Build Your Food Brand and Distribution System

You have an awesome food product and you’re sure people are going to want to buy it – now what? How do you get your product in front of prospective customers? Where can they buy it? Some products sell well online, but some need to be sold in stores. And that means you have to create a strong brand and get your product on the shelf.

 

Samuel Adam’s Brewing the American Dream program focuses on helping budding entrepreneurs realize their business ownership dreams. As part of this program, Whole Foods Market’s Global Senior Coordinator of Local Brands and Product Innovation talks about what it takes to develop and build your branding and food distribution system.

 

1. Starting Out: Know Your Product Category

Start small and simple to stay focused. Before making the leap to marketing and distributing your product, it’s important to know the lay of the land. You really want to know your unique product’s category inside and out.

 

Key Questions to Consider:

  • Who are all the players in your category?
  • What differentiates you from the other players?
  • What does your product bring to the market that no other product does?

 

The food and beverage industry is a deeply saturated, highly competitive market right now. There are vast amounts of competition for those just starting out. Part of this is because of the low barrier to entry (aka, relatively low costs) to develop and sell a food or beverage product. The goal here is to differentiate your product from all other competing products. What does your product offer that others do not?

 

This is why that it’s important to know yourself, your product, and your position in the market from the outset. Clarifying those details will prevent you from spending needless time and money on branding efforts which may be high-cost, low-return.

2. Positioning in The Market: What Value Are You Offering?

Once you’ve identified your product’s category, it’s time to consider positioning your product. What place can your product fill in your customer’s lives? What unmet needs can your product address?

 

Value vs Values

First ask yourself: What value is your product or brand offering? When you’re thinking about value in food branding, the factors you should consider include:

  • Convenience
  • Pricing
  • Flavor
  • Quality

 

Next, you should consider whether your brand is a value-driven brand. A value-driven brand means that your product is price-sensitive for its consumer. Certain brands highlight their value as the hallmark of why their product is special. Whole Foods’ 365, for example, is the store’s value-driven product.

 

Contrast a value-driven brand with a value (plural)-driven brand. A values-driven brand is a brand that focuses on the mission and the story behind the product. Both value-driven and values-driven products can offer compelling reasons for why their brands are best. Figure out where your brand and product falls on the value vs. values spectrum and use that as part of your branding story.

 

Channel Strategy

Another component of positioning is your choice of channel. This basically boils down to which stores you’re targeting to sell your food products. Key planning points include where and how your product will be featured in these different markets. Think about where your target customers are most likely to shop!

 

Channel strategy questions to consider include the following:

    • How do you plan to roll out your product in these stores?
    • Will you be focusing on natural foods or otherwise?
    • Will you be starting in convenience stores or drugstores?

 

Making Claims

Whole Foods advises using caution when making specific claims on product packaging on or your business website. The food industry is fraught with lawsuits, so you want to make sure you don’t make claims that cannot be independently verified. For example, organic or non-GMO foods must be verified and certified by third parties. These processes are time-consuming, costly, and involve a lot of paperwork. They may be worth it depending on your branding, but make sure you’re following all the rules.

 

Whole Foods also cautions against trying to be everything all at once to all consumers. For example, trying create an allergen-free, non-GMO, and organic product right out of the gate may be too much to take on. It’s better to start with one key branding or labeling goal and focus on that one specific component. For example, you could start by going through the process to be certified organic by the USDA.

 

Once you’ve mastered that one specific component, you can also broaden your brand reach to include other labeling attributes. It’s far easier to take on these new categories once your product and brand are fully established.

 

Allow Your Principles to Direct Your Branding

What if you’re not sure which attribute to focus on? Whole Foods recommends starting out by focusing on the most important attributes to you. Do you value fair trade? Do you want to bring another gluten-free snack to the market?

 

Determine what is most important to your food product and focus on that one component or attribute at the start. Your goal is to figure out your key principles and then build on that.

3. Branding Your Products and Your Company

Branding is a vital component to the success of any food or beverage company. Regardless of whether your company is just starting out or is an established company, the same branding principles apply across the board.

 

Have a Solid Branding Plan

When it comes to branding, it pays to have a solid game plan. Don’t wing it – think about your concept. Ask yourself the following:

    • What are you trying to evoke with your products?
    • What is your unique label or color palette trying to communicate to your customers?
    • What do the words on your packaging express to your potential purchasers?
    • Are you focusing on health, indulgence, bright flavors, and colors, another culture or tradition, special diets or allergens, or something altogether different?

 

Use of Buzz Words

Buzzwords can sell a product, but it’s important that they are effective and correct. For example, “plant-based” or “100% grass-fed” are key product details to customers that can be incorporated into buzz-wording to convey a certain message to prospective customers. Just remember not to make claims that can’t be verified.

 

Sometimes Less is More

Successful packaging is not only on-brand, it is also clean, attractive, and succinct. There’s a danger in being overly verbose on your packaging label. There is a fine line between conveying vital product information and visually overwhelming the buyers with busy designs.

 

When it comes to deciding what wording to include on your food product packaging, Whole Foods recommends the adage “less is more.” If the words are not of value to your product or brand, then they shouldn’t be included on the food product label. Keep it simple!

 

A Word on Price

When it comes to branding and food products, every detail matters. With so many other food options for customers to buy, you want to make sure that you stay competitive. Whole Foods advises that you think about each detail – this includes price. You may have the most exquisite, locally sourced produce in your product, but if you price yourself out of the market, your product won’t sell.

 

Pricing can be tricky to figure out – it takes some market research to figure out a ballpark number and then you may need to use trial and error to narrow down the right number.

Strong Products, Strong Brands, Strong Sales

Branding and distributing your food product is a matter of knowing the market, focusing on your product’s unique features, and sharing that message with the world. When you’re selling a food product, you don’t just have to convince your customers – you also have to convince the stores (like Whole Foods!) that your product is high quality, well-managed, and will sell to their customers. Show that you’ve put thought into your product and your branding scheme and you’ll show that you can add value to their stores. Getting a foot in the door at a major store like Whole Foods can be a huge boon to your business, so put the work in up front to get your product on the shelves.

 

Accion and Jessica Paar from Samuel Adams Brewing the American Dream break down how to drive awareness of your food, beverage, or brewing small business. Learn about how to identify your target customer and their media habits, the fundamentals of communicating with the media, and the tools and tactics you need to build up a buzz.

 

 

What is Public Relations (PR)?

You’ve probably heard a lot about “PR,” but what, exactly, does that mean? Basically, PR is all about presenting your business to the media and the public. There are plenty of ways to get impactful media coverage. At Sam Adams, for example, they use a combination of media relations, working directly with reporters, addressing customer inquiries, creating branded entertainment, crisis communication, and getting involved in philanthropy.

 

PR is different from your direct marketing efforts. It’s not about your ad campaigns, it’s about your relationships with various media outlets and how they present your business to the public. Your goal is to create positive media attention so that the public perceives your brand in a positive way and are encouraged to buy your products or services.

 

Why is PR Important?

No matter what business you’re in, you can’t afford to ignore PR. Your business has a public image and you need to manage that image. By working to get positive media attention, you can build a lot of customer awareness and extend your reach (without the cost of advertising!).

