Starting a Food Business: A Simple Guide

Have a food truck idea stuck in your head? Wish a certain cuisine or dish was available in your area? Do friends tell you to open up your own restaurant? What’s stopping you from making your culinary dream a reality?

Our team at Sous Chef wanted to help people become food entrepreneurs—no business plan necessary. We believed aspiring food business owners should focus on four topics to jump-start their success.

1. Cook and test: figure out what customers want

Before anything else, cook.

It’s easy to get distracted by the endless to-do list to officially create and maintain a business—registering the business, purchasing insurance, applying for licenses, bookkeeping, accounting, building a website, running social media, renting commercial space, finding suppliers, hiring staff, and more. However, all of that time and effort won’t matter if in the end no one wants to buy your product over and over again.

Find out if you have something to offer that customers come back for. Fortunately, this is relatively easy to do with food. You can make and distribute your product to a few friends and family to start, or hop on social media to try to gain an initial customer base, but either way, test it out. Experiment with your potential offerings and see which ideas create loyal customers.

Let’s say you have been honing your sourdough bread-making skills and are thinking about opening a bread bakery to help feed your community, have a side hustle, or pay your bills. You might start by making a few favorite loaves and hand-delivering them to local friends in exchange for constructive feedback. Eventually you could create a simple menu to distribute to your followers and take pre-orders.

This is a critical step in the process to answer:

• What are customers saying about your products?
• Why would customers buy from you instead of your competitors?
• How much are they willing to pay?
• What would it take to make them repeat customers?

As your business grows, stay focused on the fundamentals: your customers and your products. Try to become an irreplaceable part of your customers’ lives so they keep coming back and tell their friends.

2. Keep your receipts: forecast your sales and expenses

Even if numbers aren’t normally your thing, you still have to ensure that your business will make money. You should have what you need to determine if your potential sales are higher than your expected costs.

First, document the cost of your ingredients. Next, build your recipes to understand the ingredient and labor cost of each item you’re selling. Once you enter your ingredients and recipes, see if it makes sense from a business standpoint:

• How much do you need to sell to make an acceptable living?
• Does the price make sense?
• Do you need to find cheaper ingredients?

At this point you can create a basic profit and loss statement. Stay as lean as possible in terms of expenditures. Just because you’re seeing some traction today doesn’t mean it will continue at the current rate. Prematurely investing in nice-to-haves, such as new equipment or a larger space, can eat valuable cash flow before those purchases are justified by predictable future sales.

3. Sanity check: prepare for what may come

Nothing ever goes 100% according to plan, and this is especially true within food and entrepreneurship. You should be mentally and emotionally prepared for things not to go as expected. You may regularly question whether you can make this work financially or if the business or product even makes sense. Sometimes the answer will be “no,” but that doesn’t mean you should give up altogether. Take each opportunity to learn and adapt.

Much like tasting a dish throughout the cooking process and adding a dash of salt or sugar, running a food business requires preparation and constant adjustment. This is a normal part of the process and often what makes it fun.

Then why plan at all?

Building a successful business isn’t something you can easily do on the fly. Before meal service, you’d likely check that you have all your ingredients prepped and set up at your station so that you can reduce as many uncertainties as possible before the unpredictable rush begins.

Bring that same energy to entrepreneurship: prepare as much as you can, but understand that some level of agility and flexibility will be necessary to handle the curveballs that come with running a business.

4. The business canvas: a lightweight business plan

While there are a lot of elements to consider when starting any business, the traditional 30-plus-page business plan can be too much to tackle at first. You still need to think critically about the pieces within successful operations—supplies, partners, key activities, and more—which can all be addressed using the much simpler business canvas.

There are many business canvas resources and templates available. Your business canvas can act as the foundation for a potential business plan later, if needed.

Ready to stop dreaming and start doing?

Chefs and entrepreneurs are constantly challenged to do more with less. Starting a business is doable as long as you focus on customers and products first.

One of the first things to do is create a menu to share with your customers. Continue with The 9 Simple Steps to Create Your Menu.