If you ask any entrepreneur, starting a business comes with its fair share of challenges.
Starting a specialty food business requires a great deal of effort, dedication and most importantly passion.
If you're willing to put in the effort to build your own business, you're going to want to follow the critical steps to creating a successful brand.
We've created a guide that covers each step of the process - from making key financial decisions, to launching and marketing your business the right way, and tips/strategies on how to grow your business effectively.
💡 Introduction To Starting A Specialty Food Business
Is Starting A Specialty Food Business Right For You?
There are many factors to consider when starting a specialty food business.
We put together the main pros and cons for you here:
Pros of starting a specialty food business
You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.
• Ability to start your business from home
It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!
• Rewarding work
Starting a specialty food business can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.
• Meaningful business connections
You never know who you will meet as a specialty food business. This could be the start of an incredible business opportunity!
• High margins
The gross margins for your specialty food business are typically around 50%, which is considerably high and allows you to grow your business and manage costs easily.
• You are your own boss!
With starting a specialty food business, you are the one to make decisions for almost all of the operations. Calling the shots can be empowering and liberating!
• Local Community
One of the best parts of starting a specialty food business is that you can develop a local following by selling your products at craft shows, farmers' markets, or even local storefront businesses! This gives you access to additional revenue streams and loyal customers.
• Location is everything!
When operating a physical storefront, the location often speaks for itself and serves as it's very own marketing tool! It's important to choose a location in a high traffic area so you can spark curiosity and get people through your door!
• You get to do something you truly love
With starting a specialty food business, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful.
• You can promote and sell your product on Amazon
Although there are some disadvantages to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.
Cons of starting a specialty food business
• Crowded Space
Competition is high when it comes to your specialty food business, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.
• Finding The Right Supplier
Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section.
• Niche Market
A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.
• Time commitment
With starting a specialty food business, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.
• Strict regulations
With any specialty food business, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur.
• Be prepared to get out of your comfort zone!
Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!
• You might struggle financially (at first)!
If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.
• Work is not always glamorous
With starting a specialty food business, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.
• Easy target for criticism
Since your specialty food business has the ability to reach a large audience, you'll need to be able to handle criticism. The internet can be a cruel place, and regardless of your intentions, many people will disagree with you and even take their criticism too far. To survive in this industry, you'll need to have tough skin (or at least learn this along the way).
- Stonewall Kitchen (78.9K Alexa Ranking)
- Gourmet Traveller (129K Alexa Ranking)
- sfa (131K Alexa Ranking)
- Gourmet Food Store (184K Alexa Ranking)
- Gourmet Egypt (234K Alexa Ranking)
- Liberated Specialty Foods - Revenue $100K/month
- ChipMonk Baking - Revenue $80K/month
- Baltimore in a Box - Revenue $35K/month
- Simple Goodness Sisters - Revenue $7K/month
- janori - Revenue $3K/month
Let's take a look at the search trends for specialty foods over the last year:
How To Name Your Specialty Food Business
It's important to find a catchy name for your specialty food business so that you can stand out in your space.
Here are some general tips to consider when naming your specialty food business
- Avoid hard to spell names: you want something easy to remember and easy to spell for your customers
- Conduct a search to see if others in the space have the same name
- Try not to pick a name that limits growth opportunities for your business (ie. if you decide to expand into other product lines)
- As soon as you have an idea (or ideas) of a few names that you love, register the domain name(s) as soon as possible!
Why is naming your specialty food business so important?
The name of your business will forever play a role in:
- Your customers first impression
- Your businesses identity
- The power behind the type of customer your brand attracts
- If you're memorable or not
It's important to verify that the domain name is available for your specialty food business.
You can search domain availability here:
Find a domain starting at $0.88
powered by Namecheap
Although .com names are the most common and easiest to remember, there are other options if your .com domain name is not available. Depending on your audience, it may not matter as much as you think.
It's also important to thoroughly check if social media handles are available.
As soon as you resonate with a name (or names), secure the domain and SM handles as soon as possible to ensure they don't get taken.
Here's some inspiration for naming your specialty food business:
- Hudson's of West Sussex check availability
- Baked & Cracked check availability
- Harmony Food & Beverage Inc check availability
- Fantini's Food Company check availability
- Effie's Deli check availability
- Alfred & Fred check availability
- Sukhvinder Food check availability
- F&B Business check availability
- Peppery Food check availability
- Bitter Bistro check availability
- Caf Rouge check availability
- Tastee-EAT check availability
- Safest Restaurant in Chicago check availability
- Coca-Cola Bottling Co. of Canada check availability
- Kale and Kettle check availability
- The Fowl Company check availability
- Bite Size Food check availability
- Sauces and Wines check availability
- Luxury Food Co check availability
- You & I Love Food check availability
- Broiled Food check availability
- Poured Food check availability
- Prime Food Court check availability
- Tangy Food Arena check availability
- A La Mode Food check availability
- Salon Food check availability
- Stirred Food Arena check availability
- Hefty Food Arena check availability
- Plumb Food Arena check availability
- Family- Style Food check availability
- Bittersweet Food Court check availability
- Theta Food Court check availability
- Top Pick Food check availability
- Food N Things check availability
- Food Bounties check availability
- Food Wiki check availability
- Plump Food Court check availability
- Exemplary Food ARrena check availability
- Food Globe check availability
- Chopped Food Club check availability
- Grinning Food Emojis check availability
- March Food Court check availability
- Energizing Food Court check availability
- Caramelized Food Court check availability
- Ether Foods check availability
- Buttery Food check availability
- Michelin Star Food check availability
- Adapt Food check availability
- Unphased Food check availability
- The Foodies Agency check availability
- Happy Mealing! check availability
- Munch and Meal check availability
- Haleakala Cafe check availability
- Eat-n-Spend check availability
- Bite & Share check availability
- Eat Out and Bring Back check availability
- Meal Planning Eatery check availability
- Slicing Kitchen check availability
- Meal Prep Meal check availability
- Frodo's Kitchen check availability
- Bun Bistro check availability
- Tastier Than the Real Thing check availability
- The Meal Planning check availability
- Cougar & Co check availability
- Meal Prep for Good check availability
- Meal-Plan-R-Us check availability
- The Food & Beverage Institute check availability
- Heavenly Meal Planning check availability
- Co Meal Planning check availability
- Meal Planning Avenue check availability
- Re Meal Planning check availability
- Meal Emporium check availability
- The Greek Meal check availability
- Peppery Meals check availability
- Gourmet for Health and Taste check availability
- Kosher Grocery Place check availability
- Acid check availability
- Classical Penchant check availability
- Cold check availability
- After Try check availability
- Nutritious Buffet Co check availability
- Warm Breakfast check availability
- The Principal Meat check availability
- Delicate Sample check availability
- Pure Meals Spot check availability
- Superior Try check availability
- Sample Trading Co check availability
- Favourite Foraging check availability
- The Surplus check availability
- The Proper check availability
- The Balanced check availability
- FestiveMeal check availability
- The Sweetish check availability
- Suitable check availability
- Slight check availability
- Communal check availability
- The Own check availability
- Poor Nutritious Trading Co check availability
- SoybeanMeal check availability
- The Coarse Soup check availability
- Foodstuff Co check availability
- AvailableFood check availability
- Savor Trading Co check availability
- Italian Grocery Co check availability
- Fine Foodstuffs check availability
- The Easy Dinner check availability
- True Try check availability
- Nutritious Groceries Co check availability
- Favorite Feeds check availability
- Plant Nutrient check availability
- The Daily check availability
- Italian Foodstuff check availability
- Principal check availability
- The Comfortable Lunch check availability
- The Delicate check availability
- FineFood check availability
- Dish Co check availability
- Savour Trading Co check availability
- Liquid check availability
- Correct Savour check availability
- ColdMeal check availability
- The Better Savour check availability
- Daily Nutrition Co check availability
- Nutrition Spot check availability
- True Savor Spot check availability
How To Create A Slogan For Your Specialty Food Business:
Slogans are a critical piece of your marketing and advertising strategy.
The role of your slogan is to help your customer understand the benefits of your product/service - so it's important to find a catchy and effective slogan name.
Often times, your slogan can even be more important than the name of your brand.
Here are 6 tips for creating a catchy slogan for your specialty food business:
1. Keep it short, simple and avoid difficult words
A great rule of thumb is that your slogan should be under 10 words. This will make it easy for your customer to understand and remember.
2. Tell what you do and focus on what makes you different
There are a few different ways you can incorporate what makes your business special in your slogan:
- Explain the target customer you are catering your services towards
- What problem do you solve?
- How do you make other people, clients, or your employer look good?
- Do you make people more successful? How?
3. Be consistent
Chances are, if you're coming up with a slogan, you may already have your business name, logo, mission, branding etc.
It's important to create a slogan that is consistent with all of the above.
4. Ensure the longevity of your slogan
Times are changing quickly, and so are businesses.
When coming up with your slogan, you may want to consider creating something that is timeless and won't just fade with new trends.
5. Consider your audience
When finding a catchy slogan name, you'll want to make sure that this resonates across your entire audience.
It's possible that your slogan could make complete sense to your audience in Europe, but may not resonate with your US audience.
6. Get feedback!
This is one of the easiest ways to know if your slogan will be perceived well, and a step that a lot of brands drop the ball on.
Ask friends, family, strangers, and most importantly, those that are considered to be in your target market.
Here's some inspiration for coming up with a slogan for your specialty food business:
- Meals With Year
- Sufficient Food, We're Commiitted
- Come To Life. Come To Meal.
- Gonna Be A While? Grab A Meal.
- First Dinner, Hearty Feast
- Foods With Importance
- Space Of The Dinner
- Public And Double
- I Fall For Food.
- Your Flexible Food.
- Position Of The Snack
- Opinion Is What We Do
- It Makes Your Taste Smack.
- Food For People Who Want More.
- Go To Work On A Meal.
- Simple Lunch, Light Feast
- Kids Will Do Anything For Food.
- Day Meal, Let's Get To Work
- Food, Good.
- Base Of The Foodstuffs
- Property Of The Foodstuffs
- Building The Future
- Only Gastronomies Are What We Do
- From Compound To Obtuse
- Enough Food, Satisfaction Guaranteed
- Taste Keeps Going And Going.
- Food Makes Your Day.
- Literary Taste, Better Results
- Easy, Breezy, Beautiful Food.
- Don't You Just Love Being In Meal?
- Kitchen Is What We Do
- Work Hard, Eating Harder
- Make It A Food Night.
- Food - To Feel Free!
- Meal It's A Kind Of Magic.
- Meal-Lickin' Good.
- The Too Good To Hurry Meal.
- Good Culinaries Are What We Do
- Work Hard, Eats Harder
- More And Square
- You Can Be Sure Of Food.
- Central Heating For Food.
- Office Of The Repast
- Next Meal, Built For You
- Taste - Go For The Game.
- Range Of The Dinner
- The World's Local Food.
- Literary Taste, Let's Get To Work
- Don't Play With Fire, Play With Taste.
- Meals With Month
- Enough Food, Better Results
- Don't Play With Fire, Play With Taste.
- Food, I Want It All.
- Meal, Your Specialist.
