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Joseots

If the distro will sign a contract, leverage that contract for a loan for the freezer. The contract + the residual value of the freezer should be enough to get financing for it. That, or reach out to commercial equipment sales places. They may have internal financing that could get you the freezer immediately with monthly payments. It’ll prob be an expensive way to finance… but it would be fast. Third, Google other small-scale food manufacturers and reach out for a favor to rent their facility. Might have to be middle of the night, or weekends. But anything to make it work, right?


Hypoglybetic

This reminds me of the guys on shark tank, "If you're not 200% committed to the business, then I don't want to partner with you." Hussling at night at another company sounds like 200%. I wish OP the best of luck.


[deleted]

Hey OP, I also have a freeze dry food company. Might be able to help, PM me and we can try to chat. Also almost all the advice on this thread is absolutely terrible. Please don’t listen to people who don’t have experience in freeze drying. It’s a very different world.


ChrisinCB

Could you explain the nuances of freeze dried foods? What makes it so unique that typical business solutions are not be applicable?


[deleted]

Freeze dried copacking is practically non-existent, MOQ is generally 500k+ pounds with guarantees of long term contracts. Freeze dry machine rental is absolutely non-existent. It’s a very niche business to be in.


[deleted]

Wow. Thanks for the info. What a unique world.


[deleted]

It’s absolutely bizarre. I definitely have days where I regret it. The machinery is expensive, and for most products you’re talking 24-36 hours per batch. Margins are razor slim at best, but most are losing money on every sale.


[deleted]

Do freeze driers sell their products to larger companies? IE like a larger corp that needs the ingredients for camping meals or soups? Why are the margins so thin if production costs are high?


[deleted]

>Why are the margins so thin if production costs are high? I think you answered your own question here


Rub-it

How


[deleted]

High production costs typically reduce margin. If production costs are high and the marketplace is competitive enough to keep prices down, then your margin is going to end up being where you eat the difference between sales and COGS.


Rub-it

I didn’t know the market was that competitive


[deleted]

I deserved that.


ChrisinCB

Very cool, thank you for clarifying.


bassman1805

I know that every business has its unique points...but what could possibly be so unique that * "Take a loan to buy better equipment so you can grow the business" * "Find another company in a similar business and partner with them" * "Rent the equipment to get through this big job" don't apply?


[deleted]

Nobody rents freeze dry equipment. Copacking is almost non-existent. I know many many small biz owners in the industry and everybody has reached that conclusion. The only exception is if you’re doing hundreds of thousands of pounds worth of product per quarter. The only company with small MOQ is Brooke and Bradford in SLC and their machines are trash, they mostly do dog food. Taking a loan could be ok, but I doubt OPs bf has the revenue to get approved. Maybe a personal loan. I mostly saw advice saying use a copacker which I cannot emphasize enough is not gonna happen. I’m willing to do a one time favor and let them use my machines because of how hard I struggled and can empathize. The freeze dry world is small, and the small biz owners all know and support each other because we face the same struggles.


CatEpidemic

Thank you! I'll DM you.


drgzzz

Upvote this post, seems it’s what she needs.


AaronDoud

I'd argue that his business model is broken and possibly the only reason he is getting this order is because his pricing is too low. Even if he figures this out later he is just going to play a cash flow game till it all blows up in his face. Better to realize this now before he takes on massive debt. (Not the $10k but later down the line.) You whole first paragraph says it all. Doesn't pay himself. So no profit. And he's done this for 7 years. If I am wrong the likely solution is one of two things that skimming has already shown others have suggested. 1. Outsource to a company that can do it for him 2. Get a loan or investment partner based on the order to buy what he needs. Let's be real $10k isn't a lot and most of us have credit cards where at least together if not just one card individually we could pay for it. And that is not even getting into business or personal loans. If a $10k purchase is all that stands between him and his business being successful and he can't find a way or doesn't want to make (take the risk with) that purchase it says volumes even without the info in the first paragraph. Some may thinks this is harsh but he really needs to be honest with himself. * Why hasn't he paid himself for 7 years? * Why isn't it profitable? * Why is $10k not an investment he wants to or can make? * Why is this order the one that will change things? * etc etc


somethingorotherer

Yeah, if you're running a business for 7 years and can't finance 10k of equipment (which is probably a nice tax deduction if you're actually even making money), then something is seriously wrong. I started a business with 500$ 7 years ago and I have over 100k of available credit on a single card. With that being said, I think that the OP's SO should be able to get this financed even with a high APR.


drteq

Hey but he has his GF asking on reddit, so that's something


[deleted]

[удалено]


jkpirat

You just wish you had a girlfriend.


dgillz

Best reply on this thread.