 

But it’s not just about taking advantage of those opportunities. If something goes wrong with your business or someone wants to damage your reputation, bad PR can cause you serious trouble. If you have strong relationships with the media, you have the chance to take charge of that narrative and make sure your story gets out the way you want it to.

 

Core Elements of Media Relations

In order to maximize your media relations, your small business should always have certain key tools and skills at the ready:

 

  • Preparing a Media Advisory. Use the Five “Ws” to engage the media and give them enough information to get them interested. Media advisories are the best tactics for events or launches.
  • Preparing a Press Release. The goal of a press release is to share enough pertinent information to get people interested, and that can then be turned into a complete article. Use this tool to help reporters tell your story. Press releases are best used alongside visuals, such as logos or photos.
  • Maintaining a Web Presence. Your website and social media channels are another way to communicate with the media . Keep your web presence current so reporters and journalists know that the information will be up-to-date.
  • Samples (THE Most Important Thing!) When you’re in the food and beverage industry, samples are vital for PR. Never leave home without them. Samples are the best tools to get into reporters’ hands, so they can spread the word about your products. Plus a great sample can put a journalist or reporter in a good mood – and that will make them more likely to put a positive spin on your story.

How to Prep for Media Engagements (the Two Knows)

The idea of talking to reporters, journalists, and other media members can be a little overwhelming. What do you say? What if you don’t have the answers to their questions? What if they come in and seem hostile? While you can’t anticipate every potential issue, there are a couple of fundamentals that will cover most media needs:

 

  • Know Your Story. What’s your elevator pitch? How compelling of a story can you tell in the time it takes to ride an elevator up ten stories? You should be able to explain who are and what you do in a very concise statement. Try to pick the three most important things about your brand. Remember, this is like a sales pitch – don’t be afraid to brag a little!
  • Know Your Target Audience. Create a target media list. Do you want to get in touch with local bloggers, national magazines, newspapers, reporters, or other outlets? Once you have your list, make sure to tailor your pitch so you hit the right note. A local blogger might be more receptive to the personal story of why you started your business and why it’s important to you. A national publication may care more about how you’re doing something completely new and different in your industry. The local news may want to know about how you’re involved in your community. Make sure your pitch fits your audience.

How to Achieve PR Success

PR success doesn’t happen overnight and it takes some work. But like everything else about your business, you can handle it!

 

First, set out a PR plan. Create a calendar with the dates for openings, product launches, and events. Create a list of people in the media community you can reach out to. If you have an upcoming big announcement for your brand, create a formal PR plan for how to roll out the news. That gives you the core information you need to get started. Start reaching out to the folks on your list about your next event!

 

Whenever you deal with your media contacts, be confident. As we said, it can be a little scary to talk to reporters and the like. That’s totally natural! But one of the best ways to build their confidence in your brand is to show confidence. Be proud of your story. And practice your pitch until you’re really comfortable talking about it.

 

Remember that your media contacts are like your vendors or your customers – you’re looking to build a relationship. Good PR isn’t about one-off interactions. A single local news story can be great for your brand, but what about future coverage? Cultivate contacts within the media. Check in with them from time to time. Send them samples. Be open if they want to do an interview or article – don’t turn down that publicity! That way, when something great happens in your business, they’ll be ready and willing to get the word out. And when something bad happens, they’ll be ready and willing to tell your side of the story.

 

Of course, you’re busy. That’s just part of being a small business owner. So, you may find that it makes sense to hire or contract with someone to manage your PR for you. First, that takes the work off your plate. It also means you’re starting with someone that already has contacts in the media. You can work with a PR agency or find a freelance consultant to help you deal with your PR needs.

 

Rules of the Road

One of the overarching principles of positive PR is to be sensitive to the outside world. It’s important to think through how what you say and do may be perceived and how it can impact your brand. PR can help manage your image in the world, but your day-to-day operations and actions will also have a big impact.

 

Here are Sam Adams’ pro tips for PR success:

 

  • Remember that you are representing your brand at all times.
  • PR comes in all shapes and sizes – be alert.
  • Nothing is ever off the record – if you said it, it can be used!
  • Assume everything you say will end up on the Internet.
  • Guests and customers are reporting their experiences on social media and online so make sure they have a great experience.
  • Tread carefully with tone and sense of humor.
  • Be truthful, never lie to the media because it can catch up to you.
  • Avoid policies and religion.

Managing Your PR

PR is about building relationships and communicating about your brand. Know your story and know your target audience. Prepare and implement your key tools. Spend time developing your media contacts and relationships, hire help if you need to. Finally, be sensitive to the outside world and think through how what you say can be perceived. By using these tips and tactics, your small business will be rewarded with positive media coverage for your business and brand.

 

Have you ever thought about running your own restaurant? Whether you’re a great cook who wants to feed the world or a foodie who wants to raise the bar, opening a restaurant is an exciting challenge.

 

That being said, opening a restaurant is hard work. It can be a roll-the-dice business venture. The restaurant world is fickle and it can be costly to open and run a new eatery. But that doesn’t mean it can’t be done – it’s all about what you put into it.

 

With hard work, planning, and the proper financial backing, your dream of opening a restaurant can become a reality. Here are some of the big hurdles you’ll need to clear before you can serve your first meal:

 

Research The Cost

Before you dive in with both feet (or even dip a toe in the water), you should plan out exactly how much your new business venture will cost and how much money you currently have access to. You’ll need to do your homework and run the numbers. You can find mentors in your area who will be willing to talk about what to expect as far as the cost of opening a restaurant.

 

You’ll need to look at the large fixed costs – rent, insurance, permits, staffing. Then you’ll have to consider the variable costs – utilities, food supply, liquor. Then, take a look at how much money you have to work with. Consider your savings and any contributions your family or friends may be willing to make. In addition, you’ll want to start reaching out to local banks, microlenders, and the SBA to learn about potential financing options.

 

Prepare Your Business Plan

Once you have a rough budget, it’s time to put together your firm business plan. Your business plan is your model and your roadmap. Your restaurant business plan can include:

 

  • A design concept for your space
  • Target customers
  • A complete financial picture
  • Start-up capital and funding needs
  • Marketing plans
  • Plans for hiring and staffing
  • Plans for food supply
  • Licensing issues

 

The business plan is one of the most important parts of starting a restaurant or any other business. Learn more about it here.

 

Franchise Or Independent?

As you create your business plan, one of the first things you’ll need to decide is whether to open a franchise or strike out on your own. Opening a “franchise” means opening a chain restaurant using their branding, supplies, and systems. McDonald’s, for example, is a franchise. Typically you’ll need to pay an initial franchise fee to open and then anually. In addition, you may need to attend training courses offered through the parent company. You get the expertise and the marketing budget of a well-established brand, but you typically won’t get to make many decisions about how the restaurant is run. Opening a franchise can be expensive-some chains may have financing options, but many require you to pay up front. For example, opening a McDonald’s will cost you more than $1 million total, and you’ll have to pay about $45,000 up front.

 

You can open an independent restaurant for much less, but it can be tough if you have no experience. In any case, you can start with a small space, a manageable menu, and rented equipment. With a smaller space, you can focus on the food and expand later. That way, you can get your restaurant off-the-ground and keep your initial costs from sinking you at the outset. Keep costs manageable and focus on making the food memorable. If you’re independent, you have the freedom to control your own menu, hours, and atmosphere.

