Q. I
have been to culinary school and want to start my own business. I specialize
in desserts. How do I start? - Shirley
(article continued below ...)
A.
Starting a food business is both stressful and exciting. It is one business,
though, that will always have a demand.
However, the ability to cook good food and tasty desserts is not a
guarantee of commercial success. Knowing how to cook and starting a business
are two different things. While you now have mastered the techniques of your
craft in the culinary school, your next step is to learn how to start and
operate a business.
Identify Your Product
Before anything else, you need to form a realistic and clear picture of
what you can feasibly sell to make money. The first step is to identify what
type of food item you will produce. Particularly, you need to determine what
product the consumer will purchase and continue to purchase.
You indicated that you specialize in the creation of desserts, which is
still a fairly large food group. Determine your niche, and decide whether you
will produce baked goods such as cakes and cookies, refrigerated products,
canned food, among others. Do you plan to open a bakery or a restaurant? Or
are you thinking of becoming a caterer, or supplying one with your desserts?
Do you want to become a personal chef?
You also need to ask yourself if you want to limit your offerings to
desserts. Instead of simply following the age-old rule of going for what you
know, you may want to branch out to other food businesses that may meet your
goals and provide you with the returns you expect. You can opt to become a
sandwich shop owner, a gourmet food store provider, or a take-out
restaurateur. You can open a soup restaurant, a wrap restaurant (for
everything tortillas), or a soup booth in the mall.
There is a wide range of businesses you can develop. Make a list of what
you want, and put down your strengths and weaknesses. Be sure what kind of
business would suit you most. If you have excellent people skills, you may
choose to specialize in made-to-order wedding cakes. If you prefer to control
the entire process of food creation, you may decide on a business with little
or no direct interaction with customers.
One of last year’s winners of the Small Business Person of the Year
Award, Michael Reagan of Arizona and owner of a FastSigns franchise, took time
to research the business most suited to his personal traits and goals. As he
told us, “Every time a thought came to me about the characteristics of a
business I would like to have, I wrote it down in a piece of paper.” At the
end of the day, he “had about 103 characteristics of business that I want.”
He then matched these characteristics with existing business ideas and
opportunities, until he identified that he is most suited to join a well-known
signs and graphics network. You can adopt the same approach in your business
identification process.
Developing Your Product
Starting a food business is not easy. You need to be able to develop a
product that will satisfy a consumer need and return a profit. The product
must be of high quality, adheres to safety standards and fill a marketing
niche.
Moreover, you will spend hours of testing and research to come up with a
winning recipe that is suitable for commercial production. Look for ways to
ensure that your products will not change its appearance and color as a result
of chemical reaction between ingredients. Other quality parameters you need to
check include texture and flavor.
Tests should also be done to determine whether your products have adequate
shelf life, particularly if you will display your inventory. Think of ways to
address common food handling problems, such bacteria, mold and yeast. Room
conditions such as light also causes product or quality deterioration. It is
important to know how long a new product must be kept and under what temperate
and other environmental conditions.
As part of your preparatory stages, conduct a taste test. It does not need
to be an expensive one: call your friends and give samples to your neighbors.
Try to get as many people to sample your product. Have a list of questions
ready. The results can help you evaluate its commercial potential and
determine if there’s sufficient demand to make your business profitable.
Preparing Your
Products
After product identification and testing, your next question is: Do you
have the production technology to develop the product? If you are planning to
sell wedding cakes, do you have enough room in your house to bake, store,
package and transport them? There are some counties that restricts commercial
cooking done at home, so be sure to check first.
If you plan to do the production in another location (e.g. rent a
cafeteria, etc), look at the drainage, ventilation, waste disposal, lighting,
equipment size and flow, energy conservation, safety, sanitation, ease of
cleaning, and storage area. Make sure that everything is in compliance with
government regulations.
An important element of food products is consistency. Hence, you need to
establish processing controls to ensure consistent quality during production,
particularly if you have employees helping you out. You need to set up control
procedures to check if standards are being met during production. If not, you
need to be quick to introduce corrective actions to prevent losses and
spillage.
An excellent tasting food item is not enough to move products. It must be
attractive to consumers. Here is where packaging becomes important. Consumers
want colorful, attractive, conveniently packaged forms. Packaging should not
impart flavor to the product or react chemically with the food. It should be
lightweight, economical and resistant to tearing.
Marketing Your Business
Your marketing strategy will depend on your business. But first, you need
to know the best distribution system and sales outlets for your products.
Options include retail food stores, specialty shops or boutiques (selling
unique or gourmet food items), roadside stands, flea markets, or the front
door of your processing plant. If you are planning to sell through retail
store or specialty shops, you may need sales promotions and advertising. The
method of distribution will influence other business decisions, such as price,
size of container and number of containers per carton.
Most food businesses often introduce their new product in a limited area.
You can start in your neighborhood, and expand to progressively large areas
(statewide, regional, national) as the business grows. Some products may be
better suited to some geographical areas than others, so it is important to
have several variations of your product.
If you are looking to commercialize your food products, you can first start
out selling mainly to institutional trade. Look for one that sells to retail
outlets, even smaller ones initially such as privately owned stores or small
chains. You may be able to penetrate the larger chains if you have already
established a name for your products. They often look for products that are
heavily advertised by the company. Note that selling in retail stores entail
getting a Universal Product Code (UPC) displayed on the label, which you can
get from the Uniform Product Code Council.
Government Regulations
You cannot expect to start a food business without doing research on laws
and government guidelines. The exact state and local agencies that you will
need to contact depends upon the type of business, type of facility and the
location of your business. Some food businesses are required to have an owner
or employee to get special food handling training to become a Certified Food
Handler. Even mobile businesses have special requirements.
In many areas, food may not be manufactured in the home for distribution.
The local Public Health Department inspects food sold at the place of
production, while food manufactured for wholesale distribution is under the
supervision of the state Department of Agriculture. If you build a processing
facility, this too will be inspected by a representative from DA before
start-up.
Given that most specialty foods cross state boundaries during distribution,
your business will also be subject to federal regulations. The federal
agencies responsible for food safety are the FDA and the U.S. Department of
Agriculture (USDA). Carefully review the government regulations before
embarking on this business.
Conclusion
Bringing a skill or talent is your first step to starting a business.
However, for your food business to grow and flourish, you will need to embody
the personal characteristics of an entrepreneur. First off, you must have
confidence in your ability to succeed and a tolerance for risk. You will need
hard work, strong organizational skills, good interpersonal relations,
flexibility and a high degree of commitment. Most of all, you need to have fun
and love what you do.
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