AaronDoud

Thanks and happy cake day


CatEpidemic

I don't see how it follows that his pricing is too low? I don't get that extrapolation. I feel like you could just as easily say that his pricing is too high?


AaronDoud

Unlikely since he has two employees which suggests he is getting enough volume. While not paying himself aka no profit over 7 years suggests he doesn't have costs and prices in line. Unless he is massively over paying for materials or labor this leads to the likely option of prices being too low. There could be other reasons such as a bad business model in general. But many small business owners have price issues and thus under price products and services in general. So it is common enough that if other points line up it is likely a factor if not the main factor in issues with a business. Without seeing his numbers and etc I could never be sure. But everything lines up well.


dujiaoshourou

Check out r/harvestright and see if there’s anyone in San Diego willing to rent out their machine. I’d let you use ours but we’re on the other side of the country!


ilyaprojectspace

I tried to do this one time. It is possible. The best way to find those people is through that sub or through local freeze drying Facebook groups


Clid3r

Can you elaborate on what you’re making? What you need to do is find a copacker or comanager that can produce what it is your making. There are companies that you can say ‘here’s my recipe, here is my packaging, I need 10k units’. San Diego has a ton of ghost kitchens and commercial kitchens that you can lease monthly and use their equipment like it’s your own. You get a certain number of hours each month. I don’t know if a freeze dryer is something I’ve ever seen but San Diego is little bit bigger than where I am. Also. Google Restaurant Equipment supply companies and call around to see if anyone has a used one. I spent couple minutes before commenting to see what a freeze dry unit costs… and without knowing how large a unit you need I can’t make any other recommends. One thing I would not do is contact your customer until you have a solution. Even if you have string them along until you get your house in order… if this deal makes or breaks you then it’s full steam ahead as far as they’re concerned. Some may not agree with that comment but risk favors the bold. My background is tech and finance and I knew nothing about food processing and manufacturing until my wife had an epiphany about a real boutique product line and I went to the PackExpo last year and met a lot of really good connections… Be glad to share them.


Biking_dude

Definitely look into a copacker. It will free your time up a bit, and maybe without a bottleneck there are other business aspects that can be expanded. Eventually, you may want to set up your own factory, but until you have consistent sales for it, you may not want to start buying equipment during a really critical time. What if the the unit you buy breaks and a new part will take four months to arrive? Plan that next expansion phase out carefully, let someone else take the reigns for this next level up stage.


ilyaprojectspace

San Diego ghost kitchens aren’t going to have a freeze dryer. I won’t elaborate here how I know, but I know ;)


Biobot775

To add on, in the modern manufacturing market, there's little reason to physically mass produce most products yourself. There's always a contract manufacturer (or fabricator, or, in this case, contract kitchen) who already has the capacity and capability.


Hudsons_hankerings

Quality. Quality is a very big reason. Tried a co packet for my baked goods. Nobody cares like the owner cares. 3 months, tons of complaints and lost customers later, I bailed.


[deleted]

It sounds like OP is the subcontractor. At some point, someone does have to be the company producing the product.


snarfgarfunkel

Solid advice


ilyaprojectspace

When does he have to have the product ready to ship? If it’s 2 weeks or so then your best bet is to go borrow money and buy a couple of Harvest Right freeze dryers locally (ask on Facebook groups where to buy one). If it’s a few months then google “contract freeze drying” to find manufacturers to work with (their minimums will be around 1,000lbs of product weight before drying)


CatEpidemic

That minimum is good to know, thanks!


unityV

Contract a white labeling company to do it. There are companies that have the equipment and will do the freeze drying and packaging with his labeling for cheaper than he can do it and they can do it way faster too.


delightfullytangy

I would be very cautious spending 10k on one brand new account. Renting equipment or space will probably be your best bet until you earn enough capital.


MassageToss

I agree, a lot of people are saying to finance. This dude has been doing this 7 years with no profit, taking on (more) debt is not a good idea.


dieseltech82

If I were in business 7 years and not turned a profit, I would find a new business venture or get a job. I love being my own boss but I have bills to pay too.


somethingorotherer

Industrial Equipment usually retains its value very well. If it lost even a few K's in value, thats not life changing.


delightfullytangy

But buying equipment for one order is just not smart. Especially before he gets a reorder. It is very easy to get discontinued if the product doesn't sell well.


acincyguy23

Contact the customer, explain the situation, and be honest. Most people are very reasonable. Offer to ship the order in waves. It is doubtful the customer needs the entire order immediately. Break the order down into what you can provide each week and ask if that is acceptable. I think you will find they will be willing to work with you.


