How to Calculate the Cost of Food for Your Culinary Business Venture

Are you hungry for information about launching your food-service small business? While there’s a lot of shared information to get started across all industries, the food industry poses unique opportunities and questions. One of the most common we see is how to calculate the cost of food. Here’s one approach from small-business expert Sam Ashe-Edmunds, who dishes out food-cost calculations into nine steps to help ensure that you’ll be able to keep a consistent menu, please customers and remain profitable.

 

Here’s what he has to say:

 

Step 1: Pick a dish to start and list all of its ingredients – even condiments and garnishes. You’ll want to make sure that the portion for each dish is the same so that it always costs the same.

 

Step 2: Calculate the cost of each ingredient. Take a head of lettuce, for example. If it costs 75 cents and you get 30 leaves, the lettuce cost for a dish that includes one lettuce leaf would be about 2.5 cents. Ashe-Edmunds reminds us to include a proportion of any expenses directly related to purchasing foods, such as delivery fees or interest.

 

Step 3: Add up the costs of all the ingredients for the dish, but don’t include costs for labor or actually serving the dish.

 

Step 4: To start figuring out if you’ve priced the meal right, divide the menu price by the food cost to calculate the percentage of the price that comes from food. If you charge $10 for a meal for which food costs are $5, then your food cost is 50 percent.

 

Step 5: Now, you’ll want to determine overhead cost per meal, which includes everything not related to food that’s required to run your restaurant. This includes things such as labor, rent, marketing, taxes, etc. So, consider what it will cost to run your restaurant on a daily basis – then divide that number by the number of customers you think you’ll serve every day. If your overhead is $1,000 per day and you have 200 customers each day, your overhead per person is $5.

 

TIP: Keep employee meals and food theft in this overhead figure as well, because they’re not included as direct costs to serve a meal but can’t be left out.

 

Step 6: Using your overhead costs as a guide, decide your ideal food-cost percentage. If you charge $10 for a meal and your overhead cost is $6, then your food costs can’t be more than $4 to break even. Want a $2 profit per meal? Then you’ll have to charge $12 for that particular dish.

 

Step 7: Take a look at the prices listed in your menu to figure out if they’ll cover your overhead and food costs – and if you’ll be able to make a profit. So if you’ve calculated an ideal food-cost percentage of 20 percent and a dish uses $4 of ingredients, you can’t sell that dish for any less than $20.

 

Step 8: You may need to calculate different food-cost percentages for different services or items, such as a breakfast menu versus dinner menu, because of different requirements – some less, some more – to satisfy each dish.

 

Step 9: Finally, examine your sales by item to determine if your food-cost percentages are adequate to keep your restaurant in business. If it turns out you’re selling at primarily a low cost, you might need to raise prices (or lower food costs) to be profitable.

 

TIP: Get a more complete picture of your food costs by checking out total food costs per service and dividing them by total sales. Then you won’t have to calculate the actual cost of each menu item.

 

 

http://www.sba.gov/community/blogs/how-calculate-cost-food-your-culinary-business-venture

Selling Food and Drink Online: Product Descriptions Top Tips

Selling food and drink online can sometimes mean exercising creative muscles you might not have used in a long time. If writing about your products isn’t something that comes naturally, fear not! We’ve put together some top tips for writing product descriptions – inspiration guaranteed.

Whether you’re about to start selling online for the first time or thinking of fine-tuning your existing online shop, here are 5 key tips to help you overcome that dreaded writers block.

 

1. Who are you writing for? 

If you’re an established business or are used to selling face-to-face, you might already have a clear picture in your mind of who your target customer is. Perhaps your typical customer is a health-conscious foodie who knows her shallots, or the discerning husband shopping for the perfect birthday gift for his  (incredibly lucky) wife?

Having a clear idea in mind of who you’re writing for before you get started and this will make the whole process of writing product descriptions much easier.

If you don’t have any direct experience to draw from, who can you imagine buying your products online? Who would your dream customer be?

 

2. Answer their questions 

Now that you have an image of your customer in your mind, imagine what would be going through their head before buying your product online. What would they want to know? What questions would they have? The health-conscious foodie might want to know about the exact provenance of your ingredients and suitability for her special diet. While the gift-hunting husband might be more concerned about whether your will arrive in drool-worthy packaging (and, whether you can save his bacon by delivering the goods on time).

Make a list of questions you think your customer might ask, and ensure you answer these key points in your product copy.

 

3. Know what makes you different 

When you’re selling food or drink you’ve produced yourself, it’s sometimes easy to take the small details for granted. Of course you bake your biscuits using traditional techniques! Of course your eggs are free range! Why wouldn’t you use British butter, organic flour, hand-decorate your creations…..and ship them in a hand-illustrated box?!

These exquisite details can make all the difference when it comes to differentiating your products and standing out from the crowd online. So don’t forget to include them when writing product descriptions for your shop.

 

4. Don’t be afraid to sell

Remember that when buying online, customers don’t have the opportunity to pick up, smell or taste your wonderful creations. So while it’s absolutely true that your product photographs have a crucial role to play in grabbing browsers’ attention and showing off your wares, your product descriptions need to fill in any gaps. Imagine you’re selling face-to-face at a fair or market – what would you be telling potential customers there?

Whether it’s suggestions for how to use your product, the fact it’s a Great Taste Award Winner or sharing praise other customers have lavished on your range – don’t be afraid you’re being “salesy” – just tell it like it is.

 

5. Tell stories

For many shoppers, buying from independents (whether online or offline) is a deliberate lifestyle choice. Many will want to support small businesses and value all the little details that make buying from you a special experience they just won’t get from a larger retailer. So don’t miss the opportunity to give these customers what they want! Use your product descriptions to paint a picture and draw potential customers in.

Whether it’s the fact you make your gourmet marshmallows in small batches from your family kitchen in Cornwall or that you’re a fourth generation cook using recipes handed-down by your Great, Great Granny….. if stories form an important part of your brand,  weave them throughout your shop.

 

 

http://blog.yumbles.com/2014/07/01/selling-food-and-drink-online-product-descriptions-top-tips/

Charlie Bigham: Cooking up a successful food business

Inspiration can often come from strange places. For UK ready meals boss Charlie Bigham it was being unable to sleep at the border between Iran and Pakistan.

Mr Bigham was 28 years old at the time, and he and his then girlfriend were travelling from the UK to India by camper van.

"It was very, very hot, and we were in a really tough place," he says. "I couldn't sleep, so I just laid there restlessly thinking about what I was going to do for a living when we got back home.

"I decided there and then that I was going to set up a food business, and it was going to look a bit like this."

Work experience

Mr Bigham had previously worked as a management consultant in London, before he and his girlfriend quit their jobs to go travelling for nine months.

His ambition was to set up his own company when they returned to the UK, and now he had his idea - he was going to establish a business that made upmarket ready meals.

Mr Bigham was not going to let the fact that he had never worked in the food industry before put him off, and instead he decided he would quickly set about gaining the knowledge and skills he needed.

