If opening a restaurant is an ambitious challenge, this article aims to explain you why and how some have been successful in living from their passion for food:
What is a Food Entrepreneur?
An Independent Restaurant Manager?
Food entrepreneurship is the new buzzword in the food industry, but what is the real definition of a food entrepreneur?
By definition, a food or culinary entrepreneur is simply someone who starts their own business in the food or culinary industry. It could be someone who creates the next meal kit for a specialty diet (for example, vegetarian keto meals), someone who purchases a food truck and launches their own small food business, or someone who opens their own catering company. Food entrepreneurs can address a challenge they see in the food system by combining food, business, and social entrepreneurship.
The term is so hard to classify because anyone who is doing something new with food and business falls under the umbrella of food entrepreneur. Any self-employed restaurant manager would be considered a food entrepreneur.
The broad base can make it difficult for aspiring entrepreneurs to get started. People wonder whether their skills will translate - or what skills they need to have to bring their food business to life.
READ: What does a Restaurant Manager do?
What Skills Does a Food Entrepreneur / Restaurant Manager Need?
Food entrepreneurs either need a solid in both culinary and business skills, or they need a partner that has the skill set they lack.
For instance, if you're a chef, you can launch your own food business but your chances of success increase if you either master business basics or partner with someone who has business savvy.
To bolster your odds of success with food entrepreneurship, learn skills including:
- Financial reporting and budgeting
- Business planning
- Public speaking
- Management and leadership
- Culinary knowledge
- Creative problem-solving
- Team building
In hospitality guest experience has always been one of the most important factors, but consumers now want more. Hotels and restaurants need to provide an outstanding experience that exceeds guest expectations. For this level of experience to happen, managers will need to embrace innovative new programs and technology that help to create memorable experiences for guests.
READ: Hospitality skills: the future is Affective Hospitality
The Food Industry Explained
Globally, the food and dining industry is expanding in creative new ways with the advances of technology.
Food business leaders are either leveraging technology within their business model -- as in the continued popularity of quick service restaurants where diners can order from their devices -- or bucking the trend with pop-up or personalized food businesses that center the experience, not the technology.
In the market, preferences are shifting as consumers become more comfortable with the direct-to-consumer shopping model. Within the culinary fields, the applications here go beyond meal delivery or grocery delivery to personalized service in almost anything you can think of, such as fine wines, fresh smoothies, or fermented foods. Wellness was a major food trend in 2018, and it continues to dominate, as consumers seek out superfoods that promise a mind-body benefit.
READ: What is the future of food and where is gastronomy heading?
They want to know where and how something was grown, what ingredients are in an item, and even what the values are of the business that created that item. Culinary entrepreneurs can gain insight from consumer preferences to build a brand from the ground up that gives modern diners what they want.
Within these food industry trends worldwide, there's room to personalize the model (and differentiate your food business) by drawing on different culinary traditions, flavors, ingredients, or techniques.
The Different Types of Food Businesses
With all the different types of food operations, it is important to consider what’s out there before you choose what type to open as a business venture.
If you hear that someone has decided to open a food-related business, your immediate thought is likely “restaurant.” However, when you really think about it, a restaurant can mean many things--plus, there are an abundance of options for food-related businesses outside a traditional sit-down eatery.
Whether you’re in the planning stages now, or you just have that entrepreneurial spirit and think that maybe one day you’d like to take your passion for food and turn it into a business of your own, it makes sense to learn about some different types of food businesses.
Bakeries & Dessert Shops
From a traditional “French” bakery to a hip cupcake shop to a location that doesn’t have a public front and instead creates wedding and birthday cakes, few towns are complete without at least one great bakery.
Today, there is a need for many specialty shops that give customers a choice when it comes to ingredients and types of desserts offered. A bakery can be a simple affair with just a few cases for customers to browse goods, or it could also include a place for folks to sit and enjoy a dessert while on an evening stroll. The options are endless.
Pubs, Bars & the Like
The pub and bar scene is constantly changing. While the focus is often on drink, not dining, the gastro-pub is becoming a huge draw in many urban and suburban areas.
If you plan to serve alcohol, you may have a few more rules and regulations to manage than you would with a dining establishment that doesn’t serve. Make sure you are aware of any of these and be prepared for additional licensure costs to get off the ground.
A restaurant isn’t “just a restaurant.” This can include anything from a simple deli to a fine dining establishment serving seven course meals. With a restaurant, location is key and service is everything.
Make sure you research your target client base and check out the competition in depth before you open.
After all, 1/3 of restaurants fail in their first year.
