14 Secrets About Starting Your Food Business
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14 Secrets About Starting Your Food Business

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Starting your own food business isn't as easy as it looks. There's tons of regulations, financial plans, and the reality is harsh. But, you can get through it. Read this document to get a first-hand ...

Starting your own food business isn't as easy as it looks. There's tons of regulations, financial plans, and the reality is harsh. But, you can get through it. Read this document to get a first-hand look at what it's like to start your food company.

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14 Secrets About Starting Your Food Business Presentation Transcript

  • 1. It  starts  with  an  idea…   And  You’ve  got  one.  Maybe  you  want  to  bo3le  Grandma’s  grape  jelly  or   manufacture  your  awesome  BBQ  sauce.  It’s  delicious  and  friends  &   family  love  it…   But  you  don’t  know  where  to  start.   NavigaDng  the  industry  can  be  overwhelming.  There’s  lots  to  learn  –  and   it’s  not  as  simple  as  making  your  product  in  your  house  and  selling  it.   Before  we  dive  into  the  ni3y-­‐gri3y,  it’s  important  to  cover  the  basics  of   the  industry  –  the  14  things  you  need  to  know  before  you  start  bo3ling   your  legendary  sauce  or  pedaling  your  macaroons.    
  • 2. It’s  the  hardest  thing   you’ll  ever  do   I’ve  been  in  the  specialty  food  business  for  almost  ten  years.  From   cookies,  to  energy  bars,  and  now  gourmet  mustard,  it’s  been  the  hardest   thing  I’ve  ever  done.  And  I  want  you  to  know  it  won’t  be  a  cake-­‐walk  for   you  either.   Why  is  it  so  tough?   There  are  so  many  moving  parts,  legaleeze,  health  inspecDons,  and   decision.  It’s  just  like  running  any  business.  You  work  incredibly  long   hours  to  make  your  product.  Then,  aOer  slaving  over  the  hot  oven,   you’ve  got  to  do  the  books,  make  sales  calls,  schedule  store  demos,   making  point-­‐or-­‐sale  materials,  etc.  Say  hello  to  60-­‐70  hour  weeks.    
  • 3. It’s  tough  to  stay   passionate   AOer  making  the  same  product  over  and  over  again  for  several  years,  you   start  to  get  sick  of  it.  I  know  several  food  producers  who  don’t  even  eat   their  own  product.   This  makes  it  tough  to  stay  passionate.   I’ve  found  the  best  way  to  stay  passionate  is  to  always  be  tesDng  –  new   flavors,  new  store  displays,  new  labels,  new  sales  techniques,  etc.  If  you   keep  your  company  stale,  you’ll  lose  passion.  Make  sure  to  keep  yourself   on  your  toes.    
  • 4. You  need  to  know   your  numbers   Yep  –  I’m  sure  you  can  make  delicious  food,  I’ve  had  my  fair  share  from   across  the  country.  But  your  specialty  food  company  goes  far  beyond   making  something  people  want  to  eat  tons  of.     Just  like  any  business,  you  need  to  know  your  numbers.   AccounDng  is  tough  –  and  a  pain  in  the  bu3.  I  don’t  like  to  do  it  any  more   than  you  do,  but  it’s  a  necessary  if  you  want  to  make  some  money.  From   finding  the  right  suppliers  to  cosDng  out  your  recipes  and  determining   the  best  distribuDon  channel,  it’s  all  got  to  be  figured  out.  And  on  a   monthly  –  if  not  weekly  –  basis.  Grab  your  calculator  and  get  ready.  
  • 5. Other  companies  will   copy  you   You’ve  got  a  stellar  product.  And  you’ve  got  compeDDon.  Every  product   in  your  four-­‐foot  secDon  in  the  grocery  store  is  a  compeDtor  –  even  the   naDonal  brands  who  you  will  never  be  able  to  beat  in  price.  But,  they  will   copy  you.   Take  the  opportunity  to  smile.   New  products  will  be  launched  that  look  just  like  yours  –  same  flavors,   different  recipe.  But  you’ve  done  your  research,  so  you’ll  squash  them   like  a  bug.  Being  imitated  is  not  a  bad  thing.  It  just  means  you  need  to   keep  on  doing  what  you’re  doing  and  not  worry  about  your  compeDDon.   You’ll  be  out-­‐selling  them  in  no  Dme  anyway!  
