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Top 10 Things To Consider Before Starting A Food Business

by Hassan

So, you want to be your own chef?

Great idea. Yet you need to know that a food business is a bit more than cooking. There are a few things that you need to be certain of before starting. Here is the exhaustive list in no random order:

Evaluate Your Skills

Many of us are thrilled and motivated by watching a good movie or a show about cooking. But starting a business is not the same as cooking a recipe from MasterChef Australia. It is a tad more complicated than that.  

If you are reading this you probably have the cooking talent. However, a food business is more than just cooking. You will need some business privy support. You will need to:

  • Create the Business plan and Budget of your business;
  • Arrange to finance and negotiate with banks;
  • Take care of classification, licensing and food safety compliance;
  • Negotiate with vendors and purchase or hire equipment;
  • Recruit, train, motivate, and pay staff;
  • Market your business and create your digital presence;
  • Create efficient operations and processes;
  • and the list goes on … 

Prior to starting you need to consider where this support will come from – is it you, is it a partner, or maybe a friend. Whatever the case make sure you have this role aboard.

Business Plan

Now that you have main roles covered start with your Business Plans and Budget. These are sort of blueprints for your food business. Before putting the business life, you create these documents to make sure that it is a profitable one. Profitability is not just about the money, it is about clients wanting to spend their money at your venue. If you can’t make it work on paper, do not expect that it will work in real life. 

The Business Plan starts off with a SWOT analysis. This is analysing your Strengths (say, great chef, good location) and how to build on them. Then look at your Weaknesses (say not enough capital, difficult supplies) and consider how to overcome them. Now look at your Opportunities (say lack of your specific cuisine in the neighbourhood, people needing to take away for their home offices) and how you plan to utilise them. Last, but not least, think about the Threats (these may be competitors or possible new entrants) and how you will beat them with your unique advantage. Put all these on paper and create your Strategy from their respective outcomes. 

Then create your Budget. This incorporates all your expenses and all your income and what you need to do to get to this income. How many clients are necessary. How much should they spend? What will they spend this money for? Your budget needs to be balanced – meaning that your income will exceed your spending. If this is the case you are ready to go.

Competitive Advantage

This is part of your Business plan, but it is so important that it deserves special attention. You will have to come up with it. This is the one thing that sets you apart from the competition. This is what will ensure a healthy stream of clients to your business. Following the research done on your competitors consider the empty market spaces. One of these may be your niche. Build your competitive advantage around that. Here are some examples for market niches:

  • food delivery
  • cooked foods sold to other businesses for retail
  • food truck
  • catering for special events 
  • breakfast special
  • gourmet takeaway.

Start Anew Or Buy A Food Business

Now you know what your food business will look like. The next thing to consider is whether you will build its premises from the ground up or buy an existing business. Look around for food business for sale. For example, if you want to set up a restaurant in Melbourne, search “food business for sale Melbourne”. This may save you lots of time, effort, and yes … it may be cheaper with all things considered.

Greenfield Or Renovation

If you did not find the right food manufacturing business for sale (if this is your niche) you will have to think through whether you will build your own premises or undertake a renovation of an existing establishment. Both ways you will need to go down the difficult path of creating your location from the bottom up. Of course – renovation is the quicker road. 

Menu And Pricing

This is where you are strong. Will it be an extensive menu or just a shortlist? Think about your clients in your niche. Carefully do the math of food production costs. This is made or break moment!

Classification, Licensing, Food Safety 

There is a lot of preparation paperwork that is necessary for your food business. Before launch, you need to get a licensing for your food business from your local council. The requirements for licensing will vary from state to state and from one type of food business to the next. Then comes classification. Each state has its own food business classifications. You need to find out which one is the one your business fits in. For many Australian states, you will also have to hire a “Food Safety Supervisor”. She will be responsible for food safety. These are all must-dos for your business.


This is both the starting and the endpoint of your business. Here are the three important issues which you need to be clear about:

  • Access To Funding

You will need funding for setting up the business, investing in machines and cutlery, and having the capital to purchase raw materials. First, establish how much you need before turning a profit. Now consider the possible sources – savings, friends, family, bank. 

  • POS

Now prepare for providing your clients with easy payment options when working with you. Be this point of sale devices or online payment methods. It all depends on your Business plan.

Online Marketing

Someone said that “You do not exist unless you are online”. A bit spooky, but true. Your food business will need its social network presence, possibly a website, and do not forget to establish a client review option. Consider who will help you with creating and supporting these.

Staffing And Training

Now come to the most important thing – human capital. You need to man your business, train your staff, motivate them and get them ready to impress your clients. May sound easy, but some support may be good.

Final Thoughts

You already know that starting a food business is a bit beyond just cooking. However, if you have your heart in the business, you are sure to succeed. Go for it!

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