A Step-by-Step Guide to Starting a Food Business
Check out these tips from foodies who've done it.
If you think you can satisfy your entrepreneurial spirit by doing something you love, you're right—especially if you love cooking, eating, and all things food. The food business is surprisingly easy to get into, but it can be intimidating for first-timers. And, as with any successful enterprise, it requires hard work, dedication, and more than just a bit of luck. Here are some tips from those who've entered and survived the world of food entrepreneurship.
1. Start with a good concept.
Carlo Carlos of Lia's Cakes in Season thinks it all boils down to the concept. A great product with a great story is more compelling for customers. That product has to be something you're good at making, and that people will like.
Jundio Salvador of Pan de Amerikano agrees: "Offer something unique. My dad would say, 'Never go into business if you are so-so, like shawarma and lechon manok.' If you want to be superior, don't be average."
2. Make a proper business case for it.
Says Jay Tamayo of the Barrio Fiesta and Fiesta International Catering group: "Once you have a compelling product, adjust the pricing and presentation based on your costs and target market. It's not enough to have a great product; that product also has to make you money."
Consider how you will get capital for this venture. A personal loan is a good place to start to cover unforeseen expenses or to increase your operating budget. For Pep Fernandez of Tagpuan Bulalo and Pares, a real business plan is important, but make sure not to get stuck on the planning part. Sometimes, you just have to take the plunge.
If you plan to do so soon, take out a Citi Personal Loan of up to P2 million. You can get approval in as fast as 24 hours, no collateral or guarantor needed. At one to five years, the terms are also flexible.
3. Find a good location.
Binalot founder Rommel Juan believes that when it comes to restaurants or fast food outlets, the location will make or break the business. Unless you already have a rabid fanbase that will follow you anywhere, an inaccessible location with poor visibility and parking can shutter your food business before it starts.
4. Prepare only excellent food.
Juan's philosophy is that the food doesn't necessarily have to be gourmet, nor does it have to be cheap, but it must be worth the money. Always serve the freshest food to keep customers coming back. Salvador agrees: "We target A to E class customers by offering four-star food at one-star pricing. 'Di bale maliit ang kita, basta volume orders."
5. Be consistent.
For Tamayo, however big the business, quality control is something you have to take care of personally. Or, at least assign to someone whom you trust explicitly and who shares your vision. Across multiple outlets, standardization of recipes and training of personnel are a must. Juan notes that focusing on the nitty-gritty helps you reach your goal. A lot of food businesses are a flash in the pan. But this is a marathon, not a race.
6. Understand all the aspects of the business.
According to Carlos, you don’t necessarily have to know everything, but you must know something about everything. This allows you to communicate and interact more effectively with your suppliers and employees.
7. Hire people to do the legwork.
As the business grows, you have to start letting go of certain tasks to concentrate on the bigger picture. An entrepreneur is trained to think, not just do. This also gives you more time for family. Carlos finds that work-family balance is important in keeping yourself sane as business picks up.
8. Choose innovation versus familiarity.
With the stiff competition, you need to innovate to keep up. But people also need a reason to keep coming back over and over again. Never stop moving forward, but never forget what got you here in the first place.
9. Treat employees like customers.
If you do so, they will, in turn, treat the paying customers better. At Pan de Amerikano, employees join hands for daily prayers before and after work, and are empowered to suggest process improvements, decide on house rules, and give input on hiring and firing practices.
However, no one is indispensable. According to Carlos, if an erring employee refuses to shape up, there is always someone better willing to take their place. Don't let the business and the other employees suffer for the benefit of that one rotten egg.
10. Don't forget marketing.
Word of mouth plays a big role in the success of a food business. But nowadays, words travel faster online than in person. For Carlos, social media marketing is a very effective tool for extending your reach. Be warned, however, that an active social media presence helps spread both good and bad word of mouth. Being active on your social media accounts helps you respond to these criticisms and to even use bad reviews to improve your product and services.