Starting a food business can certainly be an exciting pursuit, but is also a challenging one filled with many moving parts. In addition to all of the various responsibilities an entrepreneur has when launching a new venture, food business owners will have a wider variety of matters with which to contend. A report from CNBC that revealed a 60% failure rate among food companies just one year after they open their doors, and an 80% failure rate within the first five years.
To ensure that you are giving yourself the best chance at success in this competitive industry, follow these steps before launch:
To ensure that you are giving yourself the best chance at success in this competitive industry, follow these steps before launch:
- Thoroughly evaluate regulations
One of the more cost-intensive aspects of launching a food business is the regulatory compliance aspect. Before launching your food business, you will want to look over the U.S. Food and Drug Administration's guidelines for food businesses. The agency offers a comprehensive rundown of all the regulatory implications of launching a food business, broken down by different types of legislation, such as labeling and reporting. Make sure you understand the costs and responsibilities involved. - Decide on the structure
Will you launch a restaurant or a food truck? This is a big decision, and one that could make the difference between you thriving and closing your doors. A food truck will help you avoid some of the major overhead costs, such as rent and facilities management. If you take this approach, Small Business Trends, an entrepreneurial publication, suggests creating a simple, targeted menu, purchasing a truck that can be cooked in, and investing in the right equipment. - Find the right location
Location is everything in the food industry, and this is true whether you decide on a brick-and-mortar restaurant or a food truck. The Balance, a business blog, recommends that the storefront is in clear sight on a busy street and that it is not surrounded by competitors. The news provider notes that a space with a parking lot and the right size for the operations will be especially well-suited to a successful food business. - Cover the business basics
The U.S. Small Business Administration explains that food companies, like any other startup, must have a strong business plan in place to ensure they are attractive to customers and investors alike. Then, once all of the startup costs have been established and double-checked, specialized lending programs may help. The U.S. Small Business Administration offers microloan and flagship small-business loans that can assist with these costs. - Launch with a bang
In the days leading up to your food business launch, make sure that you are generating some buzz around the area you will be serving. This can be accomplished through the use of targeted marketing programs on social media and email, as well as canvassing. Make opening night a big event to attract your local patrons, and make sure you are ready to wow them with your offerings!
