Starting a Food Business 101

Food-Preneur 101 Part 1:

With over 40 years of experience in the food industry, and currently the managing consultant at the Entrepreneur Space, Kathrine Gregory wants to help budding food-preneurs build their dream to success. She will never start her own food business, but is happy to share her expertise with you.

So you have an absolutely amazing food recipe. All your friends and family are encouraging you to take this recipe to the world, sell it, and make a fortune. But how do you start?

1-       Perfect the recipe at home. Your friends and family will become the guinea pigs, and make sure tey are honest with their comments.

2-       Convert the recipe from cups and teaspoons into ounces/grams. The best way to do this is to buy a digital scale, and weigh each measurement

3-       Comparison shop: Go to all the high end gourmet stores. Whole Foods is the Barnes and Noble for food. Find foods that are similar to yours, buy them, and create a chart for yourself. You need to know what their prices are, their packaging type, their size, and their special features. After gathering this information, compare your product to each of your competitor’s products-do this with maximum five products

4-       Go Online and take your food handlers course

5-       Think about a name for your company; test this out on your friends. Think about a catchy name for each of your recipes. Test it out on your friends.

6-       Take any business courses offered by QEDC, SBS, any other economic development organizations. These courses are free.

7-       Taking your perfected recipe, make an appointment to ask gourmet food buyers and restaurants for their professional opinion. You are not ready to sell to them. You still have much work to do. However, you would like to know, based on their expertise, whether you have a saleable product. Ask them:

  1. How does it taste?
  2. How do you think it would be best packaged?
  3. Do you think this product would sell in this store?
  4. What do you think the price point should be?

The list goes on….

Most buyers are willing to share their knowledge, but you need to be courteous of their time, make an appointment and make sure you send a thank you note!!!

Using this information, you may want to tweak your product.

8-       Investigate packaging. How do you want to package your product? Which is the best type of packaging to maintain freshness, flavor and product shape? The internet is your best friend. Remember that this will affect your price point through actual cost as well as perceived value.

9-       Now you need to make an appointment or two to work on pricing your product and to also start a marketing outreach plan. You will need to work on pricing on each of your recipes and that will involve you to go to Costco or your local supermarket and find the cost of each of your ingredients that you use. Contact a counselor at QEDC at 718-263-0546 or visit them at

10-   You must also evaluate which stores are the proper stores for you to sell. This is your target market i.e. if you are selling a package of 2 cookies, which you sell at $5, you certainly cannot go to the local supermarket, but to the gourmet store

If you do not sell your product, you do not have a business.
If you do not make a profit on each unit, you will soon have spent your life savings.

You have now completed your preliminary homework. Although it did not cost you much money, the process takes time, and it is time well spent. You now know you have something truly viable that the public will want to buy, adjusting your recipe if needed to make your product different than what is currently out there.


Food-Preneur 101 Part 2

Now is the time to spend some serious money. Sniffles

1-       You need to create a legal entity. It should be an LLC or Incorporation, since you want your personal income to be protected. You can choose one of these two based on personal preferences and tax benefits (see an accountant!!!!). Currently, for an LLC, you are required to contact the county clerk’s office based upon your home address and there is a publication requirement and fee. Approximate cost for either a corporation or LLC is between $185 – $800. After registering your business, you need to apply for an EIN (Employer Identification Number) and the Authority to Collect Sales Tax Certificate. This can be done by contacting QEDC and scheduling an appointment to complete all the forms online.

2-       You will now research commercial kitchens/incubators. We would love to have you at the Entrepreneur Space Kitchen Incubator, only if it is the right space for you. Make sure to take tours of different kitchen incubators to know which one is best for your product. Check to see if they have the right equipment for you. Equipment is most important for efficient production and cost savings. For example, using a large oven, which can bake 30 sheet pans of cookies, is faster than a smaller oven with space for 5 trays. You must have a solid and practical manufacturing plan organizing equipment and potential employees. Although higher sales mean higher profits, profit per unit sold is based on streamlining your production process. Think of an assembly line. You are now Toyota, not someone working out of a home kitchen. To help you maximize your time and output, look up GANTT chart.

3-       Now you need to get out and sell, NO SALES=NO MONEY=NO BUSINESS!! Forget about Whole Foods. You are not ready for it. Whole Foods does not want you until you have proven sales record in other stores. Start with your local neighborhood. Research stores, possible restaurants, independent cafes (not Starbucks). You can go back to the gourmet store buyers you spoke to earlier while conducting market research. Think practically. Emphasize time management. Delivering to places in our area allows you to test the product while saving driving time and putting some cash in your pocket. Independent stores are more likely to pay you immediately.

The incubator you choose need not be in your neighborhood, but it does not matter since you are not using it daily.

4-       Participating in farmers’ markets are a great way to meet your clients face to face, get immediate feedback, obtain quick cash and practice your production description so that you will feel more prepared when meeting buyers. Why not check the neighborhoods around the market where you are participating? Look for sales opportunities in that neighborhood. When you are at the market, you will sign at your booth stating that you also sell at neighboring stores. You will also list this on your website. You have now formed a partnership with the store owner.

This is your starting point. From here on, go step by step, to increase orders, to increase sales revenue, ultimately to success.