So you’re interested in starting a food business. What you might imagine being a simple business venture requires a lot of time, planning and research before getting off the ground. From licenses and permits to a killer marketing and brand strategy, starting a food business can take anywhere up to a year to get started. Whether it be an at-home catering service or strictly an online store of packaged goods, you’ll need a complex and detailed plan to see a profit and avoid premature scaling. Patience and support will be your best friends during this journey. Additionally, we’ve mapped out a handy ten-step guide for starting a food business.
How to Start a Food Business: Your Step-by-Step Guide
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1. Make It Niche
Food businesses aren’t new, and they’re definitely not rare. In order to succeed, your food business needs to be niche—or in other words, stand apart from its competitors.
Decide what kind of cuisine you’re going to specialize in and then how you’re going to sell it. Will it be delivered? Is there a catering option? Or will you opt for selling your food in a shop or restaurant? Maybe you’ll sell your food in a food truck or rent a booth at a street market.
The options are endless, and it’s important to know which route is the most promising and affordable based on your location situation.
2. Do Your Research
If you’re reading this article, you’re already off to a great start, but starting any business for the first time requires research. Consult peers who have already had success with starting a food business, read business-focused pieces on the topic and reach out to local business owners in your area. Thanks to the internet, you don’t necessarily have to have an MBA to successfully start and run a company. The resources are available to you right at your computer screen. Feedback and advice from others who have already tested out this adventure and succeeded can go a long way in the early stages of starting your food business.
3. Come Up with a Name
What you’d think would be the simplest part of starting a food business might be one of the most time-consuming. You might already have a few ideas for a business name, but there’s a huge chance it won’t be trademark approved if it’s too similar to a name that already exists. Additionally, you'll need a logo and a tagline to set your company apart and make it stand out. You can use the United States Patent and Trademark Office’s database to search for names and logos that are already in use.
4. Draft a Business Plan
While this sounds like a no-brainer, drafting a business plan is vital in convincing investors to fund your business. Investors will want to feel secure in backing up your plan, and that will rarely happen without a detailed, step-by-step proposal. Conduct a budget for various expenses, including inventory, staff, rent and utilities. Determine how much you’ll price your items and your target audience. Investors will want to know all of this before deciding on moving forward.
5. Meet with Investors
Now that you have your business plan, it’s time to present your proposal to investors. The best way to stay on top of funding is by making a list. Gather the names of all your potential investors, along with their contact info. List them in order of most likely to invest to least likely to invest, so you don’t waste too much time on gathering funding. Rehearse your pitch in front of colleagues and peers and be open to feedback and constructive criticism.
If you’re not sure where to start with finding investors, reach out to other people who have started small food businesses or search online for investors in the food industry. Additionally, start a GoFundMe or Kickstarter campaign to gain support from your family and friends and post on social media to let your followers know that you need their support.
6. Obtain Licenses and Permits
Starting any business requires a lot of licenses and permits. With a food business, there are even more of those to secure. If you’re thinking of running your business from home, you’ll first need to check the local zoning rules to see if it’s even permitted. If not, you’ll need to rent a professional kitchen space instead.
Additionally, your space will need to pass a food cleanliness test in order to sell to customers. Some states require business owners to prepare and sell food from a kitchen that is separate from their personal kitchen space. This means that all dishes and utensils used in preparation cannot be used for personal cooking. State-required food handling courses will lay out all the specifications for your specific business. Lastly, you’ll have to obtain a business license to legally operate your company and a resale license to buy ingredients wholesale tax-free. To make things simpler, we’ve configured a list of the licenses and documents you might need:
A business license from your city or state that permits you to host and run a business
A federal Employer Identification Number (EIN) for taxes
A food service license from your state or city to approve your intent to serve food
A tavern license for selling beer and wine
A liquor license for anything more than beer and wine like cocktails and other mixed drinks
A certificate of occupancy (CO) that verifies that your restaurant is safe for customers to occupy
7. Pick Your POS
A POS, or point of sale system, is the route to go. Gone are the days when writing order tickets by hand or using a cash register is the most efficient. Depending on the kind of food business you decide to operate, your POS system will vary. Your POS system will act as the communication between front-of-house and back-of-house staff. You’ll be able to manage orders and reservations, split checks, keep customer tabs open and track purchases and returns. Additionally, you’ll be able to track trends and inventory, saving you time and money.
8. Go Shopping
Don’t wait for your first order to buy your products. Make a list of all the tools, utensils and cookware you’ll need to get your business off the ground. Look to food equipment suppliers for affordable prices on bulk orders. Consider everything from packaging materials to napkins and storage containers. Some states require food businesses to print ingredient labels on each item, so you’ll need to check on your specific state’s health department’s labeling laws.
9. Hire Your Team
If you plan to start and operate your business alone, then simply skip this step. However, most startups do require help. Maybe you want to employ a friend or colleague to be your cofounder. Or maybe you just need a few people to help you produce sales. You might need someone to head your marketing and run social media accounts. Think of the roles that will need to be filled to operate your food business. If you can’t carry all of them alone, employ others to help. Maybe you already have a few people in mind, but if not, post roles on LinkedIn and Indeed or share them on social media to reach a bigger audience quickly.
10. Promote the Hell Out of Your Business
Now that everything is set into place, you’ll need to market your business. Create an Instagram page and website to host information for your customers. Start a Twitter account and LinkedIn page if necessary. Attend local fairs and markets and offer free samples to get people interested and familiar with your product and brand. Additionally, pitch your product to food magazines and food bloggers. Getting your brand’s name in the media is an easy and quick way to skyrocket your sales.