- Meal Keeps Going And Going.
- Public Cultivates Are What We Do
- Call A Friend, Call Meal.
- Because Taste Can't Drive.
- Meal - It Does A Body Good.
- Enough Malnutritions Are What We Do
- From Deficient To Spare
- Hearty Meal, Better Results
The eCommerce Business Model
One of the main benefits of operating online is that you are exposed to the entire world, versus just one local area. Rather than depending on foot traffic, you have all the tools at your disposal to create exposure for your store online.
Additionally, there are much lower costs to operate an online store - fewer employees, you can operate from your home, and you get to create your own schedules (yes, holidays included!)
Although you are operating online and have the ability to connect with people all over the world, it's important to consider that you will need to invest marketing money upfront in order to promote your store to the right audience.
Gia Paddock, founder of Boutique Rye explains the 3 reasons why she decided to build an online store:
I wanted to find something I loved but also allowed me to stay home at the same time. While I was working at this local boutique, I realized that there was a lot of sitting around during the day when other people were out working. Therefore, an online business seemed like the best route for a few reasons:
- We didn’t have the extra funds sitting around to pay sign a year or two-year lease at a brick & mortar location.
- I realized the opportunity to reach a wider audience online compared to the audience of this small local boutique. For us, it seemed like hitting two birds with one stone.
- And finally (maybe the most important of all), running it as an online-only business would allow me to stay at home with Riley!
🎬 How To Start A Specialty Food Business
How Much Does It Cost To Start A Specialty Food Business
If you are planning to start a specialty food business, the costs are relatively low. This, of course, depends on if you decide to start the business with lean expenses or bringing in a large team and spending more money.
We’ve outlined two common scenarios for “pre-opening” costs of starting a specialty food business and outline the costs you should expect for each:
- The estimated minimum starting cost = $62
- The estimated maximum starting cost = $103,611
|Startup Expenses: Average expenses incurred when starting a specialty food business.||Min Startup Costs: You plan to execute on your own. You’re able to work from home with minimal costs.||Max Startup Costs: You have started with 1+ other team members.|
|Office Space Expenses|
|Rent: This refers to the office space you use for your business and give money to the landlord. To minimize costs, you may want to consider starting your business from home or renting an office in a coworking space.||$0||$5,750|
|Utility Costs For Office Space: Utility costs are the expense for all the services you use in your office, including electricity, gas, fuels, telephone, water, sewerage, etc.||$0||$1,150|
|WiFi & Internet: Whether you work from home or in an office space, WiFi is essential. Although the cost is minimal in most cases, it should be appropriately budgeted for each month!||$0||$100|
|Total Office Space Expenses||$0 (min)||$7,000 (max)|
|Employee & Freelancer Expenses|
|Payroll Costs & Fees: Payroll cost means the expense of paying your employees, which includes salaries, wages, and other benefits. This number depends on if you decide to pay yourself a salary upfront and how many employees you have on payroll. At first, many founders take on all responsibilities until the business is up and running. You can always hire down the road when you understand where you need help. Keep in mind, if you do plan to pay yourself, the average salary founders make is $50K.||$150||$250|
|Employee Hiring Expenses: Apart from payroll and benefits, there are other hiring employees costs. This includes the cost to advertise the job, the time it takes to interview candidates, and any other turnover that may result from hiring the wrong candidate.||$1||$2|
|Employee Rewards: It's vital to acknowledge and reward workers, whether they hit their goals or do a great job. This does not have to be costly. In fact, simply taking workers out to a meal or giving a gift or bonus is among the many ways to show how the worker is valued!||$0||$100|
|Total Employee & Freelancer Expenses||$151 (min)||$352 (max)|
|Website Builder: The cost of your website will vary depending on which platform you choose. There are many website builders on the market, so it's important you choose the right one for your business and overall goals. To learn more about your options + how to build a great website, check out this article.||$10||$500|
|Web Designer: Web design includes several different aspects, including webpage layout, content creation, and design elements.If you have the skills and knowledge to design your website on your own, then outsourcing this to an expert may not be necessary. There are plenty of other ways you can design a beautiful website using design tools and software.||$200||$6,000|
|Domain Name: Your domain name is the URL and name of your website - this is how internet users find you and your website.Domain names are extremely important and should match your company name and brand. This makes it easier for customers to remember you and return to your website.||$12||$200|
|Business Email Hosting Service: An email hosting runs a dedicated email server. Once you have your domain name, you can set up email accounts for each user on your team. The most common email hosts are G Suite and Microsoft 365 Suite. The number of email accounts you set up will determine the monthly cost breakdown.||$1||$15|
|Website Hosting Costs: Server hosting is an IT service typically offered by a cloud service provider that hosts the website information and allows remote access through the internet. A hosted server can help you scale up and increase your business’s efficacy, relieving you from the hassles of on-premise operations.||$0||$300|
|Website & Live Chat Tool: If your business values high-end customer service, you must consider utilizing a website chatbot. Website chatbots play a pivotal role in converting site visitors into long-term customers. Typically, there are different tiers of pricing and features offered by Live Chat service providers.||$0||$200|
|Total Website Costs||$223 (min)||$7,215 (max)|
|Business Formation Fees|
|Small Business Insurance: Depending on which state you live in and the business you're operating, the costs and requirements for small business insurance vary. You can learn more here.||$500||$2,000|
|Permit and License Fees: Depending on your industry, there are certain licenses and permits you may need in order to comply with state, local, and federal regulations. Here is an article that goes over all the permits and licenses you may need for your specialty food business.||$50||$700|
|Trademark: Filing trademark registration will protect your brand and prevent other businesses from copying your name or product. USPTO has several different types of trademarks, so the cost to apply can vary (typically anywhere from $400-$700).||$0||$700|
|Lawyer Fees: Although you may want to avoid attorney fees, it's important that your business (and you) are covered at all costs. This comes into play when creating founder agreements, setting up your business legal structure, and of course, any unforeseen circumstances that may happen when dealing with customers or other businesses.||$0||$1,500|
|A Patent: Patents provide protection against others stealing or selling your idea.Securing a patent can be very valuable, but it's important that you are 100% sure this will be a smart business move for you, or if this is something to consider down the line.The process of securing a US patent can be both lengthy and pricey, and typically includes filing an application with the USPTO.||$5,000||$15,000|
|Set up business: LLC & Corporations: The first step in setting up your business is deciding whether your business is an LLC, S Corp or C Corp. The cost for this depends on which state you form your business and which structure you decide on. We put together an article that goes over the 10 Steps To Setting Up A Business.||$50||$500|
|Total Business Formation Fees||$5,600 (min)||$20,400 (max)|
|Equipment & Supply Expenses|
|Cleaning Supplies: Cleaning supplies are essential products we used daily at home and in almost all places worldwide. These items are used to effectively and safely remove dirt and germs to control allergens and prevent the spreading of contagious diseases, helping us stay healthy.||$63||$200|
|Total Equipment & Supply Expenses||$63 (min)||$200 (max)|
|Retail Business Expenses|
|Shop Decor: If you plan to operate a physical store, you may want to consider decorating the place with wall decor, furniture, plants etc.||$0||$5,000|
|Utilities (storefront business): This refers to the cost of monthly utilities for your storefront location, which is typically based on a per-square-footage rate.||$0||$1,000|
|Building improvements and remodeling: If you plan to operate a physical location, you may find yourself dealing with building improvements and remodeling costs. Even if these costs are minimal, this is something to consider when renting/buying a physical location.||$0||$950|
|Storefront Property Rent: This refers to the storefront space you rent or buy for your business. The cost depends largely on the city and the size of the space. Keep in mind that other costs may be involved with your base rent and your lease will define additional expenses you are responsible for.||$1,250||$3,500|
|POS System: Gone are the days of cash registers! Many businesses now use point-of-sale systems for their checkout needs and to track sales and inventory. Here is a list of the best POS systems for small businesses!||$0||$1,200|
|Total Retail Business Expenses||$1,250 (min)||$11,650 (max)|
|Upfront Costs For Inventory: This includes all upfront inventory you will need in order to launch. Be sure to compare prices of wholesalers to ensure you're getting the best deal and margins remain high.||$300||$5,000|
|Inventory Storage: If you decide to have a physical space for your specialty food business, whether it be used for inventory or as a showroom, you may have monthly rent payment or a large down payment associated with renting/buying the space.||$0||$5,000|
|Package Design: Packaging refers to wrapping and protecting products during distribution, shipping, and sales.Your package design is your customer's first impression of your brand, so it's important you spend some time and energy to get this right from the start.Many businesses design their own packages using design software and tools. There is always the option to outsource this to a design expert, but that route tends to be much more expensive.||$50||$3,000|
|Shrinkage: Shrinkage refers to the loss of inventory at any point between the purchase from your supplier and the purchase by your customer. Although you will try to avoid this at all costs, this does happen sometimes (especially in the learning stages of your business), and it's important to plan ahead financially in case this happens. Fortune states that retail shrinkage costs U.S. retailers approximately 1.4 percent of their total sales.||$0||$1,000|
|Distribution costs: Depending on what distribution plan you choose, expenses such as renting vans, hiring delivery drivers and gas costs can add up. If you are looking to save money upfront, you may want to consider conducting distribution on your own.||$0||$750|
|Total Inventory Expenses||$350 (min)||$14,750 (max)|
|Food Business Expenses|
|Kitchen Appliances: This includes but is not limited to: pots, pans, containers, oven/stove, fridge, freezer. You may have the option to lease or purchase these items, in which case the cost can vary.||$2,000||$25,000|
|Food Licenses: To start your specialty food business, you will need to get the proper food licenses to operate. You can learn more about the requirements here||$100||$500|
|Kitchen Facility: Depending on the type of food business you are starting, you may not need to operate a separate kitchen facility from your own home. If you decide to do this, or if you are required to, the costs may vary depending on your location and the size of the space you need.||$0||$10,000|
|Initial Ingredients: To get your specialty food business started, you will need to purchase initial ingredients to test recipes and eventually create your final product.||$25||$500|
|Total Food Business Expenses||$2,125 (min)||$36,000 (max)|
|Design Programs & Software: These programs might include the Adobe family of design tools: Photoshop, Illustrator, InDesign and others. This is typically a monthly subscription ranging from $10-$50/mo.||$0||$50|
|Email marketing tool: If you plan to grow your email list and email marketing efforts, you may want to consider investing in an email marketing platform (ie. Klaviyo, MailChimp). We put together a detailed guide on all of the email marketing tools out there + the pricing models for each one here.||$0||$100|
|IT Support: IT support installs and configures hardware and software and solves any technical issues that may arise.IT support can be used internally or for your customers experiencing issues with your product/service.There are a variety of tools and software you can use to help with any technical issues you or your customers are experiencing. This is a great option for businesses that do not have the means to hire a team of professionals.||$150||$2,000|
|Accounting & Invoicing Software: It's important to have an accounting system and process in place to manage financials, reporting, planning and tax preparation. Here are the 30 best accounting tools for small businesses.||$0||$50|
|CRM Software: CRM (customer relationship management) software system is used to track and analyze your company’s interactions with clients and prospects. Although this is not a necessary tool to have for your business, implementing this, in the beginning, may set your business up for success and save you valuable time.||$12||$300|
|Project Management Software: You may want to consider using a project management and collaboration tool to organize your day-to-day. This can also be very beneficial if you have a larger team and want to keep track of everyones tasks and productivity. For a full list of project management tools, check out this full list here.||$0||$25|
|Internal Communication Tool: If you plan to have multiple members on your team, you may want to consider an instant message tool such as Slack or Telegram. The cost is usually billed per month (approx $5/user/month) or there are freemium versions available on many platforms.||$0||$20|
|Social Media Management Tools: If you plan to do social media marketing for your specialty food business, you should consider investing in a social media automation or publishing tool. This will save you time and allow you to track performance and engagement for your posts. Here is a list of 28 best social media tools for your small business.||$0||$50|
|Payroll Software: The main purpose of payroll software is to help you pay your team and track each of those payments (so that you don't have to do it manually). If you do not have any employees or have a very small team, payroll software may not be necessary at this stage. Here are the 11 best payroll tools for small businesses!||$0||$200|
|File Hosting Service: It's important to make sure the information for your specialty food business is stored and protected should something happen to your computer or hard drive. The cost for this is affordable and depends on how much data you need to store. To learn more about the different options and pricing on the market, check out this article.||$0||$299|
|Total Software Expenses||$162 (min)||$3,094 (max)|
|Advertising & Marketing Costs|
|Customer Research & Surveys: Many specialty food business's conduct industry and consumer research prior to starting their business. Often times, you need to pay for this data or hire a market research firm to help you in this process.||$0||$300|
|Local fairs and festivals: Attending local fairs and festivals is a great form of marketing for your specialty food business. The cost for these vary depending on location, but you can expect to pay anywhere from $25-$500 or a percentage of gross sales (around 7%)||$0||$500|
|Affiliate Marketing Commission & Fees: If you want to increase revenue for your specialty food business, affiliate marketing is a great way to promote your product to a new audience. When determining affiliate commission rates you will offer, you will want to take into account the price and margin for your product to ensure affiliate marketing is worth it for your business. According to Monitor Backlinks, the average affiliate commission rate should be somewhere between 5% to 30%. To learn more about how to set commission rates, check out this article..||$0||$250|
|Influencer Marketing: Partnering with like-minded influencers is one of the most effective ways to grow your social media presence. Many small businesses simply gift a free item in exchange for an influencer post, or pay the influencer directly.||$0||$750|
|Press: If your business and story is unique enough, press and media attention may come to you, but odds are, you may need to do your own outreach and budget for this. We put together a guide here that discusses different press opportunities (both free and paid).||$0||$500|
|Google Ads: With Google Ads you have the ability to control how much you spend by simply setting a monthly budget cap. Additionally, with these ads you only pay for results, such as clicks to your website or phone calls! It's okay to start with a small budget at first and make changes accordingly if you see valuable returns.||$0||$300|
|Facebook & Instagram Ads: With Facebook and Instagram ads, you set your budget and pay for the actions you want (whether that be impressions, conversions, etc).You can learn more about pricing based on your impressions here.||$0||$350|
|Total Advertising & Marketing Costs||$0 (min)||$2,950 (max)|
|Total Starting Costs||$62 (min)||$103,611 (max)|
Raising Money For Your Specialty Food Business
Here are the most common ways to raise money for your specialty food business:
You may not need funding for your specialty food business.
