food business

Your 25 Step Plan to Starting a Food Business.

A lot of wanna-be food entrepreneurs sit at their kitchen table with their head in their hands wondering what to do next. Where do they start? What about finding kitchen space? Recipe approval? A logo? Man, there’s a lot.

If you’re stuck with starting your food business, I’ve created a 25-step fool-proof guide that walks you through everything you need to do before your first sale. The list is a mix of marketing, production, operations, and general food business to-do’s. And it’s in no particular order. I hope you find value in it — if you do, let me know.

Let’s hop right into it:

1. Select your company name

This one’s quick – grab some friend’s and family and start putting names down on a piece of paper. But, don’t settle. Think about your company name.

You don’t want it to be close to anyone else’s, hard to say, or limiting (yes, I realize I did 2 out of 3, but I didn’t know better back then!). Plus, look on GoDaddy to see if your domain name is available and snatch it up (we’ll talk about website later).

Here are tools to help you with naming:

2. Decide what you’re going to make

Do you just want to make bbq sauce? Are you known for cookies, but would like to make brownies and ice cream sandwiches? What product lines do you want to launch? I’d stick with one to begin with (as I wrote about here), but make sure your company name reflects the focus or depth of your product lines. Plus, think about how many products you’d like in your product line.

Do you want to make 12 flavors of jam, or focus on your top 3? For wider distribution, less is always more, You’re likely not going to get all 12 skus on the shelf. And ps: Take a look at the jam study before you make 4,000 flavors.

Attention Founders: Download our food business startup kit with business canvas, startup spreadsheets, and exclusive interviews. 

3. Get a logo designed (and other materials)

This is the exciting part! What do you want your logo to look like? Have you started sketching? Whenever I’m designing something, I ask myself what emotion do I want from my customers? Is this is a sales piece or is it fun and playful? What tone do you want to communicate? Find a friend to do some free design work in exchange for product or browse one of these sites for a freelance graphic designer:

When you’ve got your logo design, stick with the same designer for packaging, business cards, sell sheets, and more. They’ll already have a good handle of what you’re looking for after working with you to develop your company’s logo.

4. Get your website up – and social media profiles

bottling mustard

Yes… that’s really me on the production floor bottling mustard.

Even before you’ve launched your product, get your website up. It’ll give Google a chance to see you put something up on the web – and you’ll be able to build an email list of fans who can’t wait for you to launch! And don’t forget to secure those social media profiles (even if you’ve got nothing to put up yet!).

Here are a couple of resources I have used in the past to build quick websites (and they all have ecommerce components)

  • Shopify (we use this for Green Mountain Mustard and I LOVE it)
  • SquareSpace (incredibly easy to use interface)
  • WordPress (you’ll want your own hosting here, but this is wildly popular. The website you’re reading right now is built on WordPress.)

5. Look up health laws, permits, insurance and more

Ok – here’s the first biggie. Seps 1-4 were pretty easy, but important for your company’s branding. Now, it’s time to get down to work and see if you need to apply for any permits before you produce your product. What permits and licenses am I talking about?

  • Food Producer’s License (usually you get these through the state health department office.
  • Caterer’s License (if you’re preparing and serving food for immediate consumption)
  • Scheduled Process (if you produce a product in a jar it should be approved by a process authority. Here’s more on that)
  • Business License (want to be a corporation, LLC, partnership? File the paperwork to become a real business with your Secretary of State’s office)
  • Product Liability Insurance (basic insurance is $1 million general liability and $2 million general aggregate
  • Legal protection – you may want to protect your company name and it’s visual identity – or even a unique tagline.

6. Find packaging for your food product

How are you going to package your product? Do you want to put it in glass jars? Printed pouches? Your scheduled process may mandate how you package your product, so you could be limited. Regardless, here’s a couple resources (and pretty packaging) you can browse to find what you’d like:

And if you need package design inspiration check out The Dieline or even Pinterest.

There are even more packaging resources on this page.

7. Determine your product’s pricing

mustard on display

Drumming up sales at the local farmer’s market.

