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3 Tips on How to Start a Food Business

Posted by OAFVC on Sep 10, 2018 9:00:00 AM

So you’ve got an idea for a new food product. Maybe it’s a great product you can’t believe doesn’t exist in stores, or an old family recipe you want to share with the world. You’ve heard Ontario is a great place to start a food business: near farms for direct access to raw ingredients; access to support networks and funding programs; and lots of roads connecting you to the rest of North America, so you can distribute your product with relative ease. But that’s also made it a competitive place for food businesses. So where do you start, and how do you succeed?

How to Start A Food Business in 3 Steps

1) Do Your Research

Before you start making your product, do your research. If you live in Ontario, a good place to start is The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), which has lots of resources available.

And here are some questions you can ask yourself:

  • What do you want to make?
  • Where do you want to make it?
  • Where will you get your ingredients from?
  • Where are you going to sell it?
  • How much will it cost?

What do you want to make?

Writing a description of your product ideas will give you a starting point for your research. OMAFRA recommends keeping on top of business trends in the industry so you can gauge how your product(s) might fit into the market. Do some hands-on research and develop a prototype — you can also test its success by selling it at farmers’ markets, and getting feedback from local customers.

Where do you want to make it?

Your kitchen at home or a community kitchen in a church basement is great for small batches, but once you need to start production in larger quantities, buying industrial kitchen equipment and finding an affordable production space can be one of the biggest barriers to entry. Kitchen incubators, like OAFVC, remove this barrier by providing a commercial kitchen space for rent so new food entrepreneurs can use processing equipment at affordable rates.

When you’re researching your production space, keep in mind you’ll need to package your product too. Think about the kind of packaging you’re after, the kind of equipment needed, and the amount of space required.

If you don’t want to buy packaging equipment, some commercial kitchens have packaging services too. For example, OAFVC has a packaging room next to their processing room, so you can brand and package your products right after you make them. If you’re only after a packaging service, you can ship your products to contract packers or co-packers, who package your product for you. While this is more tedious than just doing it yourself in the next room, the process of finding the right co-packer is made easier through Ontario’s co-packer portal.

Where will you get your ingredients from?

Getting groceries from your local supermarket may not be the most profitable way of running a food business. Research different suppliers and start creating your network of businesses you can rely on for food supplies, and that can rely on you for products too.

Attending trade shows, like the CHFA East, is another great way to meet potential suppliers — and to see new products and learn industry best practices.

Where are you going to sell it?

In order to answer this question, you also need to ask yourself, who do you want to sell to,or, who is your target market? More people might see your organic, innovative new kale cupcakes at Whole Foods, but you’ll probably have better luck with selling your product at a farmers’ market.

When you’re researching different distributors and retailers, remember to think about who you’re trying to reach.

How much will it cost?

There are lots of costs to account for, from ingredients to packaging. If you’re using your own facility, don’t forget about bills for water and electricity. Ontario’s electricity costs have affected small food processing businesses in the past, so it’s a variable to keep in mind.

While there are many costs that come with starting a new business, there’s also funding you can apply for that can help you out! You can find funding programs at any level — local, provincial, or national — but it’s important to do your research. Check out OMAFRA for a list of funding resources for food and beverage processing companies.

2) Find a Mentor/Support

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There’s a lot of information out there, and even if you somehow find the time to read it all, putting it into practice can be challenging. When you’re starting out, getting guidance from someone who’s done it before can streamline the start-up process and help you avoid mistakes.

There are many small business centres out there that are eager to connect you with business coaches and help you set up your network. If you’re a bit nervous about going in for a consultation, some centres also have programs you can join. For example, the Faster Forward Business Success Program is an eight month training program established by the Business & Entrepreneurship Centre Northumberland (BECN) for new entrepreneurs.

Networking events, like the Women Mean Business events, are another great way to find successful business owners who are excited about sharing their experiences to mentor new start-up entrepreneurs.

If you’d prefer to meet people more organically, co-working spaces like the OAFVC communal kitchen offer lots of opportunities to meet like-minded people. OAFVC also has informal meet-and-greet nights where you can meet other people in the food industry.

3) Know the Law

One of the most time consuming parts of setting up your new food business is making sure it meets various food standards and laws. While this may vary depending on your product, a good place to start would be learning Canada’s food safety laws and labelling requirements, which will vary depending on the type of product you’re making. For Ontario businesses, legislation like the Waste-Free Ontario Act, and Cap & Trade aim to make businesses more environmentally sustainable — and new businesses need to understand them.

It’s also important to stay on top of any new legislation or changes to existing legislation. But there are lots of official and unofficial channels you can follow to stay up to date, such as Food In Canada for National Updates, or Food and Beverage Ontario for provincial ones.

If you’re worried you might accidentally break the law without even realising it, it’s worth considering using a consultation service. OAFVC offers services where you can get advice on shelf-life and packaging safety, and they’ll even help you test product samples for disease-causing bacteria. With different packaging and labelling services available, they can also help you package your product and create labels for your brand (check out the rates here).

Want to Get Started on Your New Food Business?

Farmers Market Business Plan Checklist

References:

https://www.chimptreats.com/our-story-1
http://dfc.com/bbq-2/
http://www.omafra.gov.on.ca/english/food/industry/BIB/ind-overview.htm
http://www.omafra.gov.on.ca/
http://www.omafra.gov.on.ca/english/food/industry/BIB/welcome.htm
http://www.omafra.gov.on.ca/english/food/business-development/guide.pdf#Untitled-1%3ASection%202.1%3A1393
http://foodandbeverageontario.ca/copack
http://www.omafra.gov.on.ca/english/food/industry/BIB/funding-programs.htm
https://www.becn.ca/faster-forward-program/
https://womenmeanbusiness.ca/
http://www.inspection.gc.ca/food/non-federally-registered/safe-food-production/guide/eng/1352824546303/1352824822033
http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/eng/1383607266489/1383607344939
https://www.ontario.ca/laws/statute/S16012
https://www.ontario.ca/page/cap-and-trade
http://www.foodincanada.com/
http://www.foodandbeverageontario.ca/news/

Topics: Food Business