How to organize your sprat production business

* The calculations use the average data for the World

Production of sprats in Russia is advisable in most cases where it is possible to quickly and easily deliver the required amount of sprat or herring (this fish goes to such canned food), and this is mainly the Baltic coast. Therefore, a significant part of the sprat production plants in Russia is located in the Kaliningrad region, and it must be said that the amount of fish caught there may be sufficient to meet demand. Considering that supplies from the Baltic countries are now reduced, you can start your own business, in which, in the absence of foreign suppliers, there are fewer competitors. I must say that even the opening of a new plant will not entail fierce competition between already existing enterprises and those that have just opened, and therefore such a business can be considered very promising. However, it is worth noting that entrepreneurs in the northwestern region of Russia will most likely be able to engage in such a business, because factories located far from the sea coast will not be able to purchase raw materials at competitive prices (at least at the expense of transportation costs), which will increase their cost products, which means it will deprive them of an important advantage.

To get started, you must register as a business entity. In this case, the most optimal solution would be to register your limited liability company, however, with a large number of founders, it is worth considering opening a public company, in simple words - a joint-stock company. However, a limited liability company has access to a simplified taxation system, which, as you know, involves the transfer of small funds in favor of the state as taxes, namely 6 percent of revenues or 15 percent of operating profit. The process of registering a legal entity should not take too much time and will require small investments from the entrepreneur. However, the biggest difficulty will be obtaining permits and certificates for the implementation of their activities, because it is supposed to produce food. It makes sense here to contact Rospotrebnadzor in your region in order to clarify all the requirements that apply to food plants in a particular subject of the Russian Federation. The help of a competent lawyer can be very useful here, which will help to take into account a huge number of requirements and restrictions that relate to equipping the enterprise with appropriate equipment, suggest a certain sanitary and epidemiological condition, and also take into account some other features.

In addition, a laboratory examination of your product may be required, which will reveal the conformity of the products sold to the established standards, that is, it will prove that the produced sprats are safe for human health. In general, the process of resolving all bureaucratic issues can drag on for several months, and the entrepreneur should be prepared for the fact that for some time his company, already ready for work, will not be able to engage in full-fledged activities. However, given that today the state is aimed at developing and supporting new entrepreneurs, especially those who can develop the food industry and the economy of the region with their work, we can expect that there will not be any specially created difficulties.

The following is a search for a place for its production. It is best to calculate so that the supply of raw materials takes place at minimal cost, but at the same time it is inexpedient to be located in a large city - land and buildings are much more expensive there. Therefore, it makes sense to think about the suburbs or even about the territory within a small city. As for the cost of creating your own plant, there are several options. The simplest one is to buy out a company that is idle or just suitable for changing its profile, but this will require an investment of several million rubles, if not tens. However, an entrepreneur can open a relatively small factory, can be engaged in the production of canned fish with small capacities. This is even better for a novice, because it reduces its risks, you should not start immediately from a large plant, only if, of course, the team does not have investors who are able to cover very large costs of promoting products. If you take the plant on lease, it is unlikely that a significant amount will be required for opening, but the cost of the lease will become a very significant part of the costs, and it is unlikely that then it will be possible to talk about profit. Much more depends on the region of work, in the suburbs almost certainly the cost of land will be more expensive than somewhere in the countryside. But, in general, the entrepreneur has many options, and even with relatively modest means, you can count on opening a small workshop without producing containers (and some large factories actually make cans for their sprats on their own). That is, it is better to proceed from our own capabilities, and not try to immediately start with several production lines and the formation of a wide range of products.

An important point will be the acquisition of equipment for your enterprise. The production of sprats is characterized by a considerable amount of various equipment, while you also need to understand what kind of niche the businessman wants to occupy. The fact is that in this type of production manual labor is used, and in large quantities, but this is done by enterprises that seek to produce high-quality goods, goods of the highest class. Sprats are considered good if all the fish are beautifully placed in a jar and do not fall apart, and only stackers can do this. Yes, there is equipment that allows you to pack cans of sprats, but the fish in this case does not remain whole, and the consumer does not always like it. Sprats, of course, can not be called a delicacy, but still they are more expensive than many other types of canned fish, and therefore they are usually not acquired by the poor.

