by Kyle King | November 20, 2018
With the food industry being as vast as it is varied in terms of offerings and potential, it is crucial that you do your due diligence before you launch your brand. Passion for food is traditionally a key component of food service owners/operators. Passion is often the enemy of wisdom; don’t let your passion for your idea blind you to its feasibility. Below you will see a number of key considerations for research when you are in the planning phases of your business.
Know Your Market
When it comes to the food industry, every market is different. The people, location, history and culture help shape the cuisine of an area. Even the weather has a major impact on your food business. For example, if you were to base your entire business on your award-winning chili recipe, this may do well for you in the Midwest or near Coney Island. These markets have customers that have grown up eating chili their whole lives, and the change in temperature can positively affect your business. This may not do as well in say Miami, where there is no change to colder temperature or a culture surrounding your product.
Remember, that just because you enjoy the food does not mean that it is going to sell.
Know the Laws and Regulations
Every municipality is different in the way they approach food safety. Many are similar, but it is important to be sure that you are following the guidelines that are expected at your place of business.
The best way to do this is to start a relationship with your local food safety authorities. It is far better to work with them, rather than against them. They are truly there to assist and educate you as the business owner all while ensuring the safety of the public.
Know Your Competition
Is your target market saturated? Determining this will help you establish how much of a market share is going to be available, as well as how much money it is going to cost for the business to effectively penetrate the market.
Know the Commitment Required
This may be one of the most important topics to research before committing resources to launching this endeavor. Understand that 90 percent of restaurants in America fail within the first three years.
You may love to cook at home. Do you love to cook for hundreds or thousands of people for 55+ hours a week? Having actual industry experience is going to be crucial to the business owner/operator to have a real understanding of what it takes to manage a food business.
In the food service industry, many things have to go right in order for the restaurant to be sustainable, and eventually return a statistically small percentage of net profit to the owners.
For example (these are only a few of the items)
- Managing labor costs
- Managing food costs (waste, portioning, ordering, etc.)
- Ensuring proper menu costing with various ingredient costs fluctuating daily.
- Properly managing your marketing and customer service efforts to increase frequency and new customers into your establishment.
- Identify and establish the peak times for the business on a daily basis in order to properly prepare and staff the business for service.
Know the Business
It is key to have some experience in operating and managing the business. The food industry has a very high dependency on people and the proper management of people in high volume, high stress environments.
Within any industry that is as fast-moving as the food service industry, it is crucial to stay educated and understand the key aspects of what is going to determine your business’s success.
For continued support, seek advice and guidance from local no-cost resources. There is no such thing as too much information when it comes to running your business.