What You Should Know Before You Get Started
As a regional Extension agent in the food safety and quality areas, I get several calls a week from people asking what they can do to get a food product on the market. They have an idea for a great food product that everybody insists they should be making and possibly getting on store shelves. This is how many big businesses such as Sister Schubert, Wickles Pickles, Chicken Salad Chick and others got their start.
The entrepreneurs who started these businesses had great ideas and products and were very passionate about their ideas. If you want to be just as successful, you will definitely need to do your research. Developing a product and marketing it take work and determination. Many people have done it, but you may be surprised to find that starting a food business is not as simple as it might sound. Like any business, food enterprises require careful planning, dedication and skilled management to be successful.
The Alabama Cooperative Extension System is here to help in any way, and one way we do this is by joining with the Auburn University Food Systems Institute to offer an annual Food Entrepreneur Conference to help those wanting to start their own food business. This year the conference will be Wednesday and Thursday, April 26-27, in Auburn.
In the meantime, here are some important things to know about starting a food business. A food business is different from other kinds of businesses because the food or product you prepare has a direct effect on your customers’ health and safety. In fact, a food product that has been improperly processed could cause serious illness or even death. Consequently, a business that makes or sells food products must comply with a number of complex and often confusing federal, state and local regulations.
In addition, competition is intense in the food business. Getting a product accepted by a major grocery chain or nationwide food establishment is extremely difficult. Owning your own business also requires a lot of commitment, hard work, time and technical knowledge about food.
Should you start your own business?
To turn your great idea into a successful business, the first thing to do is to evaluate your personal characteristics to decide if you have what it takes to be an entrepreneur. Then write a business plan, making sure to explain how the consumer will benefit from your product. Next, evaluate the competition before redefining and improving your idea, examine market conditions, and design the smallest possible viable business unit. Then act on your idea!
Many resources are available to help as you plan and start your food business. The Alabama Small Business Development Centers serve as focal points for the coordination of federal, state, local, university and private resources to aid small businesses. These services are offered through regional and affiliate centers located at state universities, community colleges and technical institutes. Contact the nearest office for assistance in various business areas such as writing business plans or seeking answers for financial assistance. You can find these office listings and contact numbers by searching the internet.
Many technical resources are at your disposal as well. Extension personnel at the state and county level are eager to help you and are available at no charge. Go to www.aces.edu to find the office nearest you. Other excellent resources are the Alabama Department of Agriculture at www.agi.alabama.gov, the Food and Drug Administration at www.fda.gov, the Alabama Department of Economic and Community Affairs at www.adeca.alabama.gov and the Alabama Department of Public Health at www.adph.org.
Planning the facilities – Your business’s location
In the initial planning stages, you should check the legal zoning ordinances to determine if you can carry out your food business in the chosen geographic location. Local zoning regulations may restrict the kinds of businesses allowed or prohibit food businesses entirely. If zoning laws are confusing or you have questions, ask local officials to clarify the rules. Do not make any plans until satisfied that your business will fall within the bounds of the current laws. If you plan a business with the idea of getting local zoning ordinances and laws changed, you may be in for an unpleasant surprise. You may need to rent or build a suitable facility.
Other things to think about
There are a whole host of other things you will need to think about, too many to give all the details here. You will need to determine your expenses and develop a budget; then set prices for your products while estimating profits. You will need to get necessary permits and training as well as understand the requirements for packaging and labeling your product. You will need to develop a marketing, promotion and advertising plan.
If this all sounds intimidating, don’t give up. It is definitely possible to develop a food product and start your own business, because many people have successfully done so. Let’s face it, we all have to eat. Most of us go to the grocery store, sometimes many times a week, to buy food products. For every product we buy, someone at one time had to say, "This is a great product! I wonder if I could make a go of it by introducing mine or my mother’s favorite cookie, cake, salsa, etc."
As noted, the Food Entrepreneur Conference is a great place to learn about all of this in one place. You’ll also get to hear stories from other entrepreneurs who will talk about what they’ve done right – and what they’ve done wrong.
For more details about the conference and registration information, go to the Alabama Cooperative Extension System website at www.aces.edu/foodsafety/. Look under the tab on the left hand side of the page titled "Entrepreneurs." You can also go to the Auburn University Food Systems Institute page at www.aufsi.auburn.edu for more information and to register.