Contemplating a Career Change?
Do You Have The Grit, Conviction and Stamina For One of The Toughest Entrepreneurial Endeavours?
Will You Be Able To Stand The Heat In The Food Business Kitchen?
Read Our TOP TIPS For Determining If Food Business Is Really For You!
Brave or stupid… We guarantee that as soon as you announce your intentions to dip your toes into the world of food entrepreneurship, you’ll be ascribed either one of those characteristics.
It’s a little bit of a harsh deduction, but we have to admit that any friends or family members who pass judgment on your career choice are possibly not being too unreasonable.
It’s a discouraging and disheartening truth, but a dismal nine out of ten new food and drink businesses fail. Super-depressing and spirit-sapping though it may be, we recommend sitting up and paying heed to the cold harsh statistics.
Of course, we’re not trying to rain on your parade; we’re definitely not calling you ‘stupid’; however, before you throw caution to the wind and ditch your day job, let’s think carefully about your potential business launch. Let’s ask the million-dollar question: Is starting a food business really for me?
The Fundamental Building Blocks Review:
Here at the FNQ Food Incubator., we begin reviewing the potential of a new food business idea by analysing eleven crucial business traits. For us, these are the absolute essentials. Get these elements right and your business will be a piece of cake; get more than a few of these fundamentals wrong and your goose will be well and truly cooked.
1. Find Your Niche; Know the Competition:
The shelves of your local supermarkets, food halls and delicatessens are cut throat places. Space is tight and there’s a constant land grab afoot. If a product is too similar to competitor products, too obvious, too plain, too downright boring, it won’t even get a look in – those making the buying decisions and assigning shelf space will disregard your product entirely.
In order to stand even the slimmest of chances of a hallowed spot on the sacred store shelf, your product needs to be ‘out of the park’ impactful. Ordinary won’t cut it; niche is the way to go: specialist, extraordinary, in a league of its own… Well, you get the idea!
If you familiarise yourself with the competition and find unique ways of ensuring that your product is thoroughly exceptional, then your prospects of a sought-after shelf position are just about within reach!
2. Permits & Permissions:
Hold on to your enthusiasm for a little while longer. If you truly have your heart set of becoming a food entrepreneur, then you’ll need to develop a taste for good old-fashioned paperwork. This is not the fun, creative side of the food biz that drew you to the idea of starting your own brand, is it?
Still, it’s essential that you contact your local authority to check the existing laws, permits and licences you’ll need to start your food business. Rules may differ depending on your locality, so it’s vital that you check in with your local city and state officials to determine what permits and permissions are required.
In most cases, newbie food businesses will be asked to provide their local authority with the following information:
Your food business classification
What types of food you will be serving
Who will be receiving your food
Whether or not your food is pre-packaged
Details of your nominated food safety supervisor
TIP: The savvy food entrepreneur will start thinking about responses to the above questions long before they even consider launching their food products. Trust us, it’s important to get all your ducks in a row at the earliest possible opportunity.
NOTE: Remember, fees and licences will need to be renewed annually (so budget for this expense and set time aside for annual form-filling!).
3. Obtaining Proper Insurance:
Again, more paperwork; you’re probably beginning to wonder if there will be any fun along the way as you journey towards becoming a fully-fledged food business. Oh, there will be… but first, you need to be 100% committed to getting all of those pesky administrative details in place!
Insurance is one of those absolute basics. Despite the tediousness of additional paperwork, it’s important to remember that there is an upside: if you’re willing to get the crucial necessities right, you’ll find yourself in a much more secure and advantageous position from where you can successfully and confidently grow your new business.
4. Food Safety:
Are you genuinely trying to stifle a yawn at this point?
Well, here is your wake-up call… Fines, suspensions of your food licence, closure orders and even prosecution are on the horizon for those who fail to comply with food safety regulations.
Yes, the food safety side of your business will involve yet more mundane form-filling, rule-following and implementation of plans and procedures. Plus, if you don’t already have a background in food production, you may also be required to attend training courses or seminars.
However, the consequences of not playing by the rules can spell outright disaster for your business. Here is where we weed out the sincerely committed start-up food entrepreneurs – if you’re not committed to food safety, then you’re not earnestly committed to growing and developing a sustainable food business.
5. Write A Business Plan:
Fail to plan, plan to fail… we know you’ve heard it a zillion times before. But let’s make it a zillion and one…
At the FNQ Food Incubator we’ve worked with some of the most humdrum and banal food businesses, as well as some of the most outlandishly zany start-ups. Each projects has its own unique dimensions; but the ones that succeed all have a key characteristic in common: they’ve taken the time to prepare a flawless business plan.
In many cases, business plans range from thirty to fifty pages; but don’t let the daunting length of the document put you off. At the end of the day, the quality of your business plan supersedes the page count. And, on those days when you’re drafting page after page of your business plan, do remember that you’re working on an actual blueprint for your business. This is the roadmap for your business – destination ‘success’ – so stay motivated!
Note: If document-preparation and committing your thoughts and ideas to paper are not your strong suit, then don’t despair. Engage the services of a food business mentor or consultant who can help guide you through the task.
