7 Tips When Starting a Food Business
It’s no mystery that starting a food business is one of the most challenging ventures to set up. The harsh reality is that most food businesses fail within the first year. Still, 45 new food and drink businesses are launched into the market every day, and there is no sign of this slowing down.
While ambition and passion are important to getting your business past the first year hump, turning your business into a success requires research, planning and for you to get business savvy in order to grow your brand. Here are a couple of tips that will help you on your way.
1. Do Your Market Research
With the food industry being highly competitive, research is essential to getting your business off the ground. Get started by attending networking events or join online forums to pick the brains of your fellow business people. Find someone who will share what has worked and what hasn’t — even those who have failed. Tabl hosts monthly community events so this could be an easy way to start building your network.
There is also research on product fit that needs to be done. Your family and friends may like your handmade chocolates, but what makes them different from the other chocolates out there? If you host events, what makes yours special enough that someone would want to attend your event rather than go elsewhere?
Research will help define who your target market is and how you want to build your brand specifically for that market.
2. Start Small
Test out your idea as much as possible before going all out and opening a pop-up or pitching to a supermarket. It’ll give you the opportunity to get some feedback without all the risk involved.
Going from a business plan to a full scale production is a big step; you need the chance to work out all the kinks in your operation. Try getting a place at a market for a little bit. Some market sellers are willing to even share a space. Or if you’re hosting an event, try partnering with a more seasoned host for your first run. Starting small and getting the feedback that you need will help you when it comes to the time to scale up your business.
3. Write a Business Plan
A business plan doesn’t need to be complicated, in fact most people over complicate it. The purpose is to get clarity on your vision, how you want to differentiate your product from competitors in the market, and the budget and resources you need to get there. It is important to remember that you can’t do it all, so figure out which areas you need help in and make a plan to achieve this.
A business plan also gives you the chance to understand your margins and unit economics. We’ve seen a lot of businesses fail by not understanding how shipping costs impact their margins or hosts that sell events at a loss.
4. Get Financing
Not all businesses need money from outside sources to get started, particularly if you start small. You may have a bit of savings or your costs aren’t too high and can be absorbed by your day job. If and when the time comes, consider all of your options, from small business loans to investors. A popular method of raising money has been crowdfunding. We talk about the benefits and risks of crowdfunding in this article about why businesses fail.
5. Start Your Business on the Right Foot
This goes without saying for all businesses, you should look into the fundamentals involved with starting a business to make sure you’re compliant. Companies House and HMRC are good places to start and they have good resources to make sure you have everything in order.
6. Know Your Food Laws and Regulations
This should be part of your initial research but it’s worth reiterating. Know what the laws and regulations are for starting a business. From food safety to alcohol distribution laws, understanding what the requirements are can have a big impact on the success of your business. It’s also important to keep checking in as the laws and regulations can change from year to year.
7. Find a Mentor
As to the first point around building a network, try and find a mentor. This person doesn’t have to be in your industry, but should be a trusted and be a knowledgeable advisor as you grow and scale.
What is most important to remember is that you can’t be all things to all people; focus on providing a unique product or experience that best serves your target market.
If you need any help or have any specific questions, email us at support@tabl.com.
