If you are wondering if you can make it as a food entrepreneur, here are important considerations:
1. Am I really ready to be a business owner? Having a great idea for a product is not the same as readiness which includes capital to invest, a clear marketing strategy and the time to allow things to happen. While not comprehensive, the SBA has an assessment that helps you decide. The Values In Action assessment measures your strengths and weaknesses so you can align yourself with the right advisors and employees.
2. Do you have a clear intention? If you know what you want to accomplish, you can set a plan of action. If you just want to see where it will take you…well, you’ll have an interesting ride, but you might not like your ultimate destination.
3. Your delicious recipe is only a start. Getting the SRP (suggested retail price) right is critical, as is having enough margin to work with brokers and distributors. Don’t believe you are going to sell direct without brokers and distributors. They are the door openers and they have the logistics. Some stores will buy directly from you early stage, but it won’t be enough to build a sustainable business.
4. Do you have small business experience? Knowing Best Business Practices in Accounting, Finance, Operations, Production and Sales and Marketing ensure your success. That’s a lot to know. If you plan to learn as you go, add 3-5 years to your timeline before you are turning a profit. You are guaranteed to make a slew of mistakes that will cost you.
5. Have you worked in the specialty food business or in sales? Every business is about revenue generation. You need to know the sales process, who the target audience is, how to reach them and what they want to hear. Work for a specialty food business for a year or 2 and you’ll gain super powers (or learn it isn’t for you). Either way you’ll get paid to be on the job rather than blowing through your savings.
6. Ignoring the consumer. What does the consumer want or need? The world does not need another BBQ Sauce, granola or chocolate bar. Being the “best” is laudable, but unattainable. If you want to be the “best” continue to make it for friends and family. Once you go commercial, you’ll have to compromise on quality to get shelf life. Being too innovative can also be a problem unless you have scads of money to change consumer eating habits. And if you do, you are not reading this.
Deb Mazzaferro, AKA CoachMaz, has worked with 200+ specialty companies over 38 years. These tips are a result of numerous repetitive conversations with fledging entrepreneurs who start off with a great product, but don’t carve an attainable path. Growing Your specialty Food Business is one place to start building your knowledge base. Happy Holidays!