keeps people reading
- Avoid Duplicating Content - Google will recognize this and may consider your content to have low value
- Ensure pages load quickly - This will also help with engagement and time spent on your website
- Shareability - Create content that people want to share, and is easy for them to share, especially to their social media accounts (ie. "click to tweet" is a great example of this).
Another element of creating good content is creating consistent content.
If (and hopefully you are) publishing content frequently, it's important to stick to a schedule - this helps build brand trust and easy user experience with your customers.
Planning out your content with a content calendar is key to staying consistent.
Here are a few great content calendar tools that can help you:
Backlinks are an important piece to SEO, as they allow for other websites to link to your content.
Search engines recognize that other sites are essentially "verifying" your content and essentially rank you higher because of this.
Of course, some links are more valuable than others and can affect your site in different ways.
For example, if a highly valuable and credible site like the New York Times links to a page on your website, this could be remarkable from an SEO perspective.
Aside from organically getting mentioned from other sites, there are other ways that you can increase and earn backlinks:
- Create infographics with relevant data that people want to share
- Promote your content on different sites/look into "guest blogging"
- Contact influencers/journalists/bloggers and ask them to mention you!
- Write testimonials for other sites in exchange for a backlink
- Leverage existing business relationships
Learn more about the fundamentals of SEO ➜ here and check out Neil Patel's 3 Powerful SEO Tips below
Monika with Hipcooks discusses how solid Yelp and Google reviews lead to the business ranking #1 on Google search:
Top Google Placement
We deliver a great quality product each time we teach a class. I call it “pennies in the piggy bank:” one by one, each customer contributes to a solid, dedicated customer base.
Number one Google ranking (or at least the top 5 Google ranking) is important, so we keep our Google business pages full of updated content. Our Google and Yelp Reviews are solid.
Build A Blog
One of the most effective ways to build brand awareness and grow your business is through consistently blogging.
We've outlined some useful tips for you to consider when creating content:
Consistency and Quantity
Quality is important, but it should be the standard for any content you publish.
What’s more important is consistency and quantity.
Consistency is as simple as committing to publishing and sharing a certain number of posts per week. For me, that’s three per week right now.
This kind of commitment is key, because one day, a random post will blow up, and you will have never expected it.
The easiest mind trap is to think "I’m posting too much", and “I need to give my readers/audience/this platform a break”.
This is nonsense.
There is no such thing as oversaturation. Well, there is, but it is just someone else’s opinion.
For every person that tells you you are posting too much, there is another person that wants even more of your content.
You should ignore people’s opinions on how much you post.
Patience & Persistence
Keep posting, keep trying, and keep putting out good content on the regular. Your time will come, and when it does, it will change everything.
The only thing you have control over is your content.
You can’t control how people will react to it. You can’t control pageviews, likes, or shares.
So the only metric you should focus on is how much content you can put out in a week, month, etc.
Where to share your blog content
I know it sounds obvious, but the best places to share your content is on your mailing list. It is guaranteed traffic and it is a great way to get rapid feedback from your most loyal readers.
Send newsletters often. I have done once a week since starting, and I’m moving to twice a week soon.
Work on increasing your mailing list as well. Look into ways to increase your conversion rate to your mailing list. I added a flyout popup thing to my site and now I’m collecting ~30 emails per day.
An email newsletter is one of the most powerful assets you can have and it is worth its weight in gold.
Reddit is one of my favorite places to promote content.
It is a very scary place because you will often get banned or heckled, but it can really pay off.
Create social media accounts for your blog, the main ones I use:
Twitter Facebook Instagram LinkedIn
Set up Buffer and share all of your blog posts to all of your accounts. All of these little shares really do add up.
Automate this as much as possible. I automated all of my social media for Starter Story.
When I started out, I put together a spreadsheet of relevant Facebook groups for my niche, and I would post to these groups whenever I had a big story I wanted to share.
Grow Your Email List
The more engaged list of emails, the more engaged customers, which ultimately leads to more sales.
One of the best ways to start growing your list is by providing your customer with something free (or discounted) in return.
This could also be anything from:
- Fascinating case study
- Video series
- Free week of the product
- Discount on the product
Learn more about how to grow your email list and improve email marketing ➜ here.
Dylan Jacob, founder of Brumate states their email collection tactic that is proven to work:
We use Spin-a-Sale for this (you spin a wheel for a discount code in exchange for subscribing to our email list). This has been the best email-collecting tool we have found because the customer truly feels like they won a prize rather than just a coupon code.