 

Get Funding

Opening a restaurant costs money – you’ll need to lease or buy a space, get equipment and supplies, market your new eatery, and pay for licenses and permits. You may have enough in savings to cover some or all of the cost, but you’ll need financing for the rest. Once you have a detailed business plan, you know exactly how much money you need to get up and running – and how much you expect to make. Take that business plan to the bank, the SBA, and microlenders to learn what financing they can offer you. Their offers will depend on your business history, your credit score, your business plan, and other factors, so shop around to make sure you’re getting the best possible deal. You may be able to take out loans or, in some cases, you may qualify for governmental grants to help you get started.

 

Note that you may be able to get a loan for an established franchise more easily than for an independent restaurant venture, but you’ll typically have to borrow a much larger amount.

 

Find The Right Space

Finding a space that has the right feel, can accommodate your kitchen and dining room needs, and has the right mix of foot or auto traffic can be a process. You’ll want to take the time to research your space needs, local licensing requirements, and the neighborhood. Of course, you’ll also need to find a location that meets your budget.

 

Finding the perfect space is a tall order. Here is a worthwhile article on the tricks to finding the perfect space for your restaurant.

 

Licenses And Permits

Since you’ll be serving food and alcohol, you’ll need to obtain the required permits and licenses from state, local, and federal governments.

 

Most areas will require a health inspection before granting a license. You’ll need to ensure that your planned kitchen and dining room layout meet the health codes and laws. Codes and laws differ from jurisdiction to jurisdiction, so do your homework to make sure you’re in compliance. A local restaurant association can often provide information about required permits and licenses.

 

The Bottom Line

These are the boxes you’ll need to tick before you can get ready to open your doors. From here, it’s all about stocking your kitchen, hiring staff, and firing up the stoves!

 

Bon appetit!

 

 

Just about everybody likes beer – Americans drink more than 6 billion gallons a year! If you’re a beer enthusiast, you may have considered starting your own brewery but have been discouraged by how challenging it seems. But here’s the thing – there’s nothing stopping you. Each and every business started with someone’s budding dream and took off from there. With a terrific idea, hard work, and the right team in place, there’s nothing you can’t accomplish.

 

Jim Koch is living proof of that. Koch is the founder of the mega-brewery Samuel Adams. In this article he shares tips based on his own experiences, starting from his own dream over three decades ago to start the beer juggernaut that is now Samuel Adams.

 

Quality Is King

The reason customers pick one beer over all others is because of its quality. Your number one focus should be on developing a quality product for your customers. Your customers want to drink a great beer, and if you can provide that, they’ll seek you out and spread the word to others.

 

Whatever business decisions you make along the way, make sure to keep quality control front and center. Without a stellar product, you won’t be able to grow your company. Don’t skimp on brewing the best possible beverage for your consumers.

 

Tell Your Story

As with any new business or product, the right branding can propel your company to the next level. An important aspect of building your brand is the backstory behind you and your business. Share your story to foster personal connections to your customer base.

 

According to Grant Fraley of ChuckAlek Independent Brewers, San Diego, you should “be true to your passion and that will come through in your business story.” Note that a great backstory won’t move a subpar product – you still need to deliver. That being said, a terrific product paired with a compelling backstory can be PR gold.

 

What’s your unique story? When you’re starting your brewery, incorporate that story into your brand for built-in PR.

 

Build A Strong Team

When you’re building a food or beverage business from the ground up, finding and hiring the right people can make or break you. Your fledging business will only be as strong as the employees who are making and distributing your product. Take the time to vet applicants to ensure they are the right fit for your company.

 

Every small business requires long hours and dedication during the start-up phase, but the food and beverage industry is particularly demanding in these respects. Starting a brewery is no different and you need a strong team behind you. During the interview process, look for those who are willing to invest the time and energy needed to build a successful company.

 

One of the most important considerations when hiring employees for this line of work is their intrinsic motivation. Skills can be taught, but motivation is that something extra that will make your employees provide true value -they’ll go the extra mile for you and your business, which will pay off in a better quality product.

 

Each new hire helps build the fabric of your company, and ultimately is responsible for the outcome of the final product. Learn more about hiring your first employees to build the best possible team for your start-up brewery.

 

Outsource To Pros

This may be your first time starting your own company, or even working within the beverage industry. It can be intimidating, but there are ways to learn on the job. Every great company had to start somewhere and yours is no exception. Lack of knowledge doesn’t foretell failure, but lack of education does.

 

If you’re new to the brewery industry, there’s no shame in seeking help and advice from a seasoned pro. Consider the example of lawyer-turned-distiller Chris Murillo at Astoria Distilling Company, New York – he found hiring a consultant to coach him on the ins-and-outs of the distillery industry proved to be invaluable.

 

Let Your Passion Guide You

Starting your own brewery does not guarantee overnight success. It will take dedication, patience, and work. Brewing your own beer is an inherently time-consuming and labor-intensive process, so don’t get discouraged in the beginning when you’re facing manual labor and long days (or weeks)!

 

During these times, it helps to circle back to WHY you wanted to start your own brewing business. Most likely, you had the dream and drive to become your own boss and build something sustainable. Also, odds are you picked brewing because you’re passionate about the beverage industry and thought you could create an amazing product to share with the public. Focus on those goals to keep you moving forward in a positive direction.

 

Step Away From The Office

The reality of starting a brewery sounds romantic, but it actually means long hours on-site. When the Chisms started Council Brewing, San Diego they were working up to twenty hours a day. However, they realized that their business wouldn’t survive if they didn’t set aside time for themselves.

 

It’s natural to want to direct each minute of your time and energy toward growing your new company, but that can result in burnout. Make the effort to take time away from work so you can regroup and come back refreshed. Balance makes for better days in the office, as well as more appreciation for your time away from it.

 

The Bottom Line

The nature of any new start-up is that your work will be demanding and at times frustrating, but ultimately fulfilling. Starting a brewery is no different, so know that your drive and passion can help you build something great. With time, energy, and hard work, your company may even be the next Sam Adams!

 

Accion loans to food and beverage entrepreneurs are made possible thanks to support from The Boston Beer company through its Brewing the American Dream program, which is focused on helping small businesses thrive.

 

When you’re planning to start your own business, your first decision is what that business will be. You’ll need to sell something that people want to buy – and with Americans drinking more than 400 million cups of coffee per day, you may decide it’s time to start a coffee shop. Here’s what you need to know- from inception to hiring staff to opening your doors.

 

1. Create a Business Plan

As with any business, one of your very first steps will be to prepare a comprehensive business plan. A business plan serves as a blueprint for the future and a playbook for the present. You’ll need your business plan to secure funding for your start-up, to open business bank accounts, and to woo potential investors and partners.

 

Your business plan allows you to put in the writing all the steps you need for your venture. It can seem overwhelming if you’re new to writing business plans, but there are resources which can help. Here’s our practical advice on how to put together your own business plan for your start-up.

 

Essentially, you know that you want to open a successful coffee shop. Your business plan is going to set out the steps you need to take to make that happen and help you spot potential obstacles before they arise. Writing a business plan forces you to think critically about your needs and abilities and decide on concrete steps toward your goal.

