Every new business venture has its own ups, downs, triumphs, defeats, unique resolutions, and challenges. But the food and hospitality industry? That’s in its own league—and knowing how to play ball is essential for unmistakable victory. Common mantra says that opening up a food company or food service establishment is dicey for even the most hardworking entrepreneurs. But doesn’t life always come with a little risk?
The past year has proven much about adversity and resilience—showcasing that no matter what happens, the doors to innovation are still wide open to those who seek opportunity. Needless to say, if you desire to launch your food business dream, there is no better time to start than right now. To get your business pins rolling, we’ve compiled a step-by-step guide on how to build roots and gain momentum. In our ten-step guide to starting a food business, we’ll cover the following categories:
- Assessing your skills
- Creating a business plan
- Setting up the business
- Seeking funding
- Investing in products and tools
- Hiring your team
- Determining your pricing
- Establishing an online presence
- Purchasing supplies and equipment
- Serving up delectable food
Each section will help you understand what’s fully required to kickstart a hearty business endeavor. Let’s jump right in.
Understand Your Skills: Assessing What Help You Need
Value comes from your customers, but your skills are an integral component of business success. Passion is undoubtedly a great starting point—but are you 100 percent ready and capable to embark on this venture? Before moving too far ahead, take the time to consider your strengths and weaknesses alongside your available support network and resources.
This foundational knowledge and understanding of where you’re at provides vital information about your next steps and how much support you’ll need to gather. Don’t be afraid to reach out for necessary resources or bring a team with expertise and experience.
Produce a Solid Business Plan: Multi-Fold Operations
Next up on a ten-step guide to starting a food business is approach and strategy. This will help create a multi-fold business plan that covers all the bases. First thing’s first: a business budget. Your budget includes all the required costs for opening operations, funding operations once everything’s up and running, and a long-term outlook on how to make and grow revenue. Costs typically include real estate, space design, equipment, employee salaries, and food products.
When putting together a business plan, consider your competition. This depends on the type of food business you desire to have as well as your concept. If you know your niche or can find a hole in the current market, filling a customer’s desire is possible—without much competition, that is. If your target niche has fierce competitors on the market, study what these businesses are doing well or where they are lacking. These are key steps of establishing a well-built business approach.
Set Up Your Business Structure: Legal Considerations
Opening up a food business requires many considerations for legal operations. Below are two must-do steps to take.
Select a Business Entity
The first step is to choose an ideal business entity. The most common business entities for smaller businesses are either proprietorships, co-ops, or LLCs. These choices determine an owner’s personal liability for their business. These structures may appear complicated, but consulting with a business attorney will provide clarity on the right choice.
Register for Licenses and Get Insurance
Being legally licensed to prepare, produce, or sell food is an essential step of the process. The licenses and permits you need depend upon local government jurisdictions and the type of food business establishment you desire to open. Don’t forget to cover your business with insurance for any situation.
Financing Options: Know What You Have
Your initial investment into your business is expensive, and you don’t know for sure when your business will be profitable enough to put money back in your pockets. Consider all available funding options, such as loans, investors, or support from family, friends, or community members.
Invest in Quality Business Products and Tools
You’ll need proper finances to find and set up a reliable relationship with resource suppliers. Consider local sources or national organizations for quality foods and products. Keep in mind a tech-savvy point of sale system to organize revenue influx and outflux. Last is the need to outfit your business. Buying or renting durable equipment is essential for efficiently serving customers or consumers.
Hire Reliable Staff Members
Even the smallest food establishments or companies tend to need extra hands for their BOH or FOH operations. Plan and hire accurately for your scale and type of business. Team members may include assistants, managers, waiters, cooks, bussers, packers, and delivery drivers.
The Price Is Right: Determine Correct Pricing
To make adequate revenue, you need to determine the right price for foods and products to drive sales. Market research about common competitor prices and consumer priorities reveals relevant pricing. Consider the total cost of a dish or product to create the highest potential profit.
Advertise To Your Target Consumer Base
Before opening up for business, you need to advertise to consumers in the market, community, or your target demographic. Word of mouth works wonders, but establishing an online presence for digital value is well worth the time and money. Digital marketing through websites and social media platforms gives your food business or company visibility and credibility to develop a strong consumer base.
Breaking into the industry is no easy feat, but success is possible with perseverance and responsiveness to the market. Remember that a plethora of food businesses are out there, so put yourself in the best place to grow from the get-go.
Get Ready To Serve People
Now that you’ve read through the fundamental steps to starting up a food business, you’ll be ready to begin your journey into the unknown. Keep in mind that you’re growing a village, not just a business. You can reach more and more people with time. This is only the beginning of the story.
Choose DSL for Food Service Needs
For restaurant and foodservice equipment in Edmonton, you can turn to the industry experts at DSL. Our innovative foodservice solutions bring convenience to the door of your business or company. We’re committed to our customers and are always here to serve you with knowledgeable resolutions. Contact us with any questions about our products or services.