Even if a customer doesn’t convert right away, if we have their email we have a 19% chance of converting them into a future customer whether that is through future promotions, new releases, or simply just sending an email at the right time for a purchase to finally make sense for them.
We also have a return customer rate of over 14%, so one out of every 6 people we convert will end up buying from us again with an average order value of over $60.00.
Add an exit-intent popup to your online store
A great way to double, or even triple, your email opt-in rate and to grow your list is to add an exit-intent popup to your site, and offering a discount or content upgrade for subscribers.
Here's an example of what that might look like:
One thing that I spent years NOT doing, that I now kick myself about, is adding an "exit intent pop-up" to our site, which lets people enter a sweepstakes to win a Xero Shoes gift certificate.
That one idea has added over 100,000 subscribers to our email list, which is one of our most effective marketing channels.
Improve Your Email Marketing
Different types of emails
Here are the most common types of email campaigns you can send to your customers and their benefits:
- Welcome emails - the perfect way to provide information from the start with a clear CTA. Make sure to tell your customer everything they need to know about your product or service.
- Newsletters - a great way to give customers updates or send out your latest content
- Product launch emails - the quickest (and easiest) way to increase sales is by selling to current customers. Make sure they're the first on the list to know about your new product
- Promotional emails - promote discounts, deals coupons etc. Try and make this feel exclusive and for a limited time only
- Abandoned cart emails - give your customers a reason to complete their purchase!
Here's a great resource for finding curated email designs, for all types of email campaigns!
Newsletter Example - Food Industry Tips and Tricks
We have a lot of content to share and it is very well received. Most clients need to see your brand a few times before they purchase, and email is great for that. Email is also an effective reminder for past clients to order again.
We have close to 5000 subscribers and we aim for 2 emails per month. Most of our subscriptions came through the website.
So far we have been focusing on practical life hacks and tips on how to stay focused and disciplined. Many of our subscribers are past clients that took a break.
Our open rates are good, we’re averaging 24% - 53%, much higher than the 10% industry average. We need to work on our click rates which are at around 1.2%.
Here's a look at one of our email newsletters. Here's another one.
Abandonded Cart Flow
The abandoned cart workflow is one of the most effective strategies for turning your lead into a customer, and a powerful tool to have if you're an e-commerce business.
Think about all the times that you went on a shopping frenzy only to add items to your cart and then either forget or realize nows not the right time to pull the trigger.
Then, minutes later you receive an email saying "Hurry up! Your cart is waiting - and we want to provide you with 20% off your order."
Maybe that's the special touch (and discount) you needed to pull that trigger.
Implementing this workflow can automatically trigger this for your business every time a customer abandons their cart.
Here's a great example of an abandoned cart email from Brooklinen:
Things they do well:
- Showcase 5-star reviews from other customers
- Offer a small discount + free shipping
- Great design + clear call to actions!
Social Media Advertising
Social Media Advertising is one of the leading ways to get the word out when it comes to hot sauce business.
There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.
Let's talk about a few of the main platforms and what makes them unique:
- Facebook Advertising - more than 2 billion monthly users. Facebook is the best for lead generation + capturing email addresses for e-commerce businesses.
- Instagram Advertising - approximately 500 million monthly users and has a higher audience engagement rate than any other platform. Instagram ads are best for linking to a product page or landing page and reaches the 18-29 age group most effectively.
- Twitter Advertising- Small businesses typically use twitter ads to drive brand awareness, but the platform is meant more for organic engagement (and is not as heavily used for paid advertising)
- Pinterest Advertising - 175 million monthly users and most effectively reaches the female audience. Pinterest is great for promoting products without "promoted". The promoted pins have a way of blending right in.
- LinkedIn Advertising - 227 million monthly users and is geared towards the B2B market and generates the highest quality leads. Great platform for recruiters, high-end products and services that will help businesses
It's important to first define your goal/objective so that you don't waste time and money into the wrong platform:
Here are some different questions to ask yourself as it relates to your goals:
- Do I want to simply drive brand awareness?
- Do I want to drive users to my website to gather information?
- Do I want to increase sales and get my customer to take action?
From there, choose the platform that targets your audience best and start experimenting!
Learn more about social media advertising ➜ here.
Founder Andy Hayes talks about mastering FB ads and the pixel:
The biggest bang for your buck will likely be mastering Facebook and it’s platform - which we all know is pay for play, so you’ll have to come up with a small amount of budget to start for marketing.
We’ve spent countless hours (and paid numerous coaches) before we cracked the code that works for us on Facebook, but it is working really well for us now.