 

2. To Franchise or Not to Franchise?

Coffee shops are a market saturated with franchise opportunities. A “franchise” is a license to do business as a certain brand; you own the business but you use the brand’s name and systems. For example, you could open a Seattle’s Best Coffee Café franchise. Franchising has many benefits – namely, you get a business plan and blueprint to run the business, so it’s a “turnkey” approach to starting a business. You also get the benefit of an established brand name and you may get training and access to vendors and suppliers. The downside is that a franchise can be extremely expensive to buy into, and may be out of reach for budding entrepreneurs or those without stellar credit.

 

To give you an idea of the range of costs of buying into an existing franchise, listed below are various franchise costs . As you can see, many require a hefty financial commitment right from the start:

 

The Coffee Beanery

  • Total U.S. franchises: 90
  • Cost range to launch: $62.4K to $545K

 

Biggby Coffee

  • Total U.S. franchises: 108
  • Cost range to launch: $220.5K to $390.1K

 

Dunn Bros Coffee

  • Total U.S. franchises: 86
  • Cost range to launch: $128.2K to $466.1K

 

Scooter’s Coffeehouse

  • Total U.S. franchises: 75
  • Cost range to launch: $50.5K to $457K

 

Alternatively, you can simply open your own shop. This option is less expensive and gives you the flexibility to decide on everything in the store – your business hours, what you sell, where you source your coffee beans, your décor, your prices, etc. Of course, you don’t get the benefit of an established brand or a ready-made business plan. The trick is to be meticulous and realistic in your own business plan and budget to avoid overspending and make sure you’re set up for success.

 

3. Secure Funding

Now that you have a business plan and have decided whether you plan to franchise or pursue an independent shop, you’ll need to find financing to get your business off the ground. There are many available options for a start-up, from traditional bank loans to microloans to grants.

 

Here’s our guide to securing lending for small business entrepreneurs. Shop around, take your time, create a business plan, meet with lenders, and then decide on the best financing terms for you. Whatever you do, make sure you fully understand and are completely comfortable with the terms of your financing – there’s no such thing as a dumb question when your business is on the line.

 

4. Find A Location

Coffee shops are small transaction, high volume businesses. A cup of coffee isn’t that pricey, but you’re going to sell a lot of them. You’ll want to scout locations that can accommodate bustling pedestrian and auto traffic. Consider the area’s demographics – who will your customer base be?

 

An urban space may be the right fit for a music and late night spot. A suburban spot may cater to commuters or parents home with children during the day. Determine whether the locations’ existing prospective customer base is in line with your vision.

 

No matter which space you go with, your coffee shop needs to be located where customers can easily find you – especially in the mornings! You want your shop to be part of their must-stop morning routines so they get their java fix from you, and only you. For example, you might want to start a coffee shop near a school to catch the parents who are dropping off their kids or near an office park to draw in the morning commuters.

 

5. Meet The Licensing Requirements

For legal and licensing purposes, your coffee shop will be a restaurant serving drinks and food to your customers. As such, you’ll need certain licenses and permits like any other restaurant. The health department will be inspecting regularly to make sure you’re met all the health and safety code requirements. The rules differ by state, but you’ll probably need to take a food safety certification course before you can get health department approval.

 

Most states also require you obtain an Employer Identification Number (EIN) and a sales license. This number is used by the IRS for tax purposes.

 

This stage of the process may be time-consuming and you may have to jump through some bureaucratic hoops to get it all done. There may be additional county- or city-level requirements to address, as well. The trick is to be proactive – check in regularly with the relevant government agencies to make sure your applications are being processed in a timely fashion and that you’ve met all the requirements.

 

6. Will You Need A Liquor License?

Some coffee shops also want to serve beer and wine in the evening, especially if they plan to have live music. If this is part of your plan, you’ll need a liquor license in addition to your standard restaurant licensing.

 

Regular licensing for a restaurant can be a pain, but liquor license applications are much more rigorous and costly. Some areas also limit the amount of liquor licenses available, so you’ll need to consider that when you’re choosing your location. If you do plan to sell alcoholic beverages, you’ll need to plan for a longer wait time for the license.

 

7. Tools Of The Trade

You have your business plan, your funding, and your licensing requirements handled. You’ve found a location. Now it’s time to stock up on the equipment you need to run it. That may include:

 

  • Espresso grinders
  • Commercial coffee grinders
  • Coffee brewers
  • Commercial blender
  • Commercial refrigerator
  • Running water and water filtration system
  • Commercial dishwasher
  • Serving implements (coffee mugs, cutlery, dishware, etc.)
  • Furniture
  • Payment systems: Credit card machine, cash register
  • Décor
  • Office supplies

 

Depending on the products you plan to offer, you may need more specialized equipment. If you’re going to sell food, you’ll need all of the commercial kitchen equipment to prepare and store it. You may opt to lease or purchase this equipment, depending on your needs and budget. Whatever equipment you do lease or purchase, ensure it fits into your existing space before you commit!

 

8. You’ll Need Suppliers

What’s the most important aspect of starting a coffee business? That’s obvious – it’s coffee! You’re going to need an awesome coffee roaster supplier to make your coffee shop work. You want one who’s dependable, available by phone or email for questions or problems, and prompt with deliveries and invoices.

 

When you’re looking for a wholesale coffee vendor, you may want to consider the sourcing of their coffee beans (i.e., whether they’re fair trade and what part of the world they’re from). You may also want to offer special blends to your customers – can the wholesaler accommodate your needs?

 

If you’re aiming for an upscale customer base, you may also consider buying raw beans and roasting them yourself. The equipment is going to be much more expensive, but you’ll have a lot more control over the quality of the final product. Plus, the whole area will smell like freshly roasted coffee – and that’s great advertising!

 

9. Staff Up

You’ll need to hire a staff to run your coffee shop. You’ll need someone to work the register, someone to make the coffee and prepare the food items, someone to handle the books, and someone to manage the enterprise and oversee staff and operations.

 

All of these roles could be filled by you, alone, as you get off the ground, but you may want to hire someone early on so you can train them from the beginning. That way you have reliable backup if you get sick or want to take a day off.

 

You don’t want to start a coffee shop, have a flood of customers, and then get bad reviews because it took 30 minutes to get a cup of coffee in each customer’s hands. Hiring a great staff is easier than you think – here are our tips to get you started.

 

10. Price Your Products To Sell

Pricing products for a new business can seem a little daunting – how do those decisions get made? You’ll need to take a couple of factors into account. First, what are your costs? You’ll need to charge enough to make a reasonable margin. Next, what are your competitors charging? Check out other coffee shops in the same area or similar areas and see what their customers are paying. You can either make your prices a little cheaper or brand yourself as a high-end option and charge a little more.

 

Pricing is not a once-and-done decision. Your pricing will constantly be in flux. Factors such as product supply and demand, customer requests, the growth of your business, and seasonal business all determine what prices you should charge for each item. Evaluate your prices consistently and adjust them to reflect the current financial pulse of the business.

 

11. Quality Is Key

You want to focus on making your coffee THE BEST so your customers are loyal. You have a simple product to share and everyone is familiar with it, so your focus should be on making that simple product the best quality that you can – a truly excellent cup of coffee.

