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Posts tagged ‘start a food business’

Nov 15

Ever Wondered What It Takes To Start A Food Truck Business? Part 2

This is a multi-day article about the road a new food entrepreneur has taken to get his food truck started.  Click here to read this article from the beginning.

start a food truck businessIan left Portland and headed back to Seattle where his family is from and found a job as a butcher at Whole Foods.  This was the first official culinary position he’d ever held and as a butcher he was basically making a third of what his financial advisor paycheck had been.  “The money wasn’t the important thing,” Ian says.  Read more

Aug 9

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Is Now Really A Good Time To Start A Business?

Ugh!  That’s really the only word to describe the financial markets yesterday.   With everyone predicting the end of the world as we know it, you have to wonder why anyone in their right mind would think of starting up a business right now.  With the entire global financial market on the verge of a nervous breakdown, is it really a good idea to start a business.  Truth of the matter is that now is actually a great time to start a small business – if you do it right.  

 Unemployed or Underemployed? Employ yourself! – Unemployment is hovering around 9.2% and that doesn’t even take into account those who are underemployed.  If you’re looking for a job right now, or looking for a job worthy of your skill set and background, you know that it’s brutal out there and every resume you send out seems to go into a giant black hole.

 While it may seem crazy to start a business in an environment like this, it may actually be better to put yourself to work rather than waiting for someone else to give you a job.  Use the skills you have and those business ideas you used to fantasize about while sitting in your office cube to good use and do something for yourself.   Not to mention that a small business – food or otherwise – can be a source of income and it shouldn’t necessarily prohibit you from looking for a job.   In fact, showing that you have the wherewithal, gumption, and mental fortitude to start a business while unemployed, regardless of its size, may actually help your resume float to the top of that next pile.

 One of the great unemployed-to-small food business success stories is that of King of Pops.   When the founder was downsized from AIG in the first part of the Great Recession he literally turned lemons into lemonade – or more correctly, into juicy delicious fruit ice pops known, inCentral America, as paletas.   What started as one cart and a way to bring a little extra cash into his pockets has turned into one of the most successful mobile food business operations in theSoutheastern United States.

 Employed but nervous about your next paycheck?  – If you’re worried that your company might be considering a round of layoffs of if it’s already been explained that there will be no pay increases in 2012, starting your own small business is a way to take control of your own financial situation and try to bring in additional money.  In this case, a part-time business like a farmers’ market booth or a small wedding cake business can be a way for you to work your regular 9-5 (who are we kidding – it’s more like 8-6 these days!) and start up something of your own on the side.   In addition to being a source of additional revenue, a part-time business can be expanded to become a full-time business if you’re one day callously handed a pink slip under the guise of “corporate cost cutting.”   As I always like to say, no one can ever fire me from my own business and when things are this uncertain that’s a very empowering feeling!

 Being Small Is Feasible and Powerful! – Unlike other business models, a small food business can be started with minimal money.  Startup costs obviously vary depending on what type of business you plan to start, but thinking small in these times can be a benefit.  You may have always dreamed about starting a bakery, rather than go into debt to finance that consider starting smaller with a baked goods booth at a festival or other event.  If you’ve always wanted to open up your own restaurant rather than trying to get a loan for hundreds of thousands of dollars, take a look at food trucks instead.  In both those cases you can start your dream food business on a shoestring budget, build a customer base, and, when the economy improves, use that as a springboard to grow your business into something bigger.  You may very well be the next Microsoft (which started during the recession of the 1970’s) of the food world and the skills you learn now about keeping a tight rein on the budget will be a huge benefit regardless of how big your business one day grows.  

This Is A Great Time to Hire Outsourced Help – No matter how big or small the business you’re planning is, there are some key fundamentals that you should have in place when you launch including, at a minimum, a well-designed logo, packaging (if that is needed for your business), and a website.  Of that 9.2% of people who are out of work, there are a multitude of unemployed graphic artists, web designers, and other skilled professionals who are anxious for work.  While I always advocate paying people fairly for the work that they do, anyone you hire to help with outsourced tasks may be willing to negotiate their rate based on what you want and how much you are willing to pay.