Some of the most important things to know when it comes to FB Ads:
- Start with retargeting (that’s showing ads to people who already know you but did not purchase). Master this - and start building information on your Facebook Pixel - before you do anything else
- Once you have that down, try working with the 1% “Lookalike” audience to prospect for new customers. This may take awhile because your pixel audience is small, so try layering on interests - 1% Lookalike and your largest competitor, for example. Don’t use interest-only targeting until you master this.
- Great photography and videography is key, as is smart copy. Research what’s out there in your industry and constantly test - what works for one company may not work for other people.
- Make sure you have good offers. For example, we have a $5 trial for our subscription, which converts affordably - if we promoted our subscription with the standard $30 front charge, it wouldn’t be as cost-effective.
Host A Social Media Giveaway
People love free stuff and love competition. Giveaways and contests are a great way to create awareness for your brand, grow your email list, and eventually convert leads into customers.
If your goal is to gather email addresses, make sure the entry criteria is to "enter your email." You can do this by leading customers to your landing page where they can then enter their email to be in the giveaway.
One of the most important aspects of promoting a successful giveaway is having an amazing prize. The better the prize, the more engagement you'll get.
This doesn't necessarily mean choosing an iPad or an expensive/trendy watch, but instead a prize that is actually relevant to your brand/target audience.
Giveaway Example and Tips
Example from TJ Mapes, founder of RIPT Apparel
Our most recent successful giveaway was when we gave away a PS4 + the new Spiderman game. I hosted the giveaway on our site and then let our audience know about it via email/social channels.
Entrants earned different amounts of entries for entering in different ways (tongue twister!), for instance; enter via email, get 10 entries. Follow us on Facebook, get 5 entries. Subscribe on Messenger and get 25 entries.
I also built out a drip sequence in Klaviyo that contained four emails to encourage entrants to take more action, like referring friends and liking us on social.
Email #1: Thanks for entering!
Email #2: Explained how to earn bonus entries:
Email #3: About us
Email #4: Coupon for entering
This last email in the sequence just thanked them again for entering and also included a coupon to a specific (related) collection of designs with an expiration date on it to incentivize purchases.
PS4 Giveaway Results:
We ran it for 2 weeks and recorded results in a meticulous spreadsheet to analyze the data. Here are some of the highlights:
- Giveaway page pageviews - 67,355
- Total entrants - 26,137
- Conversion rate - 38.80%
- Total entrants in Klaviyo (not suppressed) - 24,515
- New emails acquired - 16,363
- Emails we already had - 7,521
- % of new emails - 66.75%
- Cost of item - $350
- Instagram visits - 10,618
- Instagram followers gained - 3,496 ( total followers lifted by 6.9% )
- Twitter followers gained - 4,194
Build A Facebook Community
Building a community is a great way to grow your network and your business.
There are several different ways of building a community, one of the most effective (and simplest) ways is to build a Facebook group
Setting up the group page takes less than 10 minutes, and we've outlined ways the top 5 ways to create an engaging and successful group:
- Make the group exclusive. This may sound counter-intuitive, however, this ensures privacy and that the group will feel comfortable posting and engaging with members.
- Try to be warm and welcoming. A great way to do this is by having a "Member Monday" where you welcome new members and ask them to introduce themselves in the group
- Use polls/surveys. This is a great way to know your audience and see what people want more of in the group (more business tips, networking opportunities, etc).
- Include influential people & conduct AMA's (ask me anything). This is a great way to get members engaged
- Host an in-person (or virtual) event with members in the group. This will create stronger relationships and build a strong community.
Mike Doehla, founder of Stronger U, an online nutrition company noticed that his customers needed a little motivation and sense of community:
Most diets are lonely so we wanted to give support and a community.
I think many people fail diets because there is no one to talk to and no accountability.
You can by a book, or google a meal plan but who’s going to keep you on track? We will. The entire SU community.
We give our members access for life to our Facebook community filled with people around the world who are looking out for everyone’s success.
Most diets make up arbitrary rules and we thought they just didn’t make sense. Meal timing, Cutting carbs, butter in coffee, sugar being the devil? Ehh no need to overthink that stuff.
We’ll give you the science behind of what we do and show you what actually matters based on real research.
Luckily we have a PhD at our disposal to educate our staff and members so everyone is getting the most up to date information out there.
🏃🏼♀️ How To Run Your Hot Sauce Business
How To Retain Customers For Your Hot Sauce Business
Retaining customers is one of the most effective ways to grow your hot sauce business.