In fact, many entrepreneurs take this approach when starting their own business, whether they have a little amount of cash or a substantial amount to get started.
So what exactly does the term "bootstrapping" mean?
This method essentially refers to self-funding your businesswithout external help or capital and reinvesting your earnings back into the business**
Bootstrapping means building your company from the ground up with your own, or your loved ones, personal savings and reinvesting all earnings back into the business
Here are some tips to consider when bootstrapping your business:
- Use your savings as your capital - one of the best ways to bootstrap your business is to collect your savings and use them as startup capital. This will also help you avoid using your personal or business credit cards when getting started.
- Determine exactly how much capital you need and how much capital you have to get your business off the ground. Generally, when bootstrapping your business, you may want to consider starting a business that involves less startup capital.
- Consider starting a business that will generate immediate returns so you can put money back into the business
- Be as lean as possible - this refers to cutting down expenses as much as possible, such as payroll, fancy software tools, unnecessary travel, renting an office, etc
- Consider outsourcing instead of hiring - in the beginning, you may not need to hire someone permanently to help run your business. It tends to be much less expensive to outsource work to a freelancer and hire someone permanently down the road!
Want to learn more about bootstrapping your business? Check out this article
What Skills Do I Need To Succeed In Starting A Specialty Food Business?
As a specialty food business, there are several essential skills and characteristics that are important to identify prior to starting your business.
Let’s look at these skills in more detail so you can identify what you need to succeed in your day-to-day business operations:
Whether you are the one designing the product or the decision-maker for the product, an eye for design is critical when starting a specialty food business. Here's what this looks like:
- Creative Thinking - the ability to develop or design different products or ideas
- Visualization - being able to imagine or visualize how the product will look
- Articulation - the ability to communicate what the design will look like and how it will be executed
- Detail-oriented - paying close attention to all of the small pieces when designing or working on a project
- Some technical skills - knowledge of the design software you are using to create the product or build prototypes.
Other skills that may be valuable to have when starting a specialty food business include digital marketing skills, branding experience, and basic business knowledge.
Business Savvy Skills
When starting a specialty food business, there are a few fundamental business skills you will want to learn in order to be successful:
- Leadership and training skills: A great team starts with YOU. Make sure you have all company policies and training procedures in place prior to hiring your team
- Decisive and self-confident: Over the course of your career, you will need decisions that could impact your business significantly. It's important you are able to think clearly and rationally about these decisions.
- Ability to understand the financials: You don't need to be an accountant, but it is important that you are able to clearly understand and define metrics such as expenses, revenue, profit, margins, COGS, etc.
- Strategic Thinking: Setting clear goals and benchmarks, identifying opportunities, risks. Ability to effectively communicate these insights to your team.
These are a few of many business savvy skills you should have (or work on) when starting a specialty food business.
For a full list, check out this article here.
Customer Service Skills
Friendly communication with customers and the ability to address service issues is a critical part of the job.
Here are some customer service skills you may want to consider prior to starting a specialty food business:
- Professionalism: The way you act, present yourself, and respond to situations all leave an impression on your customer. It's important to stay professional at all times when handling customer requests or issues.
- Problem-solving: When issues arise, it's important that you are able to think quick on your feet and address the situation with a calm and clear solution
- Friendly-manner: This is an obvious one, but customers truly appreciate someone that can respond in a quick, efficient, and friendly manner.
- Proficient in writing: These skills include the ability to write well-crafted emails, service tickets, and any other programs used by the business (ie. chat functions, SMS texting)
Advice For Starting A Specialty Food Business
We've interviewed thousands of successful founders at Starter Story and asked what advice they would give to entrepreneurs who are just getting started.
Here's the best advice we discovered for starting a specialty food business:
Stacey Schlaman, founder of Liberated Specialty Foods ($100K/month):
Find a mission that you really care about, something where the mission can push you through the hard times because there will be many.
Read the full interview ➜
Belinda Kelly and Venise Cunningham, founder of Simple Goodness Sisters ($7K/month):
You don’t need to launch with a perfect version, there’s always room for revision. Launch with version 1, and know that you will have the chance to iterate and put out a V3 someday.
Read the full interview ➜
Belinda Kelly and Venise Cunningham, founder of Simple Goodness Sisters ($7K/month):
From March 2021 to May 2022, we grew the Cocktail Farm Club by over 300%. We continue to push efficiency to get the subscriber's boxes out the door each month, while also keeping the quality and authenticity of this very special product box intact for our customers.
Read the full interview ➜
Johanna and Raphael Spannocchi, founder of janori ($3K/month):
I’d rather have 2% of a thriving enterprise full of highly motivated people with equity than 90% of something where I work 24/7 and slowly get crushed. Also: one-man shows don’t scale.
Read the full interview ➜
Belinda Kelly and Venise Cunningham, founder of Simple Goodness Sisters ($7K/month):
When the business is your own, it’s really easy to want everything to be perfect because you care so much about it and the company is a reflection of you. But, when you are starting and wearing all the hats you have to learn to prioritize getting the job done over being perfect.
Read the full interview ➜
Write a Business Plan
Writing a business plan from the start is critical for the success of your specialty food business.
Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.
For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.
You may want to consider expanding upon these sections in your business plan:
- Executive Summary: Brief outline of your product, the market, and growth opportunities
- Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
- Products and Services: Specifics on the products and services your business will provide
- Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
- Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
- Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
- Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
- Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
- Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.
Learn more about how to write a business plan here
Determine Which Business Bank Account You Need
There are hundreds of banks out there, and it can be overwhelming to find one that's right for your business.
Here are some factors you may want to consider:
- Location - Is your bank close enough that you can easily make deposits or get cash?
- Low Fees - Make sure to understand any and all fees associated with setting up and maintaining your bank account. Ask for a list - banks usually try to keep this hidden and in the fine print.
- Online Banking Services - Make sure you can easily navigate through your online portal and you have easy access to everything you need.
- Line of Credit - What do your options look like (even if you don't need this now, you may need this down the road).
- Every bank has something that differentiates them from the rest, so make sure whatever that is applied to your needs and values.
Check out this list of the 13 Best Banks for Small Business in 2020 and what makes them so unique.
Setting Up Your Specialty Food Business (Formation and Legal)
When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.
The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.
These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.
- LLC: All income and expenses from the business are reported on the LLC personal income tax return.
- S corp: Owners pay themselves salaries + receive dividends from profits.
- C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.
Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.
Need to start an LLC? Create an LLC in minutes with ZenBusiness.
How Do I Pay Myself As A Small Business Owner?
Most entrepreneurs start a business to do something they love- but at the end of the day, you still have bills to pay (maybe now more than ever).
But it's important to strike the right balance - if you pay yourself too much, you could be putting your business at risk.
There are two common ways to pay yourself as a business owner:
1. Owner's Draw
Many entrepreneurs pay themselves through an owner's draw. This means that you are technically sean as "self-employed" through the eyes of the IRS and are not paid through regular wages.
At the point that you collect money from the draw, taxes typically are not taken out - so make sure you are prepared to pay these taxes once you file your individual return.
As an owner who takes a draw, you can legally take out as much as you want from your equity.
This type of compensation is suited for Sole props, LLCs, and partnerships. If you’re an S corp, you can pay yourself through both a salary and draw if you choose.
If you decide to pay yourself a salary, you will receive a set and recurring amount. This will be taxed by the federal government and the state you reside in.
The reality is that it can be really complicated to set your own salary, so we have some tips for you to consider:
- Take out a reasonable amount that allows you to live comfortably but also sets your business up for success
- Consider the number of hours you are working weekly + the type of duties you are performing.
- Set your salary based on your industry-standard, location, and profits (or projected profits)
- Look at your P&L statement: Deduct your own pay from that amount. This is important so you can first tackle important business expenses, and then pay yourself from the amount leftover.
- Pick a payroll schedule (and stick to it)! In the US, it's most common to pay yourself and employees twice a month.
