Posted on by John Rife
If you’ve attended a food truck rally, farmers market or local food hall recently you’ll have noticed that small-scale food businesses are firing on all cylinders these days. Customers are hungry for thought provoking and novel food concepts and savvy foodpreneurs are capitalizing on this trend.
Maybe you’ve been doing some dream hatching of you own, imagining what it would be like to bring your own unique culinary concept to market and share your food passion with the world.
There has never been a better time to start a food business than RIGHT NOW.
If you’ve ever thought that “Hey I could do this….and probably better” but you haven’t tied on the apron and gotten started, what’s holding you back?
Start-up food businesses are usually begun as a side-hustle, and since the hours outside the 9-to-5 are so limited there is not a SECOND to waste on activities that aren’t directly linked to profit. But where to start? The list of To Do’s seems endlessly long and many would be foodpreneurs get stuck in analysis paralysis.
So….to help demystify the process of starting your food business I’m going to debunk a couple myths about the process and give you a roadmap toward a successful launch of you concept.
We’ve all seen others do it successfully and with the right training I’m here to tell you that you can too. Once you’ve read through the 5 Myths….if you’re wanting to go deeper check out our Food Biz Start Up workshops. There’s once coming up soon.
Myth #1: I need to make my product in a commercial kitchen or commissary kitchen.
While producing you food product through a commercial kitchen will probably become a necessity as your grow your business, thankfully for certain concepts it’s not absolutely mandatory at the get-go.
In recent years many states have approved Cottage Food policies that enable applicable food start-ups to start producing their food products at home without needing to be in a licensed kitchen.
These policies let foodreneurs get up and selling without many of the required permits, certifications and inspections associated with more established food businesses.
Cottage laws vary from state to state, but there are some common restrictions worth mentioning. First of all, approved food under the regulation are usually non-hazardous foods like baked goods, jams/jellies, granola, dry pasta, honey, etc. Here is a list of some of the typical approved and prohibited cottage foods.
David Crabill at Forrager.com has provided some dynamite resources for Cottage Food operations and if you think starting a home-based cottage food business is the path for you, check out his website.
Myth #2: I don’t need to work in a commercial kitchen or commissary kitchen.
This one goes hand in hand with Myth #1 and it’s because cottage food regulations have some significant drawbacks. Beyond restricting food type, cottage foods are generally approved for sale direct to consumer only and can’t be sold to grocery stores, restaurants or online. Not being able to get your product on store shelves is reason enough for some folks to bypass operating under the cottage food regulations and sign up with a commercial kitchen instead.
Plus look back at Myth #1, the list of approved foods allowed under the cottage food policies is pretty narrow and I bet your local farmers markets are full of foodprenuers already making and selling these food types. The little bit of extra effort to get licensed to use a commercial kitchen can pay dividends in freeing you up to pursue your culinary dreams without restriction.
I haven’t even mentioned the gross sales cap on Cottage Food businesses. If you start your business from home and are met with success and growth right off the bat you could sail right past your state’s sales cap. Florida, for instance, has a gross sales cap of $50,000. Even as a hobbiest it’s easy to hit this cap since it’s based on gross sales, not net sales or profit. There are no caps for businesses working from commercial kitchens and for some food concepts it might just be the best place to start.
Myth #3: You’re happiest when you are cooking and starting a food business would be the perfect way to profit from your passion.
I so wish this wasn’t a myth, but far too often the things that bring us joy quickly turned sour when they become the means to a financial end.
Jessica, our chef-in-residence at East End, calls this the Food Network myth. Each day of your food business is like an episode of a highbrow cooking show. Everything neatly in its place, the fridge and cabinets perfectly stocked and all your ingredients pre-measured…..oh and all the dishes cleaned through the magic of television.
The reality is that while most people enjoy making a Thanksgiving meal for their whole family to enjoy the thought of having to do it EVERY DAY is a scene from Groundhog day. As a food start-up if you don’t feel this monotony at some point in your early days you will be one of the exceptional few.
Honestly, most of your time getting your culinary concept off the cutting boards will be spent sourcing ingredients, packaging, labeling, accounting, negotiating, cleaning….and more cleaning while the part you love, the making, gets relegated to a tiny 10% of your work week.
Believe me friends, I take no pleasure in debunking this myth, but it is vital that you go into starting a food business with a bit of grit and fortitude.
Now….it’s not all doom and gloom. Far from it! Keep in mind, launching your culinary concept means you are piloting your own ship. Finding success under you own efforts is far more satisfying than doing so under someone else’s employ and direction.
A food venture can be, and should be, deeply fulfilling and profitable, even fun, but it takes forethought and business acumen to run a successful food start-up. Knowing this and setting healthy expectations is vital. Taking time to do some foundational planning will put you miles ahead of others who start their concepts on a whim.
Myth #4: I’ll find a couple farmers markets to sell at and be off to the races
Let me start by saying the resurgence of farmers markets in the last decade is proof-positive that consumers want local, fresh and artisan products over store bought commodities. This bodes well for aspiring foodprenuers for sure!
Chances are good that attending your local farmers market is part of your inspiration to stake your claim in the food industry.
The rub is that the explosive growth of farmers markets has been met with a panoply of new market ready food businesses and you’ll find most established markets at, or close to capacity.
Point being, getting the green light to set up at your local farmers market might be more challenging than you anticipate. If there is an established vendor in your food category the chances of the market manager giving you a shot are next to nil.
There is hope however and I’ve seen many upstart foodpreneurs break into markets I thought were closed up tighter than Fort Knox. Here is how they did it.
1. Try to put a new spin on an existing category: Can you be “local”, “organic”, “hand-made”, “gluten-free”, etc. where the established brand is not. Sometimes the market manager just needs a valid argument for letting you in so as to not piss off their established vendor. Make it easy for them. Figure out just how different your concept really is from what they already have and pitch them.
2. Start by setting up at any place that will let you. Outside a popular coffee shop that doesn’t sell your type of product, at your local church or club, one off festivals and civic events. These pop-ups will help you hone your craft and build your audience. It also gives you time to get your visual merchandizing and branding down.
3. Be willing to drive out of the city and serve some of the outer lying or brand new markets that are eager to have new merchants join their ranks. In many cases you’ll be doing them a favor and in turn they’ll be willing to put in a good word testimonial for your when you try to break into a more established market in the city core.
Think about getting into your first major farmers market like trying to get a date with someone you really admire. You’ve heard the term that in dating and marriage someone is usually a reacher and someone a settler. We can admit that as a start-up you are the reacher. So…the goal with your pop-ups is to build some stories of success, a track record of social media posts full of the smiling faces of happy customers and some testimonials from the business owners who testify that your presence at their shop or market brought in more business.
Your goal in the first few months should be to close the “reacher/settler” gap as much as possible. As a market manager my ideal tenant has an existing customer base, even if it’s just a few hundred fans on social media and on their e-mail list. This gives me confidence that they will at least be bringing something to the picnic and not just sucking at the umbilical chord of our established customer base.
Last thing to mention about getting a farmers markets: Even if you are a cottage food business many markets will require that you be licensed and a carry insurance regardless of your business status.
Want to go deeper on these topic and really get the low down on starting your business. Check out our annual Food Biz Start up Workshops. We have one coming up soon and you can click here for all the details.