Smoked Salmon Business Plan, With a 12-Month Projection

A smoked salmon business plan sets out what you'll smoke and who buys it, what a pack costs from the fillet up, the smoker, cooler and sealer, the food safety plan, and the first year month by month. Salmon is the biggest cost, more than half of a pack once smoking has taken its share of the weight, and the rules are the biggest difference from other small food businesses: a smokehouse that sells beyond its own retail counter is a seafood processor, with a written HACCP plan that controls botulism for the whole shelf life. In the example below, a smokehouse in Juneau sells hot-smoked salmon and lox direct, smoked salmon dip, and hot-smoked packs to shops, makes a profit from month 5, and ends the year about $23,800 ahead on $129,200 of sales, after paying $20 an hour for the smoking and packing. Below is a description example, each part of the plan, the rules, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the fish, the products, the buyers, the goals.
• Cost a pack from the fillet: smoking loses weight, so 8 ounces starts as about 0.59 pounds of fillet.
• Sell direct for the margin; shop packs leave little at small scale.
• Turn trimmings into dip: it's the best-paying line.
• A seafood processor needs a hazard analysis and a HACCP plan; smoked fish must control botulism for its shelf life.
• Someone trained in seafood HACCP writes and reviews the plan.
• TaroStack keeps every batch with its fish lot and date, and the records a HACCP plan asks for. More below.

Part 1: the business description

Gastineau Smokehouse, a made-up smokehouse in Juneau, Alaska, I use in these examples, writes:

Gastineau Smokehouse hot-smokes and cold-smokes wild Alaska salmon bought from local processors, sold vacuum-packed and refrigerated at markets and online, in smoked salmon dip, and to specialty shops. We operate under a seafood HACCP plan, and every pack carries a lot code and a use-by date.

Part 2: what a pack costs

Hot smoking takes about 15% of the fillet's weight in the example, so an 8-ounce pack starts as 0.59 pounds of fillet. Weigh before and after a few batches and use your own loss; how to turn a weight loss into a cost is the same arithmetic as in batch yield formula. The dip uses the trimmings and belly pieces from cutting the packs, so its fish is the cheapest on the list.

Part 3: customers and prices

A shop pack leaves $2.58, a third of a direct one, because the fish costs the same and the shop needs its margin; shops are worth it for the reach, not the money, until the smokehouse buys fish by the ton. If salmon rises a dollar a pound, each 8-ounce pack costs 59 cents more and the shop pack loses almost a quarter of its contribution. A supplier price tracking template shows when fish prices are moving.

Part 4: the seafood HACCP rules

Every seafood processor must carry out a hazard analysis and, where hazards are reasonably likely, follow a written HACCP plan (21 CFR 123.6), developed and reviewed by someone trained in seafood HACCP or qualified by experience (21 CFR 123.10). Processors of smoked fish must show in that plan how they control the formation of Clostridium botulinum toxin for at least the shelf life of the product, under normal and moderate abuse conditions (21 CFR 123.16), which in practice means controlling the salt in the fish, the smoking temperatures, refrigeration and the use-by date of vacuum packs. The rules don't apply to the operation of a retail establishment (21 CFR 123.3), but a smokehouse selling to shops and shipping online is a processor. So the plan budgets for seafood HACCP training, a process review with lab tests, and the monthly records. How long to keep them is in how long should HACCP records be kept. This is general information, not legal or food safety advice.

Part 5: the first year, month by month

Fixed costs are $2,645 a month: processing space ($1,500), utilities ($300), insurance ($120), HACCP records and lab tests ($150), market fees ($250), the delivery van ($250), the website and online shop ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $129,200 and the profit $23,823, on top of $20 an hour for the smoking and packing. At full speed the smokehouse goes through about 600 pounds of fillet a month; buying in season and freezing for the winter evens out both the price and the work.

Part 6: the startup budget

Get the template

Download the smoked salmon business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the 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

Salmon bought in season in lots from three processors, frozen for the winter, batches brined and smoked every few days, vacuum packs dated by batch, a HACCP plan's records for every batch, and shops ordering weekly. A notebook can't say which fish lot went into a batch, which shops got packs from it, or what a pack costs now that fillets have gone up.

How TaroStack does it

TaroStack keeps every batch with its fish lot and date, and the records a HACCP plan asks for. Plainly: it doesn't write your HACCP plan; it keeps the records the plan asks for.

Batches from the fish. Each product is a recipe, and units convert: salmon bought by the 50-pound case, used by the pound. Recording a batch takes the fish, brine and packaging off stock from the lots used, at what you paid, notes the lots automatically, and divides by the packs that came out, so a batch that lost more weight shows in its cost.

Batch records with your critical limits. Batch record forms carry your own fields, such as brine salt, smoker temperature and time, and cooling, with limits and sign-off, so each batch's HACCP record is filled in as it's made.

Lots to customers. Every batch goes into a lot with its use-by date, picking takes the oldest first, and one report walks a fish lot to every batch and every customer who got it.

Recipes, batches, lots, recalls and batch record forms 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 smoked salmon business profitable?

It can be. In the example, a smokehouse selling hot-smoked salmon, lox and dip direct and packs to shops ends the first year about $23,800 ahead on $129,200 of sales, with $20 an hour paid for the smoking and packing.

Do I need a HACCP plan to sell smoked salmon?

A smokehouse that processes fish for sale beyond its own retail counter is a seafood processor and needs a hazard analysis and a HACCP plan; for smoked fish, the plan must control botulism for the product's shelf life.

How much salmon does it take to make a pound of smoked salmon?

In the example, about 1.18 pounds of fillet for a pound of hot-smoked salmon, at 15% weight loss. Your own loss depends on the fish, the brine and the smoke.

How much does it cost to start a smoked salmon business?

In the example, $35,200 with a commercial smoker, a chamber sealer, a walk-in cooler, brining and slicing equipment, HACCP training, a process review, permits, first fish and $5,000 of working cash.