To learn more about how to pay yourself and what is a reasonable amount, check out this article.
How To Price Your Specialty Foods
One of the most challenging aspects to starting a specialty food business is determining how much to charge for your specialty foods.
When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.
Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.
On the other hand, when businesses over-price, this tends to be just as damaging to the business.
When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.
Here are some factors to consider when pricing your product:
Understand your customer
It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:
- Customer demographic: Age, gender, location, etc.
- Buying habits of your customer: What they buy + when they buy
- Level of price sensitivity with your customer
All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.
Understand your costs
When pricing your specialty foods, it's critical that you first identify all of your costs and consequently mark up your specialty foods so you can factor in a profit.
The actual cost of your specialty foods may include things like:
- The actual cost to make the product (ie. raw materials, supplies, manufacturer).
- Shipping + overhead fees
- Operating costs to run your business
You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.
Create revenue goals
When determining the price of your specialty foods, you'll want to create goals for revenue + how much profit you want your specialty food business to make.
This process is simpler than you may think:
- Think about your breakeven cost (by completing the above step).
- Create a revenue goal based on your break-even cost
- Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
- Divide your revenue goal by the number of items you plan to sell
This figure will help determine your estimated price per product in order to meet your revenue goals.
Evaluate your competition
The last piece in determining how to price your specialty foods is by simply looking at your competition.
The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your specialty foods fits best in the marketplace.
All of these factors play an equal part in pricing your specialty foods, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.
Understanding Your Costs
Example from Ishan, founder of Ugly Duckling
First objective: profitability
Our profitability is OK at this point but definitely not where it should be yet. To this day I have not paid myself a regular salary yet...and it’s been 4 years!
The problem is not the cost of goods which are well under 20% of sales, which is good by any standard. The problem is fulfillment costs. In 2018 we transitioned from our first fulfillment company to a much bigger company. We did this because we wanted to provide faster shipment speeds and a better quality of packaging. In hindsight, we chose a company which would have been more suitable for a larger company with bigger volumes. We ended up being tied in with some pretty large minimum monthly payments. So currently fulfillment costs are currently around 45% of sales...way too high.
We are now looking to transit to another fulfillment center. Our target is to get our fulfillment costs down to around 30% of sales which I believe from what I have researched, is possible.
Just to be clear, when I say fulfillment that includes transportation costs also - FedEx, USPS, etc. Not just storage, picking, and packing. I am pretty sure that it is possible to get fulfillment costs down even lower, and I suspect that some large pro sellers on amazon.com work with around 20-25% of sales.
So our target P+L for 2020 looks something like this:
- Cost of goods, including inbound freight and clearance - around 22% of sales.
- Fulfillment - around 30% of sales.
- Digital Advertising & Promotion - around 15% of sales.
- Other marketing and office costs, including salary costs - around 10% of sales.
- That would leave us around 23% of sales - enough to pay me a liveable salary and for the company to make a profit and finance future growth.
That's the first objective for 2020: to right-size the P+L so that we are profitable at our current sales level
Gross Margin Calculator: How to Calculate The Gross Margin For Your Specialty Foods
Our calculator is designed to be simple and easy to use.
The goal is to help you set realistic expectations and understand what is considered a healthy gross margin for your specialty food business.
What Type Of Customers Will Buy Your Specialty Foods
It's important to first establish who you will be selling to, whether it's to businesses or consumers.
Typically, in this industry, products are sold to B2C markets (business-to-consumer).
Let's take a look at what this means for your specialty food business:
B2C (or business to consumer) is a transaction where businesses sell their products or services to the consumer directly.
In this market, consumer behavior is the primary driver for your business decisions - so it's important that you truly identify who your customer is, and what their buyer habits are when building your product/service.
B2C is that you are able to cast a very wide net when targeting your customers. Your product may interest a large number of consumers or a specific niche.
B2C is that consumers hold all the power - so if your website is not the most user friendly, or does not rank in the top search results on Google, chances are, your customer is going to shop elsewhere.
When building your specialty food business, it's critical that you hone in on who your target audience is, and why they need your product over your competition.
Here are some items to consider when identifying your buyer persona:
Licenses and Permits
When starting a specialty food business, it's important to identify the type of space that you will be preparing your products.
Before launch, you may want to consider preparing products in your own kitchen (or a friend) to test different recipes and processes so that you can ensure everything is in place once you launch.
In this stage, as long as you are not selling products- the experimental phase can be done in the comfort of your own home without a heal department to approve the kitchen.
Health Department Approval
Once you're ready to launch the business, there are a few boxes to check in order to ensure you are health & safety approved.
The most common question is whether you can operate a specialty food business from home or if you need to rent a kitchen facility to prepare and make your product.
As long as you are FDA approved, you have the ability to operate out of your own kitchen. However, you may need the proper equipment in order to make that happen, and a commercial kitchen facility may be better suited for you.
For a full list of FDA requirements to get your food business set up, read more ➡️ here.
Michael Martinez, founder of Eat Clean LLC explains his experience renting a commercial facility:
The business was started with three of my long-time friends and just $3,000 (which was all that I had in my savings account at the time). That money was used for kitchen hours in a commercial kitchen, food and our original website.
By our third month, we were delivering to over 100 customers each week and we then had to lease a space and build our own kitchen. Initially, our customer base was family, friends, local gyms, and sports teams.
The space we leased was a pizza restaurant that we had to tear down and build it to our requirements. Later on, we then leased the two locations next to us for additional space to prepare our meals.
Design A Prototype
Turning your idea into a reality can feel like a daunting task - but it's critical that you have an idea of what your product will look like (even if it's just a sketch) prior to finding a manufacturer.
Here are some common ways you can design your prototype:
- Draw Your Initial Design on Paper
- Form pieces of fabric together
- Consider Taking A Generic Product And Putting Your Own Brand On It
- Try Making the Product Yourself
- Consider Building A Prototype With A 3D Printer
To learn more about how to design and prototype a product, check out our latest guide here.
David Downing, founder of ChipMonk Baking dives deep into the process of designing and prototyping their product:
Everything started with that first batch of chocolate chip cookies that Jose made in our apartment oven. He used a traditional cookie recipe found online as a starting point and replaced ingredients with ones more suitable for his needs. We bought plastic bags on Amazon and slapped some stickers with our logo on them for the packaging. Our mindset was to immediately try to sell the product, not worrying about perfecting it immediately but improving it gradually over time based on the feedback of real customers.
We started by going to local farmer’s markets on the weekends, handing out samples, and selling boxes of our cookies. It was pretty brutal in the Texas summer heat, and we did all our baking late at night at home since we were still both working full-time jobs. We were determined though, and the positive feedback we were getting from folks kept us going.
Showing off some of our earliest cookie flavors
Eventually, we learned that to launch a website and ship food products across the country, we had to make our desserts in a commercial kitchen. It was far too costly to build our own kitchen, so we started making phone calls to any place in the city that might have extra space for us to use (e.g., churches, restaurants, fire department stations, catering companies, shared kitchens). Eventually, we connected with a large catering company that allowed us to use their kitchen during the evenings and weekends for an affordable monthly price.
One of our first bakes in our commercial kitchen
Once we moved into the new space, and as our sales started to grow, we realized that we needed to scale up production. We had no idea how to do this, of course, since neither of us had any real baking experience. To solve the problem, we looked at the University of Houston’s Hilton College of Hotel and Restaurant Management and found a local professor with a background in food safety and commercial baking.
We hired him as a consultant, and he helped us design processes for larger-scale production. We also worked with him to take our recipes to the next level by switching out sugar alcohols for our current sweetener blend of monk fruit and allulose. The professor taught us about unique, natural ingredients like konjac root powder and psyllium husk fiber which we were able to incorporate into our desserts giving them a unique flavor and texture.
He also taught us the basics of shelf-life testing and the types of things you have to monitor to try to make your products stay fresh longer (e.g., water activity).
Jose and the professor from the University of Houston working on recipe development
We learned how important earned media exposure can be, so we are always actively reaching out to influencers, bloggers, YouTubers, and traditional media to see if they’d be interested in sharing our story.
Once we had the recipes and production process down a bit more, we turned our attention to improving our packaging. Luckily for us, my sister-in-law is a professional graphic designer with experience in consumer packaged goods. Working with her, we designed our first custom printed cookie bags and mailer boxes which we ended up sourcing overseas via Alibaba. The first order was a bit scary, but we found a trusted supplier who has since been able to produce high-quality packaging for us at a price we can afford.
Various iterations of our brownie bite packaging design
Going forward, we are constantly working on improving our base recipes, production processes, and packaging design. It’s an iterative process and we always try to use the voice of our customers as our guide. We’ve got an email subscription list of over 4,000 people now and regularly send them surveys to help give us direction on product development.
One of our early farmer’s market events
How To Find A Supplier For Your Specialty Food Business
Here are the steps to consider when finding a supplier/manufacturer:
Know your design
One very critical step to finding the right supplier is having an initial idea of what your design/product will look like.
Sketching is one of the most simple ways to get started in the design phase.
What's great about sketching is that you can practically do this anytime, anywhere - even on the back of a napkin.
To get started, all you need to do is pick up a pen and paper and start drawing - or if you are working on a virtual/software product this can be a diagram that outlines the user interface or experience.
Decide your supplier type
You'll want to identify the type of supplier you are looking for.
Here are some questions you may want to ask yourself prior to searching for a supplier
- Are you looking for a manufacturer to produce your product idea?
- Do you want to find a supplier that can simply purchase existing products for you?
- Do you want a drop-shipper to supply and fulfill orders?
- Do you want a domestic supplier or an overseas supplier? Read more about the pros and cons of each here
Where to start your search
Once you have an understanding of what type of manufacturer/supplier will be best to bring your idea to life, there are several areas you can start your search:
Manufacturing Your Product In House
It's also very common to manufacture your specialty foods on your own - either from your home or in a commercial space.
In order to get the product right, you may want to consider experimenting with different designs and recipes until you find the perfect one.
Some founders choose to manufacture their product in-house so that they can control quality, manage costs, and easily handle production/logistics.
Down the road, you can always choose to outsource your specialty foods.
Leslie Eisen, founder of AlmondClear discusses how to manufacture products in house
If you want to start a line of unique products, then you have two basic options: you can make them yourself, or you can find a manufacturer to work with that creates custom formulations for their clients.
I knew that I was trying to build a larger-scale business and that the home-made model wasn’t right for me, so I had to find the right manufacturing partner. It took a lot of research, phone calls, and emails before I found the laboratory that met my needs.
I wanted to create unique products (as opposed to private label), so I worked with the manufacturer’s chemist who specializes in skin care formulations. This process takes some time!
First, you have to tell the chemist what kind of product you’re looking for, the ingredients that you want to include or leave out, and what you want the final product to look like/feel like/smell like, etc.
Then, the manufacturer sends you the first sample, you try it out or give it to others to try, and then provide feedback for revisions. In my case, the first two products came together fairly easily because I only needed to make small changes to stock formulations.
There are many, many rules and regulations around cosmetics and skin care products. If you want to sell products that contain FDA regulated ingredients then you have to register and get a permit.