And so upon his return to the UK he got a job at a delicatessen in London's fashionable Notting Hill area.

"I've always been really interested in food, but I had no food industry experience, so I knew I had to get some cheese under my fingernails, so to speak," he says.

Business inspiration can come from unlikely circumstances

He ended up spending almost four months at the deli, and at the same time did lots of research, and working on recipes.

"It became clear that the idea of making meals which are then sold via shops was a very good idea for a business because it was a massive market, yet one which was very straightforward to start up in," says Mr Bigham.

"I knew we could start under the radar before any bigger rivals could crush us, and then build quite quickly."

'Knocking on doors'

In November 1996, 11 months after his return from travelling, and now married to his girlfriend, Mr Bigham launched the business with £25,000 of savings, calling it simply "Charlie Bigham's".

To begin with, it was just him and one chef based at a small facility in London's Park Royal business estate.

Mr Bigham says: "We had just three product lines to start with - zesty Caribbean lamb, Cajun chicken with salsa, and salmon with a dill and cream sauce. I think we made just 20 meals in total in that first week."

To get sales moving, Mr Bigham, now 47, says he simply started "knocking on people's doors".

"I went round all the posh delis in London, and the big department stores with food halls. Everyone was approachable, and said, 'Yeah we'll give you a go'.

"I just had to be mildly persuasive, and I'm not a salesman.

"What greatly helped us, is that you have to remember that at the time, most ready - or convenience - meals, as I prefer to call them, were pretty dreadful.

Charlie Bigham's food is now stocked at Waitrose, Ocado and Booths

"We were one of the first to make quality ones without anything artificial. This set us apart and made shops interested in stocking us."

But while selling to posh stores in London was pleasing, Mr Bigham realised that in order to grow the business he needed to win a contract with one of the UK's supermarket groups. And so he cold-called Waitrose.

"I just picked up the phone and rang the Waitrose switchboard. I managed to persuade a lovely woman on the phone to put me through to a buyer. I got a meeting, and the buyer said she would give us a go."

Charlie Bigham's meals have been stocked by Waitrose ever since, initially at 40 stores for a successful trial period, and then nationwide. Online supermarket Ocado, and Booths, the north of England supermarket chain, have since followed suit.

Good timing

The company now employs 200 people across two sites at the Park Royal business park, and has an annual turnover of £20m, which is now growing at 19% per annum. 

Charlie Bigham's best sellers

1 Fish pie

2 Steak and ale pie

3 Lasagne

4 Moroccan chicken tagine

Mr Bigham says his former job as a management consultant helped him manage the company's growth over the past 17 years.

But he is the first to admit that luck and good timing played a major role in his success.

"The only way you can ever set up a successful business is to be lucky," he says. "It is the thing you need more than anything else. Anyone who says otherwise is just lying."

Mr Bigham says that most important piece of luck was all to do with timing.

"I set up a food business just as interest in food was blossoming in this country. Suddenly there was a wealth of TV chefs, and the national newspapers all added food sections at weekends.

"And the supermarkets were all being brave and looking outwards towards new suppliers. There was no planning or forethought about all this on my part, it was pure luck."

'Hugely privileged'

Mr Bigham today gives himself the job title "chairman and creative director". This followed his decision back in 2010 to bring in someone else to handle the chief executive role.

The company has no plans to start exporting

"It has enabled me to focus on the bits of the business I'm really interested in - product development, and the big strategic picture - working out plans for the next three to five years," he says.

"The bit in the middle [the day-to-day financial decisions etc] I'm easily bored by, and is best done by someone else."

Looking ahead, Mr Bigham says the company has no plans to start exporting, because the freshness, and therefore limited shelf life of his products, makes it too expensive.

Nor does he ever intend to move production away from London to somewhere cheaper, because he says he is loyal to his hard-working staff.

"I'm proud of what we have done to date, but I'm in no way complacent. Owning your own business is a hugely privileged position to be in, because I work with people I have chosen - not many people can say that."

 

http://www.bbc.co.uk/news/business-24434154

5 Steps To Starting A New Specialty Food Brand

As a bulk oil ingredient supplier, we have an unique vantage point: we get watch food companies grow from their inception into a strong brand name and then, (for the lucky few) become nationally renowned. This is one of the perks of our job: the joy in watching something real and strong grow from just a little seed.

We often work with these manufacturing companies from their start-- as they’re writing their business plan, to comparing how to bring their new ingredients in. And then later, we get to see their finished products flourish. We have the privilege to help them transition from small to large, and watch them grow. Many manufacturers we’ve worked with go on to sell to Whole Foods, UNFI, and other natural grocery chains.

But, most food manufacturers start their journey along the same path. To be able to build a solid foundation, we’ve noticed that they all need to need to learn the same things about the industry and make some key decisions about their new business. These decisions will allow them to really get their feet underneath them and begin growing their brand.

So as a way of paying it forward, here’s what you should keep in mind as you’re starting your new food brand. We hope others’ experiences can help you flourish!

How and why I started my food sector business

Bristol-based Kabuto Foods aims to take instant noodles to a whole new level. But what makes its products and brand different, and what inspired Crispin Busk (pictured right) to launch the business?

Crispin Busk launched Kabuto Noodles in January 2011, following a five-year stint as sales director for Pieminister, without doubt one of Bristol’s biggest food success stories.

“I had experience of selling into the retail and grocery trade,” he explains. “Pieminister was a very entrepreneurial environment and I’m delighted to have been part of that. Kabuto is in that same tradition. We’re very good at what we do and very focused on developing a unique, ‘big’ small brand.”Instant noodle brands generally compete on price and the market seems full of similar products, but Busk says Kabuto aims to bring something different. Busk’s products have no additives or preservatives, and there’s a mouthwatering selection of authentic Asian flavours to choose from.“Pieminister did a lot of things right. It took a standard product and made it better. I decided to take the same approach, but I had to decide on the right product.”

Market intelligence

Busk knew that supermarkets showcase products in a certain way – premium items at eye-level on the top shelf, ‘mid-range’, then own-brand or ‘value’ products at the bottom. The knowledge helped him make his choices.“Around this time, I went to eat at [popular Japanese food and noodle restaurant chain] Wagamama,” he recalls. “People were eating mainstream Asian food, mainly based on healthy noodles. Afterwards, I walked over the road to a supermarket and noticed all the instant noodles were low cost, pretty unhealthy and with flavours such as donner kebab. It felt like there was a ‘disconnect’ between the lovely food at Wagamama and the instant noodles on sale in the supermarket. That moment I knew I’d found my niche.” Busk’s research revealed that almost 100 billion instant noodle units are sold each year worldwide, with the UK consuming 230m, which equals about 4-5 units per head of the population. Many of us go through an ‘instant-noodle phase’, often when we’re students, but Busk’s mission is to catch people who are considering giving up on noodles and give them another reason to carry on eating them.

