20 Pros & Cons Of Starting A Specialty Food Business (2024)

Flexibility

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.

Scalable

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.

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).