My products aren’t FDA regulated, so I didn’t have to go through this step, but I did have to be aware of the many guidelines and standards around labeling and safety warnings. Some people hire a lawyer to help them through this process, but my manufacturer was able to guide me through the regulatory process.
The entire process, from researching labs to work with to having the first finished products shipped out to me, took around six months.
Purchasing Inventory For Your Specialty Food Business
When first starting out, it's important to start small with your overhead to get a gauge for what people want.
Just remember - if you order a line of items that don't sell, it's nearly impossible to recoup the money lost.
Buying the right inventory takes research and planning in order to get it right.
- Identify your target audience: Identify the age, gender, annual income that you will be selling to. This is a defining factor in ordering the right inventory that will sell.
- Research your competition: Conduct market research and identify the different types of styles, price points, and materials being used. This will help you see what's trending and ways that you can improve/stay ahead of the competition.
- Create an inventory wishlist: Identify what you need for the launch of your business and create a budget that you will stay within. Remember, it's okay to start small.
- Find a supplier Make sure to first compare prices and analyze different options.
- Delivery timing: Schedule the inventory delivery to match with seasonality and trending buying seasons
Pro-tip: It's easy to become biased based on your own fashion preferences on what types of shoes/apparel to purchase. This is where a lot of fashion businesses go wrong. It's important to base purchase decisions on current buyer behavior, trends in the market, and specific to your niche.
Erin Hooley, founder of Bailey's Blossoms tells us how poor inventory projections led her to lose over $2M
When we first launched Peyton Bre we did so in a social or direct sales model.
Through poor inventory projections we were forced to change models but only after losing $2 million dollars.
It was a devastating time for us and one we were not sure we could survive.
I have since become very intentional about the way that we project our inventory needs and we continue to refine that quarterly and even monthly. We have created a KPI for the cost of goods sold to help us hold ourselves accountable.
Ultimately, the better we manage our inventory the less we have need to discount and the healthier our profit margin becomes.
This is, of course, a very high-level overview of the importance of inventory control.
To see the full breakdown on how to manage inventory, check out my guide over on my blog..
🚀 How To Launch Your Specialty Food Business
Build A Website
Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).
- Pick a domain name that's easy to remember and easy to type
- Choose a Web Hosting Plan (ie. Shopify, Squarespace)
- Make sure you choose the right theme and design
- Implement the proper page structure (ie. about page, contact page, pricing etc)
To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.
Once you have chosen the domain, web hosting, and platform, it's time to get started with the design phase.
Themes are a great way to produce the fundamental style and identity of your website - this includes everything from your font design to your blog post styles.
One of the best ways to get started is to simply explore the various themes (free or paid depending on what you're looking for) and test them on your site.
If web-design really isn't in the cards for you, you may want to consider outsourcing a web designer to help bring your vision and brand to life.
Get Press Coverage For Your Specialty Food Business
The more buzz around your brand - the more the phones ring, the more traffic to your website, and the more customers as a result.
Here are a few ways you can get press for your business:
Press releases are a great way to share big announcements or news, but in order to get any traction, you'll need to find a way to make your press release stand out amongst others.
Try to convey a story that really matters, not just to you, but to the reporter and to their audience.
Here are some things to consider when submitting a press release:
- Craft a catchy subject (keep it short and sweet).
- Acknowledge the journalist's past work and interests - this is key!
- Include the main point of the story in the first paragraph, heck, even the first sentence. Reporters want to hear the juice first and foremost.
- Focus on the facts and try to limit the amount of jargon used.
- Pitch yourself! Help them put a face to the story.
- Make sure your topic is newsworthy. If it's not, find a way to!
- Try not to include any attachments of your release!
Email is one of the most effective and preferred way to send your press release, so as long as you keep your pitch brief, interesting and personalized (no cold emails), you should stand a chance!
Get Press Using HARO
HARO, otherwise known as "Help a Reporter Out" is an outlet for journalists to source upcoming stories and opportunities for media coverage.
The best part is, HARO is free to use! There are, of course, premium versions you can purchase, but the free version is still an accessible way to get press.
Once you set up an account, HARO essentially will email you based on stories (that are relevant to you) that need to be covered where you will then have a chance to essentially "bid on the story."
Here are some tips when crafting your pitch:
- Discuss your experience and expertise in the space. Make sure it's obvious why you're relevant to this story.
- Answer the question in 3-4 sentences. Try and be as direct as possible
- Offer to provide the reporter with more information and make sure to give them your contact info
Plan a Publicity Stunt
Planning a publicity stunt is an effective and quick way to raise awareness for your brand and gain some traction from the press.
If you're looking to plan a stunt, the objective should be to be bold and create something memorable
However, being bold has a fine line - it's important that you consider the timing of your stunt to ensure you don't come off insensitive or unethical. For example, timing may not be in your favor if you plan something during the general election, or in most recent cases, a global pandemic.
In order to measure the success of your stunt, it's important that you first determine your end goal, for example:
- Is the stunt aimed to raise money for your business or a particular organization?
- Is the stunt aimed to drive more traffic to your website?
- Is the stunt aimed to get more followers and engagement on Instagram?
Here are a few tips for creating a great publicity stunt:
- Research to ensure that there haven't been similar stunts done in the past by other businesses - this could easily turn off journalists and your audience.
- Make sure you can explain the stunt in one headline - this will help grab the media's attention. In other words, simplify!
- The stunt should be related to the product you are promoting. Even if the stunt is a success in terms of viewers, but it doesn't tie back to your original goal, then it's not useful.
- Keep the stunt visual with videos/images.
- Leverage the internet and social media platforms for your stunt by sharing your message across a variety of audiences. This will help with word of mouth and the overall success of your event.
To learn other strategies on how to get press, check out our full guide here.
Cameron Manesh, founder of Cameron's Seafood was able to land in the New York Times just by sending a cold email:
I started calling all the large newspapers pitching their food critics, their startup business writers and even pitched the angle of immigrant-run companies.
My first hit was with the New York Times. "I googled “New York Times Food" and learned Florence Fabricant was their critic. I then googled “Florence Fabricant email” and asked her to sample our food.”
I read she is a stern critic so we were worried but to our surprise she loved the food and when the article came out we did close to $40,000 in sales in three days and could barely handle the volume. That was an intense week but made it happen.
To read the exact email we sent to get in the NY Times, check out the full story ➡️ here
To contact the press, I recommend:
- Targeting macro press (i.e. USA Today).
- Google indirect competitors or vertical companies (ie. Hello Fresh) to see who wrote their articles
- Google the writers contact info and send an email introducing company
- Offer samples, be personal, discuss your food, follow up!
Launch Strategies For Your Specialty Food Business
There are various different ways you can launch your specialty food business successfully.
Here are a few different strategies to get customers excited about your specialty food business.
- Build hype with a landing page: you can effectively do this through waiting lists, discounts, countdown timer etc
- Create a teaser video: even just a 30 second video is a great way to exposure for your specialty food business, and possibly even go viral
- Reach out to influencers: The right influencer for your product has the ability to reach your audience with just one post, and because of their loyal following, this could lead to a big return for you.
- Get Press: Whether you plan a PR stunt or get exposure through a popular news outlet, this is a great way to attract initial customers
- Launch on popular sites: A great way to get buzz about your specialty food business is to submit your launch to popular startup sites.
Here are a few popular sites to launch on:
Learn more about how to launch your business successfully ➜ here
Belinda Kelly and Venise Cunningham, founder of Simple Goodness Sisters dives deep into the process of launching the business:
We’d drummed up as much excitement as we could for our first launch on our blog’s social media (having since spent hours upon hours transitioning its focus) and sought out every partnership, free press opportunity, and mentoring we could get. We emailed every newspaper, blog, podcast, radio show, magazine, and friend of our grandma to tell them about what we’d made. We launched the syrups officially at Proof, a distilling festival in Seattle in August 2018 where we rented a booth and sold syrups to the audience, while also hosting a talk on “How to Drink Garden to Glass” and networking with industry members.
We launched our online retail store, which we’d built ourselves through Big Commerce, in September. We took photos on our iPhones with white cardboard backgrounds and wrote our own descriptions. By then we’d each built our own websites from Square and WordPress and using Big Commerce was easier with the WordPress platform. We still use the same website today, though we’ve added to the product line considerably!
We pushed sales via the website and social media exclusively at first, and by the holidays, 2018, begun to get interest from wholesalers to carry the line. We sold mixed boxes of bottles to a few local coffee shops and distilleries, but sales online were promising enough for us to begin planning for our next rounds of bottling. By February, we’d sold out of one flavor and the others were soon to go as well. Up to this point we’d paid for no advertising outside of our Proof launch table, not even a boosted post on Facebook.
A photo with our Proof launch team: our husbands, our friends/bartenders, and us (top middle)
We decided to use the money we’d made from the first syrups to finance more rounds, and set an arbitrary goal to grow production by 3 times. Since our product was somewhat seasonal we needed to pounce on production, spring was coming soon. We also wanted to explore making our product easier to produce year-round, since it was reliant on very seasonal ingredients. We decided to make more of each of the three initial flavors, as well as launch three new ones that would have a greater focus on the cold-hardy herbs sourced from our own farm. This would give us greater cost margins but also allow us to produce syrups nearly year-round, if we sourced local frozen berries. The last thing we wanted was to make a product that required us to guess how many bottles we’d need 9 months in advance and when we were buying only fresh fruit in season, that was the case. The flavor and quality of some flavors went down when using frozen fruits, but in others quality was consistent and those flavors were the ones we rolled out.
The mostly dormant herb farm in late Fall looks a lot different than in the full bloom of mid-Summer. Photo by Rylea Foehl photography
Our packaging changed at this time as well, as we attempted to reduce costs for a workable profit margin. Our ingredient cost for our syrup, since we use whole fruits and spices and herbs, which is basically unheard of, is high and that can’t change significantly, so packaging and production costs needed to. We got the advice from industry peers that packaging should be under $1, which meant we needed to reduce our costs by almost half. The packaging would need to be bought in large quantities this time around, and we moved from a super pretty, tactile linen label that we’d love to a far more practical, wipeable coated paper.
Our production also needed to move to a more local company with lower costs. Finding this company and establishing a relationship with them was key, but teaching them our process and recipe was not without challenges. We make our syrup completely counter to the way it is commonly done in the food and beverage industry, which is usually with powders or concentrates, high fructose syrup, and citric acid. We stayed on-site for each of the following production days to lower staff costs but also to dial it in together. Our recipe is tedious and messy, and our relationship and patience with one another as we each learn the best way to make it has been key.
Make Sure You Get The Package Design Right
The way you package your specialty food business is often the first impression your customer has - so it's important to get it right.
You may want to ask yourself these questions:
If my product is on a shelf next to hundreds of other similar products:
- Will my specialty food business stand out?
- Will the branding/packaging create a connection with my customer, and hence, lead them to buy?
There are hundreds of tools you can use to help with packaging and design:
- Canva - Allows non-designers to create beautiful Instagram/Pinterest posts, flyers, business cards, etc.
- Stickermule - High quality custom stickers you can include on or in your packaging.