“Noodles are quick and easy. They appeal to a very wide range of people. We’re combining a quality product with a strong brand, and our growth shows we have tapped into a real market. My aspiration is that Kabuto will be the next big thing throughout the UK and then to take it overseas.”

Food for thought

New and smaller brands can be put off from trying to compete against the big established brands, especially when it comes to getting supermarket space. Buyers don’t make it easy — but Busk persevered. “To get a meeting you have to have done the homework: prices, packaging, does it look and taste good? Everything has to add up to a compelling story. It helps to have a product you believe in. There is no formula for success in grocery retailing. However, the big brands simply can’t have the heart and character that smaller brands like Kabuto does,” he concludes.

http://www.startupdonut.co.uk/startup/start-up-business-ideas/how-and-why-i-started-my-food-sector-business

 

New Food Business Startup Checklist

Want to start a food business? 1.    Business and Marketing Plan. Preliminarily, even just brainstorming ideas on paper to create a basic foundation is a good start. Unless you are planning on getting an SBA loan or funding from Angel Investors, Venture Capitalists, etc. then you don’t have to have a formally completed business plan to get started. A business plan is great to put your ideas and vision on paper, but most of the time it will be pretty fluid during the first year or two – so don’t waste too much time stressing about it. Now, if you are seeking outside funding/financing to launch your business, then you will certainly need a solid, polished food business plan . 2.    Establish business name. You can have a corporate name such as “Your Name Foods Incorporated” and a different brand name (or names) such as “XYZ Sweets” for your products. Setting up your business name this way is a good idea if you plan on introducing brand extensions at a later time that are completely different from your first line (i.e. you start with a line of salsas and sauces but then introduce a different line of baked goods a year later). A good example of this is Bodine Specialty Foods (corporate name) who produces several lines, including their “RC Buck’s” line, their “Cocktail Dancers” line, and their “Memphis Mojo” line, just to name a few. It is strongly suggested to trademark your business and (and eventually product/brand names), which can be done online here: www.uspto.gov 3.    Business filing (Sole-proprietorship, LLC, S-Corp, etc). Before filing, you will need to register for an EIN (Employer Identification Number) which can be done online at the IRS website here. It is then advised to consult with a CPA to determine best option for your business structure and state in which you conduct business. Your CPA can do the filing for you, but you can also do it on your own (and save some money in the process) at sites like www.incfile.com once the filing status has been chosen. 4.    Manufacturing: Self or Co-pack? It is recommended to make this decision as early as possible. This can be one of the most difficult and frustrating parts of launching a food product. •    Self-manufacturing: will you be building/customizing your own facility, renting a commercial kitchen, or using a shared commercial kitchen? Your facility will need to comply with health standards and will need inspection from the local health department. •    Using a co-packer: a co-packer (contract packaging company) is a company that will produce your product for you in large quantities for a fee. Most co-packers produce their own line of branded products, but aren’t operating at full capacity – so they also produce other products to maximize their production facilities’ efficiency. Consider different production obstacles your products may encounter (i.e. products with meat and dairy will require USDA certified facilities, not just FDA certified). It is always preferable to find a local co-packer within a reasonable driving distance for testing and quality control purposes. Co-packers provide a great advantage when getting started as they typically have a food-scientist/technologist on staff that can help you with your recipe and regulatory issues (shelf-stability, compliance, etc). *Get help understanding the ‘ins and outs’ of manufacturing food products . 4a. Product liability insurance. You will need to get product liability insurance to protect your business. This can be attained from most insurance companies with most policies offering coverage in the $500k-$2MM range. 5.    Logo and Branding. This is the face of your business/products, and must be done with great consideration and planning. Your logo and brand should be something that can implemented with consistency throughout all literatures and sales channels such as your packaging/labeling, letterhead, business cards, sales materials, order forms, and website. Get help with food logo design and food branding . 6.    Packaging/Labeling: if using the services of a co-packer, they will likely have many resources for bottling/packaging to fit your needs. If you plan using a non-standard package/bottle/jar, make sure you check with the co-packer to see if they can fill that type of container. Some co-packers offer nutritional label & ingredient statement analysis services, but most of the time you will need to take your recipe to a 3rd party labeling company. LabelCalc is our preferred provider of nutritional labeling and ingredient statement labeling services. In addition to the nutritional/ingredient labeling, it is recommended to attain UPC codes for each of your SKUs. There are a number of resources available online for UPC codes, and surprisingly, the process and turn-around time is quite simple, quick, and reasonably priced. Once you have your nutritional/ingredient statement labels and UPC labels, you will need to find a company that help with your food label design. 7.    Website , Sales Materials Business Cards, etc 8.    Time to Market and Sell! http://www.gourmetbusinesssolutions.com/new-food-business-services-51?task=view

Cafe Culture Enjoys Homemade Success

 

FISH finger sandwiches are rarely found on the menu of a city centre cafe – but that is what makes one deli stand out from the crowd.
Homemade, in Pelham Street, Hockley, is a quirky hideaway which fuses traditional homely grub with one or two surprises.
The lifelong dream of owner Jasmin Barlow-Wilkinson, it has been drawing in the crowds since it first opened its doors nine years ago.
The cafe is now in the running to win the Post and Nottingham Business Improvement District's competition to find the best independent business in the city, after being nominated by customers.
The contest, now in its third year, is designed to discover and celebrate the best independent retailers across the city for 2014.

For Jasmin, the key to Homemade's success is its "feel good, family-friendly" vibe.
The name perfectly sums up what Homemade is all about – food made from scratch that makes people feel at home..
The 35-year-old said: "When people come here they know what they're getting – we're not trying to be something we're not.
"Our feedback is really positive – we've got a great army of Homemade fans who tweet about us and write nice things on Facebook."
But far from being a "hipster hangout", Homemade attracts people from all walks of life.
Jasmin added: "Sometimes you'll look in the cafe and see some guys having a business meeting, some students celebrating the end of exams, some yummy mummies sitting with their babies and two old ladies having some tea and scones.
"It's always a real mix. But that's what's great about Homemade – there really is something for everyone."
Jasmin, who started cooking at the age of four, is passionate about food.
Her decision to open a city centre cafe has paid off, and there are now two other Homemade cafes in Sherwood and on The Forest recreation ground.
She said: "Having independent businesses is really important to any city.
"It gives it that USP and unique quirkiness.
"Brighton is one of my favourite places, where the independent shops outweigh the chains. I think that's what Nottingham could become.
"It's taken a while, but there are now more and more independent shops in prominent places, which is great."
Homemade Pelham Street cafe manager Jessica Buckley, 25, says being able to take the establishment in new directions marks it out from some of its high-street rivals.
She said: "I worked at Tesco for six years and left because I wanted to come to an independent company.
"I really feel like we're making more of a difference here – it's much more personal and I can actually make decisions that change the direction of the company by listening to what customer want.
"We've got so many regulars that we know so well – a lot of them have become friends."
Customer Harriet Shaw, 21, visited Homemade after hearing good things.
She said: "I love quaint little cafés like this – it has such a nice feel to it.
"I much prefer going to individual places like this than going to one of the chains.

