Every year, the food industry sees an increasing number of new businesses enter the arena. The industry is in constant flux, and innovations within the industry are the backbone of this movement. However, while innovating and marking new territory is important, it is imperative to keep in mind and understand the tried and true principles of business since they apply to every industry.
No matter how great your product, or how interesting your brand, you are not exempt from the laws of business and economy. Each year, as new restaurants and eateries of all kind open, just as many, if not more, close shop. What draws the line between a successful small business in this arena, and a dead or dying business? Beginning with the premise that you already have a fantastic product and a great atmosphere, here are some points to keep in mind when going into the food industry as a small business.
1. Marketing and Quality Research
Marketing is key to any successful enterprise, and the food industry is no exception. This industry, more than others, is saturated by entrepreneurs that subscribe to the “if we build it, they will come” mentality. Nothing could be farther from the truth.
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Market research must be conducted in order to attract consumers in the target market. Brand owners usually don’t realize the importance of conducting market research until their products don’t sell because it’s not what the consumers are looking for. This is perhaps one of the greatest mistakes with any small business, so be sure to put adequate time and money into proper research.
2. Professional Equipment
You need to be sure that your place of business is held to high standards of professionalism. If your budget is tight, be sure to focus on the aspects of your business and the equipment that truly make a difference. For instance, it is important to purchase commercial-grade equipment early in the formation of the business. Items such as a quality commercial ice maker and commercial grade refrigerators should be tailored to the specific needs of the business.
Each commercial kitchen will need different equipment to meet its needs as each kitchen has a different menu. A restaurant that specializes in brunch will have very different equipment from a restaurant that specializes in dinner or molecular gastronomy.
3. Smart Sourcing
This is one of the more overlooked aspects of success in the food industry, although lately, newer restaurants are catching on to the importance of this principle. Your food is only as good as the ingredients with which you make it. Take due diligence and fully understand where your ingredient supply is coming from.
Don’t just accept the price of your ingredients. Take the time to find out what your ingredients should cost to ensure you’ll be getting the best price for your high-end ingredients. Having a deeper understanding of this facet, you’ll be able to make more educated decisions, manage risk more effectively, and have more overall control of your business.
Finding success in the food industry, especially as a small business, is no light task. Few industries see such a high failure rate as the food industry, because so many new entrepreneurs believe that all they need is passion in order to make their business a success.
The reality, on the other hand, tells us that while it is essential to have passion about your venture, your passion needs to be backed up by right and intelligent action. The amount of multi-faceted demands can be staggering, but if you bear in mind these principles, and hold them as priorities, you’ll have a greater chance of success.