In the food industry, the terms “incubator” and “accelerator” are all the rage. Although there are companies that are truly trying to change the landscape of food production by helping entrepreneurs, like any trendy thing, there are a lot of people who use these terms trying to make a quick buck. If you are an entrepreneur wanting to get started, here are a few things to look out for.
One challenge our members are often faced with is how to grow. The Northern Virginia market is expensive and crowded. Standing out in that crowd seems to be impossible.
The "Valley of Death" is a real thing. It is that point after the excitement of owning your company wears off and the equilibrium of business management kicks in. It kills many, many companies. Mostly because the owners do not know how to plan and cannot see their way out.
I am often shocked by how many business owners do not know what they want to do with their companies or are afraid to admit that they dream big. There is nothing wrong with wanting to create an empire. Equally there is nothing wrong with striving for financial and physical freedom. Both are great dreams.
Once you admit your dreams, now you need to plan for them. Creating your vision is easy...when you close your eyes, what does the fantasy look like? Why do you want your company?
Strategizing how to get there can be hard. There are so many roads to take...and most of them end in a dead end. Figuring out those dead ends is the art of doing business. The best tool in your toolbox for figuring it out? Numbers.
Numbers--and knowing how to interpret them--are what make big companies big and why small businesses remain small. The vast majority of small business owners do not see the value of reports and analytics. But, if you look closely, your numbers are your magic ball. They can tell you how to be profitable, what you spend money on, how to maximize your profitability and how to change your company strategy to allow you to thrive.
As a small business owner, the best piece of advise any expert should give you; learn your numbers. How to look at them, how to calculate them and what they mean. Take a financial projections class. Take a pricing and costing course. Take an accounting course.
Frontier Kitchen has worked with over 150 companies in our 3 short years. If I had to boil down the difference between start ups that make it and those that go out of business, it would have to be numbers. Those owners that understand how to use their numbers to create the company of their dreams, do. Those owners that do not, close.
So yesterday I hear a rumor that Frontier Kitchen (aka "that kitchen in Lorton") was going out of business soon. As the owner, operator and founder of this company, I will have to say that is akin to reading your own obituary.
For all of our members, friends, fans and new business owners, I want to first assure you that we are NOT going out of business any time soon.
We are supremely privileged to be helping dozens of new companies--food trucks, caterers, bakers, product makers and even food tech companies--get started. This is our passion and our life's work. We aren't going anywhere.
In fact, we are working hard on new programs and offerings in 2018 for existing and soon-to-be members...stay tuned. Really exciting things are coming to Frontier Kitchen.
If you are thinking about starting your company or journey with us soon...don't wait! You will want to be onboard for what is next!
Brenda Cromer Brown
CEO & Co-Founder of Frontier Kitchen
To be clear, food licensing requirements vary by state. The information below covers our experience and our members' experiences specifically with the Virginia Commonwealth government.
Your licensing requirements are fully dependent on what you make. So, lets go by category.
1. Baked goods/non-hazardous food items. Virginia has excellent cottage laws for brand new businesses looking to get started. If you make cupcakes/breads/cookies (and more) you are permitted to make them from your home and sell them at farmers markets (excepting if you live in Arlington and Alexandria jurisdictions). This is a great way to start without adding overhead into your budget.
A word of caution, however...from personal experience, you are likely to run out of room very, very quickly. Plan your startup funds to include overhead by no later than month 3 if you are interested in growing as quickly as possible.
Once you are ready, you will require licensing from the Virginia Department of Agriculture and Commerce (VDAC). Sometimes you can get your home licensed to produce but, again, space and equipment are always an issue.
2. Catering. Due to time/temperature/sanitation requirements, it is never a good idea to make ready-to-serve meals from your home. No counties in Virginia permit you to do so. This is important because if you try to do so, you cannot get insurance on your company (and, even if you could, if there was a food handling incident your insurance wouldn't cover it because you are working illegally). Don't do it. Save up money enough money for at least 3-6 months of kitchen overhead and startup fees and join an incubator that can help you with proper licensing.
3. Prepackaged Meals. Ok, this one is a little more challenging. If your desire is to sell prepackaged meals to grocery outlets (or any other reseller) AND your meals contain animal protein, you will require USDA inspection while cooking. This is an expensive and time consuming process that we do not recommend for new companies. However, there is an exemption in the USDA regulations for direct-to-consumer sales that states [paraphrased] if the consumer is buying directly from the manufacturer, USDA inspection is not required. So, find direct sales outlets--delivery and subscription services are popular--at least in the beginning.
4. Drinks. In Virginia, this is also handled by the Virginia Department of Agriculture and Commerce. You may be required to take a course called the "Better Process Control School" that will help you understand dangers and mitigation of spoilage/foodborne illness with shelf stable products.
There are always exceptions and opportunities, no matter what you would like to make. If you have further questions on what it would take to put your specific idea into production, contact us today.
Almost everyone dreams of being their own boss. But less than 5% of people will ever really take that leap. Here are 5 reasons that tell you when you should take that leap..
