Start up food business
Discussion
Anybody done it from a standing start?
My son has been looking at starting a small business selling what I would call 'hipster spin-traditional' food in the city where he lives. Initially he was going to try local markets and food fayres, but cook it at home and ship it in. I know that means council inspections of the kitchen etc. Looking at the conditions laid down by the council to get a spot on their markets it includes requirements to provide seperate hot/cold washing for hands and utensils etc.
I won't spill his idea but it's food you might eat as you walk, as a snack or a full meal while out for the day. His market is probably tourists, of which his city has penty all year round.
As a start up is he on the right lines going for markets and tourists, bearing in mind low overheads but that the council don't grant many regular daily stalls and most markets are once a week?
Pros and Cons?
My son has been looking at starting a small business selling what I would call 'hipster spin-traditional' food in the city where he lives. Initially he was going to try local markets and food fayres, but cook it at home and ship it in. I know that means council inspections of the kitchen etc. Looking at the conditions laid down by the council to get a spot on their markets it includes requirements to provide seperate hot/cold washing for hands and utensils etc.
I won't spill his idea but it's food you might eat as you walk, as a snack or a full meal while out for the day. His market is probably tourists, of which his city has penty all year round.
As a start up is he on the right lines going for markets and tourists, bearing in mind low overheads but that the council don't grant many regular daily stalls and most markets are once a week?
Pros and Cons?
Cogcog said:
As a start up is he on the right lines going for markets and tourists, bearing in mind low overheads but that the council don't grant many regular daily stalls and most markets are once a week?
Pros and Cons?
Markets:Pros and Cons?
Pros: A good way to build up a reputation and once a week, makes meeting demand manageable as he builds the business. Low overhead and providing you get the right market (i.e. Borough Market rather than Romford Market) then alignment to that will help to underpin his reputation.
Cons: He'll need to commit long term. If he's there for a couple of weeks and customers start spreading the news and others on their recommendation head over only find he isn't there that week, he'll never get off the starting block.
Tourists:
Pros: Money to spend and keen to absorb the local culture and food.
Cons: They're only around for a week or two. Trip Advisor can help but he needs to be physically visible to take advantage of good reviews. If 50 people say 'Check out Cogcog's Lad on Borough Market' and 500 people turn up and he's not there, that will lead to 500 negative reviews - potentially.
The idea:
Pros: Could be the next McDonalds
Cons: Ridiculously hard work for min' wage returns for an uncomfortable period of time.
Advice
Be different. Be excellent. Don't spend what you don't have (and spend shrewdly when you do have it), understand why you're doing it, remember to have fun and come up for air once in a while.
Good luck
I've done it, selling at a small market in London. You can make it work , although we jacked it in quite quickly because we soon realised there are easier ways to make money.
I'm going to refer to London as that's where we did it, so may be different to your son's city...
- Location is king - most of the decent markets in London are operated by local authorities and as you can imagine there are lots of hoops to jump through and a loooonnnggg waiting list. Initially you'd usually only get a slot if there's a cancellation (rare), so you end up in secondary markets where you make very little
- Hours are long and it's grim in winter - get up of the crack of dawn, pick up supplies, prep the food (or get the food you spent all evening before prepping), get to market with all your hefty kit, put it up, connect to power, get everything set out, set up payments, blah blah blah. The selling is the easy bit!
- Staff are expensive if you need them and can really eat into margins (remember they're not just there for selling, but for putting up and taking down etc)
I was speaking to a hospitality consultant who specialises in food markets 2 weeks ago (completely coincidentally I was talking about food markets to a friend and he overheard us) - he said a well-run stall in London on a busy weekday lunchtime (Tu/Wed/Thur) will clear £500-£600 profit after all costs.
To make these things work as a really interesting business, you need multiple running at once in my opinion.
If it were me, I would try to find a "residence" somewhere instead. Get a little van and do the food at the local pub at the weekend if they don't do food (again, plenty of "drink +snack only" pubs in London but might be different elsewhere. Captive audience, less admin of putting up and taking down, share the revenue with the pub, etc.
G luck!
I'm going to refer to London as that's where we did it, so may be different to your son's city...