  • 6. Try  to  revoluDonize   the  industry   Just  like  other  companies  are  going  to  copy  your  company,  resist  the  urge   to  do  the  same.  Thinking  about  making  your  Aunt’s  spaghe[  sauce?   Check  the  grocery  store,  first.   If  there’s  tons  of  something,  there’s  less  room  for  innovaDon.     Look  at  food  trends.  Ask  around.  Do  something  different.  When  I  sat  in   on  a  meeDng  with  Alan  Newman,  the  co-­‐founder  of  Magic  Hat  Brewing,   he  said  “We  looked  at  what  everyone  else  was  doing  and  we  did  the   exact  opposite.”  With  that,  how  can  you  be  different  in  your  industry.   Being  different  makes  everything  easier.    
  • 7. People  will  dislike   your  product   Don’t  take  the  opinion  of  a  four-­‐year  old  seriously.  I’ve  had  them  cry   when  they’ve  tasted  my  products.  But,  I  have  been  hurt  by  people  who   flat-­‐out  don’t  like  my  product.  They  may  not  tell  me,  but  I  can  see  it  in   their  body  language.     Look  at  distaste  for  your  products  as  an  opportunity.   Whenever  someone  doesn’t  like  your  product,  ask  them  why  –  especially   when  you’re  tesDng  out  a  new  product  line.  It’s  invaluable.  And   remember,  don’t  make  what  you  want  to  make,  make  what  your   customers  want  to  buy.    
  • 8. People  will  love  your   product   These  people  are  my  favorite,  for  obvious  reasons.  And  hopefully  you   have  a  lot  of  them  (if  not,  you’ve  got  to  change  something).  Here’s  a  Dp   to  harness  your  ecstaDc  customers.     Ask  for  tesDmonials.   TesDmonials  are  social  proof.  They  not  only  help  on  your  website,  but   they  help  in  person.  Take  what  your  passionate  customers  have  said  and   use  it  in  your  sales  pitch.  Maybe  your  neighbor  uses  your  marinade  in  his   awesome  steak  recipe.  Let  your  other  customers  know!  It  helps  for  them   to  imagine  using  your  product.    
  • 9. Your  family  is  your   best  free  help   I  wouldn’t  have  go3en  anywhere  if  it  wasn’t  for  the  help  of  every  one  of   my  family  members.  My  parents  helped  sell,  package,  distribute,  label,   and  create  new  flavors.  My  sister  taste-­‐tested,  and  my  brother  kept  my   companies  in  healthy  financial  shape.     Family  is  an  asset.   They  want  to  see  you  succeed.  When  they  ask  if  there’s  anything  they   can  do,  hop  at  the  opportunity.  You’re  an  entrepreneur.  That  means   you’re  doing  a  million  things  already.  Wouldn’t  it  be  great  if  you  had  one   less?  Oh,  and  you  don’t  have  to  pay  them  much  (but  you  do  have  to  pay   them  back  –  maybe  free  product?)  
  • 10. You’ll  never  be  saDsfied   with  anything   I  know  I’m  not.  And  that’s  why  something  is  always  changing  at  my   company:  display,  packaging,  financial  reports,  website,  ecommerce   shop,  recipes,  research,  etc.   Lesson?  Embrace  change.   You’re  going  to  have  to  make  a  lot  of  changes  when  you  start  your   company.  Whether  it’s  tweaking  your  process  to  get  approved  by  the   food  lab,  finding  a  new  ingredient  that  makes  your  cost  of  goods  go   down,  or  adapDng  to  a  new  retailer’s  needs,  it’s  always  something.    
