1. Do Market Research Before You Set Up Shop
To be successful, you need to know what the market wants and what your competition looks like. That’s why market research must be your number one step. Take a look at Proper Popcorn for a great example of how to get it right.
What is important to know before you begin?
Define Your Niche: There are a lot of different types of foodservice companies. Some provide fine dining and others serve only snacks. There are cafes, fast food restaurants, and pizza parlors. Know which niche you want to open and what type of food you want to prepare.
Where Should You Locate: Do you know where you want to base your business? Will you cook from a kitchen in your home and deliver food or do you plan on having a restaurant for customers to enter. Before you decide on a location, analyze it using a heat map like Maptive. This tool will help you see what the competition is like in the area and find out if a particular type of food or service level is missing in the community. Learning what there and what isn’t is valuable information that can make or break a new restaurant. Insight before the selection is key.
Define The Market You Are Targeting: Do you have an idea about the type of customer you hope to serve? Do you hope to attract a high-end clientele, business customers, up-and-coming professions, students, or families with children? Once you’ve identified who your customers are, the next step is to figure out if the location you’ve selected is a good choice.
Risks And Challenges: Now that you know your niche, geographical location, and targeted market, you need to assess your risks and consider which aspects of your plan might be challenging to implement. Once you have a handle on these, you should revise your plan to reduce your risk to manageable levels and focus on eliminating obstacles.
2. Write Your Business Plan
No matter how clearly you understand your plan for the business, it is vital that you write it down. Written plans can expose weaknesses and help you break your business start-up into manageable steps. You will need to include the following in your plan:
* the business type. Will your food business be registered as a corporation, a limited liability company or a sole proprietorship?
* structure of the business. Who will be managing the business and how many employees will you have?
* workable budget. How much money do you need to complete the start-up process? How much money do you expect to earn and how much will it cost you to run your business on a monthly basis? Are you getting a loan? If so, how do you plan to pay off that loan? Include all expenses in your budget. Items to consider are utilities, salaries, marketing, licensing, rent, and necessary renovations.
* back-up plan. In case things don’t go as you hope, it’s vital to have a contingency plan. If your original projection was for a certain return on investment within a specific time frame and that doesn’t happen, how are you going to stay in business and payout expenses until you do turn a profit? When you are prepared for the worst, you’ll make your business partners and creditors much happier.
3. Partner With The Right People
Ultimately, your success depends on finding the right people to work with. While you may be running a sole proprietorship, you are effectively in partnership with vendors, suppliers, and creditors. Choose wisely.
If you choose to finance your business with a loan, work with a financial business that is trusted in the community, and select an appropriate type of loan.
To gain and maintain a good reputation in the food industry, you need supplies of high quality. Do your research and assess your needs. Can the supplier meet most of your needs and do they have a delivery service?