 

http://www.nottinghampost.com/Cafe-culture-enjoys-Homemade-success/story-21206981-detail/story.html

Monday’s Business Tips: How to Start a Fast Food Business From Home

Are you interested in starting a fast food business? Do you want to open a fast food restaurant but you don't know how to go about it? Do you need a sample fast food business plan template or feasibility

study report? Then I advice you read on.

Starting or opening a fast food business is challenging and difficult, but the experience can be rewarding if done correctly. Americans alone spent around $110 billion on fast food in the year 2000. Now with a rapidly growing population throughout the world, that figure is only bound to increase.

The fast food industry is highly competitive, with notable brand names like Drum stis, Chicken Republic, Mr Biggs, Tantalizer, Crunchies, Tasty Fried Chicken (TFC), Kentucky Fried Chicken (KFC), etc. It is also capital intensive and as well rewarding, so it is very essential to have a sound business strategy in place.

However, it will be best if you start a fast food business from home instead especially if you are aiming at having a restaurant of your own, but do not have enough resources. So if you are interested in starting a fast food business from home, then below is a sample business plan on how to go about it.

1. Your target market should be identified

Before ever investing a dime in starting a fast food business, you must think of who your target customers are and as well consider their different generational uniqueness and preferences. Try to understand the demographics of your potential customers and how they frequent fast food restaurants You can get such information by doing an online research or hiring a company that will provide a market research report for you.

• Make a research of fast food franchises in order to discover the
most suitable one for you.

• Get knowledge about the market demand in the location where you
want to open a fast food business.

2. Determine what type of fast food business you would like to operate

When it comes to a fast food business, there are many options and these include food truck business, ice cream truck business, fry fast food and burger restaurants, fish fast food restaurants, chicken fast food restaurants and sandwich fast food restaurants. It is left for you to either start your own fast food restaurants or purchasing a fast food franchise. A franchise is a nice option for those who wants the parent company to manage some of the marketing and operations. But bear in mind that there are royalty fees and up-front fees you will be required to pay the franchisor.

3. Write your business plan

The next step is to develop your business plan and strategy. When writing your plan, include a detailed description of your fast food business concept and target market; your market analysis, hiring strategy; pricing and menu options, employee training and financial projections.

4. Secure funds from investors or start with your money

A fast food business will never be up and running without some expenses like building rental or mortgage payments, supplies, food, employee salaries, insurance, equipments, marketing and advertising.
So you have to factor out how to raise the money to startup. If you can't personally finance the business, you can always take into consideration of other sources of funding like family and friends or government programs, etc.

5. Choose your location

When choosing a location for your business, you must consider some factors such as the volume of traffic in that area, local law and ordinances, customer accessibility, parking, lease terms, site history and sales projections.

Now for those that don't have the capital to start big, you can start small from home by using a good, ventilated section of your house. It does not necessarily mean that you will need to renovate your house to become a big fast food establishment like Taste Fried Chicken.

You can start by delivering your fast food to your neighbors and small business owners existing within your vicinity. You can also start delivering your products to young students and kids in your neighborhood. This is a logical step since it will not require a large startup capital, and your neighbors will surely love home delivery.

6. Design your fast food restaurant layout

You should take into account the amount it would cost you to design your restaurant, office and also the size of storage space you will be requiring. Carryout research or hire a professional design company to assist your drawing plans and create layouts for both the dinning and production areas for your business.

7. Get the understanding of safety and legal implications

You should not forget to consult a lawyer in this case, so that he will walk you through the legal processes for owning a fast food business.

8. Locate suppliers that will be sourcing your food and office supplies
You have to negotiate and get the best terms that is possible and most importantly, reach an agreement so that when you reach a certain level of sales, your rates will go down.

9. Buy the necessary fast food utensils

After earning some money from your delivery service, you can start investing on high quality fast food cooking utensils. A few of those utensils are:

1. Burger Equipment
2. Fryers
3. Bain Maries
4. Boiling Tops
5. Counter Fridges
6. Hot Dog Grills
7. Pizza Oven

10. Setting Up Your Diner

Subsequently, your delivery customers might increase in number. When that happens, deliveries can become such a hassle. Because of that, it is the right time to set up a simple diner. You can use your front yard, and put some beach parasols, tables, and chairs.

11. You should hire and train employees

You will be required to recruit and train managers and other employees and as well determine the play scale for all employees in your fast
food restaurant. Always take into consideration of things like employees training, benefits, bonuses and career paths for prospective
employees. For a start, your top picks as employees are your family members, and friends. However, in case they are unavailable, you can consider hiring college students.

12. Advertise your restaurant business

It is important that you advertise your service since nobody would ever know your business if you do not tell them. One of the few things you could do is to post some flyers around your neighbourhood. Or in case you have some time to burn, you could go around in your community to inform every person there about the service you offer.

It is also important that you outline strategies and develop a detailed marketing plan which you will be using to advertise your fast food business. Always consider marketing mediums such as television, print, radio and internet-based marketing. Immediately you have launched your marketing strategy, your fast food business is qualified for the grand opening.

13. Renovate or Relocate

The decisive moment comes when you already have attracted a large customer base. And together with that, you will need to decide whether you will need to renovate your house to become a legit fast food place, or to relocate your business. This decision is up to you.

At this stage, don't forget to get your business licensed because the government will definitely notice you and check to see if you are running your business legally. In addition, after your expansion, you can consider if you consider continuing your fast food business, or
changing it to a restaurant.

 

http://nigeriasrenaissance.com/index.php/news/item/42040-monday-s-business-tips-how-to-start-a-fast-food-business-from-home

Starting a Home-Based Food Production Business: Making Your Culinary Hobby Your Job

 

If it is your passion to reap the rewards of your culinary skills by starting an at-home catering or food business, you can find yourself at the center of a very rewarding form of business ownership.

In addition to providing the flexibility of a work-from-home business model, it can also offer a low risk entry into the competitive and ever-popular restaurant and food service business industry. And, it will allow you to learn the ropes at your own pace, in the familiar surroundings of your own kitchen! Take Martha Stewart, for example: She famously entered the food service business with a basement-based catering company in 1976. From there she quickly branched out and opened a gourmet food store, before entering the media industry and becoming one of the most successful lifestyle brands in the U.S.

Of course, before you start a home-based food business you will need to understand the rules and regulations that govern the production of food for public consumption in an at-home environment. For example do you need a separate kitchen? What about product labeling? And so on.

You'll also need to pay attention to the basic legal and regulatory requirements that all small business start-ups have to address (registering your business, getting a tax ID, e-commerce, etc.). And lastly, do you need financing for your venture?

