We talked about food, but mostly we talked about business

A packed presentation theatre for the latest FTC Business Club event enjoyed some lively discussion about how to make food a viable business. Our panel of experts imparted some very sound and somewhat thought-provoking advice.

For those of you who were unable to attend, below is a summary of the topics we covered. What is apparent from the ground we covered is that we will have to have a follow up to this to focus on individual aspects of the industry or its business issues. I knew the food industry in Suffolk was large (accounting for 25,384 jobs – 8.7% of Suffolk’s workforce according to the Suffolk Observatory. Equating to £400,000 million into the Suffolk economy per year), but I had not anticipated just how much ground there was to cover whilst just looking at the business side of it.

Looking through, it becomes apparent how many of these issues affect all businesses, not just food related ones.

Before you start:

Is your idea a business?

So often people are told their cakes/chutneys/etc are so good they should do it as a business. Sound advice from our panel:

1. Do your research
2. Taste other people’s cakes
3. Look at similar products on the market
4. Think about where you are going to sell
5. Work out a business plan

Are you passionate enough about this to devote your life to it without seeing any financial reward for quite some time? In the beginning you will be perfecting recipes, marketing, book keeping, sourcing, researching – i.e. everything!

Know where you are going:

So you decide that yes, you can make a go of this as a business. What sort of business do you want this to be lifestyle or bigger?

Are you working with a partner/friend/colleague? – choose wisely and find someone with complementary skills.

Where’s your market? – local, national, international.

Continuation, expansion or exit strategies:

A very important point raised by Linda Williams on our panel was that you may want to keep your product as something just to sell at Farmer’s Markets and local outlets. It will probably never make big money but it will pay its way and the bonus is that you retain control and no middlemen or supermarkets are taking a cut of your margins. Don’t let other people’s ambitions take over your ideal.

What you need to know:

1. Hygiene
2. Insurance
3. Bar codes
4. Labelling – legal requirements for content disclosures
5. Logistics – packaging, packing, delivery, sourcing ingredients
6. Quality and consistency control

There may seem a daunting list of regulations to adhere to and some prohibitively expensive set up costs. The key message is TALK. There is help out there, facilities you can hire, expertise you can tap in to and people you ask who will give you very practical advice and signpost you to more. A good starting place is Business Link East. They have knowledge of most things that go on in the region, offer practical workshops on a variety of business subjects and their advisors have previous practical experience to draw on. Otley College also have much more on offer than courses for students. You can make use of their research, kitchen and business expertise and facilities. They will also be aware if there are any funding streams that you may be eligible for in order to progress.

Also talk to Suffolk Coastal District Council (if you are in this area). They are very helpful and are not here to shut you down if your work area needs a bit more attention.

And Network. Find out more of what you need to know from people who have experienced it. The number of successful award winners and finalists at our event are proof that they know that meeting people is so important.

Know what you want:

This links to “know where you are going”. What size is your business going to be? Do you want to develop an international brand? Are you prepared o take on the big names? Can you manage expansion effectively or will this weigh the scales too heavily one way in your life/work balance”?

Are you planning to build a brand and market other products under it? Do you just want to market other people’s products?

Protection

The question was asked: “can you protect your product”? i.e. can you patent or copyright a recipe? Our panel advised that protecting your brand name and logo are the easiest steps. When it comes to protecting a recipe, this is much harder as you have to prove you have something unique or that involves a unique process or combination. An example case has been in the system awaiting protection for 8 years and still is not concluded.

One answer is to get out there and market hard to make sure everyone buys your product.

How to stand out:

1. Brand
2. Quality
3. PR
4. Marketing
5. Price

Make sure people can find your product:

Develop a strong, recognisable brand and make sure it is absolutely everywhere. All your labelling, letterheads and outputs must follow the brand. Enter competitions, win awards and use the PR. If you don’t know how to, a good place to start is a free 2 hour Business Link workshop on the subject. Advertising is expensive so get out there and sell yourself.

Make sure your product looks right on the shelf next to its competitors.

Make sure you are selling in the right place.

Make sure you have got the pricing right. You have to turn a profit but you can’t be unattractively expensive.

Get people to taste your product.

1. Where to sell
2. Farmer’s Markets
3. The internet
4. Supermarkets
5. Smaller local stores
6. Specialist retailers
7. Trade co-operatives

Decide where you want to sell. The bigger the outlet, generally the bigger cut they want, together with a bigger commitment from you to supply in larger, consistent quantities. You do have a choice – supermarkets are not right for everyone, however flattered you might be when they knock on your door asking for product.

Our panel say beware! Supermarkets can be fickle. Tie in with a supermarket, lay out investment in building up your facilities to up your outputs and cope with demand from your supermarket customer. then without warning they can drop you. Spread your risk.

Expanding

Outsourcing

Employing – know what you need to know about employment law, your rights and their rights. (Come to our next breakfast meeting on 12th November on the subject)

Be realistic about your strengths and weaknesses. You can only do so much yourself.

Can your production methods cope with higher volumes?

What are the implications of seasonal ingredients?

Does the cost and risk of expanding stack up against your projected order book forecasts?

Work together:

The Suffolk Food Network
Tastes of Anglia
Co-operatives
Partnerships

You are not alone although it may feel very lonely and daunting sometimes.

The clear message is that you have to be passionate about your product. You have to believe in it and have an enduring love of it as pursuing it as a potential form of revenue is going to take an enormous amount of courage and conviction.

Keep talking! If you want any of the above discussed in more detail at one of our networking meetings, please let us know and we will find an appropriate presenter.