There Is Still A Large Focus On Buying Local – One of the best things to come out of the ‘last’ recession of 2008 (we are not technically in a new recession, which is two quarters of negative growth, but to many it may already feel like we’re in another or, in some cases, the first one never ended) was the focus on buying locally-made products and locally-sourced ingredients.  If you live in an area where “buy local” is an important factor in people’s buying decisions, this can help propel your small food business to success.  Historically in recessions, people crave basic comfort items which explains, in part, why pie became so popular during 2008-2010.  If you have an idea that harkens back to a simpler time and is made from locally-sourced ingredients you may just be sitting on the next big food trend idea!

Without a doubt, starting a business – be it big or small – is always a bit of a gamble and there is absolutely no guarantee that you will make money.  That is why developing a business plan  before you start is so important.  However, if opening your own small food business is something you’ve always dreamed of, this may actually be a great time to jump in and give entrepreneurship a try.

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Aug 8

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Accounting Is Key To Small Business Success

When the stock market dropped 500+ points last week, it didn’t matter if you had money in it or not to make you start worrying about what our economic future holds.   For that reason, I want to spend some time this week talking about what current food entrepreneurs and aspiring food entrepreneurs can do to best position themselves to survive whatever tomorrow brings.   Check back tomorrow for a post about whether now is the right time to start a small business and Wednesday, Thursday, and Friday of this week I’m working on posts about what small businesses can do now to prepare themselves in these uncertain and shaky times.

But first I wanted to start with a little refresher course in Cost Accounting.  I would be lying if I said that I’m an Accounting wiz.  Infact,when I was in business school I struggled to get through the mandatory accounting class that’s required of all students and, walking out of the final bruised and beaten, I swore that I would never again take another accounting class.   My husband, horrified by the prospect that someone could earn an MBA with only one accounting class under their belt, more or less shamed me into taking a Cost Accounting class saying that it was the basis of small business ownership.  I don’t know whether it really was the prospect that Cost Accounting would be so important to the business plan I was working on or simply the fear that for the rest of our lives together he would always argue that his business school was better than mine (business school competition is fierce – even within the same household!) so I grudgingly signed up for the class.   This is where I will publically declare that my husband was correct.  Cost Accounting really is business accounting and it has been critical in every step of my own small business.  

The New York Times has a wonderful article in their Small Business Section about several key aspects of Cost Accounting that every small business owner should know.   Take a moment to read it (don’t think I didn’t hear that groan that just escaped you!) because it just may mean the difference between success and failure.   Just like my husband said – you’ll thank me later!

May 26

What I Plan To Do With My Summer Vacation

When I was in highschool the teachers used to ask each of us on the last day of school what our goals were for the summer and what we hoped to achieve over the next three months.   There were always a range of ambitious answers from “complete all my college application essays” to “read Shakespeare’s entire collection of work.”  Then Labor Day would roll around and we’d sheepishly admit that none of what we had hoped to accomplish had actually gotten done.  But didn’t our new tans look good (tans we would regret 20 years later when they came back as wrinkles!).

With Memorial Day weekend here in the States being the unofficial start of summer (can someone please let the weather in the Pacific Northwest know that summer is supposed to be here!), I’m going out on a limb to tell you my summer goal.  I can’t use the word vacation since I, unlike highschool kids, don’t have the summer off and in fact my nonprofit job kicks into high gear in the warmer months.   Regardless, my goal is to have a new book completed by Labor Day.  It won’t be finished and ready to print, but I’m working on having it completely written and in the “editing” phase by Labor Day.   I don’t want to share too much other than it is a small food business book and it’s about a topic that I get asked about constantly.   Since one piece of feedback I received from my first book was that people loved reading the ‘How They Got Their Start’ stories about real food entrepreneurs, I’m in the process of interviewing a whole new set of food entrepreneurs who will be able to share their real-life experience with readers. 

It’s a lot of work but it’s a topic I’m passionate about and I look forward to getting all these thoughts that are running around my head down onto paper.  This means that you may notice, from time to time, fewer posts here if I’m well immersed in the book.  But I will share bits and pieces of the interviews with you here as there’s nothing I love more than sharing stories about food entrepreneurs.   Of course if you know of a food entrepreneur who just knocks your socks off – perhaps they have a unique business model, they offer a product unlike any you’ve seen before, or they’re just an amazing person – I’d love to know about them to see if they might be a good fit for the book.

