Taste of success: How to run a food business

Posted by Jim on January 19, 2013  /   Posted in Blog

Turning foodpreneur seems to be the hot daydream du jour. It’s not merely bakers and pickle-makers, being told by friends that their special recipe is so exceptional they should turn it into a business, who are graduating from kitchen table to production kitchen.

More so-called City high-flyers than ever (bankers and lawyers are particularly numerous) – hit by the downturn in the financial sector and shrewdly aware of the momentum that is currently behind small food businesses – are opting for the allure of a food-centred life-change, trading bonds for artisan and street-food derivatives.

At the Speciality Food Fair earlier this month (the annual grand bazaar connecting producers with buyers, from Fortnum & Mason to fledgling deli owners on their first spending spree) there were an impressive 214 start-up food businesses exhibiting, from Japanese home-cooking teacher Hiromi Stone’s delectable sweet miso nuts to Lincolnshire-based Claire Brumby’s Scrubbys vegetable crisps with character (30 per cent less fat, gluten-free and proper dip-able size). All reported significant potential interest that could make or break their foodpreneur dreams.
Riding on the surge of food start-ups, there seems to be an ever-growing number of markets to which fledging foodpreneurs can tout their wares, especially in London.

However, it seems the most sought-after, from Borough and Maltby Street to Broadway Market, have been so inundated with requests for stalls, that they’ve closed their waiting lists, so even getting a pitch is increasingly competitive. A new source of help is now at hand. Forget the boot camp that promises to fine-hone one’s physique, the newest regime is designed as a kick-start for those in the early stages of starting and growing a food business.

Cannily spotting a gap in the market and with the all-round food knowledge and experience to back it, Monique Borst has notched up more than 20 years of experience in the industry, having worked with companies such as Harrods, the John Lewis Partnership, Waitrose and, latterly, as board level MD at Compass Group and Sodexo, focusing on food strategy, improving sales and profitability.

Explains Borst: “My goal is to give food business owners the practical advice, tools and, perhaps most importantly, the confidence to manage their businesses more effectively and more profitably. It can be a daunting task: you need to be aware of all the legal regulations – environmental, health, licensing and insurance. Competition is fierce and profit margins are small.

“A realistic business plan and a marketing strategy to give your business the best chance of being seen and heard are critical, too, besides sheer bloody-minded conviction and determination.”

Borst cuts to the core. The first morning is spent looking at whether participants have got what it takes, the skills, knowledge and attitude to succeed, and doing a SWOT (strength, weakness, opportunities, threats) analysis, which form the basis of their action plan.

As Borst warns: “There is no hiding place; nowhere to shift the blame. Growing a business depends on the entrepreneur; no-one else.”

Brutally honest, she cautions that 75 per cent of start-ups fail in their first year. She reels off some of the most common reasons for failure: simply no real demand, no plan B, C or D, inability to forecast or budget, incorrect pricing (whether under or over), unrealistic cash flow predictions and excessive start-up costs. Most crucial of all, contends Borst, is writing a business plan.

“I ask delegates: ‘Would you ever consider setting off on a long, unfamiliar journey without your satnav or road map and only a dribble of fuel?'”

The reality is that food service and retail are unforgiving when it comes to achieving bottom-line profits. There is little room for financial mismanagement because profit margins are almost invariably small.

Time is spent at the boot camp looking at what records need to be kept: accounting, forecasting and budgeting as well as ways of financing the food venture. Also covered are marketing, social media (an active Twitter presence can and does work wonders: eatmypies.com and flavour sofspain.com are two textbook examples) and PR and managing people.

Shining examples of successful start-ups make guest appearances at the boot-camp, such as Nick Barnard of Rude Health. “Going from deli to deli doing tastings ourselves was an essential part of the learning curve,” he reflects ruefully. Yet it was only when we got several distributors on board and started building volume that we were able to take money out and reassess and concentrate on what we do best: brand building, design and innovation.

Boot camp participants seem unfazed by the emphasis on sheer hard slog, especially in formative years.

Muna Koghal, formerly in corporate banking, who is weeks away from opening “Book & Kitchen”: a most appealing-sounding bookshop with a cafe “third space” on All Saints Road, is unstinting in her appreciation of what she’s taken out of the weekend assault course.

“It’s given me a real handle on the main challenges and pitfalls and ensured I am pragmatic about not over-extending in my start-up phase, yet inspired me to feel there are even more opportunities than I originally envisaged. I am continuing with regular nitty-gritty mentor sessions with Monique.”

Similarly raring to go is Vivien Hargreaves, a former buyer for a promotions company, who is keeping exact plans close to her chest, but is set on a food truck and a pitch at the peripatetic Northern Street in Leeds, where the street food craze is still in its infancy.

Borst agrees that such mobile ventures, with no fixed premises, have relatively low start-up costs and overheads compared to bricks-and-mortar capital, and can prove lucrative quickly for those with great ideas and who are prepared to put in the required hours.

Nick Green, who currently runs a digital media agency, has rather more ambitious aspirations for the up- scaling of street food: to give the much stigmatised kebab a fresh and ethical makeover with the first of what he hopes will be a number of fast-casual eateries due to open in Soho, London, later this year.

“Arriving at the right branding is key, now we’ve overcome the hurdle of finding our first site,” reflects Green. “Now we’re ensuring we have the right resources and people operationally.”

Brand agency owner Mark Glynne Jones, sanguine with 20-plus years experience, currently adding a Food Hub network to his business, cautions too that would-be foodpreneurs “mustn’t get carried away with what they think the market needs, they have to be convinced – thorough market research is essential– that would-be customers would really want it, too.” Yet, what’s arguably not teachable is what boils down to the X-taste Factor – which translates into the breakthrough foodpreneurs taking the zeitgeist by storm.

Jamie Berger, founder of cult barbecuers Pitt Cue Company, one of the runaway successes among recent street-food launches (it graduated from trailer under Hungerford Bridge to Noho site in less than a year), disarmingly puts it down to luck. He’d been tracking the food-truck movement long before it hit British shores and drew on his family’s American Deep South roots, matched by his fascination with US bourbons little known or understood in the UK. He gives full credit to family friend Jackson Boxer of Brunswick House for pushing him into going with his gut idea.

Plus his refusal to compromise on quality for fast bucks: Berger invested in the ultimate US smoker kit (paid off after their initial summer stint) and Pitt Cue’s sourcing is impeccable, using only rare-breed meats. Drawing on head chef Tom Adams farming roots, they’re now beginning to breed their own pigs, too.

Integrity, deliciousness and sheer force of personality are vindicated as the trump cards that must be exercised even beyond all a boot camp can do. Would-be foodpreneurs, there’s no easy fix.

About Jim

James is a director with JCR Network Services Ltd, which provides sales, marketing and business development expertise to local SMEs in Ireland and the UK. Many businesses have developed their growth strategies through our focussed actions. We specialise in helping the agri-food , emerging technology, manufacturing and services sectors.

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