 

If your customers love what you’re giving them, they’ll be loyal to your brand and to the product. Do what you can do to ensure an outstanding product, a relaxing, customer-oriented experience at your shop, and they’ll reward you accordingly with their continued patronage.

 

12. Opening Day

Congratulations! You did the legwork and figured out how to open a coffee shop. Now, embrace your customers, share your joy, and you’ll soon be on the way to financial success!

 

Whether you’re a foodie, a chef, or simply someone who wants to dive into the entrepreneurial pool with a new venture, the rules are the same. The food-service industry is hard and many restaurants fail during their first year, often due to lack of funding and proper planning.

 

Here’s what you need to know about starting your own restaurant, so you get off on the right (lucrative!) foot.

 

1. Nail Down That Target Market

Before you commit to opening a restaurant, you want to make sure that your restaurant is offering something new. Restaurants are a dime-a-dozen so you’ll need a way to differentiate yourself from the competition.

 

Assess your local restaurant market. What type of restaurants are currently out there? What’s the common thread of the local restaurants that are successful in your area? Is there a type of restaurant that the market is saturated with – such as pizza joints? Is there an opening for a new type of restaurant, such as an authentic ethnic restaurant with fresh new flavors?

 

Your goal is to fill a market niche. If you can provide something new to the restaurant scene and local food culture, you might intrigue new patrons and find a booming customer base.

 

2. Decide Whether To Franchise Or Start Fresh

Opening a franchise has the benefits of name recognition and assistance with sales, business plans, marketing, but the downside of a large financial output and limited autonomy in running the business “your way.” When you purchase a franchise, you own the rights to open a new chain restaurant and you pay royalties to the head office – McDonalds and Panera are two well-known franchises.

 

Part of the purchase cost of the franchise gives you access to their menus, marketing, and their corporate vision. In return, franchisees are required to adhere to the vision and mission of the franchise umbrella, which may be off-putting if you have your own vision for what you’d like to see in your restaurant.

 

Bottom line: Franchises can be an easier way to jump into the restaurant business for those without experience, but they require a lot of upfront capital and require you to follow franchise rules.

 

3. Be Prepared To Work Hard!

The restaurant business is not a get-rich-quick scheme. You’ll need to maximize your sweat equity for a successful business. Typical business hours don’t apply to the food service industry. Starting a restaurant (and keeping it open) require you to work mornings, evenings, late nights, weekends, and holidays.

 

It’s hard enough to cook dinner for a crowd at home, but the demands of a commercial kitchen are on a whole new level. If you don’t have experience in a commercial setting, consider either taking some classes to get up to speed or hiring an experienced kitchen crew to make sure you can keep up with demand during the dinner rush.

 

In addition to mental endurance, you’ll need physical endurance because the nature of working in a restaurant can require long hours standing, lifting, moving, and walking. The plus side is that the constant motion and activity means that your days fly by!

 

Bottom Line: Go in with your eyes open, roll up your sleeves, and be prepared to put some sweat equity into your new venture.

 

4. Planning Is Key

Just as with any other business, you’ll need a business plan to get your restaurant off the ground. You need to set your immediate goals as well your long term plans. Your business plan will also be crucial to securing financing, as well as wooing potential investors.

 

It’s not just about selling your grandmother’s famous red sauce – you’ll need to create a coherent menu plan and get your suppliers lined up to make sure you can consistently provide quality food to your customers. Starting a restaurant takes financial planning, too. You’ll have to rent or purchase a space, rent or buy the equipment you need for the kitchen, bar, and dining room, and make sure you can afford to purchase the ingredients you need. You’ll also need to meet your state’s licensing requirements for food safety and, if applicable, alcohol sales.

 

Bottom Line: A restaurant is, first and foremost, a business. Make sure you have a solid business plan so you’re ready for anything.

 

5. Know The Costs Of Doing Business

Starting a restaurant isn’t cheap. The most expensive approach will be building a new restaurant from the ground-up, since you’ll need to set up the restaurant with all the commercial kitchen cooking equipment and everything you need in the dining room- from plates and napkins to chairs and tables to the decorations on the walls.

 

If you’re renovating an existing restaurant, the start-up costs will be less than the blank slate approach. However, the rent for an existing restaurant may be more than for a space that you’re building from the ground up.

 

Experts caution that a restaurant can fail if they’re underfunded because some new restauranteurs don’t estimate how much capital it will take to keep the business running. One question to ask yourself when you’re starting out is whether each purchase is crucial to opening the venue, or whether that particular purchase can wait until you’ve earned some money to put back into the business.

 

A general rule of thumb:

 

  • Cost of goods = 25% to 40% of revenues
  • Payroll = 20 to 25% of revenues
  • Rent = 8 to 10% of revenues
  • Marketing, Payroll, Taxes = Fluctuates

 

Those numbers add up quickly! At the end of the day, if you have 5% profit, that’s a positive return. When you’re just getting off the ground, cash flow will be tight. You may want to open a line of credit so that you have access to capital if you hit a cash crunch.

 

Bottom Line: You’ll need capital and a line of credit to get your restaurant business off the ground.

 

6. Location, Location, Location!

One of the most important decisions you can make about your new restaurant is where it will be located. The most amazing food in the world won’t sell if customers can’t find your restaurant.

 

Not only will you want to be close to your potential patrons, you’ll also want to be in close proximity to your vendors and suppliers. For example, a seafood restaurant should be close to a fish market, or even better, close to the docks when the boats come in.

 

There are four essential elements to consider when scouting a restaurant location:

 

  1. Population – Is your restaurant located in an area where they are enough people to patronize the restaurant? You need to open in a densely populated area, or in an area where there is enough foot traffic to fill your seats.
  2. Parking – Is there onsite available parking for your patrons? If not, is their close local parking, such as a public garage? If not, could you obtain zoning to build a lot for your location?
  3. Accessibility – Is your location easy to find? Can you find it on a map? Using GPS?
  4. Visibility – It’s common sense: If your restaurant is highly visible, you’ll have more patrons. Can you see your restaurant from the street? From prime pedestrian traffic?

 

Bottom Line: Choose a location that makes it easy for your customers to come to you.

 

7. The Fine Art Of The Perfect Menu

You want your dishes to dazzle your patrons and leave them eager to come back from their next meal. Of course, you want to hire an excellent chef. But there’s more that goes into planning a restaurant menu from a business perspective.

 

Experts say that the ideal restaurant menu offers a balance of traditional dishes and new cuisine. You also need to look at the cost of food to keep your balance in the black. Having more menu items doesn’t necessarily make your restaurant better – it’s all about finding a manageable level of variety.

 

The ideal menu (again, from a business perspective) has the following:

 

  1. Low cost options for patrons
  2. Dishes that are easy to prepare so the chef and kitchen don’t get backlogged
  3. Menu items that versatile so waste is minimized and ingredients may subbed into other items

 

Bottom Line: Plan your menu with an eye toward taste – and profit!

 

8. Don’t Forget The Proper License And Permits

In order to start a restaurant, you will need to get the necessary licensing to serve food and, if you chose, alcohol.

 

Licensing can be a long, tedious process and take up to several months. It’s best to apply for the necessary licenses as soon as you find your location, so any bumps in the road don’t push back your opening date.

 

Your selected restaurant location and structure has to adhere to local zoning laws. If you need to purchase or add equipment, you need to get that approved by the local health department (specifics vary depending on your state). Food safety courses may be also be required of your staff before you can get a license.