All this can seem overwhelming, so here are five steps that you can follow that will help comply with the rules and regulations that govern home-based catering or food production businesses:

 

1. Ensure that You and Your Home Are Properly Equipped for the Business of Food Production

While this isn't necessarily your first step as a home-based food business owner, it is something you will need to consider before you kick-off your new venture.

If you already know what product(s) you intend to produce, ask yourself if you have the right equipment with which to adequately prepare, cook, store and transport your product. Will you need to invest in a separate kitchen or additional equipment to scale to your business needs (many states forbid the use of residential kitchens for commercial food production)? How do you intend to support the ebb and flow of production? Are you willing to hire employees? And, once you share control of food production, how will you ensure consistent quality standards?

Some local governments also restrict at-home commercial food production, so be sure to check out local zoning laws and contact your local Public Health Department.

 

2. Finance your Home-Based Food Business

While starting a home-based food business can be low risk, you may need to consider available financing options to help cover your start-up equipment or other asset costs. The government's Small Business Administration (SBA) offers a variety of loan programs - it won't lend you the money, but the government does provide a guaranty to banks and lenders for money lent to small businesses. A great option is the SBA's Microloan program, which guarantees loans up to $35,000 but typically averages $13,000. Find other loans using the government's Loans and Grants Search Tool.

 

3. Register and License Your Home-Based Business

Once you are ready to start your business venture, you will need to take the appropriate steps to 'register' your business with your state and county government; obtain appropriate food service and general business permits; as well as register with the IRS. The government (through SBA.gov) provides a lot of guidance on making sure your new business is operating legally; check out this guide on Steps to Registering a Business.

 

4. Understand the Regulations that Govern Food Production

Aside from ensuring that you can produce food for commercial purposes from your home, you will also need to understand and comply with a variety of laws that govern food preparation, food safety, product packaging and labeling, etc. At the local level, your county's Public Health Department is responsible for regulating commercial food production activities, and regulations vary from jurisdiction to jurisdiction.

If you produce a food product that is shipped across state boundaries then the FDA and Department of Agriculture both provide compliance guidelines. For an overview of federal regulations that affect this industry, check out the resources on Business.gov's Restaurant and Food Service Business Guide or visit www.foodsafety.gov.

 

5. Marketing Your Food Product or Services Online

If you intend to accept orders or even just advertise your food service business online via a Web site, there are a few government laws that you'll need to follow with regard to e-commerce, sales tax, truth in advertising, data privacy, and so on. Find out more at Business.gov's Online Business Compliance Guide.

So these are five basic steps you need to consider before embarking on a home-based commercial food production or catering business. Since much of the regulation is at the state level it's worth talking to a small business expert in your community to get practical advice. The SBA has local offices across the country; Small Business Development Centers and SCORE (link is external) can also help you get started.

 

http://www.sba.gov/blogs/starting-home-based-food-production-business-making-your-culinary-hobby-your-job

An entrepreneur's story of setting up a food business from home

Running a business from home has its challenges, but it's convenient, cheap and a good option for a fledgling company

 

          

Depending on your business, the only space you need might need is somewhere to put your laptop. Photograph: Royalty-Free/CORBIS

Where you base yourself is a vital decision for all small business owners. Whether you go straight into office or shop premises, or decide to work from home, there are pros and cons for each option.

I established The Little Smoked Food Company Ltd in 2012, bringing Moorish Smoked Hummus to market in Waitrose and other retailers. I work from home in the Midlands.

With a fledgling company, I wouldn't deny that a key reason to work from home is financial necessity; but there are other great advantages, like flexibility.

The most obvious plus point is lack of overheads, such as rent. We don't need to hold stock, as we work with a manufacturer, so technically I only need to find space for my laptop, plus a little extra cooking equipment for new product development purposes. But this does mean there is little separation between my work and home environment. With young children and the accompanying constant noise in the house, that can create its own problems.

It's possible to offset some domestic costs against the business, such as a proportion of the mortgage and utility bills. I also avoid supplementary costs that come with 'normal' work - I have no commuting expenses, avoid daily visits to the coffee shop and pre-packaged lunches. It's cheaper to raid the fridge - but the ability to do so, all day long, can be a disadvantage!

Aside from cost, gaining extra spare time is the other major plus. I don't waste it commuting and I can use office dead time, such as being on hold, to multitask and get chores done or put the dinner on. Flexibility is part of this too: I can get things done in the middle of the night if I have to, and my working day is less disrupted by the school run or having to get home for things like deliveries.

My business partner is also a mum and working as we do gives us some control to fit things around family life. We often have complicated discussions in the evening. You have to be disciplined about this though, as it can run the other way. It's hard to switch off if the notebook beside the bed seeps work thoughts into your mind, just as you're trying to sleep. And callers might not understand why you can't talk right now, in a critical child-tantrum moment.

I don't spend my whole week at home though, since I'm frequently on the road visiting retailers, suppliers and distributors. But I can see how in a different business it could be boring or even lonely. That makes it easy to find distractions, or sometimes they find you: my kids find it very tempting to come and see me (constantly) when they come home from school, if they know I'm in the house.

If you're worried about giving the right impression, sometimes doing business at home can feel too personal. It's not always appropriate to invite business contacts into a home office and you wouldn't want to give out your address in the public domain. We also try to demonstrate that although we're a young, small, artisan producer, it's not a 'cottage industry': retailers need to know we are a serious business that is reliable, consistent and scalable.

And finally, when taking on staff, it can be unappealing not to be able to offer work space, except for a home study. Thinking about my team though, if everyone had to all be in the same office or even the same town, I simply wouldn't be able to work with the great bunch that I do.

Here are my tips for setting up a small business from home:

• If at all possible, set aside dedicated working space, whether it's in shed, office or spare bedroom, where important papers won't get lost. Ideally where you can physically shut the door on work after the day's hard slog

• Consider a second phone line. Noise-cancelling telephone headsets can also be a great help.

• There are many providers of meeting rooms by the hour; scout around so you have it in mind before you're asked for an appointment.

• You may also need to set up an internet-based virtual conferencing account. Although you can do this for free, you might choose to pay for better functionality, reliability and something that looks more professional.

• Make clear to other members of the household what your hours are and when work really has to mean work.

• Add daily tasks to your diary in set blocks of time with specific deadlines, with breaks built in - remember, nobody is there to remind you to take a lunch hour.

• My colleague swears by always "dressing for work", as it helps focus. But pyjama working might be your big working from home plus point!

 

http://www.theguardian.com/small-business-network/2013/may/27/home-based-food-business-starting-up

5 Steps To Starting A New Specialty Food Brand

How A Specialty Brand Usually Starts Up

Many young food manufacturing brands start with the same story-- perhaps yours is the same. It typically starts with a home or restaurant chef, who we will call Mr. Goodfooder. Here is his story of how his food (and his company) came to be.

Mr. Goodfooder first made his signature dressing for his family, and then for a few friends. After a few weeks, his food became renowned in his community. One day, someone said to Mr. Goodfooder in passing, “You should sell this! It is so good, it would really sell!”