- Location is king - most of the decent markets in London are operated by local authorities and as you can imagine there are lots of hoops to jump through and a loooonnnggg waiting list. Initially you'd usually only get a slot if there's a cancellation (rare), so you end up in secondary markets where you make very little
- Hours are long and it's grim in winter - get up of the crack of dawn, pick up supplies, prep the food (or get the food you spent all evening before prepping), get to market with all your hefty kit, put it up, connect to power, get everything set out, set up payments, blah blah blah. The selling is the easy bit!
- Staff are expensive if you need them and can really eat into margins (remember they're not just there for selling, but for putting up and taking down etc)
I was speaking to a hospitality consultant who specialises in food markets 2 weeks ago (completely coincidentally I was talking about food markets to a friend and he overheard us) - he said a well-run stall in London on a busy weekday lunchtime (Tu/Wed/Thur) will clear £500-£600 profit after all costs.
To make these things work as a really interesting business, you need multiple running at once in my opinion.
If it were me, I would try to find a "residence" somewhere instead. Get a little van and do the food at the local pub at the weekend if they don't do food (again, plenty of "drink +snack only" pubs in London but might be different elsewhere. Captive audience, less admin of putting up and taking down, share the revenue with the pub, etc.
G luck!
Cogcog said:
Anybody done it from a standing start?
My son has been looking at starting a small business selling what I would call 'hipster spin-traditional' food in the city where he lives. Initially he was going to try local markets and food fayres, but cook it at home and ship it in. I know that means council inspections of the kitchen etc. Looking at the conditions laid down by the council to get a spot on their markets it includes requirements to provide seperate hot/cold washing for hands and utensils etc.
I won't spill his idea but it's food you might eat as you walk, as a snack or a full meal while out for the day. His market is probably tourists, of which his city has penty all year round.
As a start up is he on the right lines going for markets and tourists, bearing in mind low overheads but that the council don't grant many regular daily stalls and most markets are once a week?
Pros and Cons?
My wife did a specialist food start-up; gave it up only due to her disability.My son has been looking at starting a small business selling what I would call 'hipster spin-traditional' food in the city where he lives. Initially he was going to try local markets and food fayres, but cook it at home and ship it in. I know that means council inspections of the kitchen etc. Looking at the conditions laid down by the council to get a spot on their markets it includes requirements to provide seperate hot/cold washing for hands and utensils etc.
I won't spill his idea but it's food you might eat as you walk, as a snack or a full meal while out for the day. His market is probably tourists, of which his city has penty all year round.
As a start up is he on the right lines going for markets and tourists, bearing in mind low overheads but that the council don't grant many regular daily stalls and most markets are once a week?
Pros and Cons?
First key question: does your son like making food, selling food, selling in general, running a business, dealing with the public, competing with other pitches, etc.? Depending upon his inclinations, there are many ways to run a food business. For instance, my wife started out as a micro wholesale operation (selling product to other businesses - coffee shops, stall-holders, etc.) before going into retailing it. But it is quite possible to run a food business without ever coming into contact with the public!
Assuming the public is a part of it, the primary reasons for making your own food are (a) differentiation, and (b) margin. Otherwise you'd just buy it in and focus on driving footfall, top line revenue, and potential expansion to multiple sites / outlets.
In terms of the making side of things, running from home is fine. You're right about requirements for separate handwash, etc. But also if, as so many do, your son is living in shared accommodation then that might be harder to operate. We did this (home kitchen), but had separate fridge and freezer and cupboards for commercial food - that way we could be clear to inspectors what was business and what wasn't. Otherwise you're in a potential world of pain.
Even if you do that, on the day of your inspection, if your housemate wanders into the prep space without a hair / beard net (you said hipster!) and so on then you might be in trouble, depending upon the inspector. So your son needs to do his homework and, ideally, speak to the local Environmental Health team to understand how they view the sort of set-up he's got.
Allergens are a huge thing now. Your son needs to get somebody who knows what they're doing to draft a suitable sign / disclaimer. If not then he'll have to police *every* item that comes into that kitchen (whoever's it is) to prevent potential cross-contamination.
If living in rented accommodation, he may have trouble too - most leases preclude running a business, and landlord's insurance will most likely be invalid if commercial cooking is going on. This is especially the case if deep fat frying (when we did it, we fully investigated the insurance angle, and had to certify we wouldn't be doing any commercial deep fat frying of any sort.
