How to start a frozen food business
Starting a frozen food business is fairly simple and can be done with very little overhead. However, it will take some planning, as several different kinds of frozen food business models are in the marketplace.
Starting a frozen food business is fairly simple and can be done with very little overhead.
However, it will take some planning, as several different kinds of frozen food business models are in the marketplace. This article will help you choose one that suits you and develop a delivery method and a marketing plan so you earn a solid reputation that, in turn, will result in residual income for you in the future.
Choose your products. Virtually thousands of foods are sold frozen. From pizzas to pickles, the gambit is being covered by many. This means you will likely never be all things to all people. However, it also means opportunities to specialise are ample. Choose products that are simple to obtain and market at first. If you have a recipe of you own, you may start there. If you do not, look for wholesalers that sell unique products that are not currently available in your area.
Write a business plan. Your business plan should be written around your product or products and how you plan to market them. It should include studies of the frozen food business in your area, your intended marketing plan, a budget, a list of equipment you will need to operate your business and your niche.
Choose a delivery method. Selling frozen foods often involves several delivery systems. You may decide to market your products online and deliver them in freezer trucks, pedal your foods to businesses and homes face to face or open a store. You may also have an idea that's completely unique. It's up to you. However, you may not have the capital to take on a large venture in the beginning. Starting out small is the best way to begin. This involves finding an already successful grocery, health food or other retailer that will permit you to sell your products in its shops for a small percentage. This will allow you to deliver your foods to customers out of the gate and help you earn a solid reputation before you start a full-blown operation involving delivery services and a wider range of products.
Raise capital. You will need some cash to start, especially if you plan to buy a delivery truck and kitchen equipment or lease a storefront. Contact the Small Business Administration (See Resources below). Representatives will provide you with information about the many small business loans available for entrepreneurs. These loans, called SBA loans, often have very attractive terms. Forgivable grants are also available for small business owners at every level of government. You may also get a loan from your bank or solicit private parties to invest in your business. Regardless of where you turn to raise capital, you must show them a strong business plan and sell investors on your idea.
Find storage space. It is important to keep an ample inventory on hand at all times. In the beginning, this may involve you buying a deep freezer or two. Or, if you know someone who has a commercial-grade freezer, such as a restaurant or store, ask him if you could use some of the freezer space. Offer him rent or a cut of your revenue until you get on your feet. Mini storage companies also rent climate-controlled units.
Get a food license. To sell food in almost all areas of the country, you must have a food-distribution license and/or a license to prepare food for sale. Such permits usually fall into the £48 to £130 range. You'll also need to make sure your business passes health codes in your area and complete a brief food-preparation course through your local health department. Expect to pay £32 to £65 to complete such a course. If you are short on capital and need a kitchen to prepare food, develop a relationship with a local restaurant and ask the owner to use her kitchen on days it is closed or slow. This will get you started until you obtain your own license.
Consider a franchise. Many companies with proven business models are looking for franchisees. Although this type of model will likely require a sizeable capital investment, it's a good option if you wish to bypass the process of building a business from the ground up. Some frozen food wholesalers are always looking for independent contractors to market their products. This type of arrangement may work well for you, in that you won't be required to get a license, find a kitchen or storage space, or cross market with other businesses. You simply find people to buy from your catalogue or corporate website. Products are then dropped-shipped directly to your customers from a central corporate location. Although this largely equates to an outside sales job, it is a great way to get into the frozen food business with little experience or money.
- Try your best to specialise. Selling frozen foods customers can buy in supermarkets is not recommended. Unique health foods, homemade foods and products exclusive to your area will bring you the best results.
- Stay small in the beginning. The food business is largely built on reputation. Trying to cover a customer base that's too large will often result in unhappy customers. Sell one or two products only in the beginning, and focus on providing stellar customer service.
- Have a website. This will add to your professionalism and allow prospects to browse and become familiar with your company at home before they buy.
- Do not buy or lease equipment until you're sure your revenue can cover the investments. Initial expenses of delivery truck leases, kitchen equipment purchases and real estate agreements often take years to recover. They also can eat up capital, requiring you to go further into debt to keep your operation running.
- Never operate a food business without the proper license or permit. Not only can it result in fines, it will likely permeate throughout the industry that you are unprofessional and do not care about health codes and the quality of your food products.