1. You feel awful at the end (or beginning) of everyday. The cubicle grind is tough--terrible commutes, backstabbing coworkers and terrible bosses. Being on your own means you are in complete control of your day providing levels of freedom that you can only imagine!
2. You are the hardest worker at your job but are unappreciated. Starting your own company is the hardest work you will ever do.
3. You want more for your family's future. Whether it is teaching the fundamentals of business to your kids or just taking control of your family's finances, starting your own company puts you in the drivers seat. The car may be difficult push start it up hill, but once it gets moving--watch out!
4. Your energy and knowledge are your best resource. Here in the DC area, many of us work in government industry jobs. You likely have a great looking resume and an unfulfilling, boring job. Even if you have never cooked professionally, ALL of your previous skills matter when it comes to running a company.
5. You are ready to learn and challenge yourself. Owning your own company is a steep learning curve. No matter how much you research, read and work with others, being in charge yourself and spending your own money is very, very different from anything you have done before. Everyday brings new challenges and, if you are open and honest with yourself, will shape you into a new person. Being the boss is as much about being a student as it is being a leader.
Welcome to Frontier Kitchen. We are a food incubator—our only job is to help our members grow into a successful business. So, as consultants, we get asked a lot of the same questions. In this blog, we are going to demystify what it is to start a food business.
So, you hopefully found yourself here because you are (at least mildly) interested in or curious about starting your own food business. So, what do you need?
We will go through the specific regulations for Virginia in future installments, but let’s first talk about what you need personally.
1. Passion and Drive. A LOT of it. If making money is your primary motivation, food business is probably not the way to go. The work going into running a food business is exponentially more than most other jobs for way less return. If money is your primary motivator, you should lean toward the tech industry. However, if job satisfaction is your goal and what you want is the satisfaction of your work being enjoyed, then this is the business for you.
2. Physically capable. You will spend a LOT of time on your feet. Professional cooking can’t be done sitting down. If you’ve been at a desk job for the last 20 years, your first few months are going to HURT—your feet, your legs and your back primarily. Be prepared.
3. Business acumen. Chefs often make poor businesspeople (sorry, chefs, we love you!). The skill sets are simply different. You may be the best chef on the planet, but unless you can run the business portion—marketing, budgeting, regulatory requirements, taxes, human resources, overhead, emails, etc—you should work with someone who is good at those things. Take on a partner or hire a business manager you can trust.
4. Experience. SOME sort of experience is required—business experience, sales experience, cooking experience (professional or hobby). Just because you have never been a chef doesn’t make you unqualified, as there are LOTS of things you need to do.
5. Attitude. Yes, this is cliché but probably the most important attribute. I can’t emphasize enough…this business is HARD. You need to remain positive even when your spreadsheets are not. You need to keep your creativity engaged and your quality at peak, even when you’re tired and don’t want to. If not, you start to spiral toward a deep, dark pit of depression the downward spin is difficult to impossible to pull out of. It usually goes like this: For reasons you can’t figure out (possibly ones that have nothing to do with you), people aren’t buying your product, so you make less or try to extend the shelf life of what you have or you cut corners, which cuts your quality which makes people want to buy even less….and down, and down and down it goes. When you hit the bottom, you are out of business. You have to stay positive to keep out of the spiral and you can’t be afraid to change yourself.
So those are the intangible things you need, now what are the practical things you need?
1. Food Managers Certification. Required for every food business owner and manager you will have in the kitchen. There are many courses and tests but the industry standard test is Servsafe, recognized in all 50 states. If you are in Northern Virginia, you should have something at least recognized in Virginia, Maryland and DC.
2. Incorporate your company. The Virginia State Corporation Commission makes this easy. Don’t take the company as a personal liability.
3. Recipes/ Product. Develop your recipes and test your product with friends and family. Do not get set in your ways on your production process—it will probably change once you apply big batches and professional equipment. With only a few exceptions (Virginia cottage law), NEVER sell product you make in your home.
4. Capital. All businesses have expenses. Make sure you can cover yours even if you sell nothing in your first 6 months.
5. Insurance. This is why you should not sell product made in your home; your insurance will not cover it if the items are not specified in Virginia Cottage Law as permissible to make in your home. So, all someone has to do is pretend to get sick off your food and you lose because you broke the law in the first place (and by lose, I mean lose a LOT). I’ve known people to lose homes, all their savings and future earnings to something like this. Don’t do it.
6. Kitchen. Whether you join a shared kitchen, build your own kitchen or can work in a friend’s kitchen, you need someplace professional to produce. If you have never worked in a professional kitchen before, join an incubator kitchen because you will need help learning how to change your processes and to use professional equipment.
7. Regulatory Licensing and Certification. In Virginia, this is a complicated issue based on what you make, where you make it and where you want to sell it. We will cover more in-depth in later posts.
8. Places to sell. Markets, Events, Subscriptions, Direct, Wholesale, Retail…there are a lot of choices, each with positives and negatives. We’ll cover these in a future post, too.