We caught up with the brilliant and insightful Homero Gonzalez a few weeks ago and have shared our conversation below.

Homero, thanks for joining us, excited to have you contributing your stories and insights. Let’s start on the operational side – do you spend more of your time/focus/energy on growing revenue or cutting costs?

Between the two, I would absolutely prioritize growing revenue over cutting costs. That said, I think these two concepts go hand in hand and should be considered together. In the general case, if a business is able to stay afloat, then pursuing growth of revenue will maintain the quality and soul of the product or service, albeit at the cost of potential profit. When chasing lower costs, it can be easy to slip into measures that compromise the original spirit of what brought customers to you in the first place. How a business operates changes greatly at different scales, and finding cost effective ways to maintain quality through a large growth spurt is a puzzle unique to each one.

A great example of this came about during the development of one of my flavors named “Totec’s Tears”. This Aztec-inspired sauce uses dried chilis and plums for the base of its flavor. When I first created it, I used fresh plums that I would char on the grill along with some onions for extra complexity. This was a terribly labor intensive step for multiple reasons such as having to core the fruit by hand, the fact that the fruit would soften considerably while grilling which would then drip onto the grates and burn necessitating heavy cleanup between batches, as well as the logistics of dealing with large crates of fresh fruit before they spoiled. In order to keep the sauce in stock, I’d simply bite the bullet and dedicate a day to grilling pre-measured quantities that I’d pack and freeze to use during cooks. This was my version of prioritizing revenue over cost cutting, doing whatever it took to manufacture one of my best sellers for my customers.

While looking for other sources of plums (they can be difficult to source in quantity out of season), I came across cases of frozen plum halves, already cored. I knew these would not be able to be grilled, but the savings in effort and year-round availability was worth experimenting with. I created two test batches of the sauce, one with grilled fresh plums and another with frozen. I was surprised to find there was little discernible difference. In this case, I was able to keep the sauce on hand full time while saving both on the price of one of the main ingredients as well as the labor that went into preparing it.

As my operation grows, I expect different versions of this story will play out again and again as I discover new resources/solutions I couldn’t afford previously. I’ll have to experiment with them to ensure I can create the same great flavors my customers have come to know and love to keep revenue growing and cutting costs at the same time the right way.

As always, we appreciate you sharing your insights and we’ve got a few more questions for you, but before we get to all of that can you take a minute to introduce yourself and give our readers some of your back background and context?

My name is Homero Gonzalez and I am a gourmet hot sauce manufacturer based in Cookeville. I moved to Tennessee from Tampa, FL in 2016 to attend TTU for electrical engineering, though eventually found that this was not what I truly wanted to do with my life. I thought that my knack for problem solving would be best used in engineering, but quickly found myself in an unfulfilling cycle. I found relief from the crushing school work by cooking and eating adventurously as well as sharing great flavor with my friends. My passion for good eats and feeding those around me was born of growing up in a Cuban household and being taught how to show love through food. I have Abuela to thank for that!

In the summer of 2018 I started making hot sauces as a hobby after I tried my first craft hot sauce at a wing night hosted by a friend who collects hot sauces. My eyes were opened to the world of flavor that sauces like that could contain, and I began experimenting with unique and interesting flavor combinations based on the many cuisines I had encountered in my foodie life. I was fortunate to stumble into creating two delicious and repeatable recipes that friends simply could not get enough of! They pushed me to try selling some, but I was too focused on my schooling to summon the extra effort to play business as well. With just three semesters to finish, the pandemic came and changed the world as I knew it, shattering the plans I had made in life thus far. Classes went online, and I was learning absolutely nothing while paying full price for the pleasure. Disillusioned and frustrated, I dropped out and decided to start my sauce business on Christmas Day of 2020.