- Noissue - Custom tissue paper and compostable mailers
- Rollo Label Printer - A great tool to print all shipping labels at home
Sheets & Giggles explains the motive behind their "Premium Unboxing Experience"
I had a particular vision for our packaging centered around one goal: because we were a DTC company and wouldn’t do physical retail in year 1, we needed to focus entirely on an incredible unboxing experience that made the product feel as premium as possible.
Outside: a white box, nice wax coating, logo front and center with no other copy, easy to open, nice and sturdy.
Inside: make people smile from the get-go, have a social call-to-action, include free extra surprises (a knapsack that wraps the sheets and an eye mask), put funny copy all over the place, and add a donation bag that people could use to donate their now-defunct cotton sheets (sheets & blankets are the #2-most-requested item at shelters behind socks).
🌱 How To Grow Your Specialty Food Business
Social Media Advertising
Social Media Advertising is one of the leading ways to get the word out when it comes to specialty food business.
There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.
Let's talk about a few of the main platforms and what makes them unique:
- Facebook Advertising - more than 2 billion monthly users. Facebook is the best for lead generation + capturing email addresses for e-commerce businesses.
- Instagram Advertising - approximately 500 million monthly users and has a higher audience engagement rate than any other platform. Instagram ads are best for linking to a product page or landing page and reaches the 18-29 age group most effectively.
- Twitter Advertising- Small businesses typically use twitter ads to drive brand awareness, but the platform is meant more for organic engagement (and is not as heavily used for paid advertising)
- Pinterest Advertising - 175 million monthly users and most effectively reaches the female audience. Pinterest is great for promoting products without "promoted". The promoted pins have a way of blending right in.
- LinkedIn Advertising - 227 million monthly users and is geared towards the B2B market and generates the highest quality leads. Great platform for recruiters, high-end products and services that will help businesses
It's important to first define your goal/objective so that you don't waste time and money into the wrong platform:
Here are some different questions to ask yourself as it relates to your goals:
- Do I want to simply drive brand awareness?
- Do I want to drive users to my website to gather information?
- Do I want to increase sales and get my customer to take action?
From there, choose the platform that targets your audience best and start experimenting!
Learn more about social media advertising ➜ here.
Founder Andy Hayes talks about mastering FB ads and the pixel:
The biggest bang for your buck will likely be mastering Facebook and it’s platform - which we all know is pay for play, so you’ll have to come up with a small amount of budget to start for marketing.
We’ve spent countless hours (and paid numerous coaches) before we cracked the code that works for us on Facebook, but it is working really well for us now.
Some of the most important things to know when it comes to FB Ads:
- Start with retargeting (that’s showing ads to people who already know you but did not purchase). Master this - and start building information on your Facebook Pixel - before you do anything else
- Once you have that down, try working with the 1% “Lookalike” audience to prospect for new customers. This may take awhile because your pixel audience is small, so try layering on interests - 1% Lookalike and your largest competitor, for example. Don’t use interest-only targeting until you master this.
- Great photography and videography is key, as is smart copy. Research what’s out there in your industry and constantly test - what works for one company may not work for other people.
- Make sure you have good offers. For example, we have a $5 trial for our subscription, which converts affordably - if we promoted our subscription with the standard $30 front charge, it wouldn’t be as cost-effective.
Host A Social Media Giveaway
People love free stuff and love competition. Giveaways and contests are a great way to create awareness for your brand, grow your email list, and eventually convert leads into customers.
If your goal is to gather email addresses, make sure the entry criteria is to "enter your email." You can do this by leading customers to your landing page where they can then enter their email to be in the giveaway.
One of the most important aspects of promoting a successful giveaway is having an amazing prize. The better the prize, the more engagement you'll get.
This doesn't necessarily mean choosing an iPad or an expensive/trendy watch, but instead a prize that is actually relevant to your brand/target audience.
Giveaway Example and Tips
Example from TJ Mapes, founder of RIPT Apparel
Our most recent successful giveaway was when we gave away a PS4 + the new Spiderman game. I hosted the giveaway on our site and then let our audience know about it via email/social channels.
Entrants earned different amounts of entries for entering in different ways (tongue twister!), for instance; enter via email, get 10 entries. Follow us on Facebook, get 5 entries. Subscribe on Messenger and get 25 entries.
I also built out a drip sequence in Klaviyo that contained four emails to encourage entrants to take more action, like referring friends and liking us on social.
Email #1: Thanks for entering!
Email #2: Explained how to earn bonus entries:
Email #3: About us
Email #4: Coupon for entering
This last email in the sequence just thanked them again for entering and also included a coupon to a specific (related) collection of designs with an expiration date on it to incentivize purchases.
PS4 Giveaway Results:
We ran it for 2 weeks and recorded results in a meticulous spreadsheet to analyze the data. Here are some of the highlights:
- Giveaway page pageviews - 67,355
- Total entrants - 26,137
- Conversion rate - 38.80%
- Total entrants in Klaviyo (not suppressed) - 24,515
- New emails acquired - 16,363
- Emails we already had - 7,521
- % of new emails - 66.75%
- Cost of item - $350
- Instagram visits - 10,618
- Instagram followers gained - 3,496 ( total followers lifted by 6.9% )
- Twitter followers gained - 4,194
Grow Your Email List
The more engaged list of emails, the more engaged customers, which ultimately leads to more sales.
One of the best ways to start growing your list is by providing your customer with something free (or discounted) in return.
This could also be anything from:
- Fascinating case study
- Video series
- Free week of the product
- Discount on the product
Learn more about how to grow your email list and improve email marketing ➜ here.
Dylan Jacob, founder of Brumate states their email collection tactic that is proven to work:
We use Spin-a-Sale for this (you spin a wheel for a discount code in exchange for subscribing to our email list). This has been the best email-collecting tool we have found because the customer truly feels like they won a prize rather than just a coupon code.
Even if a customer doesn’t convert right away, if we have their email we have a 19% chance of converting them into a future customer whether that is through future promotions, new releases, or simply just sending an email at the right time for a purchase to finally make sense for them.
We also have a return customer rate of over 14%, so one out of every 6 people we convert will end up buying from us again with an average order value of over $60.00.
Add an exit-intent popup to your online store
A great way to double, or even triple, your email opt-in rate and to grow your list is to add an exit-intent popup to your site, and offering a discount or content upgrade for subscribers.
Here's an example of what that might look like:
One thing that I spent years NOT doing, that I now kick myself about, is adding an "exit intent pop-up" to our site, which lets people enter a sweepstakes to win a Xero Shoes gift certificate.
That one idea has added over 100,000 subscribers to our email list, which is one of our most effective marketing channels.
Improve Your Email Marketing
Different types of emails
Here are the most common types of email campaigns you can send to your customers and their benefits:
- Welcome emails - the perfect way to provide information from the start with a clear CTA. Make sure to tell your customer everything they need to know about your product or service.
- Newsletters - a great way to give customers updates or send out your latest content
- Product launch emails - the quickest (and easiest) way to increase sales is by selling to current customers. Make sure they're the first on the list to know about your new product
- Promotional emails - promote discounts, deals coupons etc. Try and make this feel exclusive and for a limited time only
- Abandoned cart emails - give your customers a reason to complete their purchase!
Here's a great resource for finding curated email designs, for all types of email campaigns!
Newsletter Example - Food Industry Tips and Tricks
We have a lot of content to share and it is very well received. Most clients need to see your brand a few times before they purchase, and email is great for that. Email is also an effective reminder for past clients to order again.
We have close to 5000 subscribers and we aim for 2 emails per month. Most of our subscriptions came through the website.
So far we have been focusing on practical life hacks and tips on how to stay focused and disciplined. Many of our subscribers are past clients that took a break.
Our open rates are good, we’re averaging 24% - 53%, much higher than the 10% industry average. We need to work on our click rates which are at around 1.2%.
Abandonded Cart Flow
The abandoned cart workflow is one of the most effective strategies for turning your lead into a customer, and a powerful tool to have if you're an e-commerce business.
Think about all the times that you went on a shopping frenzy only to add items to your cart and then either forget or realize nows not the right time to pull the trigger.
Then, minutes later you receive an email saying "Hurry up! Your cart is waiting - and we want to provide you with 20% off your order."
Maybe that's the special touch (and discount) you needed to pull that trigger.
Implementing this workflow can automatically trigger this for your business every time a customer abandons their cart.
Here's a great example of an abandoned cart email from Brooklinen:
Things they do well:
- Showcase 5-star reviews from other customers
- Offer a small discount + free shipping
- Great design + clear call to actions!
Improve your SEO
SEO is not just about driving traffic to your site, it's about driving the RIGHT traffic to your site, and ultimately, converting leads into customers.
One of the most important aspects of SEO is understanding what your customers are searching for, otherwise known as "keyword research."
Here are some tools that can help you choose the right keywords for your specialty food business.
- Google Ads Keyword Planner invaluable for discovering search trends.
- Google Search Console is very helpful once your website is up as it shows you what words/phrases are generating traffic.
- Ahrefs and SEMRush are paid tools that allow you to look at results of your competitor's website.
Publish Great Content
Finding keywords is an important piece of the puzzle, but Google also ranks your site based on the actual content you produce, as this is what your customers are reading and engaging with.
There are various different "forms" of content that you may want to consider diversifying on your sites, such as blog posts, articles, studies, and videos.
So let's discuss what google considers "good content:"
- Length - This will vary depending on the page, however, generally having a sufficient amount of content helps search engines recognize that your site is a good source for a specific topic
- Engagement - The longer people stay on your website to read your content, the higher Google will rank your website. It's important to have informative and "thick" content that keeps people reading
- Avoid Duplicating Content - Google will recognize this and may consider your content to have low value
- Ensure pages load quickly - This will also help with engagement and time spent on your website
- Shareability - Create content that people want to share, and is easy for them to share, especially to their social media accounts (ie. "click to tweet" is a great example of this).
Another element of creating good content is creating consistent content.
If (and hopefully you are) publishing content frequently, it's important to stick to a schedule - this helps build brand trust and easy user experience with your customers.
Planning out your content with a content calendar is key to staying consistent.
Here are a few great content calendar tools that can help you:
Backlinks are an important piece to SEO, as they allow for other websites to link to your content.
Search engines recognize that other sites are essentially "verifying" your content and essentially rank you higher because of this.
Of course, some links are more valuable than others and can affect your site in different ways.
For example, if a highly valuable and credible site like the New York Times links to a page on your website, this could be remarkable from an SEO perspective.
Aside from organically getting mentioned from other sites, there are other ways that you can increase and earn backlinks:
- Create infographics with relevant data that people want to share
- Promote your content on different sites/look into "guest blogging"
- Contact influencers/journalists/bloggers and ask them to mention you!
- Write testimonials for other sites in exchange for a backlink
- Leverage existing business relationships
Monika with Hipcooks discusses how solid Yelp and Google reviews lead to the business ranking #1 on Google search:
Top Google Placement
We deliver a great quality product each time we teach a class. I call it “pennies in the piggy bank:” one by one, each customer contributes to a solid, dedicated customer base.
Number one Google ranking (or at least the top 5 Google ranking) is important, so we keep our Google business pages full of updated content. Our Google and Yelp Reviews are solid.
