It’s not easy to break into the food business. According to a University of Ohio study, about 60% of new restaurants fail in their first year, and in many ways a mobile food business is more difficult to operate than a restaurant because the owner usually takes on more duties with a much smaller staff to help carry the load.
Success in the food business takes a lot of work and dedication. If you are interested in success, then good luck to you. If you are more interested in failure, here is our list of sure ways to fail in the food business.
1. FAIL TO MAKE A BUSINESS PLAN
Starting a food business requires some courage and some faith, but having these two things does not lessen the importance of planning for the future. The U.S. Small Business Administration suggests creating a business plan that is as specific as possible and that lays out goals for the first 3–5 years of your business.
Check out this page for more information on creating a successful business plan.
2. PUT A LOT OF EFFORT AND MONEY INTO MARKETING, AND SELL A MEDIOCRE PRODUCT.
It’s great to have a catchy name and a trendy food trailer, but while marketing will find you customers, those customers won’t come back and they won’t recommend you to their friends.
The truth is, that if you want to create a food business with longevity, you need loyal customers who trust you to feed them delicious food every time they come back, and you need to get these loyal customers as quickly as possible.
3. FAIL TO BE SAVVY ABOUT INSURANCE.
We know that as an insurance company, we’re biased about this point, but really, when you are selling food, there is a high risk that someone might blame you for something and that could end up costing you and your business a lot of money if you don’t have liability insurance.
Then again, if you pay too much for your insurance, it could be a burden on your small business, so it’s important to find liability insurance designed to help small food businesses succeed. To learn more about what great food liability insurance looks like, visit fliprogram.com.
4. FAIL TO BE MINDFUL OF CASH FLOW PROBLEMS.
Running a food business requires investing in a lot of business property like your cooking equipment, your ingredients, and your marketing materials. With so much to purchase, it can seem overwhelming to try to keep a reserve of cash at all times, but remember to have a reserve of cash for any emergencies or unexpected opportunities that come up.
5. BE MEAN TO YOUR CUSTOMERS.
This goes back to point number 2, but it’s so important that we want to reemphasize how essential it is to keep your customers happy and to keep them coming back. Think of it this way, even if a few of them are ignorant, rude, or annoying, they are still customers that can help make your business successful.
6. CHOOSE A POOR LOCATION.
Location, location, location. It’s as true in the mobile food business as it is in real estate. If you want to sell your product, you need to know where to find your customers and aggressively seek out that prized spot.
7. UNDERESTIMATE THE COST OF ENTERING THE BUSINESS.
If you want to succeed, don’t be in such a hurry to enter the food business that you underestimate the cost of starting out. It will always cost you more than you think it will, so wait until you have the capital you need to buy reliable equipment and hire good people.
8. FAIL TO HAVE A SOLID CONCEPT.
Small food businesses, especially trucks, trailers, and stands, don’t have the space or the staff to produce a variety of foods, so it’s essential that you choose one kind of food, or even just one dish, to specialize in. Find your niche, and you will be on your way to succeeding in the food business.
For more information about succeeding in the food business, we’d recommend checking out these resources:
http://foodtruckempire.com/interviews/fail/
http://www.foodandwine.com/blogs/2013/11/22/the-top-3-reasons-food-businesses-fail
http://www.businessinsider.com/why-restaurants-fail-so-often-2014-2
http://online.csp.edu/blog/business/why-do-90-of-restaurants-fail-in-the-first-year
http://www.forbes.com/2007/11/11/restaurant-entrepreneurship-business-forbeslife-food07-cx_pl_1113resto.html
http://www.dummies.com/how-to/content/ten-tips-for-preventing-food-truck-failure.html
BY ASHLEY BAKER
Ashley Baker writes about marketing, business, and insurance for small business owners and entrepreneurs.
Ashley is a former Licensed Massage Therapist. She has a background in writing for state political offices, newspapers and was the web editor for two regional magazine publications. When she’s not writing, she’s spending time with her family, attending college football games or kayaking. Find Ashley on LinkedIn, Instagram, or Twitter.