Delivery is becoming more common as people get busier and busier. Whether you choose to offer delivery of your own product (such as with a delivery pizza restaurant) or team up with other local businesses to get food from one place to another, delivery is a sector of the food industry that only has room to grow.
A food truck is a small food business that you can take with you anywhere you go. In the past, they were often parked in urban areas, giving workers an alternative dining option for a busy lunchtime crunch.
However, today the food truck is a staple of fairs and festivals--in fact, there are often “food truck days” held in small downtown areas to bring these businesses together for the benefit of all involved. With a food truck, creativity is king!
If you are looking for a food-related business that lets you make your own hours and choose your own way of doing business, catering could be your calling.
You can choose to do this on a part-time basis or operate a full-scale catering firm. You won’t necessarily need a storefront, just a good commercial kitchen and a transport vehicle.
READ: Sodexo: How Employee Engagement is Transforming the Catering Giant
A coffee shop can be a good option for those looking to enter food service without a huge menu. Serve coffee, drinks and a few small snacks to hungry commuters or open up your location and offer free wi-fi to attract those who want a place to study or work on projects away from the office.
A coffee shop is often a community center of sorts. If you want to do things the “right way” make sure you study up on coffee and barista techniques so you can serve a great cup to your guests.
Specialty Food Shop
A food related business doesn’t necessarily mean you have to cook meals or even serve beverages. Specialty food shops are a great way to share your love for food with your community. Just make certain you choose a type of shop that will have enough support in the community around you, to avoid any difficulties down the road.
READ: Commercial vs non-commercial food services: What is the difference?
Top Trends for Food Service Businesses
There are a lot of opportunities for forward-thinking entrepreneurs who want to jump on the food industry train.
If you’re looking to start a food-related business, trying to decide exactly what type of business in which your skills would be best utilized is the first step. Today, there are more things to think about than just figuring out what type of restaurant you’d like to open. There are actually many different opportunities for forward-thinking entrepreneurs who want to jump on the food industry train.
We’ve put together a few trends food entrepreneurs should be aware of when putting together their business plans.
READ: Top 10 Food and Beverage Trends
A Focus on Health
Today, more than ever, people are thinking about their health. For many, this includes eating healthier meals on a daily basis. Restaurants that offer healthy choices for their patrons will be able to attract customers that are making health a top priority. Remember, even if you choose to offer healthy choices at your restaurant, cafe or deli, you can also offer more indulgent options as well. Finding the perfect balance may be difficult but when you do so you’ll be able to attract a wide variety of customers who may bring along friends and family too.
Dining for Those on Restricted Diets
Whether or not they are doing it for health reasons, more and more people are on restricted diets today. These diets may include vegetarian, vegan, paleo, keto, Kosher, gluten-free, dairy free and others. While you may not want to have a menu that is ALL vegan or ALL gluten-free, by offering at least a few options you will avoid alienating certain customers. In addition, you can become a restaurant or establishment that is known for being inclusive and appealing to many diners, no matter what types of food they prefer or require. This immediately makes your business a great place to bring a crowd!
Food delivery is hotter than ever. In the past, delivery may have been limited to pizza or the odd Chinese restaurant that decided to offer the service. However, today more and more restaurants are getting in on the action. This is one trend you will certainly not want to ignore. Even if you do not wish to offer in-house delivery, as this can be challenging, of course, there are other options. Go the extra mile to make your establishment easy to access for services such as GrubHub or UberEats. This can help you gain an extra stream of business, especially during the daytime lunch hour when offices are looking for a way to feed their staff.
READ: Key Trends in the Food Delivery Industry
Other Convenience Options
In addition to delivery, your customers are looking for other ways to make dining convenient. Many restaurants are offering drive thru or curbside pickup for meals to go. This can make for a very easy dinner option for families on the go! When you’re setting up the layout of your restaurant, think about how you can make dining in AND carrying out easier for your customers. By doing this, you may boost your business during the week, which can often be a less-busy time for some businesses, and could mean the difference between success and failure for a new restaurant.
More and more people are becoming familiar with a wide variety of ethnic cuisines. The world is a much smaller place that it has ever been before. As such, you’ll find that ethnic restaurant are very trendy. In the past, there were certain types of ethnic food that was appreciated such as French and Chinese, while others wouldn’t receive much attention. That is no longer the case. Today, you’ll find that even less-known cuisines will garner excitement among many guests. If you know a certain type of food, don’t be afraid to go with what you know. You’ll find that following your passion is almost always a good move.