On the other hand, there are a lot of those buyers who want to buy just a delicious product, and they do not care about the external state of the fish, because the taste does not change much. You can bet on such buyers, and this niche can be even more profitable, especially at a time when everyone is eager to save even on trifles. The choice of direction is best made after a full-fledged marketing campaign. In general, for the full production of canned fish (without the production of cans) the following equipment is needed for:

1. production of sprats with conveyors for stringing fish and smoking tunnel chambers;

2. canning fish in a jar with a stuffing machine;

3. fishing and washing, for sorting,

4. Ambassador and pickles,

5. filleting,

6. slicing and portioning,

7. styling, as well as:

8. fish dressing; cannabis, oil filling, sealing (in a vacuum and / or normal environment), labeling machines,

9. Installation of automatic weight control of cans;

10. autoclaves vertical or horizontal;

11. conveyors, loaders / unloaders of autoclave baskets,

12. automatic chambers for hot and cold smoking,

13. defrosters.

In some enterprises, smoke generators are connected to heat chambers to give the resulting product a pleasant aftertaste. In general, the number of these cameras is calculated depending on the estimated production volumes. The cost of equipment can vary greatly depending on the supplier, performance, functionality, on whether it is necessary to transport and / or pay customs costs, some enterprises save on the fact that they buy used equipment. However, in general, the average cost of all equipment will be 10 million rubles; this, of course, is not the most perfect line, there are sets of equipment worth several times more, but for a small enterprise relatively simple machines that produce several hundred cans per day will be enough. Although, of course, if you open production with manual labor, you need to understand that large volumes of products will only be possible if you hire a very large number of employees. And even despite the fact that workers receive a salary depending on the output, the amount of expenses is still very high.

Without laying equipment, you can save 1.5-2 million rubles (taking into account auxiliary machines and the lack of the need for additional adjustment of the production line), but maintaining the staff of your handlers is usually much more expensive. If you wish, you can find a ready-made production, which can be purchased for a little more (if the equipment is new) than you need to open your factory, but then you can get rid of bureaucratic red tape, because the past owner will already have all the necessary permissions and all the documentation is needed .

The next question is personnel. To begin with, very few people can work at an enterprise (a small enterprise in general can have a staff of about 10 people), and a huge number of them. A large enterprise has to independently service a huge number of its business processes, that is, it is likely that it will be necessary to organize its own marketing, logistics, financial, personnel and other departments. A small plant can outsource a significant part of its work, especially one that is not related to making a profit. A banal example is accounting, with small volumes and not too complicated financial flows, for 5-10 thousand rubles a month you can get all the reports made by a remote employee, and not keep a staff accountant who will not justify the funds allocated to him. The same applies to security - it makes no sense to organize your own security service if security can be transferred to another company that specializes in this. But a large plant is already forced to hire additional employees, because it turns out to be even more cost-effective, while there is a need for constant marketing campaigns and optimization of its production process.

And, of course, what has already been said - manual labor. At a large factory, fish are manually strung on rods, where they are then smoked, and fish are manually laid out in banks. Of course, there is some automation here, but a person needs a lot to complete only these two procedures. Do not be surprised if several dozens of people work exclusively with such handlers, this is the norm for some plants. Here, the salary fund exceeds one million rubles a month, and if there are also senior managers who are engaged in logistics, marketing, finance, and the like, then the amount of funds allocated to personnel increases sharply. A small enterprise is deprived of these necessities, and, starting from small volumes, it is possible to determine which way the enterprise will take. In very small industries, the entrepreneur himself can take part in the production process - in the end, he works for himself.

