The Secret to Food Start Ups – Top Tips From the Experts
When the recession hit our country and many people lost their jobs, some turned to skill sets they had been nurturing for years through pastimes, hobbies and interests. As people looked to their passions to provide their income, many have made very successful businesses supplying food and drink products to the market.
Creating your own food or drink start up has become a viable opportunity for people to leave behind the 9-5 and invest in their passion for production. We spoke to industry experts and some entrepreneurs who have done it themselves to bring you the top tips to making your start up successful.
1. Decide What You Need to Get Out of It
Some people who want to start their own food businesses dream of creating huge umbrella brands with loads of products, exporting all over the world. Others are quite happy selling a couple of items at a few farmer’s markets and some want to get into a couple of national retailers.
James Burke is the Network Manager of the Dublin Food Chain, a collective that promotes the food sector across the county through combined training, networking and marketing. He says it is important to decide what kind of financial return you need to get out of the business.
“Decide first what it is that you want out of the business. What is your objective? Do you need it to pay the mortgage and put the kids through college or are you happy to have a smaller income annually? This will determine the type of business you may need to start.”
2. Do Your Homework
Before you get up and run to the kitchen to start whipping up the next big thing in food production, take a deep breath and sit down at the computer. There is no point charging headfirst down the producer journey without doing a little bit of research into the market.
Shane Bonner founded the Newmarket Kitchen in Bray in 2014. It is a commercial kitchen space that helps start ups on their journey by providing logistic and business support at affordable rates. Shane recommends all potential entrepreneurs spend some time investigating to find out if their idea actually has a market and if the business model is viable.
“Great ideas can come from anywhere like what’s trending abroad. This can include anything from the actual product to branding and identity. We recommend that each new start-up does a lot of research. This will quickly identify if your idea or concept has a chance. Benchmarking another business is a legit phrase for taking something you like from an existing business and putting your own spin on it.”
3. Get Advice
Now you know there is room for you in the market, you need to find out the best way for your business to launch into it. Whether you are going solo in your efforts or you have a clever business partner by your side, it’s always a good idea to get objective outside opinions on your proposals and ideas. James says you shouldn’t be afraid to ask for help.
There is lots of information out there to help you decide on where to start. www.bordbiavantage.ie is a great resource for early stage producers and Bord Bia also have some really great consumer research. A good start point would be to talk to your LEO who can provide advice, mentoring and possibly some grant assistance once you have established your business and proven that there is a working model. Many LEOs have a specific training programme you can participate in called Kick Start Your Food Business which will provide you with critical supports at the early stages.”
4. Customer Feedback is Key
Why waste any of your all important budget on market research when your customers are ready and waiting with their opinions? Tapping in to the concerns of your customers is a convenient way of finding out where you can improve your products. TV dragon Eamonn Quinn worked with many entrepreneurs in Superquinn and he has since been a go to expert on the subject of start ups. Now doling out advice and investments on RTÉ’s Dragon’s Den, Eamonn says start ups need to tap into this invaluable resource.
“The development of farmers’ markets has been a great way for food entrepreneurs to learn about what works. In Superquinn we used to take about the boomerang principle – for food producers it’s selling products that don’t come back to customers that do. They learn so much about talking to customers every week about what works or doesn’t so when they make the next step of going for packaging and spending more money they should already have a very good idea what is working. But, and it’s a big BUT, to get customer reaction you have to actively seek it and not get defensive when it does arrive.”
5. Be Flexible and Adapt
Listening to advice and feedback is one thing, actually implementing what you have learned is another. Sarah Kiely is the entrepreneur behind Sadie’s Kitchen, a range of nutritious bone broths now available in SuperValu stores across Dublin and some independent retailers. She welcomes customer opinions and isn’t afraid to make changes based on their views.
“Adaptability and honesty are key, especially with yourself. If something or some part of the process isn’t working – change it. We’ve gone through packaging changes, production changes and distribution too, but every tweak has been to make sure we’ve the best product possible for our customers. One thing I believe strongly in is meeting your customers and asking for feedback. I love taking the time to be present at in store tastings, as nobody can sell your product more passionately than you can.”
6. Accept Your Limits and Delegate
No man is an island and that is particularly true in business. While you may be quite successful by yourself in the beginning of your start up journey, as your business expands you physically won’t be able to do everything on your own. Learning how to accept your strengths and weaknesses and knowing where you should be focusing your energy is vital for your continued growth. Eamonn says founders should remain at the forefront of their business.
“As a business expands, the founder has to resist the temptation to try and do everything or they will end up getting swamped in the process. There is a solid infrastructure in Ireland now around the food industry and quality producers can be found to outsource when the need arises. The founder often has a great story behind why they started doing what they are doing and it’s better having them out front selling either directly or promoting via social media.”
Sarah agrees, saying that you won’t win any medals trying to do it all alone. “It’s possibly a generation thing, but I started my career in the recession and worked very hard, kept my head down, stayed late and said yes to every request for years. Asking for help felt like I wasn’t doing my job properly. Now that I’m my own boss, I’ve been busier than ever and have finally learned to delegate. I know where I am strongest and allow experts to help fill in the gaps where I’m not.”