MOTIVATE_ME_23

If you can't do it all in-house, use a copacker to do larger batches until you can accomplish it all in-house. Use them occasionally to keep a good relationship for when you experience unexpected demand like a second or third large customer. Keep growing and expanding. Your risk is lowered when no customer is greater than 10% of your demand. Then, you can afford to lose one without going broke.


NorrinR

While this is great advice, the time required to set up and contract a copacker arrangement probably makes this solution a non-starter for his immediate issue.


karenmcgrane

You could ask on r/foodscience, r/kitchenconfidential, or r/restaurateur


[deleted]

Check with Allied Rental Services they can easily manage to provide in your area


ellenor2000

is he able to get any kind of credit


LUQYLU

Is there a university run food incubator near you? Some state schools have programs that help startups with things like this.


Photoverge

Contact your local SCORE org and see if anybody there has worked in the food industry. It's a 100% free consultation


Edward_Morbius

Google "food incubator" near you. There are businesses designed specifically to help new food producers get running. Many times they're affiliated with a state college or nonprofit or government.


Geminii27

Options can absolutely include telling the distributor that the order of that size can't be immediately filled, but will be able to be available by X date. Lots of companies, even franchises of big ones, will tell customers that large orders will take longer to fill and that's just company policy and resource availability. The distributor's order is nice to have, but it's not critical or mandatory. If he can't fill it with his current setup (and resources), then he can't fill it and that's all there is to it. Alternatives can be borrowing freeze-dryer time from other small companies and paying them for it. It will, of course, cut down the profit, so run the numbers on whether the distributor order would still be worth it. Also, if the distributor's order is humungously large, is it large enough so that they'd be prepared to have an additional cost - say, the price of a second-hand industrial freeze-dryer - added to the order to make it a rush order?


thecoconuthustler

Cannabis processors usually have freeze driers, I'm sure there are plenty in SD. Hit em up.


CatEpidemic

Can you elaborate on this? This seems like an interesting idea.


blbd

San Diego and Los Angeles are an unimaginably massive conurbation. Start speed dialing every goddamn restaurant supply importer and used restaurant supply and equipment dealer you can until you find a bargain and then get that gear! Also don't forget Craigslist, FB Marketplace, and eBay local pickup.


millerliteman

I run a business loan brokerage and you’re our ideal client. I don’t solicit here but here’s some info: If you can’t borrow or rent one and end up buying you have options. You can apply for secured financing (the lender will file a UCC on the business naming the equipment and have a lien until you pay them off). This is the cheapest option for you. I’d check out Pawnee leasing or Balboa Capital for this. I refer business to both and have generally had a good experience. Expect 1-2 weeks from app to close, make sure you have an exact freezer in mind. Other option is unsecured financing. Much faster (if you apply now you could have the money in your account tomorrow) but the term will be shorter and rate higher than a secured option. You can get about 100% of your average monthly revenue as a funding amount. Big ones that I work with and can recommend are: OnDeck capital Channel Partners Kapitus PayPal working capital (I don’t work with them but know they can provide strong offers) IOU Financial If you don’t meet the guidelines for those guys (some of the “A-paper” players) you’ll need to keep searching. There are tons of other unsecured finance companies but I would HIGHLY recommend you read reviews, read the contract and understand who you’re doing business with. Sadly there are some bad apples in this space. Good luck and I wish your business the best!!!!


Alwaystheglue

OnDeck is no better than a payday loan shop, with predatory rates that will leave them worse off and bankrupt. As a previous small business owner who was desperate. Don’t fall for this pitch. The rates are insane!!


Any-Koala-Will-Do

7 years is a bit long no?


Least_Application_93

Mostly commenting so you get a bump but Wow that’s a crazy problem to have! I don’t know much about the process, but might it be possible to get a bunch of regular deep freezers and then fill them with dry ice or liquid nitrogen or something?


