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Top ten tips for starting your own food business

Top ten tips for starting a food business
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Oonagh Monahan, published author and Founder of Alpha Omega Consultants, shares her top ten tips for starting your own food business.

Having mentored almost 300 startup food businesses over the past ten years, over time, it became very apparent to me that they all had more or less the same concerns – Who do I talk to? What about registration? What are the legal implications? Is my kitchen at home suitable? Can I get funding anywhere? Who will buy my foods? Where should I sell them? How can I source packaging? What has to go on a label, and so on.

While legislation may change, Brexit not withstanding, and new food trends come and go, the issues and concerns facing most start-ups remain the same. So, here are my Top Ten Tips:

Work to Your Strengths

What are you good at? What skills do you have? Baking, growing vegetables, preserving, fermenting, cooking, product development…? Start your food business on a good foundation, one that is based on your core skills, your passion for food, your desire to bring good food to the nation, and that’s a good place to begin. For everything else, get help.

Benchmark Your Competitors

Check out the competition! Is anyone else doing what you’re thinking about doing? If so, are they doing it well? Can you do it better? Look at their packaging, prices, where they’re selling, portion size, labels, branding. Think about how you might position our range relative to theirs.

Try to fill a gap

Make something that isn’t already available locally. While it’s very easy to start baking at home, the market might be saturated with cupcakes or bread in your area. Shopkeepers are always looking for something different that will sell. Consider your USP – Unique Selling Point. Identify your target market and think about what they are looking for and where they shop.

Work out your costs

How much does it cost you in ingredients and time to make it? Don’t forget to pay yourself. Startup businesses of all sorts often overlook this very important consideration! Also, benchmark your recommended retail price against other similar products that might sit beside you on the shelf. You might be able to charge more than you think!

Start with a very simple costs calculation, just to give you a good estimate:

a) Cost to produce (direct costs - raw materials, packaging)

b) Cost of processing / baking / preparation

c) Cost of transport & distribution

d) Cost of selling (market fees, insurance, store charges)

e) Staff costs – starting with your own required income

f) TOTAL

g) Sales value

h) PROFIT (g-f)

Starting a food business only because you want to make money is not the best attitude as it’s going to be hard work, and the initial rewards will probably be more qualitative than quantitative! On the other hand, assuming you’re not starting a charity, then you need to focus on profitability.

Where will you make your foods?

Ensure that your home kitchen can handle your new food business – ask your local authority / Environmental Health Officer to call and take a look. Most home kitchens are fine for low risk foods like baked goods, bread, jams, but are not ok for meat, fish, dairy, prepared salads, sandwiches. You might have to extend or look for suitable premises.

Ask everyone!

Get advice from mentors, enterprise advisors, networks, your Local Authority, Enterprise Offices and others like a friendly Food Scientist! Talk to producer groups, local market traders and potential customers. Do your market research by simply asking people what they like / don’t like. Most people are willing to share their knowledge, even competitors.

Branding

While very important, I advise that you leave the Branding / logos /label design until you have your recipes and packaging sorted out. People love this part, but sometimes jump ahead to it too soon! Branding takes consideration and a rush job is hard to undo if you’ve invested your hard-earned cash in its development.

Legal labels

Labeling is really important – there are very particular legal requirements for labels, referred to as FIR, which you must follow including Allergen declaration, weight, nutrition information, ingredients and so on. Make sure you do this properly before you print labels or order packaging. Mistakes can be costly!

Packaging

The packaging format you use will help protect your food as well as presenting it for sale. Your choice of packaging might also be determined by your target market. No matter how good the food is, if the packaging is cheap looking, it won’t sell to high-end consumers. If you’re aiming at the lower end, don’t waste your money on glass or fancy boxes. Consumers are increasingly looking for biodegradable and/or recyclable packaging, so that may also be a consideration.

Just do it!

Once you make your first sale you’re in business! Bring a few jars of jam or pickle / buns / salad bags up to your local grocer, ask them to take a chance on you, sale or return, and see how it goes. You might be pleasantly surprised!

 

Oonagh Monahan is a Fellow of Institute of Food Science and Technology (UK) and the Institute of Food Science and Technology Ireland (IFSTI). In addition to her Bachelor and Masters degrees, she holds a Graduate Diploma in Food Science and Technology from IFST. She is a published author and is the Founder of Alpha Omega Consultants, a Food business development consultancy based in Ireland. She lectures part-­time in EU and Irish Food Legislation and New Product Development.



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