As a foodpreneur, you specialize in the food and beverage industry. You may opt to focus on different aspects of this industry, such as ethnic cuisine, fine dining or diet-based delicacies, such as Keto-friendly foods or gluten-free dishes. Either way, you’re part of a massive slice of the economy—in 2019 the food and beverage industry generated $5.9 trillion worldwide.
Although there is considerable demand for foodpreneurs and their services, it’s estimated approximately 60% of all restaurants that open close their doors permanently in less than a year. However, with thorough preparation, foodpreneurs can beat the odds and open a successful business. Here are something to keep in mind as you embark on your small business journey.
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The food industry is competitive, and foodpreneurs can increase their chances of success by identifying a niche market they can fill. Small businesses that focus on serving customized products to specific clients are more successful than those trying to cater to everyone. Explore recent trends in the region and identify needs that aren’t being met by other local businesses. Doing your research is a great way to ensure that your small business is standing out from the competition.
Make a clear business plan.
Every business needs a business plan. Your business plan will identify your goals and determine how you plan to fulfill those objectives. Effective business plans can also attract investors and help you secure business loans. Your business plan should outline your market research, highlight promotional strategies you intend to use and explain your company’s organizational structure. As a small business owner, creating a clear business plan will also help you stay on track during your startup stage.
Look out for the legalities.
If you plan to start a one-person operation, you may initially decide to operate as a sole proprietorship. However, even if you’re the sole staff, it’s good to register your business as a limited liability company (LLC). Companies that are LLCs have their assets and you, as a small business owner, will not be personally liable if something goes wrong down the line. Your personal property is protected in the event of legal issues.
You will also need to apply to the internal revenue service (IRS) to secure an employer identification number (EIN). This is your business tax number, and it allows you to pay employees and file taxes.
Create a budget.
A thorough budget is crucial. All businesses have start-up costs and ongoing operational costs. Determine what resources you will need and how much these items will cost.
One thing to consider in your budget is equipment. Restaurants and food production venues need customized refrigerators, such as those provided by companies featuring True Refrigeration products. Whether you need under-counter freezers, countertop refrigerators, or deli display cases, you will want to create an account with a reputable foodservice equipment company that can fulfill your needs. Find out costs for commercial refrigerators and other refrigeration products while you are first building your budget. That way, you’ll have a supplier lined up and ready to go before you open your doors.
Your budget should also include promotional costs, including website design and search engine optimization (SEO) marketing. Hire web designers or optimizers who use expert small business SEO tips to boost your site’s ranking on search engines. SEO marketers can generate backlinks and integrate keywords into your site’s content to effectively raise your company’s online profile and generate relevant website traffic from potential customers. You want to be focusing on the vision for your restaurant—not worrying about quality content for your social media profile, search engine optimization and blog posts. That’s what professional web designers are for. Make sure you have someone who can create the best business profile for you so that you know you’re reaching the most potential customers possible online.
Choose a location.
The location of your business is crucial. Many restaurants fail because they’re in a poor location. They either lack parking for clientele or aren’t close to public transit. Other factors, such as criminal activity, may also deter potential customers.
When you do your market research, identify your target customers. Determine what factors should influence your choice of location. For example, if you’re opening a vegan restaurant, you may not want to be located near a meat packing plant. If you’re focusing on ethnic cuisine, you may want to set up shop near a community with many people from that ethnic group. Also, make sure that the location you’re choosing will be large enough to accommodate any true refrigeration equipment you’ll need for your commercial kitchen. You don’t want your chefs to feel crammed in between the coolers and the freezers. Make sure you’ve found a great place that meets all your needs before signing a lease.
Clarify operational policies and employee guidelines.
You will need to determine how your business will operate and what guidelines will govern staff. If you work alone, you will still need to set your business hours and determine what health and safety requirements need to be followed. The occupational safety and health administration (OSHA) has guidelines that apply to different industries, and your choice of footwear and other items may impact your insurance premiums. Using proper equipment and wearing appropriate attire can prevent injuries and reduce insurance costs.
If you need to hire employees, you will need to provide clear expectations for their workplace appearance and conduct. It’s a good idea to consult with a human resources professional about this. Outsourced human resource professionals can advise you about operational policies, generate applications, create an employee handbook, and interview potential candidates. You can save yourself the cost of hiring a permanent HR staff by outsourcing and benefit from their expertise to ensure you acquire a qualified staff team for your business launch.