04/10/2022

Some important things to research before starting a business

A food business is not the easiest business to start. Most businesses in this sector fail within the first year.
Reducing the risk of failure is our goal.

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1. Double-check your suppliers and distributors

Suppliers will deliver everything you need to make your product, so, yes, you’ll want a good price for what they deliver—but Xander says you should also investigate to see how reliable a prospective supplier is. Xander recalls an entrepreneur he knew found a great deal on jars but says the first order was wrong and the next came without lids; some jars were even broken.

A lot of this advice also goes for your distributors (aka, those people who deliver your wares). Time is money, especially when you have a perishable product, so working with reliable distributors and suppliers is definitely a top concern, no matter if you sell a food product or run a restaurant or food truck.

2. Don’t overlook certain costs

So you’ve got most of your costs calculated but have you also factored in those tiny costs for distribution? That includes gas (especially if you’re running a food truck), vehicle maintenance and the cost of storing your food.

Don’t overlook these expenses. Xander says some food business owners are puzzled why they don’t make a profit because they forget to factor in these key costs.

3. Get into stores

Putting your product in stores can be a great way to make your product more available to a bigger audience. That may be easier or harder, depending where you are in Missouri. For example, Xander says grocery stores in the KC metro are generally easier to work with than in other cities because they tend to have more flexibility with small businesses (that might include procurement, insurance, delivery requirements, etc.)

So your job is to find out who that decision-maker is and what you need to do to get your product in the store. Xander cautions against dropping your product off to a customer service rep … because it likely won’t get to the person who can give you the OK to sell your goods.

4. Plan your marketing

So you might see that word and think that you don’t have to market your product. Well, if you ever hope to be one of the food businesses that survives, you’ll have to.

You should create an authentic and memorable culinary brand that speaks to the emotions and the perception you want customers to link to your business. (Your logo and packaging are certainly part of that.)

Social media can help you monitor and discover the much bigger portion of what’s really your brand, like customer reviews and critic reviews (things you can’t control).

But just setting up a Facebook account won’t cut it. It’s what you do with that account that will determine the success strategy. Do you want to increase sales by 5 percent? You’ll need a clearly defined goal that you can act on and measure to reach your marketing benchmarks.

(Check out these other goal-setting strategies.)

5. Make your business scalable

What is your plan to scale your business? If you have a product, maybe you’re eying a wider distribution, locally, then regionally and nationally. Maybe you want to expand production to a factory instead of doing everything yourself.

If you’ve got a restaurant, you’ll need to hire employees to prepare and cook the food, servers to interact with customers, etc. Maybe you’re thinking about more locations across your region of Missouri or the entire state or the country. Maybe that means you want to franchise? Who will manage those other locations?

No matter the scenario, Xander says you want to make sure you’ve got the proper systems and training to ensure that the people who make up your brand are representing it how you’d want them to. That human capital is important to the success of your business.

 

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