7. Think Logistics and Combine Your Efforts
Collectives are a great way for small businesses and start ups to combine their resources in a way that benefits everyone. Newmarket Kitchen is a great example of how a community comes together to grow businesses by providing affordable space that small producers need to move their production to a higher commercial scale. Shane’s mantra is Join, Grow, Gain. “We are a business incubator for small food businesses. We pride ourselves on truly being an incubator: launching small businesses to great success by saving time, augmenting sales, reducing costs, and helping entrepreneurs gain the edge, savvy, and market share to grow great businesses.”
When it comes to distribution, small operations can manage a couple of local deliveries but as interest in your product grows, you may not be able to keep up with demand across the country. Eamonn says food businesses need to be consistent with their supply as customers and retailers will move on to another product if yours isn’t on the shelf.
“Walter Ryan Purcell from Loughbeg Farm, one of my Dragon investments this year, has an innovative approach to this problem. He has found a few small producers from the West Cork area that have a need for distribution but can’t go it alone. Walter has become a type of boutique consolidator for artisan food producers by spreading the logistics costs across a number of producers.”
8. Mind Your Money
You might feel that keeping tabs on your budgets and balances is better left to the accountants and financial wizards but all business owners should have a basic understanding of how their business makes and loses money. Talk to as many finance experts as you can to ensure your business model is viable in the beginning and as your company develops and grows, keep listening to their advice; a lack of money is a fast way to close down operations.
Shane says keeping a lean operation will give you more control over your finances. “Cash flow is the lifeblood of any company and bad management of it is the number one reason businesses fail according to a HMRC insolvency report. Avoid buying expensive equipment and always shop around for all business purchases. It can often take longer to set up and start trading than people think. I’ve found that you need to budget way more than you think on marketing while also avoiding excessive digital marketing costs like creating a website. If it’s something you can teach yourself – that’s lean and bootstrappy. Your money is precious so learn to do all those things yourself.”
Another way to avoid excessive spending is watching your wages. Payroll can add up to a huge percentage of your profit so you need to be careful from the beginning and keep your team lean. Sarah O’Connor is one of the founders of the Cool Bean Company, a range of nutritious bean meals available in SuperValu stores nationwide. She says it is wise to keep your headcount low at the start.
“You have to invest to grow but you also need to manage costs while profitability catches up. Assess critically what and who you need and, importantly, when you need them in the life-cycle of your business. Don’t forget, you can take on part time workers and flexible workers. It doesn’t always have to be a full time position.”
9. Perfect the Pitch
Whether you are going for a grant, presenting to a potential investor or trying to reach a deal with a buyer, being prepared and knowing your audience is key. Eamonn is the expert, after all he witnesses countless pitches as part of his role on Dragon’s Den. He says you have to be confident and convincing.
“When selling into retailers, many producers forget they have to make the case that it will benefit the retailers too. The classic was jam, everyone in the country makes jam and they all would like it to be sold in the local retailer. Clearly they can’t stock 60 varieties of jam nor do customers want to be presented with too many products. So the producer will have to make the case as to why they should be in the top five and earn their place on the shelf.
There are lots of ways to compete: price, brand, taste, health, local, organic and so on but you must own the territory. Talking through the product positioning can often reveal gaps that need to be fixed before the meeting with the dreaded buyer. This logic holds true for all food businesses, if you are a new supplier, you must have a compelling reason to displace the incumbent.”
10. You CAN Do It
Often in business people can get bogged down in negativity and struggle to find their motivation when that happens. When you hit a roadblock, look at it in a positive way, as an opportunity for learning instead of a sign your business is doomed. Shane says that making mistakes isn’t always a bad thing. “We don’t believe that mistakes should be avoided. By making some small mistakes our members quickly learn and tend not to make the same mistake twice.”
Sarah Kiely agrees and says what drives her through rough periods is a belief that all her hard work and effort is part of something bigger. “It’s how you adapt to tough times that drives you through the other side wiser and more resilient. The emails we receive weekly from customers saying that our product has helped them or improved some aspect of their health and lifestyle is an incredibly special thing and reinforces why we started the business in the first place.”
Sarah from Cool Beans advises all business owners to take time for themselves. “Sometimes you need to have a moan, a cry or a giant glass of red wine. No one is super human. Running a business is demanding and you need to have a support network and be able to process your feelings and frustrations without it affecting your performance in the business. Take an evening off and have some fun!”
11. Pay it Forward
Going through the process of establishing your own start up, it is inevitable that you will learn a lot of valuable lessons along the way. Everyone who ever imparted advice or suggestions to you also had to start somewhere and they got advice and help too. Sarah O’Connor suggests you do the industry a favour and pass it on, it will come back to you in a good way.
“Everyone is having struggles. If you can help out another business person with a question, a student doing a project or a customer then try to do it. You will reap the rewards, I can’t tell you the amount of connections we have gotten from people who we have helped us out and vice versa.”
Alison has been writing since she could hold a pen, which came in handy for her degree in English, Media and Cultural Studies. She has been working in media since graduating and is the latest features writer for TheTaste.
Writing for TheTaste allows her to combine her passion for the written word with her love of food and drink. Find her on Twitter @AliDalyo