This was as close to a ‘Hail Mary’ play as I can imagine, as I had no capital, no business or manufacturing background, and only a few years of restaurant experience under my belt. What I did have was a part time job, a passion for developing great flavor, and my previously mentioned knack for solving problems. It’s a good thing entrepreneurship is nothing but problems! I scoured the internet for free resources to develop my brand identity, researched food manufacturing techniques, and began testing the waters in a small circle to see if there was interest in my product. With a warm reception, I began to take the idea more seriously and moved into professional packaging ahead of planning my first retail sales events. I worked my first market in August of 2021 and the rest, as they say, is history.

Do you have any stories of times when you almost missed payroll or any other near death experiences for your business?

My closest call ironically begins with a big win! I was fortunate to win a pitch competition in November of 2023 against other local businesses and won a $10k prize for my efforts. This was the largest sum of capital I could leverage at one time since my initial investment run and I was ready and excited to put it to work. I failed to recognize that while it felt like a lot, as a one-time sum, it didn’t amount to nearly what I thought it would. In fact, it almost became the length of rope I hung my business with.

Poor planning on my part saw me spending the prize money on new equipment and materials to expand a product line instead of preparing for the early-year slow season where revenue slows down significantly. This led to a crisis ahead of the longest business trip I had ever planned, driving from Cookeville to Albuquerque to exhibit at the National Fiery Foods & BBQ Show. I overextended myself at a time when I could least afford it. I was behind on just about every payment, including rent by over a month, and my choices were to either shore up bills and forgo the trip, or risk everything and spend my last dollar to make the trip possible. I bit the bullet and made what may be the most dangerous play of my career to date, packing everything I could and heading west for the largest hot sauce trade show in the country.

Fortunately, I decided to document my journey and post videos daily regarding the trip. This coverage garnered a good deal of attention from new customers and I noticed online orders streaming in at a rate I had never experienced before. Hundreds of orders streamed in and plugged every leak I had. My risk had paid off! I’ve since learned to plan better, but also how important it is to never give up. Being able to operate with a clear head even when it feels like the jaws of defeat are closing in helped me turn my position around and rocket out of the worst financial position I’d ever been in.

Okay – so how did you figure out the manufacturing part? Did you have prior experience?

I am proud to say that I manufacture all of my products in house, and always will. Naturally before this was ever a business venture, I was making my sauces in my home kitchen. The recipe was not very exact and the sauce came out a little different every time but that didn’t matter. When it came time to tighten up and create something repeatable, I recreated my recipe in metric so I could measure everything down to the gram and scale up with ease. This was also the point where I needed to decide if I was going to contract production out or bite the bullet and become my own factory. Due to the many laborious steps in making my sauce (charring, fermentation, processing fresh fruit, etc.), I decided that I would take the path of most resistance and build out my own means of manufacture.

This is a *difficult* path. It’s expensive, labor intensive, and risky, but you maintain full control over the quality of your product and don’t have to rely as much on outside entities to create your product. It’s a double edged sword as it has now fallen on me to secure commercial space, manufacturing equipment, commercial refrigeration, and wholesale ingredients to self manufacture every jar of sauce I sell. This is a huge investment of both time and resources just to operate and maintain the business that necessarily takes away from selling and growing it. The dreaded ‘working *in* the business as opposed to *on* it’. This is not the right solution for everyone, and certainly not for the faint of heart. I have found my true grit from going down this path. I have learned that there are a million little problems you need to solve exactly one time, and that everything changes when you scale up. Things don’t work the same and you make progress in one direction while having to totally redesign another. That said, I’m glad I did what I did. Now I am poised to grow into a co-packing company of my own and produce not just my sauces, but those of others who are not willing to assume the risk and cost of their own facility.

Contact Info:

• Website: https://www.harmacyhotsauce.com/
• Instagram: https://www.instagram.com/harmacyhotsauce/
• Facebook: facebook.com/HarmacyHotSauce/
• Linkedin: https://www.linkedin.com/in/homero-gonzalez-iii/
• Youtube: https://www.youtube.com/@harmacyhotsauce

Image Credits
Adam York Hailey Allen