 

Serving alcohol will require a liquor license, which has variable fees and requirements depending on your location.

 

Bottom Line: Licensing and permits can be a time-consuming, costly process, but are a necessary for starting a restaurant.

 

9. Your Staff Is Crucial

Finding and hiring your restaurant staff can be a challenge. It can be hard to keep good staff on the payroll, but it’s worth it to put time and energy into hiring the best you can.

 

In the service industry, your staff are some of your best assets. They are the face of your restaurant and who your customers interact with when they visit. They’re the people who can handle your customers when things get busy and make their experience pleasant and smooth.

 

Don’t rush the hiring process, take time to properly screen applicants, and conduct thorough interviews so you know you’re putting together the best team you can. You’ll also want to check references and verify past employment so you can confirm prior food-industry experience. These steps may seem as if they add extra work to your already busy schedule, but it will save you headaches down the road if you take the time to properly vet potential hires.

 

When you’re hiring staff for your new restaurant, keep in mind your own experience and abilities. If you haven’t worked in the restaurant industry before, you’re going to be very reliant on your managers, servers, chef, bartenders, and kitchen staff to keep things running smoothly.

 

Bottom Line: Your staff can make or break your restaurant. Take the time to hire quality staff and treat them well.

 

10. Word Of Mouth Marketing Is Golden

In the restaurant industry, word of mouth is paramount. If you create a fabulous ambience and serve out-of-this-world food, your happy customers will want to share their positive experience with others. On the flip side, if your customer finds a fly in their water glass and it takes an hour to get their entree, they’re going to spread that news, too.

 

Word-of-mouth has gone digital with Yelp and other online review sites, so it’s more powerful than ever. In short, you can’t afford to have an angry or unhappy customer. Go above and beyond to provide customer service and your patrons will feel appreciated, and spread the word.

 

Bottom Line: Word of mouth is the best kind of advertising.

 

Who’s Hungry?

Starting a restaurant can be exciting, satisfying, and potentially very lucrative. Just be sure to have a solid business plan and be ready to work hard. Bon appetit!

 

When starting your own business, some of the best lessons can be learned from those who’ve already walked in your shoes. Here are valuable tips from some Accion clients who built their own food and beverage businesses from the ground-up.

 

Dream Big and Just Do it!

It all starts with your unique dream. “If you have a dream and a vision, do it,” opines Kris Schoenberger at BBQ’d Productions. According to Schoenberger, small business entrepreneurs are the new face of the United States’ business climate. Many small businesses began with a simple dream, and grew from there.

 

Even the most dynamic, vibrant entrepreneur with a slam dunk business idea shouldn’t expect overnight success. It starts with a dream, and success will follow. By its very nature, growing a new business is a gradual process; however, with inspiration plus perspiration, you can realize the fulfillment of big dreams.

 

Build your “Dream Team”

There’s a misconception that you need to be a pro in your industry to start a business in that specific field, but it’s smart to get help from someone with more experience than you when you’re starting out. Education is part of building a company. That applies not only to the rules of entrepreneurship, but also to learning about your industry and product.

 

Chris Murillo of Astoria Distilling Company, New York, saw this first-hand when he changed careers from lawyer to distiller. At the time, he didn’t have much knowledge of the distillery industry, so he hired a consultant who had a tremendous amount of distillery experience. Murillo focused on learning as much he could from the pro.

 

Murillo recommends food and beverage entrepreneurs follow his lead and seek expertise from people who can help you grow and develop your brand and your business.

 

Accept that Failure and Growth go Hand-in-Hand

Wendy Carver of Hollingworth Candies, Inc., Chicago, shares this perfect nugget of wisdom: “Don’t worry about mistakes, they help you learn.” Learn to let go of the fear of failure when you’re starting a new business. It’s true that it’s easier said than done, but entrepreneurship is risky. Expect to fail, but then expect to learn, grow, and bounce back stronger.

 

The sooner you realize failure is not the end, the easier it will be to let mistakes propel you forward, as opposed to hold you back. Look at each misstep as a learning opportunity, rather than an insurmountable roadblock. This mindset will help you overcome setbacks to build a better, stronger business.

 

Be Clear About Your Intentions

It’s important as you start up to clarify your end-game goals and intentions. “Be clear about what you want,” says Maria Harrison of Tea Gallerie, San Diego. Clarity will help you focus on what’s important as you build your brand, and allow you to dismiss what’s not.

 

Clear direction is vital for both your business-and your whole life! Look at the overall picture when clarifying your goals and intentions, so you can apply these motivations across the board. From there, refine your intentions and goals into a dynamic business plan to build a road map toward a successful, fulfilling future in business and life.

 

Make Time for Life Outside of Work

While starting your new business, it’s common to feel as though the myriad demands are all-consuming. Long hours, stress, hard work, financial challenges-when you pour every ounce of time and energy you have into building a business, all of these factors take their toll.

 

Curtis and Liz Chism of Council Brewing, San Diego experienced this first-hand when starting their company when they faced eighteen to twenty hour workdays. Curtis’ take-away advice is to “make time for yourself” as you start out. You sacrifice time, money, and energy for your business, but make sure you don’t sacrifice your family, relationships, and friends in the process.

 

It’s vital to step back and decompress. Scheduling time away can make your hours with your new business even more productive. When you find some balance, you’ll come back to the business with a refreshed mindset and a renewed purpose.

 

Allow Your Story to Market Your Product

It’s likely you started this business because you’re passionate about the product or service you provide to others. Allow your story to be your driver behind your marketing.

 

Don’t be timid about sharing that passion and the story behind it with the world while you build your brand. According to Grant Fraley of ChuckAlek Independent Brewers, San Diego, you should “be true to your passion and that will come through in your business story.” Your story makes it easier to market your product. When you genuinely believe in what you’re building, the public will recognize that as you cultivate your brand.

 

Building a new business can be tough, but don’t be discouraged. Allow others who have been there to guide you. Take their advice to heart as you venture forward with your own business.

 

Accion has a long-standing partnership with Samuel Adams to help food and beverage entrepreneurs access capital, coaching and other resources they need to grow their business. For more information about the Samuel Adams Brewing the American Dream program, please visit www.brewingtheamericandream.com.

 

So you’ve got your food or beverage product and (perhaps also) your brand identity built – that is great! You’re on the right path. So now, how should it look on the shelf?

 

How your food or beverage product looks has a lot to do with whether the consumer pulls it off the shelf. Getting your label and design together can seem overwhelming. We want to demystify how label design is approached by showing you the basicprinciplesand strategya good designer should use to strategically build your label using your identity and selling a story. If it is done right you should be able to tell your story visually to everyone who encounters your product.

 

Together we will explore all the basicprinciplesand strategies that successful products employ and will help you to think about how you can use some of them for your product.This webinar is for food and beverage small business owners.

 

Want to turn your love of baking into a successful business? It’s going to take a lot more than a pastry bag and a dream. Here are the seven steps to turn your passion into a reality.

