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"Butter Production Business": How to Get Started

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Butter is an essential product required by households, restaurants, hotels, and many other venues. Although many butter manufacturers are big players, the trend has shifted to prefer the high-quality, homemade butter, especially on high-end restaurants, hotels, and bakeries.

Thus, a butter production business can be a very exciting business prospect that won't require a high startup investment, and can be started with a relatively low skill and experience requirement.

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Interested to start this business? Here are a few tips to help get you started:

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1. Startup Investment
You can start this business as a home-based business, eliminating the cost required for renting a space. Your necessary investments will go to equipment such as cream separators, butter machine, butter cutter, refrigerators, and milk tanks. You can start with around $20.000.

Second-hand equipment might be available to reduce the initial startup investment. However, you will need to make sure that they are still in good conditions.

You will also need to invest in your initial stock of ingredients such as milk, salt, and cream.

2. License and Permits
Depending on your location, a zoning permit might be necessary, as well as other required licenses or permits.

If you are planning to sell your product pre-packaged, you will need to get a certification from the health department.

Liability Insurance might be a wise investment for your business, even when it's not required by the local law. Contact your local insurance agents to get the best option for your business.

Consult your local authorities to get a better information regarding necessary license and permit for your business.

3. Marketing
As mentioned, you can supply your product to local restaurants, bakeries, hotels, and other venues. Prepare a business proposal to increase your credibility and marketability before you approach potential clients.

If you are planning to sell your butter as a pre-packaged product, you will need to invest in branding and packaging, as well as necessary marketing strategies to build your brand reputation and recognition.

4. Maintaining Costs
Milk, cream, and salt will be your most essential ingredients, and you will need to negotiate the best deals as possible with your suppliers.

Maintaining your ingredient costs and operational costs will be highly essential in this business to maintain a healthy profitability of your business.

Depending on your production capacity, this business can also be labor heavy. Make sure to maintain a healthy labor cost at all times.

Do enough research for the pricing strategies of your competitions, and set your pricing strategy accordingly after considering all your expenses.

Earning Potential

Producing 20 KGs of butter a day, which will certainly be manageable, will net you $78,000 in annual earning. A very impressive number and profit can be as high as 20%-35%, bringing you $23,000 in annual profit.

As your production capacity grows, you can increase your earning, as well as reduce your operational expenses to make a higher profit.