Food is usually the highlight of a night out, but drinks are becoming more than just a sideline. When you’re thinking about what type of business to open, don’t forget that coffee shops, bars, pubs, beer gardens, tea rooms, and wine and dine establishments are often a good option too. You don’t have to choose beverages above many of these establishments that are most successful have a menu featuring delicious edibles as well.
While these are some of the trends in the food industry today, the most important thing when trying to decide what type of business to open is that it is up to you to keep it up and running. Even if something is trending, if you don’t feel passionate about it, you’re not going to have your highest level of success. Do some research on these trends, but take the information with a grain of salt and put together a business plan that will hopefully lead to success and happiness.
READ: 7 restaurant technology trends to watch in 2021
How to Open a Restaurant? How to Become a Restaurant Manager?
When you've decided to start a food business, you must spend some time planning and plotting - this will save you time and money in the long run.
If you are looking at opening a food-related business, the concept can seem overwhelming at first. There is so much to think about that it may seem like you will never accomplish your goals and get off the ground. However, for every successful business, there was a motivated individual just like you who had dreams too. While every restaurant, catering company or food truck will get its start in a slightly different way, we’ve put together a guide that will put you on the right path and help you get started.
READ: How to Start Your Food Business: an 8-step Guide
Consider Starting Small
You should consider testing your idea before you go all out with a pop up location. It will give you an opportunity to run through your ideas without all the risk. Many food businesses start as a hobby at home and once they outgrew the space they moved on to something bigger.
Along the same lines, perhaps starting with a food truck rather than a full-scale restaurant may be a smart idea--as that will give you more flexibility so you can make adjustments to your menu and plan later if necessary.
Do Your Research
The food industry in general is highly competitive. Therefore, it is imperative that you do plenty of research before you dive in with both feet. Doing research will help you to define your target market, niche opportunities, and identify your greatest risk factors. Then, you can build a strong business plan and move forward with setting up your restaurant or food business.
Create a Business Plan
It takes more than just great recipes to succeed in the restaurant industry. Good business sense is necessary too. Sit down with someone who knows the industry and your area to write a business plan--both a long term and a short term plan.
You need to have something to work from so that you constantly have goals to work towards. With a solid business plan in place, you will be much more likely to succeed in your ventures.
READ: Restaurant Management: The 7 elements of a Business Plan
Secure Your Financing
Whether you’re planning to start a food truck that’s only open a couple of weekends a month or you want to own the next great restaurant in a fine dining city, you need money behind you.
Instead of trying to start with a wing and a prayer, so to speak, go ahead and secure your financing now before you buy the first piece of produce or create the first recipe. Having your financing steady will make a huge difference your chances for success.
READ: Restaurant Management: Financing your food business
Start Your Business the Right Way
In addition to having a good financial backing, there are other things you need to do to start your business the right way.
- Do you have a good location picked out?
- What about employees--do you have the right people for the job?
Don’t start things rough and then try to backpedal and fix things later. You’ll certainly regret that decision. Do things right the first time and you’ll have a much higher success rate.
READ: Restaurant Management: How to choose the right location?
Know Rules & Regulations (in Your Country, Specifically)
The food industry has many rules and regulations. Each country (and some states, provinces and cities) have rules and regulations when it comes to zoning, food handling and customer service.
Make sure you know these rules backward and forward. By following these perfectly, you can save yourself trouble and potentially save money and time too.
Find a Business Mentor
A mentor is someone who can help you through every step of starting your business and getting it off the ground. It may be someone you meet during your education or someone who is a “friend of a friend” so to speak. The important thing is that this individual knows the business and that they are dedicated to helping you. A good mentor is one of the most valuable tools you can have on your quest towards restaurant success.
The reality is that no matter what type of background you have, a solid education will help you succeed.
As author Richie Norton said “Opportunities will come and go,
but if you do nothing about them, so will you.”
How to run a successfull food business?
What's the best way to succeed with your new food business? It's to start off strong and keep up your good work.
What's the best way to run a successful food business? It's not a trick question. When you break it down, it's simple once you realize that the best businesses are intentional from the ideation phase on. Put simply, when you ace your food business launch, things will go much smoother.
So here are our tips for food entrepreneurs on how to start a great food business from the ground up.
Research and Plan
You may be eager to dive in and start testing recipes, but the wisest food entrepreneurs know it's best to take a step back from dreaming and think logically. Noting the competitive nature of the food industry, the Small Business Administration recommends food entrepreneurs do their research before opening a new venture.
You'll also need a solid understanding of the laws that affect running your business. Whether it's laws governing wages and employees to laws regarding food safety, research into regulations can be time-consuming. However, it's worth the time to figure these things out, so you don't run the risk of accidentally violating a law you didn't even know existed!