This is the most important step on the entire list — the cost of your product. It determines if you’ll have a viable business. It determines your price on the shelf. And it could literally crush you if you don’t get it right. I created a tool to calculate food or menu costs that you can download here and start to use right away.

Anyway, here’s what’s included in your product cost:

  • Ingredients (plus shipping!)
  • Packaging
  • Labor

If you have your own kitchen, you’ve also got things like rent, utilities, etc. Ultimately, you need to make and sell enough product to leave the lights on, right?

Related Reading: Menu & Recipe Cost Template – Download My Spreadsheet

8. Decide how you’re going to produce your product

There are a lot of ways you could produce your product. For some of you, your home kitchen is perfect. There are many states with cottage food laws that allow you to run a small business out of your kitchen. That means you can produce products in your house for public sale. There are limitations on process, revenue, and how you can sell, but they are fantastic programs to get started.

You could also use a church kitchen, community kitchen, shared kitchen, restaurant kitchen – or if you want you can have someone else make your product. That’s called co-packaging – and I wrote an entire guide on getting started with co-packing.

Ultimately, there’s no right or wrong answer – I’ve produced three food products three different ways. It all depends on where you on with your business.

9. Check out your competitors at the grocery store

This is a covert operation because many large grocery stores – and even specialty stores – discourage photography. But, with a smartphone, you can snap a shot quickly. I have written a lot on test marketing your food product in my book, but here’s three reasons why it’s so important:

  1. It helps you position your product – are you going to be at the bottom of the market or the most expensive?
  2. It helps you get an idea of shelf space – how much bbq sauce is on the shelf? Is there room for you?
  3. It helps you identify local competition – If you make spice blends, your direction competition probably isn’t McCormack – it’s the other guy making spice blends in your town.

10. Read up on how to become the best salesperson

whole grain mustard

My top selling whole grain mustard.

Your hot fudge sauce isn’t going anywhere unless you can sell it. And a lot of food producers just want to make their product. Not you, though. You’re going to become a sales master. You’re going to get your product into a handful of stores when it first launches, right? YES. I’ve been reading a lot of sales books and blogs to get better at personal selling – whether it’s at a farmer’s market or a new retailer. Here are a few of my favorites:

Just one of these books is going to help your sales game. By the way, I don’t get any compensation for recommending these books. These are guides that have help me along the way. You can also check out my book on starting a specialty food business on Amazon titled Food Business Secrets. Read-up!

11. Know what you’re good at – and outsource the rest

This is hard for any business owner: you want to do everything, but that’s simply not possible. That means you have to think about what you love to do. The part of your business that keeps you going through the long nights and weekends.

Do that. And outsource many of the other business functions. I realize when you’re starting out, you don’t have a lot of cash to have other people do things for you. You’ll get there. Heck, I’m not there yet either. But I want to be. It’ll feel amazing once something HUGE is off your plate, won’t it?

12. Make your sell sheet (aka giant billboard)

This is basically the food industry’s version of a billboard. Your sell sheet is a giant business card – beautifully designed, I might add – that tells retail buyers and distributors about your company, your products, and sometimes includes pricing. Here’s a great article I wrote on sell sheets with examples.

Again, if you’re not design-inclined, hire a college student looking to build their portfolio – they’ll love the work! Or, use one of the sites I mentioned above to get your sell sheet designed.

You Might also Like: The Economics of the Fried Chicken Sandwich

13. Make a list of retailers in your area

Where are you going to sell your product? Are you going to sell to retailers in your area? What about farmer’s markets? Are they sustainable to build  business? Or, you could go the food service route and sell only in bulk. Finally, take advantage of technology and sell online – lovely margins to be had!

Whatever strategy you choose, it’s time to get listy! Write down a list of stores you’d love to see your product in. Include the big stores (you know, the kind-of-impossible ones?), small specialty stores, bakeries, farmer’s markets, restaurants, etc. Then, use your super-ninja sales skills to get into some retailers.

Bonus: Here’s what to bring to your retail buyer appointments.

14. Find sources for your ingredients

If you don’t get a little bit nerdy with math, specialty foods (aka manufacturing) might not be for you. You’