Beef Jerky Business Plan, With a Projection

A beef jerky business plan starts with two facts most food plans don't have to face. Raw beef loses more than half its weight on the way to jerky, so a bag costs more than people expect, and jerky is a meat product, so it has to be made under inspection, not in a home kitchen. The plan has to show where it will be made, what a bag costs from the raw beef up, and how much of the selling can go through shops, which pay little, rather than markets and a website, which pay well. In the example below, a jerky maker in Montana makes its jerky in a shared inspected kitchen, sells 3-ounce bags at markets, online and to shops, plus pound bags and gift boxes, and ends its first year about $22,600 ahead on $106,100 of sales, with its own hours paid at $20 an hour. Below is a description example, each part of the plan, the rules, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the jerky, where it's made, who buys it, the goals.
• Say where it's made: an inspected kitchen, a meat processor, or a co-packer. Not a home kitchen.
• Cost a bag from raw beef: the yield, the marinade, the bag, your hours, the kitchen's fee.
• Markets and online pay well; shops pay little a bag but take volume.
• Gift boxes and pound bags lift what each customer spends.
• A first year that builds slowly needs a little working cash and a batch or two of stock.
• TaroStack keeps every batch with its beef lot and every bag's lot with the shop it went to. More below.

Part 1: the business description

Cedar Hollow Jerky, a made-up jerky maker in Bozeman, Montana, I use in these examples, writes:

Cedar Hollow Jerky makes small-batch beef jerky from eye of round in three flavors, in a shared inspected kitchen in Bozeman, sold at two farmers markets, on its website, in gift boxes, and to about 20 shops, ranch stores and gas stations in southwest Montana.

Part 2: where it's made, and the rules

Jerky is a meat product, and meat products sold to the public generally have to be made under USDA inspection, or under a state inspection program for sales within that state. A federal exemption covers the kind of work retail stores and restaurants do, curing, cooking and smoking included, for sale in normal retail quantities to consumers at the store, using only inspected meat; a store that sells to other businesses, like shops that resell the bags, is outside it (9 CFR 303.1). Cottage food laws generally don't cover meat. So a jerky business that sells to shops makes its jerky somewhere inspected: a shared inspected kitchen, a meat processor's plant, or a co-packer. How to choose between a co-packer and a kitchen is in co-packer vs commercial kitchen.

The label of an inspected meat product carries, among other things, the product's name, the ingredients, the name and place of business, the net weight, and the official inspection legend with the plant's establishment number (9 CFR 317.2). A label with only the required features can be used without sending it to USDA's Food Safety and Inspection Service first, but special statements and claims, such as "natural", need its approval before the label is used (9 CFR 412.1, 412.2). Ask the kitchen or plant you'll make it in what they need from you, and check with your state's meat inspection program before the first batch. This is general information, not legal advice.

Part 3: what a bag costs

A 40-pound batch of raw eye of round, at $5.50 a pound, trimmed, marinated and dried, makes 16.2 pounds of jerky, so the meat and marinade in an ounce of jerky cost $0.91. How a weight loss turns into a cost per finished unit is in roast loss and cost per bag; the arithmetic is the same.

The gift box is three 3-ounce bags of different flavors, at $5.23 each before fees, in a $2 box.

Part 4: customers and prices

A shop that sells a bag for $10.50 buys it for about $6.50, which leaves the maker $1.17. At full speed, shops take 800 of the 1,400 three-ounce bags a month and a third of the sales, but bring only about a sixth of the contribution. They're worth having for what they do for the name and the volume, and because a batch of 16 pounds costs the same hours whoever buys it, but a plan that leans on them needs bigger batches and a lower cost a bag first. How to set a wholesale price that still pays is in how to price handmade items for wholesale.

Part 5: the first year, month by month

Fixed costs are $1,185 a month: the inspected kitchen's membership ($250), product liability insurance ($150), storage ($150), market fees ($200), the website ($50), fuel for delivering to shops ($150), marketing and samples ($200), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $106,114 and the profit $22,585, on top of $20 an hour for every hour of making, which is in the variable costs. At full speed that's about 350 pounds of jerky a month, 22 batches, and about 130 hours in the kitchen. Cash dips to −$469 in month 2, and the beef for a batch or two is bought before it sells, so the plan keeps $3,000 of working cash. The break-even, $1,185 of fixed costs a month over the contribution of each sale, is worked out the same way as in break-even point for a food business.

Part 6: the startup budget

The kitchen supplies the dehydrators or smokehouse in this plan, which is why the startup is small; a business building its own inspected plant has a far bigger budget, and a co-packer swaps the kitchen fee and your hours for its price a pound. How to find one is in how to find a co-packer.

Get the template

Download the beef jerky business plan workbook. Four sheets: your bags and boxes with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twenty-two batches a month, beef from two suppliers, three flavors, a lot code on every bag, 20 shops each with its own order, and markets on the weekend. A notebook can't say which shops got the bags from a batch made with a particular case of beef, how many bags of teriyaki are left before Saturday, or what a bag costs now that eye of round went up.

How TaroStack does it

TaroStack keeps every batch with its beef lot and every bag's lot with the shop it went to.

Batches with their lots. Each batch is made from a recipe, and its batch record notes which lot of beef and marinade went in, on its own, and gives the bags their lot, with the good and rejected bags and the minutes it took.

Shops on orders. Each shop's order is a sales order with a picking list and a delivery note, and the lots each shop got are recorded as it ships, so a recall is one report: which batches used that beef, and which shops got them.

The cost of a bag. Batches are costed at what the beef and bags cost, and the price creep report shows when your supplier's beef went up, so the $6.50 to shops is checked against this month's cost, not last year's.

Recipes, batches, lots and recalls are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a beef jerky business profitable?

It can be. In the example, a maker selling at markets, online and to shops ends its first year about $22,600 ahead on $106,100 of sales, after paying its own hours at $20 an hour, with most of the money made on bags sold directly.

Do you need a license to sell beef jerky?

Jerky for sale generally has to be made under USDA inspection, or state inspection for sales within the state, with a federal exemption for retail stores and restaurants selling to their own customers. Check with your state's meat inspection program.

How much does it cost to start a beef jerky business?

In the example, $9,050 when the jerky is made in a shared inspected kitchen: recipe testing, a slicer, labels, barcodes, a market setup, a website, shipping supplies, and $3,000 of working cash.

How much beef does it take to make a pound of jerky?

In the example, about 2.5 pounds of raw eye of round: 40 pounds makes 16.2 pounds of jerky. It moves with the cut, the slice and how dry you take it, so weigh your own batches.