It is also worth considering where to get the raw materials for your production. It will be necessary to acquire large volumes of fish, as well as additional oil, spices, a special filler (if you plan to produce sprats in a tomato and there is no way to produce this filler yourself), we also need containers suppliers. There are enterprises that buy only food products, and there are also those that themselves prepare the filler and even crush the oil, acquiring only the raw materials for this. A kilogram of frozen fish costs about 50 rubles, but only for bulk purchases, that is, when buying large briquettes of several hundred kilograms. Approximately two times cheaper is a liter of oil in bulk, and the cost of spices is often even less than 5% of the cost of a product. From one kilogram of fish you can get about 10 small cans of sprats, a liter of oil is enough for 20-30 cans. In general, together with the container, the cost of producing sprat jars for the enterprise is at least 20 rubles, and this is without taking into account other expenses - only the cost of products and containers.

A considerable number of companies can supply all these raw materials, but, as noted earlier, you need to understand that the best sprats are caught in the Baltic Sea (in any case, it was believed in the minds of consumers that the best sprats are Baltic), and if you work even in Central Russia, the value of transportation costs will be very large. Yes, fish can be delivered almost anywhere, because it is still transported frozen (therefore, defrosters are needed at any enterprise, by the way), but will it be profitable if there are many companies in the Kaliningrad region that are now for bans on the import of sprats from the Baltic countries are developing, located almost on the coast and able to sell sprats much cheaper. Here, of course, an entrepreneur can win due to the fact that he will save on transport already in his region, but it becomes more difficult to find a supplier not in the north-west of Russia. In general, there are many offers (they are easy to find on the Internet), but many of the suppliers are geographically located in the same region. And with other raw materials, problems should not arise at all, oil, spices and cans are sold in any relatively large city, there are enough wholesalers.

So, the prime cost of a bank starts from about 25-30 rubles, at some enterprises that are focused on quality, this indicator is several times higher, deviations can be very large depending on many factors, although sometimes to a lesser extent. For example, there are companies that sell a small can (100-200 grams, usually 150) for 30 rubles (in bulk, of course), but there is no need to talk about quality. The minimum price of relatively good sprats per can is from 40-50 rubles, "elite products" are sold, of course, more expensive, but rarely the margin in any case exceeds 50%, usually 30-40% or even less. But even this indicator for mass production is very, very good. After all, even receiving 5 rubles from one can, you can, selling 100 thousand cans per month, make a profit in the amount of half a million. It is profit, that is, after deduction of expenses for the maintenance of his enterprise as a whole. Reaching such a sales volume in the first months can be very difficult, due to the need to work through distributors, you have to carefully check them to be sure that the partner will be able to sell his products.

An enterprise operating only in its region, however, can itself be engaged in selling products to stores (that is, bypassing a wholesale intermediary, going directly to retailers), but for this you need to hire a sales department with a large number of employees - you will not have to work with more adequate ones distributors, and with directors of small and not very stores, and their number will be large. Having gained a reputation in your region and earned money, you should think about investing them directly in your marketing campaign in order to enter the Russian market. The main competitors in this direction are slightly behind (we are talking about the Baltic producers of sprats), and now the market is gradually being captured by Russian companies. And yes, there are successful examples of the fact that even in central Russia you can set up your production of sprats, that is, all of the above in this regard was a warning, but not an assertion that only in Kaliningrad you can do such a business.

Summing up, we can say that the industry of this production in Russia is only beginning to develop, and although there was some basis, now this area is still relatively promising. If we compare it with other types of production, then the value of the initial investment is not too large. With the proper development and competent organization of your production process, as well as with an active marketing campaign, you can start to make a profit within a few months after launch, and the payback period of a project rarely exceeds 2 years. We can talk about good profitability and good opportunities, but as in any production, competent management is required, and you need to pay as much attention as possible to your strategy and development tactics.

Matthias Laudanum

(c) - a portal to business plans and guidelines for starting a small business 08/18/2019

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