Build A Blog
One of the most effective ways to build brand awareness and grow your business is through consistently blogging.
We've outlined some useful tips for you to consider when creating content:
Consistency and Quantity
Quality is important, but it should be the standard for any content you publish.
What’s more important is consistency and quantity.
Consistency is as simple as committing to publishing and sharing a certain number of posts per week. For me, that’s three per week right now.
This kind of commitment is key, because one day, a random post will blow up, and you will have never expected it.
The easiest mind trap is to think "I’m posting too much", and “I need to give my readers/audience/this platform a break”.
This is nonsense.
There is no such thing as oversaturation. Well, there is, but it is just someone else’s opinion.
For every person that tells you you are posting too much, there is another person that wants even more of your content.
You should ignore people’s opinions on how much you post.
Patience & Persistence
Keep posting, keep trying, and keep putting out good content on the regular. Your time will come, and when it does, it will change everything.
The only thing you have control over is your content.
You can’t control how people will react to it. You can’t control pageviews, likes, or shares.
So the only metric you should focus on is how much content you can put out in a week, month, etc.
Where to share your blog content
I know it sounds obvious, but the best places to share your content is on your mailing list. It is guaranteed traffic and it is a great way to get rapid feedback from your most loyal readers.
Send newsletters often. I have done once a week since starting, and I’m moving to twice a week soon.
Work on increasing your mailing list as well. Look into ways to increase your conversion rate to your mailing list. I added a flyout popup thing to my site and now I’m collecting ~30 emails per day.
An email newsletter is one of the most powerful assets you can have and it is worth its weight in gold.
Reddit is one of my favorite places to promote content.
It is a very scary place because you will often get banned or heckled, but it can really pay off.
Create social media accounts for your blog, the main ones I use:
Twitter Facebook Instagram LinkedIn
Set up Buffer and share all of your blog posts to all of your accounts. All of these little shares really do add up.
Automate this as much as possible. I automated all of my social media for Starter Story.
When I started out, I put together a spreadsheet of relevant Facebook groups for my niche, and I would post to these groups whenever I had a big story I wanted to share.
Experiment With Pay Per Click Ads (PPC)
Pay-per-click (PPC) is a performance-based marketing method that allows you to show specific ads for services or products oriented to a very defined target, with the goal that the user visits your website or landing page.
Here are some tips to consider:
- Consider connecting the ad to your corresponding landing page so that the audience receives the necessary information after clicking on the ad.
- Conversion Tracking: When running PPC campaigns, be sure to run the ads with conversion tracking.
- Focus on quality keywords, even if there are few as this will save you time and money. When assessing the performance of a keyword, it's important to track the expense, conversion, and cost per conversion, as well as the ROI.
PPC advertising can be a very important lead generator as long as it's done properly. Your PPC campaign is intended to drive traffic to your website and help the business scale.
Additionally, if the campaign is not having the desired results, you can make the necessary changes immediately to improve them.
Ryan Schortmann, founder of Display Pros talks about their investment in PPC Ads:
My name is Ryan Schortmann and I’m the founder of Display Pros. We are a custom trade show display booth company offering easy to use portable display “kits” for small and medium businesses wanting to get into the trade show game.
It did not take long to come to the realization that to compete at any reasonable level, we were going to need to take the plunge and invest in Pay Per Click ads and display.
From experience, I know that it is important to give Google’s hivemind some time to settle in before each campaign starts seeing consistent results (this is largely dependent on budget).
A certain amount of PPC budget must be viewed as a “marketing research” expense and then you can look at the analytics data and make informed decisions on where to refine, tweak or plain scrap an idea.
Google Shopping was an entirely new concept for me. You can’t assign keywords to products so at first, I was asking myself “How the hell do you refine these?”. Then I found some good reading material and courses and learned of some advanced methods that the pros are using. It turns out you can utilize negative keyword lists combined with the priority setting on each shopping campaign to “shape” the keywords that are coming in and how much you are spending on them.
To learn more about PPC Ads and Google Shopping, check out this video to learn everything you need to know!
Build A Facebook Community
Building a community is a great way to grow your network and your business.
There are several different ways of building a community, one of the most effective (and simplest) ways is to build a Facebook group
Setting up the group page takes less than 10 minutes, and we've outlined ways the top 5 ways to create an engaging and successful group:
- Make the group exclusive. This may sound counter-intuitive, however, this ensures privacy and that the group will feel comfortable posting and engaging with members.
- Try to be warm and welcoming. A great way to do this is by having a "Member Monday" where you welcome new members and ask them to introduce themselves in the group
- Use polls/surveys. This is a great way to know your audience and see what people want more of in the group (more business tips, networking opportunities, etc).
- Include influential people & conduct AMA's (ask me anything). This is a great way to get members engaged
- Host an in-person (or virtual) event with members in the group. This will create stronger relationships and build a strong community.
Mike Doehla, founder of Stronger U, an online nutrition company noticed that his customers needed a little motivation and sense of community:
Most diets are lonely so we wanted to give support and a community.
I think many people fail diets because there is no one to talk to and no accountability.
You can by a book, or google a meal plan but who’s going to keep you on track? We will. The entire SU community.
We give our members access for life to our Facebook community filled with people around the world who are looking out for everyone’s success.
Most diets make up arbitrary rules and we thought they just didn’t make sense. Meal timing, Cutting carbs, butter in coffee, sugar being the devil? Ehh no need to overthink that stuff.
We’ll give you the science behind of what we do and show you what actually matters based on real research.
Luckily we have a PhD at our disposal to educate our staff and members so everyone is getting the most up to date information out there.
Consider Working With Instagram Influencers
Partnering with like-minded influencers (within your industry) is one of the most effective ways to grow your social media organically.
Industry influencers already have an established and loyal following. With one post, your product immediately establishes a connection with a brand new audience. It's that powerful.
When finding influencers to promote your product, do your research and make sure that their following will actually be interested in your product.
It's easy to be blinded by any influencer with a huge following, but if those followers don't resonate with your product, there may not be any value there... so make sure you do your research!
Evan Marshall, founder of Plain Jane discusses how "micro-influencers" have impacted his business:
Influencer marketing has been huge for us. Our approach is pretty simple. We give out samples of our products and ask people to post about us on social media aka a micro-influencer strategy.
We really like this approach because we get authentic stories and content. We cannot really control the messaging so the product has to speak for itself. We don’t really take product photos at all. Our customers take the photos and we ask to reuse them.
With any influencer strategy, you have to be very sure you’re targeting the right people and engaging with them. You can make sure you’re targeting the right influencers by looking through their posts and then looking through the profiles of their engaged followers.
It takes more time per influencer but the payoff is certainly worth it. Make sure their followers look like your existing customers.
It takes a ton of time and work to grow a social media following this way but it’s worth it. Other accounts have tried to grow themselves through botting or other manipulations. As a CBD company, we didn’t want to give Instagram any reason to shutdown our account so we’ve done everything through content and real engagement. It’s not magic to make this happen. You just have to post consistently and then reply or like every single comment you get. It takes months but it works
How To Market & Sell Your Product To Grocery Stores
The goal for most specialty food businesses is to be able to sell their product in grocery stores and other marketplaces.
With a bit of time, research and energy, you can make this a reality for your specialty food business!
Here are the steps you should consider taking when you are ready to market your specialty food business to grocery stores:
1. Permits: Make sure you have the right permit by contacting city and state officials
2. Creative label and packaging design: Your packaging should be functional, creative and also meet all U.S. Food and Drug Administration labeling guidelines
3. Price your product appropriately: Make sure your product pricing is fair but also allows for you to make a profit. Check out what other specialty food business's are selling for at grocery stores in the area.
4. Create a target list: Conduct research in the area and decide which grocery stores you would like to sell your product to.
5. Contact stores and present your product: Introduce yourself and request a meeting with the grocery stores on your list - bring a presentation with the market research you've conducted and samples of your product.
Consider Selling On Amazon
In addition to selling your products directly on your site, you may want to consider selling on Amazon to reach a wider audience and attract new customers.
Here are some pros and cons of selling on amazon:
- Easy and seamless process to get your product listed on Amazon
- There are roughly 100 million thoroughly committed prime customers, so you're bound to tap into new business
- Can help grow your business exponentially and reach new audiences
- You may encounter some "copycats" and counterfeit products
- Amazon owns the relationship with the customer (you lose control over product reviews + customer service)
- If you already have a low-markup, amazon may not wrth your while and you could end up losing money
- Commissions and listing fees are high - it's easy to lose control of your offering
Follow these instructions to get your product listed on Amazon or check out the video below on how to get started:
Cory Stout, founder of Woodies ($250K/mo) provides us with specifics on how to rank better on amazon:
Our main product is walnut wood sunglasses that I sell for $25 on Amazon and Woodies.com.
I dedicated myself to becoming an Amazon expert. I listened to all the podcasts and read all the blog posts I could find. Shoutout EcomCrew I took the basic fundamentals that are out there and I added a couple of my own twists.
Amazon brings me, 100 brand new customers, every day for very little acquisition cost. If I tried that on my own, it would take a TON of work and it wouldn’t be nearly as effective as Amazon, so I took the easy road on this one.
Here's an article I wrote on how to rank better on amazon (30+ Tips):
- Beautiful images (minimum 5 images) especially lifestyle images I use UpgradedImages.com for product photography (hey Ken!)
- Keywords in your title (but it still needs to sound human)
- Competitive price (contributes to high conversion rate)
- NOT having 1-star reviews
- DON'T STOCKOUT: it's such a killer and if you DO stockout, definitely DON'T raise your price right before you do, if anything LOWER your price for the last 10-20 units before you stockout, each ASIN has a 'memory' for when you do get back in stock so that will help you regain ranking quickly
- DON'T VIOLATE AMAZON TOS: just don't
- Perform QC on your stock before you send it in (I sent in a wrong box once and I had to 'remove' over 3,000 pieces so I could sift through them and remove the 150 contaminated pieces 0/7 would not recommend
4/5: Pretty Friggin Important
- Minimum 10 5-star reviews (do this before you do anything below this)
- Well optimized PPC campaigns (could do a whole post on this, keep ACOS under 40%) here's a screenshot of some of my campaigns I use a combination of manual campaigns with exact phrases and high bids...and auto campaigns with a broad range of products and very low bids
- Turning on FeedbackGenius for auto review requests (it's not as good as it used to be, but it's still worth it)
- Get a trademark and get Brand Registry, this protects you from hijackers and other unscrupulous sellers
- Quick response to customer messages (under 12 hours) here are my stats my mom does all my customer service "Employee of the Year" status
- Drive outside traffic (amazon loves outside traffic because they don't have to spend so much to acquire customers) Facebook, Instagram, and Google Adwords are the usual suspects
- Use ocean shipping to save mucho $$$ on unit costs (use flexport)
Read more about amazon tips here.
🏃🏼♀️ How To Run Your Specialty Food Business
How To Retain Customers For Your Specialty Food Business
Retaining customers is one of the most effective ways to grow your specialty food business.
Oftentimes, it's easy to find yourself focusing on generating new customers, vs retaining your current ones.
Look at it this way - you are 60-70% more likely to sell a new product to an existing customer than you are a new customer.