Oftentimes, it's easy to find yourself focusing on generating new customers, vs retaining your current ones.
Look at it this way - you are 60-70% more likely to sell a new product to an existing customer than you are a new customer.
That's not to say that finding new customers and revenue streams is not important, however, the easiest (and most inexpensive) source of new revenue is right there in front of you.
Here are some ways you can retain customers for your hot sauce business:
- Responding to comments on social media
- Send discounts (or freebies) to loyal customers
- Provide valuable content, for free
- Write a hand written thank you note
- Provide awesome customer service and build relationships with customers
To find out more tips and tricks on retaining customers, check out this article ➜ here
Theo Lee, founder of KPOP Foods dives deep into the process of attracting and retaining customers:
As we started to see high levels of conversions on Amazon, sometimes as high as 30%, we began changing our digital marketing strategy.
We were able to get clicks to our website at a very low cost per click, and thanks to some PR initiatives, SEO optimization, and content development (both video and blog articles), we were able to increase sessions to our website to 150 to 200 a day.
We would then retarget our website visitors with Facebook ads, driving them to Amazon and continued to see high conversions. As we began talking to other CEOs and CMOs of food startups selling online, they mentioned that they were using the same strategy.
The one downside to this strategy is that you can’t collect customers’ email addresses through Amazon - inhibiting your ability to retarget.
While we’ve grown our Instagram account to over 10,000 followers, we’ve been using Instagram as a tool to partner with Korean restaurants and reach out to influencers we’d like to work with.
We haven’t seen a significant amount of conversions from campaigns with Instagram influencers, however these partnerships have been successful in growing our following, driving traffic to our website, and providing creative assets for our e-mails, website, and ads.
We’ve had success partnering with YouTube influencers, but it’s taken a lot of time, effort, and luck. When we first started cold e-mailing influencers, we didn’t get many responses.
If you’ve ever had experience selling anything, you know it’s a numbers game and that was true here, but we really lucked out when Greg Mrvich, of Ballistic BBQ (230K+ subscibers), got back to us.
He also resided in Southern California and was empathetic to our struggles as a newly minted startup. It also helped that Greg was a huge fan of Korean food. We sent him some samples of our sauce and the rest is history.
He creates these amazing, mouth-watering videos featuring culinary BBQ masterpieces and we can’t thank him enough for his help!
Along with YouTube influencers, we’ve been able to partner with other companies, such as subscription boxes leveraging our success on Kickstarter, online sales, earned media, and prior relationships.
We use past partnerships as credibility to fuel the next one giving other parties multiple reasons to collaborate with us. We are honest in our communications, prompt in our responses, and detailed in our work. We use every success as a stepping stone to reach up and find better opportunities.
We’ve partnered with subscription boxes such as Bespoke Post and BBQ Box, and each partnership has led to increased website traffic and new customers.
Our latest partnership for KPOP Sea Snacks was with women’s quarterly subscription box, FabFitFun, and Pinterest in their limited-edition, specially co-branded box called the P100, a box reflecting Pinterest’s top trends for 2018.
Partnerships like these can help in multiple ways from generating direct sales, increasing brand exposure, to acquiring a new group of potential customers. We see large influxes of website visitors at the onset of announcements and steady traffic for the duration of a partnership.
We are generally able to cater to these new audience by creating unique landing pages or offering special discounts only offered to them.
So how did we source these kickass deals? Apart from what I mentioned above about using accomplishments to get one deal, and then using that deal to source another, it comes down to goodwill and building relationships. Here’s an example:
Our Kickstarter success can be attributed to what we learned by reaching out to the founders of other successful campaigns. We paid that collaborative, sharing mentality forward by talking to anyone that reached out to us for Kickstarter advice or business advice in general.
Months after helping one such person, that individual connected us to one of her friends, working at an amazing brand that just so happened to be looking for amazing Korean-inspired products. And voila! Relationships matter and have led to some of our biggest achievements.
No matter how busy we are, I think we can all agree that we can spare 20 minutes out of a day to talk to someone or help someone out. Help other people out without expect anything in return
Lastly, a new initiative that we’ve been focused on is email marketing. Through a platform called Dojo Mojo, we’ve been able to partner with companies to run giveaway campaigns and through just three campaigns, we’ve been able to grow our e-mail list by over 500%.
While email marketing has always been great way to keep in touch with our initial customer groups to drive repeat purchases, gathering new emails is essential to widening our top sales funnel and increasing revenues.