  • 11. Age  Has  No  Limit   Are  you  young  and  sDll  in  high  school?  Or,  are  you  reDred  and  looking  for   something  new  to  occupy  your  Dme?  Either  way,  in  the  food  biz,  age   means  nothing.  I  started  my  first  food  company  at  the  ripe  age  of  15   years  old.     You  can  start  whenever  you  want  –  you  only  live  once.   You  are  your  own  person.  Whether  you’re  16  or  60,  there’s  always  Dme   to  do  what  you  love.  Yes,  there  may  be  a  learning  curve,  but  it’s  easy  to   get  over  the  iniDal  hump.  So,  what  are  you  waiDng  for?  Get  out  there  and   just  do  it.    
  • 12. It’s  not  all  about  the   money   Think  specialty  food  is  the  road  to  millions?  It  might  be  but  you  won’t  get   there  for  several  years.  On  every  unit,  you’ll  be  making  several  pennies,   up  to  a  couple  of  bucks  if  you  sell  direct  to  your  consumer.  The  food   business  is  all  about  volume  –  how  many  units  can  you  sell?   So,  what’s  a  realisDc  number?   That’s  totally  up  to  you.  For  me,  I  started  my  company  when  I  had  no   other  obligaDons.  And  even  though  I’d  work  for  50-­‐60  hours  a  week,  my   company  didn’t  grow  too  fast.  Make  yourself  a  goal,  whether  it’s  $2,000   or  $20,000  and  do  everything  to  work  towards  it.    
  • 13. The  food  community  is   awesome   We’re  all  in  this  together.  If  your  company  makes  a  couple  thousand   bucks  a  year  or  you  have  a  small  commercial  kitchen,  we  have  the  same   pain,  the  same  struggle,  and  the  same  successes.     It’s  great  to  be  able  to  reach  out  when  you  need  it.   We  all  share  resources,  funny  stories  from  tasDng  events,  and  how  we   were  able  to  solve  problems.  From  the  smiles  to  the  tears,  we’re  one   huge  community.  You’ll  see  online  communiDes,  statewide  chapters,  and   even  a  naDonal  organizaDon.  There’s  always  someone  able  to  lend  a   hand.    
  • 14. Hold  on  to  your  cash  –   it  comes  in  handy   If  there’s  one  thing  I’ve  learned  in  my  ten  years  owning  a  specialty  food   company,  it’s  this:  cash  is  king.  You  need  it  to  operate  your  company,  pay   bills,  get  glass  jars,  build  websites,  ship  samples  out,  etc.   Remember  #3  about  knowing  your  numbers?   Be  conscious  of  whether  or  not  you’re  burning  through  cash  like  crazy.   My  first  few  producDon  runs  cost  me  thousands  of  dollars  and  my  cash   was  always  Ded  up  in  inventory.  Lesson  learned?  Keep  a  watchful  eye  on   your  bank  account.    
  • 15. Store  demos  are  a   necessary  evil   When  you  get  into  a  couple  of  retailers,  one  of  the  best  ways  to  get  your   name  out  there  is  to  do  a  store  demo.  They  usually  last  a  couple  hours   and  people  taste  (and  hopefully,  buy)  your  product.     So,  what’s  so  bad  about  demos?   Your  Dme  is  precious.  You  may  have  to  run  back  and  make  more  product,   go  to  another  store  for  a  delivery  –  or  heck,  pick  up  the  kids  form  soccer   pracDce.  Time  is  money,  and  when  you  sell  a  handful  of  units  at  a  three   hour  demo,  it  can  be  a  li3le  discouraging.  But  remember,  you’re  ge[ng   your  product  out  there  for  people  to  taste.  It’s  going  to  be  necessary  for   the  first  few  years  to  sacrifice  those  Saturdays  for  demo  days.    
  • 16. Gredio  is  a  web-­‐app  to  quickly   calculate  your  food  product  cost  and   manage  your  ingredient  inventory  to   make  sure  your  next  producDon  goes   off  without  a  hitch.