If your dream in life has always been to start a food business, you should know that the odds are stacked against you.
Starting a food business from the ground up will typically require a large investment on your part. It costs about $275,000 on average to jumpstart a restaurant in a leased building and even more if you decide to buy a building for a restaurant outright.
Pouring that much money into a restaurant doesn’t necessarily guarantee success, either. In fact, about 60 percent of restaurants fail within their first year and 80 percent close down before they reach the five-year mark.
But you shouldn’t allow this to deter your dream! If you’re really committed to trying to start a food business, there are things you can do to increase your chances of success.
Here are 9 tips for starting a successful food business.
1. Find Your “Why”
Why do you want to start a food business? Is it because you:
- Love to cook?
- Live in a place that doesn’t offer enough food options?
- Think you have a special type of food to introduce to your community?
Before you can even begin starting a food business, it’s important to sit down and figure out why you want to do it. This will keep you on track once you start trying to bring your dreams to life.
2. Do Your Homework
Finding your “why” should be pretty simple. If you have a hard time doing it, there’s a good chance the food business isn’t for you. So make sure you have a good “why” before you proceed.
Once your “why” is in place, it’ll be time to do some of the dirty work. You’ll have to do your homework and discover as much as you possibly can about the food business in your immediate area.
Try to answer some of these questions while you’re researching the food business in your city or town:
- How many restaurants and other food businesses already exist?
- How many have opened and closed over the course of the last 10 years?
- Is there a strong enough market for the food business you want to open?
- Are there already other businesses in the area that offer the same kinds of foods you’re planning on offering?
- Who is your target audience going to be once you open your food business, and are there going to be enough people to support it?
This part of the process will often be arduous. It could take months for you to get answers to the questions you ask. But it’ll be well worth it in the end when you’re able to formulate a plan for moving forward.
3. Create a Business Plan
Speaking of making plans, every single business–whether in the food industry or not–needs to generate a thorough business plan prior to setting up shop. The business plan needs to lay out exactly how a business is going to operate when it opens.
Make sure your business plan is airtight before you get too far along in the process of mapping out your business strategy.
4. Obtain the Proper Financing
Part of the reason why it’s so important to create a strong business plan is because you’re going to need it to get your hands on financing for your food business. A lender isn’t going to willingly hand over tens of thousands, if not hundreds of thousands, of dollars to someone without a very clear business plan in place.
After you have your business plan put together, you can start reaching out to potential investors and local lenders who might be willing to give you the cash you’ll need to get going. Without an investment of some kind, it’s going to be almost impossible to start a food business.
5. Start Off Small
When you’re excited about starting a food business, it’s easy to get carried away when putting everything together for it. Rather than proving that people actually want to buy and eat your food first, you might sign a long-term lease to rent space and immediately put pressure on yourself to succeed.
Instead of taking this approach, start small. Sell your food out of a food truck for a few months to build up a following or see if it would be possible to establish a temporary pop-up restaurant in your town.
This will help you get your food business name out there and show people what you’re capable of doing. It could get investors more excited about what you have cooking up in the kitchen.
6. Search For the Right Location
“Location, location, location” is a phrase that you’ll hear early and often in the real estate world. And it really applies to those looking for a place to open up a food business.
If you pick out a place to set up your food business and it’s out of the way and hard for people to get to it, you’ll be putting your business behind the 8-ball from the beginning. Select a location that’s situated in the right part of town so that people will be more willing to stop by and try what you have to offer.
7. Learn the Law
Depending on where you’re going to open your food business, there are going to be certain laws on the books that you’ll have to follow. Make sure you know and understand those laws before you start a food business. They could prevent you from running the type of establishment that you want to run in some cases.
8. Order the Best Food
The only way to get people coming back to your food business over and over again is by serving the most delicious food possible to them. It’s also important for your food to be as fresh as it can be when it comes in through your back door.
This page can show you a simple way to keep your food business fully stocked with the freshest foods.
9. Track Down a Mentor
Navigating your way through the food business can be tricky if you don’t have any idea what you’re doing. It’s a good idea to try to find someone who has been in the business for years now to show you the ropes.
Attend local small business networking events to meet up with possible mentors. If you’re able to find a food business expert who would be willing to teach you everything they know, it could be invaluable to both you and your business.
Start a Food Business Today
Millions of Americans dream about trying to start a food business every year. But far too often, they rush into it and fail because they’re not prepared for everything that the food business has to offer.
Avoid making this same mistake by following the tips found here. They’ll help guide you in the right direction and turn your food business into a success in no time.
Read our blog to learn about some good ways to market your food business effectively.