8 Tips for launching a successful food startup
By Brook Sauer Ruiz, founder and CEO of Elby’s Organics,
a new food startup based in Hamburg, Germany.
Starting up in the food industry
Launching a food startup is an exciting avenue to pursue for someone with passion for spreading culinary delights. The global food industry’s estimated worth as of 2017 was 5650 billion. This figure will continue to rise in the future, so there is much to be gained from startups entering the market.
With a good idea and proper planning, profits can soar. However, launching a successful food startup is challenging endeavor. Your grandmother’s famous goulash recipe might be the best in the world, but without a well-organized plan, success can be difficult to realize.
To be ahead of the game, we have prepared 8 helpful tips for you to consider as you get ready to launch your startup.
1. Do a self-evaluation
What are your strengths and weaknesses? What’s your motivation? Do you want to be your own boss? Do you want the freedom to set your own hours? Or are you driven by the financial gain?
Taking an honest look at your professional and personal standing, helps to determine if you have what it takes to manage a successful food brand. It can also help align your expectations with the realities of the business.
2. Research everything!
Knowing your market inside and out can make the difference between success and failure of your food startup. Make sure you have information on every aspect of your industry, and be prepared for the ups and downs.
What sets you apart from your competitors? What are the current trends in your segment? What challenges will you face as a new small brand?
For example, if you want to produce the food yourself, make sure you’re aware of all the safety standards associated with your products. Many times, smaller brands have trouble adhering to strict controlling standards associated with food.
Know what you’re up against, and how you’re going to overcome obstacles.
3. What do you stand for?
The shear volume of options available can cause new brands to get lost on the shelf. Set yourself apart from the competition by selling the feeling, not the product.
There are a number of environmental and social issues that your brand can help support. Figure out what’s important to you, and make it a part of your vision. Consumers will be more likely to buy your product if it’s both tasty, and has heart.
4. Choose your team – wisely
Having good chemistry with your coworkers, partners, clients, and vendors can make or break a brand. You can have all the professional experience in the world, but if you have no chemistry with your partners, you have nothing.
Cultivate good relationships with people. Work with people who have like-minded views, and aim for the same goals. Support local suppliers where possible. This helps maintain the livelihood of the community, and reduces transportation costs.
5. The importance of marketing
Marketing agencies can provide valuable assistance with trend research, logo and packaging, brand concepts, .com, launch strategy, etc… If you don’t have experience in these topics then it might be beneficial to consider working with an agency.
If you have no fluid income from your brand, then investing tens of thousands of Euros on marketing might not be feasible. However, presenting a finished logo and brand concept to investors will give you the professional edge that can help secure funding. Therefore, find a balance.
Shop around and get quotes from several agencies. Keep in mind that bigger agencies sometimes only work with clients with large budgets. It’s important to compare services, and prices to make sure your needs align with the services they offer.
Seek out smaller marketing agencies that are willing to work with start-ups. A smaller agency can have a more appealing price tag, and be little gems if the founders are talented and have previous experience in the food industry.
6. Business Plan
Create a business plan. Make sure your plan is scalable. It’s wise to start small, but investors like to see that you plan for growth.
Decide on the ERP system you will use, and when you will implement it. Consider cloud-based services. Cloud-based technologies don’t require massive hardware systems, therefore are they faster to implement. Also, they have flexible payment options that fit with startup budgets.
Arrange your supply chain. Start forming relationships with possible suppliers, producers, packaging companies, lawyers, logistics companies, etc.
Contact your local city hall for more information about the regulations in your area. Many times, city offices can provide helpful services for startups. But they might have specific forms, or a business plan format they prefer using. Contacting them up front can save time in the end.
Failing to plan, is planning to fail. Make sure you have accounted for all the foreseeable challenges that will arise, and know how you will overcome them.
7. Seek Funding
Decide on what kind, and how many investors you want to have. Do you prefer to use your own money, or will you seek private investors?
Depending on your country of origin, startup funding could be available through banking institutions. KFW bank in Germany is a government bank that is start up friendly.
8. Plan for the future
As you think about the future, it’s important to plan for a number of scenarios. Plan for success, but also have a plan in case sales fall short.
Keep an eye on the big picture. Watch what’s going on in the industry as a whole. What new technologies are emerging (e. g. blockchain) that can help your business? What new regulations are being implemented that can impact your brand?
Supply chains and workflows can be tricky to manage manually. As your brand grows, so must your methods. Software can help minimize human error, and keep the ball moving forward so nothing slips through the cracks. Automate your operations.
Startups don’t always have the resources to hire a lot of new employees. The right software can help fill the gaps in your business and help support your process until you’re ready to hire more personnel.
Educate yourself on BI (Business Intelligence) technologies, and know what ERP system is right for your business. Keeping up to date on industry developments and embracing technology, will keep you ahead of the game.
Go for it!
Launching a successful food startup is challenging, but not impossible. If you have the right idea and are highly motivated, then go for it! People will always need to eat, so new and improved food items have a promising future.
With hard work, good connections, and a great plan, your food brand has every chance to become a household name. Leaving you with the sweet taste of success.
We are a creative team that loves writing and sharing its broad range of expertise with you. For our blog, we regularly write articles about current topics in the fields of IT, trade and agriculture. Whether it’s cloud solutions, artificial intelligence, digitalization of business processes or smart farming – we keep our finger on the pulse and you up to date: with exciting reportages, interesting interviews, in-depth background reports and illustrative overviews.