There are so many different objectives a company can hit with e-mail marketing (e.g., web traffic, referrals, conversions, education, etc.). The greatest part of e-mail marketing is that it is extremely cost efficient and targeted – we don’t spend on advertising and we get prime placement in the mailbox of our would-be and existing customers.
Specialty Retail Stores
A specialty sauce distributor reached out to us after the completion of our Kickstarter campaign and we’ve been working with them to get our products into their network of specialty stores nationwide.
These stores we’re placed in are generally independent grocers (think mom-and-pop shops), but our experience has taught us much about selling in retail as we look towards expanding distribution. It’s one thing to get into a retailer and another to ensure your products are selling in that retailer.
Sell-thru in a store can depend on, but are not limited to the following: customer demographics, store location, product price points, promotions/discounts, and sampling. Our success in these stores have served as validation that we must expand our distribution in order to scale and take our company to the next level.
Diversify Your Product Line
Adding new products to your business is a great way to expand into new markets and grow your business.
It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.
Here are some reasons you may want to considering adding/diversifying your product
- Meeting the needs of your customers
- Establish yourself as a top provider in your industry and stay ahead of the game with competition
- Resistance to downturns/trends fading
- Create new revenue streams
Preparing To Scale Up
Example from Hipcooks Cooking Classes
With 7 profitable owner-operated locations and 15 years in the business, I’m (finally) ready to scale up!
What we're looking to do:
- Open a Hipcooks in every big city in the US (and even internationally)
- Streamline and get ready to franchise
- Finish our second and third cookbook
Lousia with Funky Fat Foods states just how important their customer service is:
We’re consumer-focused and take care of our customers as quickly and correctly as possible.
I believe what is also working for us, is our customer service and the relationships we have created with them.
Even today we see huge support from Instagram, as you can talk directly to your (potential) customers all over the world. Basically, just ask them what kind of content they’re interested in, and always reply to their questions.
We’ve recently started sharing our struggles and learnings via IG stories and see a growth in our engagement. We try to stay in as much contact with our followers as possible and strive to create good and engaging content through social media. As a result, we have been steadily growing our follower base organically.
We also run contests on Instagram in collaboration with other brands and send our bars to micro-influencers, which really help to increase awareness of the brand but there is still a lot of room to grow in this area.
Provide Great Customer Service
Providing exceptional care and creating relationships with clients is a great way to build your reputation and retain customers.
Whether you are an online business or a physical business, it's highly important to communicate with customers and make them feel like they are the priority.
Just remember: customer service represents your brand, values, vision and YOU as a person.
Build a Referral Program
Word of mouth is one of the best ways to get the word out about your business and acquire new customers. Especially when you are starting out, it’s important to build a solid referral program to encourage existing customers to help you find new ones.
A great way to do that is by offering a reward (ie. credit on your service or cash) to customers that refer you to their friends and family.
A fantastic referral program will help with clout, credibility, and establishing yourself in the space.
Word of Mouth
The most tried and true way to grow a hot sauce business is through word of mouth - some entrepreneurs would say it's more important than all social media.
Why you should focus on word of mouth:
- Consumers trust word of mouth above all other forms of marketing
- 92% of consumers believe recommendations from friends and family over all forms of advertising
- 64% of marketing executives indicated that they believe it is the most effective form of marketing
Learn more about word of mouth in our guide: 30 Ways Founders Grow Their Business ➜
We put together the best resources on the internet to help you start your hot sauce business.
- Platform tools such as Shopify, WooCommerce, Amazon or Cratejoy
- Email tools such as MailChimp, Klaviyo or Whatsapp
- Social media tools such as Facebook, Instagram, Twitter, YouTube, Hootsuite, Reddit or Tiktok
- Advertising tools such as Facebook Ads or Instagram Ads
- Design tools such as Canva or Adobe Suite
- Analytics tools such as Google Analytics or Sumo
- Productivity tools such as Google Suite, Dropbox, Microsoft Office 365, IFTTT or Trello
- Payments tools such as Paypal, Shopify Payments, Amazon Payments, Square or Braintree
- Customer service tools such as Zendesk
- Blog tools such as WordPress
- Accounting tools such as Quickbooks or Kashflow
- Freelance tools such as Fiverr or Upwork
- Shipping tools such as USPS or Royal Mail
- Stock images tools such as Unsplash or Shutterstock
- Crowdfunding tools such as Kickstarter
- Seo tools such as Ahrefs or Yoast
- Web hosting tools such as GoDaddy
- Affiliate tools such as PepperJam
- Wholesale tools such as Faire.com
- How to Start a Hot Sauce Business: all the essential information for hot sauce business
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Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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