May 10

Pop-Up Food Businesses

Pop-Up restaurants, a restaurant that opens in a under-utilized space such as a dinner pop-up in a breakfast joint, are on the rise.  While Pop-Ups have to adhere to the same stringent health codes that normal ‘everyday’ restaurants have, it’s an interesting concept if you’ve always dreamed of trying your hand at the restaurant trade.   Check out this great article for more on pop-up restaurants.

Apr 26

Gremlins In The Kitchen

Most days working in a commercial kitchen is enjoyable.  It can certainly be tiring being on your feet all day but it’s fun to be creative and make something by hand that others enjoy. 

And then there are those days, like yesterday for me, when Gremlins show up.   Gremlins are to blame when burners don’t work, ovens won’t hold heat, and chocolate suddenly siezes without warning.  Gremlins are  reasons cookies burn and dishwashers malfunction.  And even if you don’t feel it, Gremlins are the ones who push you so that you drop a 25# bag of flour all over the floor.

I’m absolutely exhausted after a full day in the kitchen but can’t say I actually got anything accomplished yesterday.  I certainly tried but those darn Gremlins kept getting in the way.  Do you have a favorite Gremlin story?

Apr 21

Sticking With Eco-Friendly Labels

Labels can make or break a product.  A beautifully-designed logo goes to waste if it isn’t out in front of your customers which is where labels can come into play.  A label on any type of box or bag will help customers identify you company and they’ll start to associate that logo with your delicious goodies.   While at first you may choose to simply print your logo on stock labels you purchase from an office supply store, when you’re at the point where you’re selling more and more products it makes economica sense to have the labels professionally printed.  If you’re looking for an environmentally-friendly option you definitely need to check out Label Impressions. 

A southern California company, Label Impressions are on the forefront of eco-friendly labels.  Did you know that there are tree-free labels that feel like silk but stick like traditional labels?  Did you know that you can make scratch-and-sniff labels?  Honestly, the options they have available are a little overwhelming but the good folks at Label Impressions can walk you through all of the choices so that you can find a lable that’s good for the environment and in line with the brand image you’ve developed.

Apr 18

Eco-Friendly Food Packaging

I didn’t mean to have two theme weeks back-to-back but with Earth Day this Friday it seemed like the perfect opportunity to talk about eco-friendly packaging options.   Depending on what and how you sell your food, packaging can say a great deal about your company and can add to your brand.   And whether ‘natural’ is a part of that brand or it’s simply something you want to incorporate into your business for the good of the Earth, the good news is that there are more eco-friendly food packaging options then ever before. So in honor of Earth Day, I’m going to highlight four eco-friendly food packaging providers:

  • Tuesday April 19: Vegware – the makers of eco-friendly take-away boxes, cutlery, and plates/cups/etc;
  • Wednesday April 20: NatureFlex – the maker of the only biodegradable cellophane bag that is carbon-neurtral to produce;
  • Thursday April 21: Label Impressions – the only US manufacturer of eco-friendly labels;
  • Friday April 22: We’ll tie the whole week up with a look at Cream City Ribbon’s biodegradable ribbons. 

These are by no means the only eco-friendly food packaging providers out there but the goals of the week are to  provide an overview of the different options available and a starting point for anyone looking for eco-friendly food packaging.   It should be noted that none of the above companies are paid placements.  I know about these companies because I or other food entrepreneurs I know use their products but none of these are paid reviews nor did I or anyone affiliated with this site receive free product in exchange for a review.

Apr 14

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Guest Post – How Do You Know When It’s Time To Hire A Bookkeeper?

If you’re scrambling around today trying to finish up your personal taxes and get them to the mailbox before the stroke of midnight tomorrow then the last thing you may want to deal with is also filing business taxes and keeping your business accounting books up-to-date.   Even if your taxes have been finished for months, doing your own business bookkeeping may not be one of those responsibilities that you love or have time for when it comes to owning your own small business.  

Today, I have a guest post by Jessica Reagan Salzman of Heart Based Bookkeeping that provides some guidance to small business owners as to when they know they’re ready to hire a bookkeeper.   In addition to this article, Jessica’s site is a wealth of bookkeeping resources to any small business with numerous informative articles on the topic and well worth your time to check out.   Jessica also has a monthly e-zine, Problems Into Profits, that you can subscribe to with even more helpful bookkeeping tips.

How Do I Know When It’s Time To Hire a Bookkeeper?

A friend recently asked me a question that you might have pondered from time to time as well.

“How do I know when it’s time to hire a bookkeeper?”