6. Develop A Marketing Plan:
While it’s important that the data contained in your marketing plan is consistent with the intentions set out in your business plan, it’s imperative to recognise that these are two separate documents that demand matching levels of care and attention.
Several hours (or perhaps even days!) will need to be set aside to complete this key strategy document. A staunchly committed food entrepreneur won’t mind, however! At this point in the start-up journey, many less hardy wannabe food entrepreneurs will have fallen by the wayside.
Strategy, budgets, a SWOT (strengths, weaknesses, opportunities and threats) analysis, pricing, distribution and brand positioning will all need to be scrutinised in detail.
Once again, if support is needed, seek out the help and advice of a mentor of food business consultant.
7. Source Your Suppliers:
Are you willing to take the time to be super-particular with your supplier choices? If so, then maybe you’re about to challenge the naysayers and prove that you’re a food entrepreneur worth your salt!
Why worry about suppliers?
Taste & quality: Your final product will only be as good as the ingredients you use in your production processes so, where possible, choose top quality suppliers.
For complete peace of mind (and especially where food safety and hygiene are concerned), you need to be sure that your suppliers uphold the same standards as you do.
Reliability / avoiding late order delivery: If you choose unreliable suppliers, you may, in turn, end up missing order deadlines and disappointing clients.
Price: While quality is important so is your bottom line. Work with suppliers who offer reasonable prices, thus allowing you to maximise your profit margin (without sacrificing quality).
8. Developing Your Recipe For Mass Production:
There’s a big difference between whipping up quantities of thirty or forty, to transitioning to the big league where hundreds (or even thousands) of units might be required at short lead times.
How do you feel about fulfilling large-scale orders at short notice? Can you rest assured that your recipe that tastes amazing when produced in small batches, will remain as flavourful when production is dramatically scaled-up?
Are you happy to up skill in terms of processes and procedures so that you’re perfectly poised to take on lucrative orders should they materialise? Think about these practicalities before you lurch wholeheartedly into the realm of food entrepreneurship.
9. Food Labelling:
Here, once more, you’ll need to display a commitment to up-skilling and eliminating any gaps in your knowledge.
Naturally, labelling needs to be superbly attractive and eye-catching. However, don’t forget to pay heed to the statutory requirements relating to ingredient labelling, allergens and nutritional information.
10. Financial Challenges:
Unfortunately, passion is not enough to make a success of your new food business. Carefully consider your financials before packing in your permanent and pensionable employment.
While your enthusiasm may not be in question, it’s easy to forget that your initial success will largely be based on the cash flow at your disposal. In particular, the early days can be extremely tough - there are a lot of big bills coming in, but you may not get paid in one hit to deal with them!
Budgets will need to become your new best friend!
TIP: As we’ve previously recommended, if you struggle with certain business development tasks, be sure to seek expert advice – speak to accountancy and finance professionals or draft in a food business mentor who can help you navigate the stormy financial seas of a food start-up!
11. Understanding Your Market & Developing USPs:
Finally, it’s worth paying significant attention to the following central business development themes: understanding your market and developing unique selling propositions.
Do you truly know your customer? Are you happy to spend hour after hour contemplating your customer profile and pondering his/her hopes, dreams, motivations and aspirations?
To understand your target market in earnest, you need to face the fact that countless days of research may be required. Workshops, online seminars, evenings spent with your nose in a business strategy book – these are the undertakings that you’ll need to realise if you want to pursue a profitable career in food business.
So, now may be a good time to remind you that a gloomy nine out of ten new food and drink businesses fail. In order to rise to the cream of the crop in this competitive profession, it’s crucial that you don’t shy away from the considerable research that will be needed.
Likewise, when considering your unique selling proposition (USP), surveys, face-to-face interviews, competitor analysis, customer observation and product trials will guarantee an arduous research process. Your ‘recipe for success’, however, will stem from the hard graft you put in at the beginning of your food marketing adventure.
In fact, before even deliberating a brand name for your product range, referring to yourself a ‘food entrepreneur’ or seeking out a production premises, there’s one basic project you’ll need to ace – you need to absorb a full and comprehensive knowledge of the marketplace and how it relates to your business proposal.
Plus, a closing word of advice on research and business development… More often than not, knowing that you definitely don’t know everything is the very best starting point for growing your new food business.
Have you found ‘What, Me…? A Food Entrepreneur..?’ a useful read? Have you any feedback in relation to our ‘TOP TIPS For Determining If Food Business Is Really For You’?
What are you own personal worries and concerns as you set out to establish your new food business venture? Do you feel you have the grit and staying power to see your entrepreneurial ambitions through?
Of course, as folks who are absolutely passionate about food business and who fully understand the joys of building an outstanding food brand, our purpose is not to discourage you from chasing your business development dreams. On the contrary, at the FNQ Food Incubator we’re focused on enhancing your resistance to the inevitable obstacles that you’ll meet along the way!
If you have further questions or queries about starting a new food business, don’t hesitate to get in touch. We look forward to hearing from you via email: firstname.lastname@example.org