Food-Preneur 101: Part 2
Food-Preneur 101 Part 2
Now is the time to spend some serious money. Sniffles
1- You need to create a legal entity. It should be an LLC or Incorporation, since you want your personal income to be protected. You can choose one of these two based on personal preferences and tax benefits (see an accountant!!!!). Currently, for an LLC, you are required to contact the county clerk’s office based upon your home address and there is a publication requirement and fee. Approximate cost for either a corporation or LLC is between $185 – $800. After registering your business, you need to apply for an EIN (Employer Identification Number) and the Authority to Collect Sales Tax Certificate. This can be done by contacting QEDC and scheduling an appointment to complete all the forms online.
2- You will now research commercial kitchens/incubators. We would love to have you at the Entrepreneur Space Kitchen Incubator, only if it is the right space for you. Make sure to take tours of different kitchen incubators to know which one is best for your product. Check to see if they have the right equipment for you. Equipment is most important for efficient production and cost savings. For example, using a large oven, which can bake 30 sheet pans of cookies, is faster than a smaller oven with space for 5 trays. You must have a solid and practical manufacturing plan organizing equipment and potential employees. Although higher sales mean higher profits, profit per unit sold is based on streamlining your production process. Think of an assembly line. You are now Toyota, not someone working out of a home kitchen. To help you maximize your time and output, look up GANTT chart.
3- Now you need to get out and sell. Forget about Whole Foods. You are not ready for it. Whole Foods does not want you until you have proven sales record in other stores. Start with your local neighborhood. Research stores, possible restaurants, independent cafes (not Starbucks). You can go back to the gourmet store buyers you spoke to earlier while conducting market research. Think practically. Emphasize time management. Delivering to places in our area allows you to test the product while saving driving time and putting some cash in your pocket. Independent stores are more likely to pay you immediately.
The incubator you choose need not be in your neighborhood, but it does not matter since you are not using it daily.
4- Participating in farmers’ markets are a great way to meet your clients face to face, get immediate feedback, obtain quick cash and practice your production description so that you will feel more prepared when meeting buyers. Why not check the neighborhoods around the market where you are participating? Look for sales opportunities in that neighborhood. When you are at the market, you will sign at your booth stating that you also sell at neighboring stores. You will also list this on your website. You have now formed a partnership with the store owner.
This is your starting point. From here on, go step by step, to increase orders, to increase sales revenue, ultimately to success.
About Kathrine Gregory: With over 40 years of experience in the food industry, and currently the managing consultant at the Entrepreneur Space, Kathrine Gregory wants to help budding food-preneurs build their dream to success. She will never start her own food business, but is happy to share her expertise with you.