That's not to say that finding new customers and revenue streams is not important, however, the easiest (and most inexpensive) source of new revenue is right there in front of you.
Here are some ways you can retain customers for your specialty food business:
- Responding to comments on social media
- Send discounts (or freebies) to loyal customers
- Provide valuable content, for free
- Write a hand written thank you note
- Provide awesome customer service and build relationships with customers
To find out more tips and tricks on retaining customers, check out this article ➜ here
Belinda Kelly and Venise Cunningham, founder of Simple Goodness Sisters dives deep into the process of attracting and retaining customers:
Today our challenge is to move forward with our online retail with as much vigor as we can, while also learning as we go the wholesale food business. We have the lofty goal of outsmarting the traditional food system to bring greater profits. Marketing will be extremely key to our success. Before we talk about marketing strategy though, we’ll need to explain why we decided to market directly to the consumer in the first place.
From the start, we’ve taken a unique view of distribution because we learned quickly how little the farmer + producer would keep off the profits in the traditional food system. A farmer makes next to nothing on sales of raw ingredients once land costs, water, labor, and materials are considered. A value-added product is one way a farmer can make a greater profit margin off of their land, by turning their raw product into something else exciting and useful, in our case, cocktails!
Traditionally a farmer sells ingredients at a wholesale price to a produce distributor. Then a food business buys the ingredients from the produce distributor and pays a co-packer to make the product. The food business then pays a distributor to distribute the product, then gives away even more profit margin to the final wholesaler. The farmer makes next to nothing in this system and the business owner also makes very little, only about the same chunk of money that the distributor and wholesaler make, once costs are accounted for. In addition, the business owner might pay higher costs by paying a food broker to help gain traction/accounts with distributors for a greater distribution footprint, ie, more stores in more places. We would like to succeed in using as few middlemen as possible, and we’ll use technology to do this.
To work as hard as we do to get such a small piece of the pie sounds really unappealing to us (indeed I am sure it does to everyone) and would necessitate having big-time investment money and huge, fast growth to draw any profits from the business. A small-time food business just does not make dollars and cents. A huge volume of sales and extensive distribution is the only way to profit... at least traditionally. Our aim is to use social media to share our story because we know our story sets us apart in our market and leads to sales. Then we aim to convert that “listener” to an engaged consumer. Direct to consumer sales via social media has been hugely successful in almost every category, though less often with food.
Our strategy is to maintain the majority of sales through our own website by using SEO, Facebook and Instagram ads, and a robust, lifestyle-focused social media strategy. We recognize that we do not only sell a food product, we sell the hope that so many share to get back to the land, grow their own food, and connect with one another.
We’re focused this season on paying for Google ads, Facebook and Instagram ads, and Instagram boosted posts to drive these online direct sales. We’ve begun to invest in website SEO with a marketing firm, Intellitonic, who will improve the backend of our site for better web rankings. Our site is well established, having been a blog for so many years previously, but when we converted it to our sales site we never did the full clean up of old posts and unrelated data that is still ranking us for keywords like “signs your goat is in labor” so that’s a big priority this year. We’ll be investing in a website “remodel” rather than a “rebranding.”
For Google and social media ads we have designed a few different ads, each slightly different than the next, with slightly different targets than one another, to see which keywords and which audiences perform best, for future ads. We’ve also been filming short videos that are focused on how you might enjoy our products “in the wild:’ outdoors around a fire pit, at a garden party, etc.
Paying for ads will be a considerable expense, but our bet is that over a year, this expense will still be far less than what we would have lost in margin. Maintaining authenticity throughout this shift is also extremely important to us because we know that while we could buy followers, you cannot buy engaged followers. We have a very high level of engagement with our social media followers and they truly buy into what we choose to share with them from our lives. We want to continue this relationship online while we grow. For this reason, we continue to send out a monthly newsletter, give hosting and recipe tips on our blog and on social, and share stories of the drinks we make after a fun day on the farm with the kids.
Wholesale is an entirely separate ballgame for us, and one we’re focusing on less for all of the reasons described above. We need to be distributed enough to help grow our brand (essentially we look at the wholesale market as a way to make sales while also “paying” for customer acquisition through our loss of margin, because the store helps us market,) but not so widely distributed that all of our time and attention is focused on trying to convince distributors to bring us on and cranking out huge volumes of product for very small profits.
Working with a handful of well-matched distributors for these accounts is an aim of ours because driving boxes all over kingdom come is not something we can do. We have believed from the start that if we just focus on telling our story and making a unique, quality product that businesses who share our ethos and customer base will come to us. And that has proven to be true, we are currently taking new accounts (we recently launched locally in New Seasons Markets and PCC, our first grocery chains) and are in talks with a couple of distributors.
Finally, PR is one of the most important parts of the business right now, because until people hear our story, our product is not fully understood. The fact that our syrups are naturally made with whole fruits and no additives is special, but the most unique part of our product is that the ingredients are mostly sourced directly from our farm, or other small family farms in our area. We can trace each ingredient except sugar back to a farmhouse, a family, a field, and that is huge for us and for our customers.
We were featured this past year on a FarmHer episode on national TV on the RFDTV channel, on our local evening news, and in the pantry section of Sunset magazinebecause of our commitment to tirelessly pursuing PR. We’ve also been on podcasts like Drink & Farm, The Forgotton Art, Mom Wants More, and the radio show Seattle Kitchen. We’ll continue to share this story in every avenue possible, including “How to Grow Cocktails” classes and workshops, “ask the expert” media opportunities, etc.
Diversify Your Product Line
Adding new products to your business is a great way to expand into new markets and grow your business.
It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.
Here are some reasons you may want to considering adding/diversifying your product
- Meeting the needs of your customers
- Establish yourself as a top provider in your industry and stay ahead of the game with competition
- Resistance to downturns/trends fading
- Create new revenue streams
Preparing To Scale Up
Example from Hipcooks Cooking Classes
With 7 profitable owner-operated locations and 15 years in the business, I’m (finally) ready to scale up!
What we're looking to do:
- Open a Hipcooks in every big city in the US (and even internationally)
- Streamline and get ready to franchise
- Finish our second and third cookbook
How To Crush The Sales Process For Your Specialty Food Business
You may find yourself in a spot where you're ready to hire a few (or many) salespeople to support the sales conversion process.
Regardless if you have one or thirty salespeople, it's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
Mike Korba, co-founder of User.Com walks us through the entire sales process and which teams are responsible for what:
User.com Sales Process
Each user and account is qualified with a specialist. For business leads, they are handled by the sales team, and if they are qualified we give them a demo, more than often at the end of their fourteen-day trial. If they’re happy they’ll add a payment, and get an account manager, so a customer support and success team who will help implement the solution and to use the technology.
Sometimes, users will convert naturally on their own, after using the freemium product and finding it to be something that they will find beneficial.
After they convert, we help with onboarding, give them some personalized tips for their specific business or industry to grow plus all kinds of support, for whatever they need - something we take huge pride in.
The team is right now more than 30 people, with more than half working on the IT and product side, and the rest are in three teams: Support, Marketing, and Sales who all work together very closely.
Word of Mouth
The most tried and true way to grow a specialty food business is through word of mouth - some entrepreneurs would say it's more important than all social media.
Why you should focus on word of mouth:
- Consumers trust word of mouth above all other forms of marketing
- 92% of consumers believe recommendations from friends and family over all forms of advertising
- 64% of marketing executives indicated that they believe it is the most effective form of marketing
Learn more about word of mouth in our guide: 30 Ways Founders Grow Their Business ➜
As a brand, you want to deliver an experience that authentic, honest and transparent.
Don't make the mistake of giving your audience less credit than they deserve.
If you go around chasing every trend and only focused on yourself and money, you’re going to lose very quickly.
There have been many times where we have been tempted to do this but stayed true.
Sure we sacrificed sales, but we kept our integrity, played the long game and people saw and appreciated that, and really began emotionally investing in the brand.
Provide Great Customer Service
Providing exceptional care and creating relationships with clients is a great way to build your reputation and retain customers.
Whether you are an online business or a physical business, it's highly important to communicate with customers and make them feel like they are the priority.
Just remember: customer service represents your brand, values, vision and YOU as a person.
Lousia with Funky Fat Foods states just how important their customer service is:
We’re consumer-focused and take care of our customers as quickly and correctly as possible.
I believe what is also working for us, is our customer service and the relationships we have created with them.
Even today we see huge support from Instagram, as you can talk directly to your (potential) customers all over the world. Basically, just ask them what kind of content they’re interested in, and always reply to their questions.
We’ve recently started sharing our struggles and learnings via IG stories and see a growth in our engagement. We try to stay in as much contact with our followers as possible and strive to create good and engaging content through social media. As a result, we have been steadily growing our follower base organically.
We also run contests on Instagram in collaboration with other brands and send our bars to micro-influencers, which really help to increase awareness of the brand but there is still a lot of room to grow in this area.
Build a Referral Program
Word of mouth is one of the best ways to get the word out about your business and acquire new customers. Especially when you are starting out, it’s important to build a solid referral program to encourage existing customers to help you find new ones.
A great way to do that is by offering a reward (ie. credit on your service or cash) to customers that refer you to their friends and family.
A fantastic referral program will help with clout, credibility, and establishing yourself in the space.
We put together the best resources on the internet to help you start your specialty food business.
- Platform tools such as Shopify, Amazon, Google Shopping or BigCommerce
- Email tools such as MailChimp, Klaviyo, G Suite or Auth0
- Social media tools such as Facebook, Instagram, Twitter, YouTube, Pinterest, LinkedIn, Hootsuite or Reddit
- Advertising tools such as Facebook Ads, Instagram Ads, Google Adwords, Bing Ads, Google AdSense, Amazon Ads or Google ads
- Reviews tools such as Product Reviews
- Design tools such as Canva or Adobe Suite
- Shipping tools such as ShipStation, Stamps.com, USPS or Amazon FBA
- Analytics tools such as Google Analytics or Google Tag Manager
- Productivity tools such as Google Suite, Dropbox, Microsoft Office 365, Trello, Evernote or Calendly
- Payments tools such as Paypal, Shopify Payments, Stripe, ReCharge, Amazon Payments, Square, Bill.com, Wave or Squareup
- Blog tools such as WordPress or Squarespace
- Accounting tools such as Quickbooks, Wave or Google Sheets
- Customer service tools such as Facebook Chat App
- Freelance tools such as Fiverr
- App tools such as Flexify
- Crowdfunding tools such as Kickstarter
- Web hosting tools such as GoDaddy
- Wholesale tools such as Faire.com
- How to Make a Profit Creating & Selling Your Own Specialty Food Products in the USA: Specialty Foods for beginners
- The Foodpreneur's Beginning Tips For Starting A Food Business
- Starting A Specialty Food Business - IDAHO
- How I Started A $100K/Month Food For Auto-Immune Sufferers Business
- How We Started A $25K/Month Low-Carb, Gluten-Free Desserts Business
- How We Left Our Jobs At Tech Companies To Sell Farm Fresh Cocktail Ingredients
- How We Started A $3K/Month Local, Organic Foods Online Store
- How I Created A $35K/Month Baltimore Themed Gift Box
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