Hello, CBM, and I hope all of you had as good of a Father's Day as I did!
Congratulations on your business and I wish you continued success. These have been tough economic times and anyone who can see business growth deserves kudos. I have been in my business field for 31+ years and IMO things have never been tougher - even including the recession in 1980 - because of the uncertainty which is compounding the economic issues.
A simplistic answer to your question is the fact that SMKY overhead is enormous. Your main product is the result of ideas and mental/technical skill. Your overhead is rolled into payroll and the "machines" (computers) to bring your product to market.
SMKY has the overhead of salaries (whether paying a processor price per piece or lot or purchasing the processor and paying salaries), "raw materials" which have a high base price itself, and their machines are MUCH more expensive than a $8k Mac for each employee. When you add sales, distribution, etc. the overhead is a considerably large multiple than yours.
Thus the need for large financing. Obviously, you could start your business with 1 or 2 people and get one "toe-hold" in the market and begin to add to your business model. SMKY has an enormous overhead just to get one case of product prepared to sell.
To tell you the truth, if the food tasted like crap, I would have made my swing trade and moved on after a month. I think the product is unique and good enough for return business, which makes me interested enough to stick around for a while. Since I rode the train from .06 to .40 and only sold to recoup my investment, I am more confident (not guaranteed at all) that when/if financing is obtained we will go much, much higher.
I agree that by EOY we should see whether the direction of this company is headed toward solid ground or if the business model changes again.
I still think I am at a 3-5 (now 2-4) year hold to see the real potential here. And that is real tough for me because I have been swing-trading for 8 years now and my "method" to which I have become so accustomed is screaming for me to sell and move on.
All The Best