If the domestic hob/oven is gas-powered, he may also have a problem with extraction. In a commercial setting, products of combustion are vented through the extraction, with an interlock valve (gas won't flow unless extraction is on). Domestic kitchens have no such set-up. If there's gas at home, it may be best to use plug-in induction hobs / electric ovens to overcome this. Not a huge issue unless he gets inspected by local HSE, but that can and does happen. So, again, best to ask lots of questions and ensure he understands the situation.
Moving to the business itself, the key problem is usually margin control (or lack of it). A lot of people assume that ingredients must be available at "wholesale prices" if you're buying in greater quantity. Some are (flour, spices say), but a lot aren't - supermarkets are often *cheaper* than wholesalers... This is why a lot of commercial food products contain a bunch of stuff you don't find on your usual kitchen shelves - because they need to substitute expensive fresh ingredients with pre-package, bulk, non-perishable alternatives.
Minimising wastage is also key. If using eggs, for instance, use liquid egg - lasts longer, can be measured precisely, no handling issues, no wastage.
If the business is going to scale, the cooking is going to have to be given to somebody else (or the sales - but usually it is the latter where you want to be focused). That means recipes, measures, processes, etc. that *anyone* can follow. You want to de-skill the prep and cooking process as much as possible, otherwise the business can never scale.
In our case, I bought lab scales, and a variety of equipment (commercial mixers, food prep machines, etc) to ensure consistency and accuracy. Every recipe was rigorously tested for repeatability, and ingredients chosen to minimise variability. In the end, we could produce a lot of award-winning-standard food with staff who had no prior commercial kitchen experience and a few days' training.
Domestic equipment (food processors, etc.) tend to break quickly under sustained use. It is worth your son figuring out what more commercial equipment he might like, and setting up saved searches on eBay, etc. for such things. You have to wait a while, but good deals do come up. None of that stuff is cheap, but it also tends to keep its resale value. In our case, we bought pie blockers, pastie-making machines, mixers, and so on - all of it was worth more than we paid for it in the end. Can also be worth buying domestic kit second hand if there's enough availability, and standardising - we did this with Kenwood Chefs at the outset, meaning even if the base blew up all of the attachments would fit the other one we had spare in the cupboard.
Maximising margin is about ensuring portions are just-large-enough, quality is excellent, but also need support with branding and verification. Your son should consider (if appropriate) entering awards - things like Great Taste, Great British Food Awards (which my wife won), and so on. Some of the awards are easier than others, and most involve paying some money. For marketing purposes, start with the ones most likely / easy, because having awards displayed on your stall is a great way to overcome pricing resistance.
In terms of building-out revenue streams, if appropriate, your son might wish to consider things like event catering, delivered / frozen / pre-prepared / bake-at-home / etc. options, and so on. Set up a loyalty programme (lots of free/cheap app based systems nowadays), gather email addresses, make sure to mention the non-stall options in those emails = potential free referrals for lucrative gigs.
In terms of on-stall wastage, as others have mentioned, this can be an issue. So either that needs factoring in to the equation (which is tough), or the offering needs to be developed so that pre-prepared product has a life of more than 1 day, and is cooked / heated to order (assuming hot). That may mean having on-site chilling, and so on, which is way easier than it used to be (battery-powered cool boxes are a thing these days).
Other ways of expanding include finding venues that don't have food provision, and negotiating a permanent pitch - great to have a steady stream of punters, even if only 1/2 nights per week, and provides a way of scaling the business by hiring staff just for those gigs if needs be.
But I echo what others say - this is a tough way to make a living. The critical key is minimising cost and maximising price. That requires ruthless attention to margin - no ingredient should be included if it can be avoided, no portion should be larger than absolutely necessary for the price point / customer expectation. Ideally he'll want a "modular" offering, where add-ons can be charged-for (like Porsche, the money is in the accessories), as well as supplements (snacks, drinks, etc. - although watch out for the branded stuff like Coke, which he'll likely make no margin on).
There is, obviously, a lot more, and it is a steep learning curve for sure. Most people fail because they just can't generate enough margin, repeatably and continually. It is very hard to make food taste like it has the most premium ingredients you'd use at home, but using cheap-enough ingredients to maintain a margin at a price customers are prepared to pay in a market setting (where there's loads of choice).
That said, if he *can* crack all the variables, there's no reason why such a business can't scale in a variety of ways. I wish him luck!
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