95 days ago I did a post on a business opportunity that was presented to me and after doing the numbers agreed to come on board. I have been counting the days chomping at the bit as this is such a good opportunity I am really looking forward to this happening. The deal funnily enough was only happening if I agreed to join my friend/business partner which is a definite confidence booster. We agreed around 20 years ago to look out for each other and now here we are finally linking up. Crossing the fingers and toes for this one as it opens up the move to the Algarve very nicely.
The health product which we have to manufacture and package was launched in South Africa during the month of February and has already hit 2000 sales per month. This is not quite enough yet to justify opening a manufacturing plant and I would first like to see the sales numbers steadily increasing before plunging head first into this one.
There will be a small investment required which includes the manufacturing equipment plus the packaging machinery. The above picture is an example of what I presume we will need to get the packaging done. This I would take advice from the company first and try and match whatever machinery they are currently using.
I got the fist sight of the product today and there are 10 vacuum packed pouches within the bigger pouch so there are two packaging steps required to create one product. I do not want any human element involved in this process even though it would be easy to check if an extra pack was packed inside the main pack using a scale. Still human error scares me and the less staff I have the better I will feel.
This machine shown above we know states it can do 40 packs per minute so 2400 per hour which is actually only 240 full packs with 10 mini packs per pouch. The target I was told when this was all bought up was 2400 packs per day so I am not sure if it is the smaller packs or the completed 10 packs making 1 pack. I presume it is the first one then they need 24000 packed daily to create the 2400 main packs which is more realistic. This changes things slightly as I thought this was going to be straight forward and have me working this machine for 1 hour daily and not 10 lol. This is also on maximum production rate so being a novice I have to be realistic and add a few extra hours on whilst learning.
The information is coming through slowly as they are concentrating all their efforts on sales for now so I need to be patient for the time being. The business model still works for a 10 hour day and would cover the rent of the building within the first week. Two packing machines would be required to reduce the overall time of packaging by half down to an estimated 5 hours so more like 8 in the beginning. This means the investment has kind of doubled rather quickly, but all recoupable within the first month which is a very rare type of scenario so after 1 month you are not out of pocket. I do not know another business that will allow you to recoup your investment within the first month and why I am sold on this business model. Most businesses I know take a good couple of years to break even before profit can be taken. A salary could be drawn, but definitely no profits.
This is all about the numbers and I will know more next month as I have already been given the figures required before this triggers the UK operation. 14 000 is the magic number to kick off the next phase which they specified London and will have to tweak the location. London is ok, but not ideal and there are plenty of suitable areas just outside the London area and my mind says close to the M25 is close enough. The plant in Johannesburg will supply the UK until the UK numbers warrant or justify a plant opening. The weird thing is if SA can achieve 14K with such a small percentage of the population working then the UK and Europe numbers would be seriously large.
This sounds complicated and is actually quite simple with the various expansion plants relying on sales numbers before each plant comes to life. If the product is any good which I hope it is then this should happen quite quickly with a huge learning curve ahead. Who knows I could be temporarily working in London later this year or early next year and the Algarve the following year if all goes well. This is all on the product and the expected growth that needs to take place.