Research can help you figure out where your target market is saturated and where there are opportunities, what made other businesses fail and how you can succeed, and what customers in your area want to see in a new food business so you can offer it -- among other valuable things.
Your research can help you establish proof of concept and create a business plan, two things you'll need to do if you want to recruit investors.
You will find business plan templates online to guide your thinking. Typical elements of a business plan include:
- Executive summary
- Mission statement
- Product or service information
- Location and employees needed
- Leadership team
- Market analysis and forecast
- Marketing strategy
- Funding requests
- Financial projections
Writing a business plan can feel scary, but you don't need to do it alone. Look for other business owners who have been through the process before and enjoy mentoring new entrepreneurs.
If you study at EHL, you can leverage the power of the global alumni network to find business owners who understand what you are trying to do and what to help you make the best possible case to investors.
Test Out Your Concept
Before you sign a lease -- committing your capital to your idea -- why not test out your concept? Testing out your food business idea will help you put your ideas into practice, so you can fix wrinkles in your product or service model while stakes are still low.
Depending on your concept, you might try cooking products out of your home kitchen, rent space in a commercial kitchen, rent a food truck, or participate in a local market.
By testing out your idea, you can see what customers respond to. You can gauge your pricing model, too. If your beta test is less profitable than you envisioned, it may be time to tweak your menu or lower your price point, so you can attract more customers. Alternately, your concept may be better suited to a different community, where your target audience lives, works, or shops. The only way to get this valuable information is with a concept test.
Knowing what sells well at the early stage may help you tweak your model or, at the very least, avoid investing capital in menu items that don't go on to sell well to customers - something you would have known if you tested your concept first. The trial run can also streamline your role in the business by showing you how much work you can feasibly complete on your own. When you have a better idea of your capability, you can hire smartly from day one.
Hire the Right People
After you've found funding, tested your concept, rented a space, and invested in everything you need, you're ready to open...almost. For most food concepts, you will need help staffing your business as you can't realistically do everything on your own.
The amount and type of staff you need varies by your concept.
If you're creating a line of cookies, for instance, you may need a cook and delivery driver to launch your line -- and you can scale up as your cookie company grows.
If you're opening a restaurant, roles within your restaurant will include purchasing and receiving, cleaning, purchasing, supervisory, human resources, bar service, food servers, food runners, cook, chefs, dishwashers, host, and accounting. For some services, such as accounting, you can hire service providers. For many roles, you'll need to bring on part-time or full-time employees.
Discover a handful of key elements and techniques that can save you a heap of negative service feedback in the future.
Of course, you can do some of the work yourself. However, appraise your skills ahead of time and only take on roles that align with your strengths. If you are a chef who wants to open their own restaurant, then it may be natural for you to take on the executive chef role in your food business. If you are a competent cook with an innovative idea, it might be a better business decision to hire a chef who has experience running a restaurant than to assume this role yourself.
A skilled accountant is a worthy investment for food business owners, as cash flow is often the key to keeping a business going. Accountants who work for other food businesses make great hires, but your accountant doesn't need to have prior food experience as long as they can make suggestions to help you save money. Your accountant can help you understand your KPIs or key performance indicators, such as labor cost or food cost. When you have an accurate understanding of your KPIs, you can shave expenses, for instance by price shopping among suppliers to get the best price on inventory.
To set your food business up for success, look for people who have the right skills for your business. Regardless of the role, people who have prior experience working in restaurants (or similar businesses) are the best choices, as they will need less training in their roles. With front-of-house employees, an extroverted, friendly attitude works best, since these workers interface with customers all day long. All employees, especially kitchen workers, should have a calm and capable demeanor, work well under pressure, and be able to multitask.
READ: Starting a Food Business? Hire Top-Notch Staff and Overcome Turnover
Connect to Your Target Audience
One of the biggest keys to the success of your food business is understanding your target market and communicating your value proposition to them. What does your demographic want and how can your food meet or exceed their expectations? It's easy to lose sight of the audience and think about your concept and your dreams for your food business, but you must keep your potential customers in focus. If you don't tailor your food business to what they want and need, then the odds are greater that you will miss the mark entirely. You may have made your case in a business plan, found investors, hired employees, and done everything else right, but if your target audience simply isn't interested in your food business idea, then you will struggle from day one on.
Social media offers an easy way to connect to your target audience and grow awareness of your food business, but it isn't the only way to reach potential customers. You can use direct mail or email marketing, take out ads on billboards, television, or radio, participate in community fundraisers, join groups of local business owners, and attend networking events. To decrease overwhelm, ask yourself how attending a particular event or trying a new ad strategy will get you in front of your target audience. If the fit is not there, then it's not a good use of your time and money.
