Starting your own business may be your long cherished dream, but the accomplishment of this dream depends on proper execution of your core idea. If you are constantly being admired for your ingenious recipes and your finger licking good food items, then it may be a good idea to start your own food production business. Starting your own business will let you not only doing what you love to do, but it also gives other people a chance to experience your skills.
So, here is our guide to help you start your own food production business.
Nitty Gritty of Food Production Business
First you need to what the food production business entails. The food sector is one of the biggest industrial sectors in the world. Depending on your vision, your business may be a multinational setup or a small home based venture, catering to a niche crowd. If you are looking to cater beyond local fetes then you should be aware that food production business is highly regulated and requires a large number of approvals.
Step 1 – Develop the Idea
The preliminary step in starting a food production business is to develop your core idea. You need to be clear about your offerings and the scale you want to accomplish. This exercise will help you in drawing up a marketing plan. Once you have designed solid business goals, you need to carry market research. This is important for the purpose of determining the feasibility of your idea. You will also get important inputs about pricing, packaging and distribution.
This step is also important for getting information about the competition. Once you are well acquainted with the competition scenario, you can go ahead with your Unique Selling Point. This is important for setting up price point as well.
Step 2 – Seek Approvals
As stated earlier, food production business is a highly regulated business. Once you are set with your business plan, you need to go around securing required approvals. This process may be very long drawn as it usually involves inspection of cooking facilities and premises, which brings us to another important point which is settling on the right kind of location.
Until or unless, you are looking to keep your business to a micro level, working out of your kitchen is not a viable option. In the long run, it will also turn out to be a more expensive choice as it will hinder your scaling up. You may also need to customize your kitchen, which may turn out to be costly as well. Therefore, it is important to decide on your premises during the preliminary stage. The place chosen should be able to meet your requirements. It should also be close to different means of transport as you will be required to ship your food products with precision and timeliness. You may seek legal help while drafting a lease or rent plan.
You need to get certificates and approvals from appropriate authorities. These approvals vary for different foods you are going to process. A business selling baked goods require different set of approvals from the business which is going to focus on dry fruits. In any case, it is important to ensure that you have all the required permissions and approvals.
Step 3 – Secure Funding
There are several ways you can go about funding your business. In the initial stage, you may decide to bootstrap your venture. Bootstrapping your venture essentially involves using your own funds for financing. Such funds may come from your own savings or may be borrowed from friends and family. This source of funding is recommended only if you are planning to keep the business at small scale. This is especially true in the case of gourmet food market or other such niche markets.
If you have plans to scale up your business, then it is important to be aware of other business financing options as well. You may opt for debt funding, which may involve taking loans from banks or from other financial institutes. While taking this approach, it is advisable to have a legal aide with you. It is important to pay proper attention to various terms and conditions including interest rate charged and repayment schedule.
There are several other options as well, which includes venture funding where you get funding in lieu of a share in your business. Whatever mode of funding you choose, you should make sure that you completely understand the setup and requirements.
[ Read: How To Find The Necessary Funds For Your Business ]
Step 4 – Hire Your Team
Again, until or unless, you are starting a nano-business, you cannot do everything by yourself. Depending on your business plan, you may need to hire finance, marketing professionals. Even for fairly small business, you will need to hire at least line workers to carry out actual manufacturing. Once you have hired the team, you should ensure that you have met all the legal requirements as per labor laws.
Step 5 – Decide Logistics and Marketing
You need to have a clear idea about marketing your products. This step includes making various decisions. If you are looking to sell through third party, then you should seek proper agreements with them. Now you are all set and all you have to do is to actually start making your dream food items.
[ Read: How Startups Can Reduce Their Expenses ]
Food production business has its own challenges, but at the very same time, it may turn out to a satisfying and creative outlet for you. Follow our guidelines to pursue your dream.