And so, a spark was ignited in his entrepreneurial spirit, and Mr. Goodfooder began the journey of starting his own line of dressings. He’s decided that with his quality ingredients, he will sell to Whole Foods and a number of other natural and mainstream grocery stores. And he knows that his food will be a hit-- because it’s that good. And lucky Mr. Goodfooder… he is right!

But, for Mr. Goodfooder to start up his own brand, there’s still a number of things he’s going to have to learn. And if you’re looking to create your own line of products, you’ll need to learn the same things.

5 Steps To Starting Your New Specialty Food Brand

1. Learn How The Natural / Specialty Food Industry Works (In General)

This step is KEY, so listen up! If you’ve never been in the food business before, you’re not alone. Many great brands come from founders who used to work in a variety of other industries.

To really get your feet underneath you and make smart business plans for the future, you’ll need to get a firm grasp on how thing work in the specialty food world. The best place to find out answers to all of these questions is to attend the Fancy Food Show put on by the Specialty Food Association, and sign up for the Education Seminars. This is an association that provides guidance to young brands starting out, and will be a strong networking and selling platform for you as you continue to grow. First things first, attend a show and learn as much as you can about your industry. It will absolutely be worth the money.

This is the first step, the foundation, from which you’ll make all of your future business decisions. Through these seminars, you’ll get vital answers to questions like:

• Who will sell your products?
• Who will buy them?
• How will you go to market?
• How do you get a distributor to pick up your products?
• Where will you get your ingredients from?
• Will you manufacture them yourself or use a co-packer?
• How will you market your brand?

You will not be able to successfully move on to the next steps without knowing all of the background information that they can teach you. Even though you can move on to the next steps and just wing it, you will thank yourself later for taking the time to attend and learn everything you can.

2. Decide Who Will Be Making Your Products

Once you’ve attended the Fancy Food Show (and gotten a good dose of inspiration and business answers) you’ll need to begin working on your operations/manufacturing plan. When it comes to actually making your products, there are a number of ways that you can structure your business plan.

You can set up your own manufacturing plant, which you’ll have to scale as you continue to grow. You’ll be responsible for all of the production, sales, marketing, and business admin side of your new company. As you grow, you’ll need to hire employees, move into a larger space, set up a production line and more. This system requires capitol for investment, and will take a substantial amount of your time to actually produce the product (and/or oversee your facility and team).

You can work with a co-packer or co-manufacturer (which stands for contract packer or contact manufacturer). Their job will be to assemble your product exactly as you specify; using the packaging you choose, your design, your labels and your ingredients. They will also deliver the loads of finished products to the locations you specify. Sometimes co-packers are responsible for ordering raw ingredients, and sometimes you will be. Every co-packer will have their own minimum requirements to do a production run for you, and they will expect that you will continue to increase your sales.

The advantage to this co-packer system is that it takes production off of your plate, and utilizes their full scale production line that’s already been set up. This keeps your operations working at max-efficiency and allows you to spend your time actually selling the product and growing the brand.

A good co-packer can be hard to find though, and relationships take a long time to build. We suggest looking through the following listings for co-packers:

• Specialty Food Resource | Co-Packer Listing
• BBF Direct | Working With Co-Packers Article

If you work in a particular industry, you may contact a complimentary company to yours (but don’t try a direct competitor) and ask if they would be willing to work out a co-packing arrangement. Even if they don’t do this for their primary business, they might be willing to consider your proposal.

3. Create Your Brand

You’ll need a brand, a product name and a logo. You’ll at least want to create something basic, even as you start at the beginning stages of your business.

If this sort of work isn’t your forte, think about hiring a branding company before you take your final product to print. The labels on your product will have a large impact on your overall sales-- though remember, labels aren't everything.

Remember that in the long run, you’ll also need a website and line cards for each of your particular products. These line cards will give information to buyers about a particular product (or line of products), and will include photos, pricing information, nutrition, case layouts and sizes and more. You can work on these larger marketing pieces over time.

4. Get Your Business Details In Line

Think about everything you’ll need to answer, to be able to sell your products to grocery stores. Questions from buyers may be about your company or they may be about the logistics of the products. Putting answers together can be a complex process-- they’ll require making some larger business decisions and getting all of the pieces of the puzzle together for when you officially start making sales.

• What’s your retail and distributor price? To be able to answer that you’ll need to first be able to answer: what are your margins, your cost of ingredients and the co-packing or manufacturing costs?
• What distributor carries your products?
• What’s the minimum order?
• What makes your product different than others like it?
• What kind of customer is interested in your product?
• Why would our customers want to buy it?
• Do you have samples ready for buyers to taste?

5. Do Sales Presentations and Demos

To really complete the start-up process you’ll need to sell something. Even if you just produce a few sample runs of your product and you do some demos to buyers, this is a good way to start the process.

You’ll need to set up meetings with buyers as they’re analyzing your particular category once every year or two. It will require calls and presentations, as well as providing samples for them to try your products.

Once one grocery chain picks up your products, that will prompt a distributor to get your item set up in their system. From there, selling will get easier because you’ll already have one distribution channel in place. This means that companies who work with that same distributor can simply add your products to their current orders.

Unfortunately, These Steps Don’t Always Happen In Order

The process of starting your new specialty food company will not always follow these steps as outlined. This progression is not as clear and linear as it may appear on paper. It can be complex, with some steps taking months and then sometimes all of the pieces come into line at once and you’ll need to make all of your decisions immediately!

Starting your new brand will always be challenging. Your business decisions will not always be straight forward or outlined. But will it be worth it? I think you already know the answer to that.

http://www.centrafoods.com/blog/5-steps-to-starting-a-new-specialty-food-brand?utm_campaign=Small%20Business%20Advice&utm_content=5804077&utm_medium=social&utm_source=twitter

2 Myths That Keep People from Starting A Food Business

Myth #1: The artisan food industry is too crowded for another new product to enter the fray. 

The artisan market is crowded but the truth of the matter is that the specialty food industry as a whole is seeing unprecedented growth. A recent report by the Specialty Food Association (yes, there is such a thing!) shows that specialty food sales exploded in 2012 with 14.3% growth over 2011. That’s a whopping $85M spent on specialty food in the US alone! Customers today actively seek out artisan food products and are willing to pay a premium for food products they deem are crafted with care and quality ingredients.

What if your dream is to start a food truck? There are some who would argue that it’s impossible to start a food truck in the Seattle Metro area today.  Josh Henderson from Skillet argues differently, though. At the 2012 University of Washington Entrepreneur Week, I had the honor of moderating a food truck panel that included top Seattle mobile food entrepreneurs. When asked whether they thought this city had reached its capacity for food trucks these entrepreneurs all declared that Seattle, a bigger city than Portland, hasn’t even come close to reaching the number of food trucks that Portland has. What’s more, they said, food trucks that can consistently deliver great product will always have a place in this market.

Myth #2: It’s too risky/expensive to start up a business in today’s economy. 