 

Step 1: Select a Bakery Type

What kind of bakery do you want to run? There are a lot of potential ways to start a bakery business. Some options to consider:

 

  • Wholesale Bakery: Do you want to sell your products to existing establishments, like coffee shops and restaurants? Many businesses will start out as wholesale, and then once they’ve established a following, open their own shop. If you go the wholesale route, you’ll have to decide if you want to work out of your home kitchen (check laws in your state to make sure you’re compliant), a kitchen incubator, or try to work out an arrangement with a restaurant to use their kitchen during their off-hours.
  • Retail Bakery: If you want to open your own bake shop, think about how you want the store to operate. Counter-only? Sit-down? Food truck? Each option comes with its own rules and regulations, so research thoroughly before you make a decision.
  • Online Bakery: If you want to sell baked goods online, you’ll have to consider where to do your baking just like you would for the wholesale option.

Step 2: Test Your Recipes

If you’re going to be doing all of the baking, your next step is to test and perfect your recipes. Friends and family are a great place to start, but eventually you’ll want some more objective feedback. Farmer’s markets and small grocery stores are a great place to give out samples and solicit reviews. If you’re planning on offering additional items you won’t be making yourself, now is the time to source them.

 

Step 3: Calculate Costs

Once you’ve figured out what baked goods you’re going to sell, you need to figure out how much capital you need to make it happen. You’ll need to know those numbers to create your bakery’s business plan, and also to figure out how much money you’ll need to bring in to cover those costs. Consider all of the following:

 

  • Recipes: For any items that you’ll be making, cost them out on a per-item basis. It’s important to know how much each cupcake costs to make so you can figure out what to sell them for.
  • Supplies: Cost out any additional items you intend to buy on a regular basis, such as napkins and utensils, bake boxes and other packaging and serving supplies, and even cleaning supplies for the kitchen and retail space.
  • Equipment: Calculate costs for any equipment you may need to purchase. You may luck out and find a commercial kitchen space stocked with a number of the items you’ve factored in, but you shouldn’t count on it.

Step 4: Write a Bakery Business Plan

If you plan on seeking funding for your bakery, you’ll definitely need to have a business plan to give to potential lenders. But what if you’ve got the startup money saved, or have already secured investors? Write a business plan for your bakery anyway. It will help you to become more focused on growing a viable business.

 

Here are the basic elements that a bakery business plan should include:

 

  1. Executive Summary: An overview of your bakery’s goals.
  2. Business Description: An explanation of your company and industry, along with the current outlook and forecasts.
  3. Organization and Management: An explanation of how your company will be structured. How many employees will you need? Who will be in charge of what? Even if the company will just be you for the foreseeable future, it’s a good idea to think about when you might need to bring additional team members on board.
  4. Products and Services: This is where you explain your concept, including what you’re selling, what vendors and suppliers you’ll use, what your anticipated costs are, and what makes your business unique.
  5. Market Analysis and Strategies: An explanation of who your competitors are, how you differ from them, and what kind of market share you reasonably expect to take.
  6. Sales and Marketing: An overview of how you plan to market and grow your business.
  7. Funding Request: If you’re creating a business plan in order to secure funding for your bakery, this is where you ask for how much money you need right now, explain what you’re going to spend it on, and when you anticipate needing another round of financing.
  8. Financial Plan: Even if you aren’t looking for funding, completing this section is a good exercise. List out your sales projections, costs, and how you plan to allocate resources. This will give you a good idea of whether or not you can actually make money.

Step 5: Secure Funding

If you’re just starting out in business, a bank loan may be out of your reach. Traditional banks deal mainly in large sums. If you’re starting a bakery, you likely won’t need that much cash. Here are some alternative lending options for new businesses:

 

  • Microloans: Usually smaller than a traditional bank loan, microloans can be a great option for a business just starting out.
  • Investors: If you’re willing to take on a partner or partners and give up some of your business equity, investors may be an option.
  • Savings: If you can scrimp and save enough to get your business off the ground, you can avoid having to ask for money or pay interest. This isn’t possible for everyone, obviously, but it is ideal.
  • Crowdfunding: There are tons of websites out there for drumming up money for your business, and lots of people who donate money on those sites. If you decide to go the crowdfunding route, make sure you read the fine print so you understand fees and penalties for not reaching your funding goal.
  • Friends and family: More forgiving than a bank and with usually with much less interest involved, loans from friends and family can give you the boost you need to meet your funding goals. If you do borrow money from friends and family, it’s a good idea to document the payment terms, just to make sure everyone is on the same page.
  • Credit cards: This is a risky option for financing your business, but if you have a plan in place for making required payments, you can keep your credit in good standing and keep your business afloat.

Step 6: Choose a Commercial Space

Whether you’re looking for a commercial kitchen to bake in or a full-scale baking and retail operation, finding the right space can be a long and arduous process. Know what you want in a neighborhood and space, and look at a lot of different kitchens before you make a decision.

 

As you get deeper into your search, depending on economic factors and your preferences, you might decide whether you want to buy or rent a commercial space. Consider foot traffic, accessibility, and nearby businesses that could complement or compete with yours. Most importantly, make sure any location you consider meets all safety requirements, which vary from state to state.

 

Step 7: Market Your Bakery

If you created a business plan, you likely spelled out your overall marketing strategy. Now it’s time to put that plan into action! Make it clear from the outside of your bakery that you’re having a grand opening, and get the word out through social media, flyers, and local media. Keep the momentum going by promoting your business both online and off.

 

Getting to wake up every morning and do what you love may not seem like a lot of work, but turning a baking hobby into a viable business will take a lot of skills beyond the kitchen. Don’t be afraid to ask for help when you need it, and remember that you’re going to be learning a lot about running a small business on the job, and that’s okay.

 

As you start your business, you might be dealing with limited funds, time or personnel, and you might be wondering how entrepreneurship really works. You might wish you had more resources, a mentor or more education to help you through the process of growing your business so the operation and the finances become more easily sustainable. If you’re ready to grow your business, but you’re not sure how to overcome these hurdles, then a business incubator might offer the resources you need to succeed. In this article, we’ll take a look at the benefits and downsides of business incubators so you can decide whether joining one is right for your business. But first, we’ll answer the question: what is a business incubator?

What is a Business Incubator?

An incubator is an organization designed to help startup businesses grow and succeed by providing free or low-cost workspace, mentorship, expertise, access to investors, and in some cases, working capital in the form of a loan. You’ll work around other entrepreneurial businesses, often with a similar focus as yours.

 

Joining an incubator is almost like joining a college program: You have to apply, be accepted, and then follow a schedule in order to meet benchmarks set by the incubator. You’ll also need to commit to a length of time to be a part of the incubator, typically one to two years.

 

Incubator Benefits

Based on the definition, you can already see some of the pros an incubator can provide to businesses to get a powerful start. Make sure to research potential incubators carefully to be sure they provide the following benefits:

 

  • Your incubator should provide a free or low-cost workspace that allows you to reduce overhead while you grow.
  • Look for an incubator that will give your business access to benefits that can help accelerate your business, including office space and services, mentorship, expertise, influence, and sometimes capital.
  • Incubators may also offer business development programming such as workshops and panel discussions.
  • Make sure investors trust the incubator to invest in the right startups and groom them into successful businesses. Joining this type of incubator will give you an advantage when seeking funding.
  • Businesses in some incubators might have access to office must-haves like internet, administrative support, and production equipment. Office services vary from program to program.
  • The structured environment and curriculum of an incubator can help a new business keep focus and grow in the right direction.