READ: Restaurant Management: Marketing for food entrepreneurs
Evaluate and Tweak Your Food Business
With all the hard work done, you can open your food business and start serving customers. During the early days -- and, quite honestly, throughout your tenure as a food business owner -- it is important that you monitor performance and do everything you can to keep standards high.
Two areas to focus on include quality of food and quality of service. These are paramount to the customer experience, which is key to retaining customers and getting new customers by word of mouth.
Customer expectations are high when it comes to food quality: why would people spend good money on a meal when they could make something just as good at home? Always buy the best quality ingredients you can afford and prepare them fresh. Monitor cooks and address any problems quickly, to keep consistency high.
Customer service also affects customer acquisition and retention. If your employees have a reputation for rudeness, diners won't come back - and they will tell all their friends about the horrible service they received! While off-days happen to everyone, monitor the quality of service provided and be proactive about correcting any slips. It could save your business.
How to Find a Business Mentor?
A mentor can help a new food business owner turn a potential flop into a potential success--we've gathered some tips to help you find one.
If you are considering starting a food-related business, chances are you know food. However, restaurants, catering companies and the like need more than great recipes to survive in today’s hyper-competitive marketplace. Getting the right training, the right network and the right mentors could be what separates a hugely successful business from one that struggles to remain open.
A knowledgeable and dedicated mentor can have a huge impact on your startup. A mentor may have connections that open doors and the experiences this individual has can help you, as an entrepreneur, from making the same mistakes they have already made.
However, finding the right mentor for your startup isn’t like choosing a plumber from the phone book. You need to know what makes a mentor qualified, how to approach someone to request mentorship and then how to get the most you can from this relationship.
While you certainly have a lot to think about as you find that perfect mentor, we’ve put together three tips that can help you find the mentor who will help you take your restaurant or other business to the next level.
Know What Makes a Great Mentor
Only you know exactly what you are looking for in a mentor. However, a common way of thinking is that the best mentors are those individuals who ask the tough questions and constantly challenge you to not only meet but to exceed your goals. As they do this, they will naturally share their own experiences (both good and bad) and how they have grown from them.
Understand that best mentors will not tell you exactly what to do. They know they are an advisor and that it is up to you to run your company. A mentor who constantly tells you what to do, and becomes upset if you don’t follow along, will likely do you more harm than good.
Find the Perfect Fit
You may think that a well-known mentor or one that worked with someone you know would be the best possible choice for you. While this may, on occasion, help you find someone that can help, it is usually more productive to take a detailed look at your network and look around you for mentors with whom you already have a relationship. Consider approaching the owner or executive of a restaurant or business in your area--someone you admire. These are the people who would be more likely to invest time in your business.
To break the ice, consider sending a quick email explaining your plans and why you are reaching out to them in particular. Avoid sending a form letter, and instead personalize your communications. If you don’t know the person as well, spend some time following them on social media or reading their public blog so you can personalize your contact letter. Don’t push for a meeting right away--remember that the person you’re connecting with is likely very busy! Instead, build up to the first meeting by creating a back and forth chain of contact. Ask thought-provoking questions and always respond to any questions you may receive in return. Connecting with someone as a mentor is not unlike trying to land a first date or build a romantic relationship--it takes time, patience and a willingness to communicate.
Take Full Advantage of The Opportunity
Once you have built a connection, it's important to nurture the relationship over time. Check in regularly by email, text or social media--whatever your mentor prefers. A great mentor will be excited about your progress and take pride in knowing they are making a difference.
Anytime you check in, ask a question to keep the conversation alive. However, don’t allow your message to become to burdened down with details or ask for too much time.
Top business owners and those who are destined for great things will almost always instinctively realize how important a mentor is to the process. As you get your business off the ground, don’t become overwhelmed with the difficulty of the startup, but understand that with the help of an experienced and knowledgeable mentor, amazing things can happen. With the right network, including a mentor who has “been there, done that” your food-based business will be poised for success.
Consider Joining a Restaurant Management Training
Even if you do know the culinary side of the business like the back of your hand, restaurant management knowledge may not come naturally to you or Vice Versa.
EHL offers various culinary management programs that provides you with the tools, mindset and resources needed to launch a new business within the growing food industry. EHL’s instructors and network of industry leaders provides the ideal environment to cultivate the next generation of food entrepreneurs. You’ll not only get the knowledge, but you’ll find support, and yes mentorship, to help you build confidence and skills. In fact, these relationships you build will serve you long after the course is complete.