The Case for the Foodie Entrepreneur

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Story by Danielle Tsi

Published on Mar 15, 2012 in Eatsy

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I was 23, armed with a college degree, and confident that I could change the world. Five months into my cubicle job, I found myself in an existential quandary, wondering if I was on the “right” path, whether I was meant to do this, and if I shouldn’t be doing something else to pursue my dreams.

Like many in my generation, I began dreaming about starting my own food-related business: a little bistro in Singapore’s business district. This flight of fantasy was a welcome respite from the drudgery of a corporate job, but when it came down to it, I realized I wasn’t ready to commit to my dream. After reading Chow’s discouraging piece on starting a food business, I decided to reach out to small business owners for their insights. What should an aspiring food entrepreneur know before turning their dreams into reality? These are the people who had a vision and wanted it badly enough to give it everything they’ve got.

Caramel Jar owner Nicole Ebbitt with a collection of her handmade caramels

Who: Nicole Ebbitt, The Caramel Jar
What: Eco-friendly, handmade caramels.
Where: Danville, PA
Years in business: 1 year and 10 months

Be unique:
“Don’t be afraid to be different. Caramels aren’t new to the market. Neither is popcorn, beef jerky or chocolate. If I were starting a new company, I would think about what sets you apart from the competition. Packaging? Quality? Company policies or culture? Also, think about whether your product can weather ever-changing food trends. I admit that caramel is enjoying a bit of a renaissance right now; however, caramel lovers won’t disappear after the fashionable days of the salted caramel dwindle. We just go underground and continue to seek our caramel in any way, shape or form. Be sure to listen to your customers, have patience, and keep outworking your competition. Quality and customer service always shine through!”

The nuts and bolts:
“Form your LLC. Set up a separate bank account for your business. Purchase your domain name (even if you sell on Etsy) to protect the brand you’re putting so much energy into creating! Find an excellent intellectual property lawyer to trademark your company name/logo and protect your product from infringements, and purchase insurance to protect you from product liability.”

Stephen Loewinsohn

InnaJam owner Dafna Kory

Who: Dafna Kory, Inna Jam
What: Makes seasonal jam from produce grown within 100 miles of their kitchen.
Where: Berkeley, CA
Years in business: 1 year and 10 months

Profitability:
“There are easier ways to make money. The margins (in the food business) are pretty slim, but that’s not to say that a profitable food business is impossible. Just be aware that it doesn’t happen overnight and plan accordingly.”

Cash flow:
“The most important thing is to think about cash flow. It’s totally boring, totally not why we make jam or pies, but if you run out of money, your business ends. I’ve seen a lot of people who closed their business because of it. As much as it sucks, you have to sit down and do a cash flow projection and identify those periods where you’re going to run out of money. For example, if you’ve got 300 orders for Thanksgiving pies, you’re going to have to purchase the ingredients and pay your staff and rent and bills in order to produce those pies — all before you get paid. So you’ll have to decide what you’re going to do to manage those periods, either postponing purchases or getting more money in to tide you over.”

It’s not about the recipe:
“My biggest recommendation is to sit down and figure out how much money you’re going to spend every month. Nobody wants to hear this because it’s not about how good your recipe is, but this is the reality of it.”

Who: Mark Sopchak and Jenna Park, Whimsy & Spice
What: Husband and wife team producing handmade marshmallows, cookies and an assortment of sweets.
Where: Brooklyn, NY
Years in business: 4 years

Doing research:
“It’s important for anyone thinking of starting a food business to research the laws for their state and obtain all the licenses and insurance requirements needed to sell food; it’s also to protect yourself from liability. I think sometimes it’s easy to underestimate how much work is involved in running any type of business, so do your research, figure out your costs, and know your personal limits in terms of how many orders you can fulfill without getting overwhelmed. Have fun and shoot for your dreams, but have one foot grounded in reality, too.”

Sustaining the glow:
“We (visited) one local bakery (back in 2008), who invited us after seeing us on Daily Candy a few months after we launched because we reminded her so much of herself when she was first starting out. She said something to the effect that that second and third year of business are some of the hardest because you’re not the new kid anymore and, once the newness dies down, you have to work harder to keep your name in the press and keep people interested.”

Danielle Tsi

Marge Bakery owner Megan Gordon

Who: Megan Gordon, Marge Bakery
What: Artisanal baking company specializing in granola and classic American sweets.
Where: Seattle, WA
Years in business: 1 year and 4 months

Find your community:
“I’ve learned how important it is to connect with your community and with other small food producers. These are your people. They’re doing it, too. They will help you in ways you couldn’t imagine. Network. It’s all you’ve got. Show up. When I drop granola samples off to new vendors, I never leave them anonymously with an employee. I wait until the owner or buyer is there and really sell them on the product. They’ll remember your smile, the jokes you made, your enthusiasm about the product.”

Learn the business side of the business:
“I’ve also learned that, despite being a ‘do-er,’ you have to step back and revisit your business plan and reevaluate your goals, positioning, and projections often. I think many small business owners are passionate about their product but scared of the money/business side of things. It may sound harsh, but it’s really not just about a good product. That’s fine and good and important, but means nothing if you don’t know how to sell the product, leverage the product, and build a brand.”

Who: Karen Li, Sparkles Macaron
What: Hong Kong-raised baker specializing in French macarons.
Where: Milpitas, CA
Years in business: 1 year and 9 months

Keep the faith:
“It really isn’t easy establishing a food business here, I have to say. We have met many obstacles in this new environment that we live in – financial, technical. I almost gave up many times, but here we are, hanging on and doing fine, and I think what got us through all these, is the passion for creating beautiful things and the heart to perfect your product.”

What’s your dream food venture?

About the author: Danielle Tsi grew up in Singapore, a tiny, food-obsessed island on the tip of the Malaysian Peninsula, where every waking minute was spent thinking about what her next meal was going to be. Landing in the United States with her well-traveled Nikon, she turned her lifelong love affair with food into images and words on her blog, Beyond the Plate. When not behind the lens or at the stove, Danielle can be found on her yoga mat perfecting the headstand.

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3 Featured Comments

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  • WingedWorld

    Vickie Moore from WingedWorld says: Featured

    Hearing about how hard it is to run a food business makes me feel even more committed to supporting small, local food producers. Just imagine having to know all the food regulations and buy liability insurance. No one is going to sue me because one of my art prints gave them food poisoning!

    1 year ago

  • KettleConfections

    KettleConfections from KettleConfections says: Featured

    I'm so glad to see everyone interviewed here pursuing their artisan food ventures with such great success! Having sold to stores, I know how much of a challenge it can be giving stores a reason to carry your product over the long run- especially when stores can easily buy 'gourmet' machine made goods that are cheaper and have higher profit margins than handmade food products. It's wonderful that we live at a time where even small artisan food producers can get the word of their products out outside the confines of mass media and chain stores and conglomerate food distributors who get to decide what you can and cannot see in your supermarkets.

    1 year ago

  • reveriefrance

    reveriefrance from reveriefrance says: Featured

    I know the ins and outs of the food business. I did it for ages, including consulting for others. This article is dead on. You can make the best pie in the world, but if you don't have a solid financial plan and marketing plan, you won't survive.

    1 year ago

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