Ghee Business Plan, With a Projection

A ghee business plan is a plan built on butter. Ghee is butter slowly cooked until the water is gone and the milk solids brown and are strained out, and about a fifth of the butter goes with them, so the plan starts with the butter price and the yield. After that it's simple: an 8-ounce jar costs about $5.35 to make and sell and goes for $14 online and at markets. In the example below, a ghee maker in Wisconsin sells 8-ounce and 16-ounce jars direct, 8-ounce jars to co-ops and grocers, and a spiced ghee, and ends its first year about $25,700 ahead on $75,600 of sales, with every hour paid at $20. Below is a description example, each part of the plan, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the ghee, the butter, who buys, the goals.
• Cost a jar from the butter, after the loss: about 0.63 pounds of butter makes an 8-ounce jar.
• Butter is most of the cost; plan around its price, and buy ahead when it's low.
• Direct jars earn about 60%; co-ops and grocers about 39%.
• A spiced ghee sells for $2 more on 40 cents of dried spices.
• Weigh the yield every batch and date every jar.
• TaroStack costs every batch from the butter you paid for and records each batch's yield. More below.

Part 1: the business description

Fox River Ghee Co., a made-up ghee maker in Appleton, Wisconsin, I use in these examples, writes:

Fox River Ghee Co. slow-cooks grass-fed Wisconsin butter into ghee in a shared commercial kitchen, and sells plain and spiced ghee online, at two markets and to co-ops and grocers across the Fox Valley. In its first year it aims to sell 880 jars a month.

Part 2: what a jar costs

A dollar a pound more for butter is 63 cents more on every 8-ounce jar. How each channel's margin works out, and where it leaks, is in ghee business profit margin, and how to measure a batch's yield in batch yield formula.

Part 3: customers and prices

In a month at full speed the direct 8-ounce jars bring $2,595 of the $6,076 of contribution, the co-ops $1,328, the 16-ounce jars $1,154 and the spiced ghee $999. The co-ops take the most jars and bring the least for each; they put the name on shelves all week. What grocery buyers ask of a new supplier is in selling to grocery stores requirements.

Part 4: the first year, month by month

Fixed costs are $1,305 every month: the shared commercial kitchen ($700), market fees ($150), the website ($50), insurance ($70), ads ($300), and software and card fees ($35). Sales start at 15% of full speed:

The year's sales are $75,616 and the profit $25,660, with every hour paid at $20. A full month uses about 600 pounds of butter, so buying a month or two ahead when the price dips, and keeping it frozen, smooths the cost.

Part 5: the startup budget

The $4,300 spent before working cash is earned back in month 7, when the cash reaches $5,448.

Get the template

Download the ghee business plan workbook. Four sheets: your jars with price, variable cost and a month 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

Butter from two dairies at different prices, in the fridge and the freezer, batches that each lose a little more or less, jars in two sizes and two flavors, and co-ops reordering. A notebook can't say what this week's jars cost, which batch a co-op's jars came from, or how much butter to buy before the price goes up.

How TaroStack does it

TaroStack costs every batch from the butter you paid for and records each batch's yield.

Batches from real butter. Each batch takes its butter off stock, recording which lots it used, and is costed from what that butter cost, and the jars it made, good and rejected, are recorded, so the yield shows.

Jars dated, co-ops on one list. Each batch gets a lot and a date, recorded automatically; each co-op's order is a sales order, and the lots each co-op got are recorded as it ships.

Butter watched. Butter comes up on a reorder list in days of cover, and each dairy's price rises show up in the price-creep report.

Recipes, batches, lots and reorder lists 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 ghee business profitable?

It can be. In the example, a ghee maker ends its first year about $25,700 ahead on $75,600 of sales, with every hour paid at $20 and the price keeping up with butter.

How much does it cost to start a ghee business?

In the example, $7,300, with the first butter and jars, the stockpots and burners, and $3,000 of working cash the biggest parts. The kitchen is rented by the month.

How much butter does it take to make ghee?

About 1.25 pounds of butter for a pound of ghee at the example's 20% loss, or 0.63 pounds for an 8-ounce jar.

Can you make ghee at home to sell?

That depends on your state's cottage food rules; ghee is a dairy product, and states differ on what can be made at home. The example uses a shared commercial kitchen.