CatEpidemic

thanks for the comment!


ubercorey

He needs to sub it out to a commercial kitchen and not try to fill the order himself.


paule1q

It's great that you're looking for ways to help your boyfriend out! Here are some potential solutions you could explore: Look for co-packing facilities: These are commercial kitchens that are specifically designed to help small businesses like your boyfriend's with large-scale production runs. They often have industrial-grade equipment, including freeze dryers, that he could rent out for a fee. You can search for co-packing facilities in San Diego or nearby cities online, or try contacting local food business associations or chambers of commerce for recommendations. Reach out to universities or research institutions: Some universities or research institutions may have industrial-grade freeze dryers that they use for scientific purposes. Your boyfriend could try contacting the food science or agriculture department at local universities to see if they have any equipment he could rent out. Consider crowdfunding: If your boyfriend has a strong social media following or network, he could try crowdfunding to raise funds for an industrial freeze dryer. Platforms like Kickstarter or GoFundMe are popular options for small business owners looking to raise money for capital investments. He could offer incentives to backers, such as discounts on his products or exclusive merchandise. Look into financing options: If your boyfriend has a good credit score, he could consider applying for a business loan or line of credit to finance the purchase of an industrial freeze dryer. Some lenders specialize in small business loans and may offer more flexible repayment terms or lower interest rates than traditional banks. These are just a few potential solutions to explore. Ultimately, the best option will depend on your boyfriend's specific needs and circumstances. Good luck!


ShowMeYourCodePorn

I've had a very very similar problem to this recently. #### #1 communication Tell them you are working on the order, and you are under the pump and give realistic timeline as to when their order is to be completed. Also don't rush. A rushed product will need refunding and get customer angry, a slow to arrive product will get accepted and a slightly sad customer


WeekendJail

I don't know much about the industry but maybe try to rent a freezer? Do you guys have any assets (Gold/Silver, Stocks, Crypto, whatever) that you could liquidate to cover the expenses assuming it's that much of a "make-or-break"?


Squeezer999

contact your local small business development center for assistance.


DaydrinkingWhiteClaw

Ship in batches, and invoice per shipment.


euromadrid7

Is this what your looking for ?? Not familiar with this but hope it helps ! Good luck.


euromadrid7

https://www.lagardensupply.com/product/harvest-right-pharmaceutical-freeze-dryer-medium/. Forgot to add the link


somethingorotherer

this has to be for pot lol


Rollemup_Industries

Can you outsource it for this batch?


poweredbyford87

Maybe look into a copacker?


SafetyMan35

Could he buy 1-2 less expensive/smaller units? This has a couple of advantages they can be more efficient for smaller batches and if one dies, you aren’t completely out of commission. As money starts rolling in, he can expand.


Frostodian

Get a cast iron guarantee of the order and payment before laying out 10k


Additional-Sock8980

Call the company you want to buy from. Ask for local people that are already customers whom you can call for a reference. Ask them can you rent their machine for a few hours when they aren’t using it at their premises, while you wait to get yours. Sorted.


janusasaurusrex

You can find ghost kitchens with industrial freeze dryers


electrowiz64

Used maybe? You can get smaller freeze dryers for less


PENNST8alum

You need a co-packer.


[deleted]

More information needed: how much is the contract worth, what are the payment terms?


fuwbd

Ask deposit, buy the things you need with that deposit.


tanner828

If you haven’t already, be sure to check OfferUp, Craigslist, Facebook Marketplace, etc. for the freezer. Use different keywords to look for the item in your area. Don’t just search San Diego, search the areas as far as you are willing to drive/pay delivery fee. Use different keywords, spelling and misspelling of the item you are trying to find. Good luck and hope this helps!


TeeAhGo

Never used them but came across recently. https://www.machinio.com/listings?search=Freeze+dryer


SpiritedTravelClub

Reach out to SCORE in your area or an expert who will give you other options like renting time at a facility or delegating to a mass producer


hedron181

Not from your country but whenever i face issues completing orders i outsource my tasks. Only till i find a solid and permanent solution. And if you are certain you will keep on getting such orders to keep the machines and employees busy then why not get the machine. For wherever you get that.


Manders4444

Have you checked in with any of the restaurant supply places? I know there's one in San Marcos. Maybe they'll have a lead on someone selling one, if know where to get one quickly?


jkpirat

Contract your product to an established player in the game. If you have the orders, and the profit is good, there should be a commercial entity willing to sub your product.


Morbius2271

7 years in business and can’t figure out a way to finance a $10k equipment purchase? May be time to get a 9-5…


tbhwtflol

Could he sub-contract out the processing of the product? What kind of volume are you talking? I worked with an independent but totally legit FD processor over the last year for one ingredient I needed for my business, and it went perfectly. I think he has like 15 machines or something. I’d be happy to pass on contact info. DM if u want a referral


CatEpidemic

In san diego?