 

Many incubators target specific industries-such as digital education, green technology, homeland security, fashion and food-and thus offer targeted resources and expertise. It’s important to make sure you have a clear understanding of what an incubator provides before applying.

 

Incubator Downsides

Not all incubators are equal; some provide more or better benefits than others. Here are some potential downsides:

 

  • The application process can be rigorous and competitive. For most incubators, an applicant is required to submit a detailed business plan and disclose all business activities.
  • Many incubators require a time commitment of around one to two years, plus adherence to the schedule set by the incubator, which can include many trainings and workshops. Yes, you will learn a lot, but you’ll also spend a fair amount of time doing it.
  • For better or worse, an incubator is a professional environment. You can’t simply come and go as you please, and you’ll be expected to answer to someone other than yourself in regards to your progress. Think of an incubator like a boss who is invested in your success.

 

As you can see, the benefits can be great for the right applicant. Make sure you are willing to dedicate yourself and your business to the program in order to reap the rewards.

 

How to Choose a Business Incubator

Choosing an incubator for your startup business is a big decision, especially if you’ll be giving up a hefty chunk of time and equity for its resources and expertise. Here is what you should look for in a business incubator before you choose a program:

 

Incubator Perks

Research the incubator’s offerings to see if they match your needs. Learn what resources and services the company provides. Study the incubator’s mentors and advisers to determine if their expertise, skills, and networks match your business’s needs.

 

Incubator Curriculum

Many incubators require rigorous training and have strict schedules. Assess the curriculum to make sure it teaches what you need to learn in order for your business to succeed. Make sure you can take it all on while still running daily operations.

 

Incubator Track Record

How have similar businesses performed with the support of the incubator? If possible, contact alumni for their take on the experience. Most incubators list graduate companies on their websites.

 

Incubator Cost

How much does it cost to use the workspace and the equipment? If applicable, what are the loan terms offered, or what percentage of equity will the incubator take? Make sure the cost fits with the sacrifice you’re willing to make.

 

Incubator Location

As previously mentioned, joining an incubator is not unlike joining a college program. Because you’ll be going to class several times per week if not every day, you’ll need to be on campus–that is, in close proximity to the incubator. This may mean relocating to be closer to an incubator if you can’t find the right fit close enough to home.

 

Incubator Example: Hot Bread Kitchen Incubates

Hot Bread Kitchen (HBK) Incubates helps startup and growing food businesses in New York City proper by offering licensed commercial kitchen space and business development support.

 

HBK Incubates Program Description

If you want to sell food commercially, you must use a licensed commercial kitchen and have your own food business licensing. It’s expensive when you’re just starting out, so HBK Incubates gives startups an affordable option during that beginning, awkward growth phase.

 

HBK Incubates allows food businesses the chance to grow by using their reduced-rental rate commercial kitchen. While the typical commercial kitchen rental costs $25 to $60 per hour in New York City, HBK Incubates charges much less. HBK Incubates also offers a low-income rate for qualified users, plus a subsidy that allows them to use the kitchen.

 

In addition to production space, HBK Incubates also offers a suite of business development resources to position its member entrepreneurs for growth and sustainability. HBK Incubates offers ongoing workshops, panels and exchanges that provide content on various small business topics like access to capital and marketing. Members are also able to schedule one-on-one financial and business counseling sessions with HBK staff.

 

Program members also benefit from the network and growth of Hot Bread Kitchen’s bakery business in the form of introductions to potential sales accounts and other access to market opportunities.

 

HBK Incubates also provides attendees with business and culinary workshops and commercial kitchen training. HBK requires a minimum of twelve hours kitchen utilization per month.

 

HBK Incubates Program Goals

The program helps a diverse group of business owners with proven sales who are expanding beyond their home kitchens. These business owners need a commercial space to legally grow.

 

HBK Incubates is committed to helping members get past the profitability and cash flow transition in the early years of their businesses so they can get off the ground. In order to do this, HBK Incubates provides members with training to boost sales and access to market opportunities that support healthy business growth.

 

HBK Incubates Success Stories

While there have been fourteen graduates of the program since its inception in 2011, one inspiring business is the Harlem Pie Man, a husband and wife team that sells pies and pastries on 125th Street in Harlem, New York. When they outgrew their home kitchen, they applied to HBK Incubates and were accepted into the program. In addition to low-cost kitchen time, HBK Incubates has worked with the couple on best practices, has facilitated catering contracts, and more recently has made introductions to a major retailer for potential distribution.

 

2015 HBK Incubates graduates Catherine Oddenino and Ruthie Vishlitzky are founders and co-owners of Luca & Bosco, a specialty ice cream business. About the program, they say, “HBK Incubates taught us the basics of how to operate in a commercial kitchen. Monthly workshops were helpful for us, especially the workshop on catering. Workshops encouraged us to meet other members and introduced us to helpful resources like Accion. We learned which suppliers [other HBK Incubates] members were using, and even found our current production space thanks to an HBK Incubates member.”

 

HBK Incubates 2015 graduate Loliware is a company that produces a line of biodegradable and edible cups. Co-Founders and Co-CEOs Leigh Ann Tucker and Chelsea Briganti say, “The biggest thing for us was having the opportunity to get into a food production facility in a way that was affordable and flexible and that had the equipment already there. The growth of our business would have been entirely different if there wasn’t a place that we could rent the kitchen on an hourly basis.”

 

Who Can Participate in HBK Incubates?

Any culinary entrepreneurs in New York City can participate, but the program is designed especially for motivated food-based business owners who have outgrown their home kitchens. These entrepreneurs are ready to formalize and expand their business.

 

Some indicators that you might qualify to participate in HBK Incubates:

  • Your product, menu, or product concept is strong and unique.
  • You have a comprehensive business plan that shows you know how to produce, sell, and market your product.
  • You already have sales or have already gained a fan following for your product.
  • You’re ready to go into commercial production and sell at higher volume within weeks of beginning the HBK Incubates program.
  • You have a food business that needs support, mentorship and counseling in order to accelerate growth.

 

Program attendees must also have general liability insurance, workers compensation insurance, a sales tax certificate of authority, and a food handler’s license from the Department of Health.

 

NYCHA’s Food Business Pathways Program

One example of HBK’s dedication to culinary entrepreneurs who have outgrown their home kitchen is NYCHA Food Business Pathways. HBK partners with Citi, The New York City Housing Authority (NYCHA), NYCEDC, the NYC Department of Small Business Services and Start Small Think Big to prepare eligible NYCHA residents of public housing to start food-based businesses. Participants in HBK through NYCHA’s Food Business Pathways Program receive class room training, business coaching and free licensing, permits, legal advice on choosing a business entity and grants to pay for it.

 

This part of the program offers a 15-class curriculum, which is known as Fast Trac, which is customized to teach business owners best practices of food business operations and how to maximize profits. Selected participants in NYCHA’s Food Business Pathways Program receive HBK’s commercial kitchen access and storage for five months at no charge. Others who graduate have the tools and resources necessary to apply on their own.

 

How to Apply

To become a member of HBK Incubates, businesses must submit an application. Completed applications are accepted and reviewed year round. To request an application for the HBK Incubates program, please fill out the request form. You will receive an application electronically.