That may be true for some businesses (biotech doesn’t seem like a cheap endeavor for instance!) but if a food business is what you dream of building, then there’s really never been a better time here in Washington. Recent changes in our laws now make it possible to start some food businesses from your own home kitchen, which can cut down immensely on your startup costs. If that’s not an option for you, there are also a number of kitchen ‘incubators’ in the area that enable you to essentially sublease a commercial kitchen space for a certain number of hours every week rather than having to find or build a kitchen of your own. Be it a home kitchen or a kitchen incubator, both of these provide you with a way to cost effectively start your business small and grow it from there.

Starting a food business also doesn’t mean you necessarily need to give up your day job or put the kids in full-time daycare. It is not only possible to start a part-time food business, but you can actually build a successful and profitable business this way that you could later move into full-time or simply keep part-time as a way to make a little extra money.

Food trucks differ a little from this in that if you’re going to commit to a food truck then you likely need to be willing to put more money upfront to get it started. That being said, it is possible to start a food truck for as little as $5000 if you’re willing to put the elbow grease into fixing up a truck yourself.

By starting an artisan food business you are in no way guaranteed a life of riches, gold, and ample leisure, but if making and selling your specialty food product brings you happiness, makes your heart sing, and can be turned into a viable part-time or full-time business, then isn’t it worthwhile to give it a shot?

https://continuinged.northseattle.edu/blog/2-myths-keep-people-starting-food-business

Big interview: Gloucestershire business woman Susannah Moffatt - from the dole to director in four years

 

It could be the plot of an inspirational film

A young woman, unemployed, needs a job; so starts work on the minimum wage behind the counter in a cafe. A few years later, she’s running coffee shops and cafes all over town and looking at a massive expansion of her business.

But it is no film script, it is happening to Susannah Moffat.

The 34 year old started her career in catering a mere four years ago as an alternative to sitting about on the dole, having graduated with a degree in creative writing from the University of Gloucestershire.

She is now director of two companies, Cheltenham Coffee Co and In The Park, running the Central Cross Cafe and the Boathouse in Pittville Park, as well as the cafes at Sandford Parks Lido.

There’s nothing new about aspiring writers getting a gig in a cafe, but what drove Susannah into being such a successful entrepreneur?

She said: “I spent my 20s singing and playing in bands – I still do that – and then did a degree in creative writing.

“I got the job in the cafe in Pittville Park in 2010 because I needed something to do, I don’t like not having something to do, but I’ve found that there’s a real outlet for creativity in running a business.

“It’s all about how you look at problems, having new ideas about doing things.”

 

And in her new venture at the lido, Susannah has certainly shaken things up.

Having just opened for the summer season, the cafe has been split into two operations.

Café Lido is available for swimmers and will, as usual, close at the end of summer.

But there’s a second coffee shop – Park Cafe, Sandford Parks – branded with green livery and aprons instead of the aquamarine blue branding Susannah has chosen for the pool cafe which will stay open all year round.

Susannah said: “I’m hoping this cafe can do for Sandford Park what the Central Cross cafe will do for Pittville Park. “It can become a destination, somewhere to meet and bring people to the park.

“At the Central Cross cafe we’ve provided blankets for people to sit on the grass and newspapers and we’re providing a community service, “I want to have jazz events linking the three parks, a big Hallowe’en event and we’ve done Christmas carol singing in Pittville which is really popular.”

But how did Susannah go from just working behind the counter to running an expanding empire?

Susannah smiled from under her dramatic red hair and said: “The cafe, which was just known as the ice cream hut at the time, closed for the winter and the council put it out to tender.

“They wanted someone to run their cafes, that one, the boathouse and the one in Montpellier Gardens. “I only wanted to do one, so I got together with two friends to form Cheltenham Coffee Co and I got loads of books from the library, books about running a business, doing a business plan, running a coffee shop.

“Because it was a council tender it was about 80 pages long – but I think they also knew that because I’d been working in the cafe and had often been on my own, managing it in effect at those times, that I knew what I was doing.”

Susannah’s new ideas included extending the opening hours, whereas the cafe had been open from 10am 5pm, she realised there was a trade to be found from people walking through their park on their way to work.

In three years the cafe’s turnover has nearly quadrupled, Susannah has taken over running of the Boat House in the park after her business partner Gene Waterhouse decided to follow other opportunities and she is bouncing with enthusiasm about her new venture in Sandford Parks.

She said: “We’ve only just opened – we had a month to get it all sorted out, decorated and the new colour scheme up. We’ve got pictures on the wall of the history of the place. It’s such an amazing asset for Cheltenham, I love the lido.”

And news of her success is spreading. She was invited to speak to business students at her alma mater at the University of Gloucestershire.

She added: “That was an honour. I had to start by telling them that I didn’t have a business degree.”

Susannah’s particular expertise at running cafes in parks and gardens has even seen her approached by the Royal Borough of Kensington and Chelsea; she was asked to provide a report on how to improve the catering operations in places like Holland Park and Kensington Memorial Gardens.

Susannah said: “I went down and had a look. There’s five parks and gardens. I went to their Holland Park offices.

“At the moment they’re providing instant coffee and packaged biscuits and they wanted something more like what we’re doing here, with homemade food and really good coffees and teas.

“ They’re going to put them out to tender, I think.”

And might she put in a bid?

“I might. I don’t know. I’d have to spend half the week in London if I did that.

“I’d also definitely have to get an office. At the minute I don’t have one, it’s my front room. So that would have to change.”

Susannah, who still sings and plays in bands when she finds the time, admits that she hasn’t done much creative writing since she graduated.

There’s definitely a screenplay to be written in her experiences over the last four years – but it might get turned down for being unrealistically easy – surely no one can be that good from a standing start? Except it would appear, Susannah is.

She’s only four years into her business career, and there’s a long way to go, but soon parks all over the country may be filled with cafes run by a Cheltenham girl who once took a job in a café because it was that or the dole queue.

 

http://www.southwestbusiness.co.uk/news/10062014080928-big-interview--gloucestershire-business-woman-susannah-moffatt---from-the-dole-to-director-in-four-years/

Do you need a degree to run a business?

Most business owners learn the important stuff on the job. So what’s the value of a degree if you know you want to set up your own business? Rachel Miller asks three successful entrepreneurs and a leading enterprise expert at Plymouth University. With youth unemployment at about 20% for 18-24 year-olds, more and more young people are thinking of setting up their own business, rather than waiting for the right job to come along.And with high levels of graduate unemployment, it’s perhaps not surprising that 63% of undergraduates “are now looking to start a business”, according to a survey by Start Up Britain.

 But with university fees at record levels, is it better for would-be entrepreneurs to skip university and get on with establishing their own ventures?

After all, many of the UK’s most well-known entrepreneurs are not graduates — Peter Jones, Theo Paphitis, Duncan Bannatyne, Hilary Devey, Richard Branson and Alan Sugar to name a few.

