Development Center offers key ingredients for successful start-ups
Since 1985, the Indiana Small Business Development Center has worked with and advised thousands of aspiring entrepreneurs, as well as owners of established businesses. ISBDC provides no-cost, confidential counseling for all types of business, but food and food-related business concepts have always represented a significant share of the organization’s client base.
In some years, food-related ideas of all types—restaurants, caterers, bakeries, food processors, beverages, etc.—comprise as much as 15%–20% of the start-up clients served by the Central ISBDC office, according to Doug Boehme, regional director. The Central ISBDC serves Marion County, and the seven “donut” counties, from its base in the Indy Chamber offices on the 19th floor of the Chase Tower.
Food-related start-ups are in some respects more challenging to work with than other types of businesses as they are often in fiercely competitive markets, face more government regulation and have more difficulty finding initial capital than the average start-up, to name a few. But food start-ups are often more exciting and may offer more profit potential than others.
“Despite some notable differences between food-related and other types of ventures,” says Boehme, “the ISBDC works with foodies in pretty much the same ways we would work with any entrepreneur who is serious about starting a business.”
When an entrepreneur applies to become an ISBDC client, she or he is assigned to one of the organization’s four business advisors. Working one-on-one, the advisor will help the entrepreneur understand the market(s) for their food business or product, and determine the preliminary feasibility of the entrepreneur’s concept. From there, the ISBDC advisor will assist and advise the client to develop a business plan, which gets into the array of details such as start-up costs, location options, sources of supply, government rules and requirements and many others.
At the core of the business plan is the financial plan or forecast. This is where all of the details and decisions laid out in the rest of the plan come together and are translated into dollars and cents. This would include direct costs of ingredients and packaging, as well as overhead expenses such as rent, utilities, liability insurance and advertising. For many entrepreneurs, the financial plan is the most challenging component of the business plan. With some hard work, though, and some help from the ISBDC, most entrepreneurs find the financial plan do-able.
Joe Wisner, founder of Broma Chocolate in Indianapolis, spent much of 2015 working on his business plan and getting his chocolate company ready to open its doors in 2016. Early in the start-up process, Joe turned to the Central ISBDC for help with his plan and assembling a realistic financial plan.
“The ISBDC advisors were always very prompt, courteous and understanding in answering any question I had,” says Wisner. “And they were able to provide me with not just their knowledge, but their experiences in the business world.”
ISBDC business advisors have a variety of tools and resources that may be beneficial to food start-ups. Here is a sampling, almost all of which are available at no cost to the client:
- IBISWorld research reports: quarterly reports on current trends and long-range outlook for more than 700 industries, including many food-related businesses
- Business Reference Guide: benchmark data, information on industry trends and market conditions for over 500 business types
- Esri reports and maps: detailed demographic and consumer spending information, essential for market analysis
- Reference USA: business database useful for generating lists of prospective customers, suppliers and/or competitors
- Navigator On-line Business Plan and Marketing Plan software
- Procurement Technical Assistance Center: if you want help selling your food products to the government
- Export consulting: technical assistance in selling your food products in foreign markets
For more about how the ISBDC works with food entrepreneurs, go to isbdc.org and look under “Success Stories” for My Sugar Pie, Gettinger Family Custom Meats and other food businesses.
Resources for Food Start-ups
Beyond the services of an organization such as ISBDC, there is a wide range of resources that may be helpful to food start-ups. Here’s a list and brief descriptions of just some of those resources:
National Restaurant Association
Restaurant.org
The NRA is an excellent resource for start-ups and established restaurants, with information on national trends, culinary and financial forecasts and expert advice on operational issues. Membership is not required to access most information.
National and state trade associations in other industries are often (though not always) good resources for start-ups. For a list of food and beverage trade associations, go to
CareersinFood.com/Food-and-Beverage-Trade-Associations.
Purdue University Food Science Department
765.494.8256
Ag.Purdue.edu/FoodSci
Another great resource for foodies located right in our backyard, with a focus on technical aspects on new product development, food processing and FDA and State of Indiana food regulations. Offers a three-part webinar titled “Cooking Up a Food Business in the Home.”
Indy’s Kitchen
Linda Gilkerson, Owner / Manager
317.426.2996
Located at 2442 N. Central Ave., Indianapolis, Indy’s Kitchen offers a fully equipped, commercially licensed, shared-use kitchen to aspiring food entrepreneurs.
From Kitchen to Market by Stephen F. Hall (Upstart Publishing, 2005).
This is a “must-read” for anyone who wants to turn their family recipe, snack item or gourmet food into a business success. Specialty food business guru Stephen Hall takes the reader step-by-step through the process of development and commercialization. By the author of Sell Your Specialty Food: Market, Distribute and Profit From Your Kitchen Creation.
Available at Amazon.com and many other retailers and at the Indianapolis Public Library.
Trade Publications and/or Websites
If you’re a one-person business making and marketing organic soda made with extracts of exotic flower petals, you should be subscribing to Beverage World at BeverageWorld.com, the trade magazine of the broader beverage industry. Even if you’re a small player in a huge industry that includes the likes of Coca-Cola and SABMiller Brewing, you need to be in touch with what’s going on in the world around you (market trends, government regulations, technical innovations, etc.).
Many publishers of trade periodicals provide free subscriptions to businesses, large and small. Such is the case for Beverage World. A simple Google search will help you identify the trade publication—and there may be more than one—for your segment of the food and beverage industry. For example, a specialty yogurt maker who subscribes to Dairy Foods magazine, should also get About Yogurt (AboutYogurt.com) and a high-end chocolate maker who reads Chocolate Connoisseur (ChocolateConnoisseurMag.com) may also benefit from information in Candy Industry Magazine (CandyIndustry.com).
OpenCounter Indy
Indianapolis.OpenCounter.com
If you’re going to need space to run your food business, and especially if you’re going to produce and sell food or beverages, it is almost certain you’re going to need at least one permit or license to comply with Indianapolis ordinances. And you may need several such permits or licenses before you have the green light to open your restaurant, catering or other food-related business. The process can be confusing and time-consuming, and if you make a mistake, your open date may be delayed. That’s why the City of Indianapolis created OpenCounter Indy.
When you go to the OpenCounter website, you’ll be asked a series of questions about your business plans. Based on your responses, OpenCounter determines what permits and licenses you’ll need for your business, which forms to file (and when to file them) and how much the process will cost.
Venture Club of Indiana
VentureClub.org
Since 1984, Venture Club has brought together entrepreneurs, investors and professional business service providers from throughout Indiana for monthly networking gatherings, educational opportunities and other events. For the past two years, Venture Club has dedicated one of its monthly events to the topic of food entrepreneurship. The 2015 event featured speakers and panel discussions on topics such as financing, food distribution, local foods and the Indiana Grown initiative.