However, going to university is not just about getting a qualification — it’s also about developing life skills and making contacts. What’s more, university is often the perfect place and time to start up a fledgling business.

Would Facebook exist today if Mark Zuckerberg hadn’t gone to Harvard? Would Innocent Smoothies have been born if its three founders hadn’t met at Cambridge University?

And, whether you go to university or not, is anyone really ready to run a business at the tender age of 18?

So what is the right path for a young entrepreneur?

Simon DolanSimon Dolan, SJD Accountancy

“I think a degree can actually be a hindrance — the further you go in education, the more narrowly defined you become, until you’ve almost got blinkers on. By the time you graduate, you have invested so much of your life in one area and amassed a wealth of knowledge so it’s hard to imagine not doing something with that. I think it limits your horizons.

With business courses, you tend to get a bit of law, a bit of accounting and a bit of marketing. But running a business is very simple, it’s about selling something that you have bought for more than you paid for it. You can bring in those other skills as you need them — but you can’t bring in get up and go.

I wouldn’t encourage anyone to set up a business before they’ve had some experience of the workplace. You can learn a lot from working for any type of company, big or small. When you start working — whether it’s in an office or flipping burgers — you quickly pick up what’s expected of you in the workplace. It doesn’t really matter what you do, every job involves selling something to someone. You don’t have to be a prima donna about the type of work you do, all experience is valuable.

Do you need an amazing idea to get started? Very few businesses actually make money from an original idea. People point to innovative companies like Google and Apple but the vast majority of companies do mundane things well. When I started my business I modelled it on another firm — but I did it better.”

Simon Dolan is owner and founder of SJD Accountancy. His autobiographical guide, How To Make Millions Without A Degree: And How to Get by Even If You Have One, is available on Amazon.

Rajeeb DeyRajeeb Dey, Enternships.com

“I wouldn’t be running Enternships if I hadn’t gone to university. While I was there, I ran the Oxford University enterprise society, Oxford Entrepreneurs. The experience was so valuable — we held weekly events, the committee was 18-strong, the budgets were considerable. It was like running a business. And the contacts I made were awesome — we invited speakers like Peter Jones and Sir Stelios Haji-Ioannou and they have become good contacts.

I started Enternships at Oxford but it was not a business to begin with. I created a basic listing site (with the help of fellow students) for Oxford undergraduates to find internships in start-ups and small firms — businesses that were looking for entrepreneurial talent but that didn’t have the resources to do the milk rounds.

When I graduated in 2008 I saw an opportunity to turn it into a business and Enternships was launched in 2009. I always knew I wanted to run my own business and this was a chance to do some good at the same time.

For entrepreneurs, it’s not a pre-requisite to have a degree. I have friends that didn’t go to university that are running very successful enterprises. As an entrepreneur, you are judged by what you do so it’s a more level playing field. But it’s about what is right for you. If you are 18 and ready to go with a business idea and a plan in place, there’s a lot of support out there.

But if you are not ready, university offers a great experience and opens up opportunities. Of course, it also means considerable debt. But if you take advantage of the extra-curricular activities like I did and throw yourself into student life, you can get a lot out of it.

However, things are changing. In recent years there has been a push by successive governments to increase the number of people going on to higher education. But now with the rise in fees my hunch is that that may reverse. People are taking a long hard look at the value of degrees.

Practical entrepreneurship courses can be useful but the best way to learn is by actually doing things. There are hard skills in business that you can teach but it is harder to teach the soft skills. A good way to learn about running your own business is to work for a start-up — you see first hand the highs and lows of being an entrepreneur. Many of our interns have gone on to set up their own business.”

Rajeeb Dey graduated with first class honours in economics and management from Oxford University. He is the founder of Enternships.com which connects students with small businesses and start-ups.

Julian BeerJulian Beer, Plymouth University

“Going to university helps you develop many important skills necessary to running a business — critical reasoning, doing research, learning how to present and communicate effectively. And above all, it gives you confidence.

At Plymouth University, our approach to entrepreneurship is radically different from other universities. We run the Growth Acceleration Investment Network offering all undergraduates, no matter what they study, the chance to set up their own businesses. It’s a one-stop entrepreneurial shop, with access to resources, advice, funding and business contacts.

Students can pitch ideas, develop them and formulate a business plan with our help. They get to meet inspirational people — people like Doug Richards and Dominic List. It’s about connecting students with ideas, money and support.

We are also heavily involved in local enterprise here in the South West. We bid for Regional Growth Fund money from the start and have invested £1 million in local businesses, creating 120 jobs. We work closely with Local Enterprise Partnerships and chambers of commerce and we also have links with businesses in the UK and overseas.

You can teach hard skills — and we do offer entrepreneurial modules at Plymouth — but we also provide the environment where students can develop soft skills, like negotiation, pitching ideas, making presentations and networking. They learn how to crystallise their ideas, and abandon the ones that won’t work.

Some students who come here have planned to be an entrepreneur almost from the cradle and they are up for everything we offer, they take every bit of advice, enter every competition. A lot of the new business ideas come from the arts faculty and also from science and technology. Many students set up their own businesses while they are studying, making things, selling things and trading things.

There are no national stats on how many graduates go on to set up their own business. The first destination leavers’ survey didn’t class self-employment as work. We have lobbied hard for this to change and now self-employed graduates will be counted — the first results will appear in 2013.”

Professor Julian Beer is Pro Vice-Chancellor (Regional Enterprise) at Plymouth University.

Mike SouthonMike Southon

“It’s not necessary to have a degree to become an entrepreneur but it doesn’t hurt at all. Learning is a good thing and a degree shows you have a skill. It’s also a fantastic way to meet people, make contacts and get life experience.

Then there are the business courses — but the great irony is that many MBA courses that are meant to turn out entrepreneurs instead turn out merchant bankers and venture capitalists.

At university you have the ideal opportunity to set up a little business, with your mates as your first customers. You’ve actually got time to do it. If I was an employer and I met a graduate that had run a venture at university and paid some of their debts off with the revenue, I’d hire them. That means much more than all the usual academic achievements.

You do hear about so many entrepreneurs that are dyslexic and learning doesn’t work for them. And there are still plenty of old-school entrepreneurs that have learned on the job — I meet them every day. The butchers, bakers and candlestick makers — real entrepreneurs who are at the grassroots.

When you are young you should try as many things as possible and build up a network of contacts. To start with, you don’t know anything and more importantly you don’t know anyone. So you’ve got to get some kind of experience — that could be university or it could be working — but you probably won’t be ready to start a business straight away. 28 is a great age to start a business. What you need is gumption and the ability to bounce back.”

Mike Southon is an entrepreneur mentor, speaker and columnist for the Financial Mail. He is the author, with Chris West, of several books including The Beermat Entrepreneur. He graduated with a 2:2 in chemical engineering and economics at Bradford University. 

http://www.startupdonut.co.uk/startup/start-up-business-ideas/is-running-a-business-really-for-you-/do-you-need-a-degree-to-run-a-business-