There are lots of things to consider when making this decision, but I think there are three initial (and simple!) questions you must answer as you evaluate whether or not it’s time for your business to work with a bookkeeper.

1. Do you enjoy doing the bookkeeping?

If you enjoy doing the bookkeeping, that’s great! One of the perks of owning your own business is that you’re the boss and you get to decide what you do or don’t work on from day to day within your business. So if you’re enjoying the tasks associated with keeping the books for your business, that’s great!

You might benefit from working with bookkeeper to obtain training or get some of those pesky bookkeeping questions answered. I find that most small business owners who enjoy doing the bookkeeping themselves still find that they have a few questions each month they can’t quite figure out on their own. A partnership with a bookkeeper can come in handy in this situation. Also, training can often help you to speed up the time it takes to do the bookkeeping. So you can keep enjoying the work, and you can enjoy spending less time on it too!

Years ago I began working with a solopreneur, a chimney sweep, who really enjoyed keeping the books by hand on a monthly basis. However, he was finding that his manual system was simply taking far too much time each month and he was starting to spend less and less time on marketing because he preferred the satisfaction he felt when he finished creating his monthly reports (again, by hand!) each month.

So we swept in and trained him on QuickBooks. After a few short sessions, he’s reported that not only is he able to process his books faster, he’s finding that he enjoys it even more now that everything is computerized, because with a few clicks of the mouse button, he can generate all sorts of reports that he never had before! And he can actually see the results of his marketing efforts in concrete ways, which is leading to more satisfaction with his marketing efforts as well!

2. Is the bookkeeping up-to-date?

Another important matter to consider when keeping your own books is how often are you keeping them. When owning a small business, there is never a shortage of things to be done. Certain things consistently take top priority – working with paying clients, marketing to ensure you will continue to have a steady stream of paying clients, and other critical tasks that simply have to happen regularly in your business like returning phone calls and reading/replying to e-mails. Unfortunately, for most small business owners, bookkeeping ends up being one of those tasks that you’ll “do tomorrow” and that tomorrow just never seems to come!

If you’ve found that by doing the books yourself, the books just aren’t getting done, it’s definitely time to investigate what it might mean for your business to work with a bookkeeper. Contrary to popular opinion, there are many different ways to work with a bookkeeper and a professional bookkeeping service will never try to “sell” you something that’s more extensive than you really need. Perhaps you just need a little assistance getting caught up again. Perhaps you want to have your books handled quarterly. Or maybe you are ready to let go of this task that never seems to leave your perpetual to do list! Whatever the case might be, falling behind with the books is always a good sign that it’s time to consider another approach!

I just recently completed a large back-work project for a new client, a professional photographer, who had become so busy in business that her books hadn’t been attended to in over a year! One nice thing about success in business is that you often get to focus on doing the thing you love, almost exclusively! That was the case in this small business. The owner was now able to spend almost all of her time focused on billable work, staying out in the field for weeks on end, to the extent that her office suite mates mentioned that they might not recognize her if she were to walk into their shared office space!

It’s a great thing to be super busy in business, working on the things you love to work on. But as this photographer realized, the key is to outsource the tasks that you don’t have time to do yourself, that way everything is getting done, regardless of whether or not you’re the one doing it all! Plus we immediately uncovered a lot of hidden gems in her year’s worth of books and made suggestions for improvement that she’s been able to effortlessly implement, which has led to quickly realizing some great gains in her business.

3. Is the bookkeeping helping you grow or improve your business?

One of the most overlooked aspects of bookkeeping within small business is the benefit of keeping the books. If your bookkeeping system is not helping you grow or improve your business, it’s time to take a magnifying glass to the situation and see what we can sleuth out of it! An accounting detective can help you sort out what is and isn’t working within your current approach to keeping the books. Perhaps you would like to learn about creating and reviewing financial reports so you can better understand the story of your business’s numbers. Perhaps you’d like some professional feedback about how your business is (or isn’t) doing each month.

Regardless, the key to getting the most out of your business is knowing what’s happening so you can keep on doing the things that are working and quickly work to change the things that are dragging your business down. So if you’ve been diligently entering the data each month and still don’t know what’s up within your business’s finances, partnering with a good bookkeeper can make a world of difference in your business! It just might be the missing piece of the puzzle that you can easily pop into place and complete the bigger picture!

I’ve witnessed this problem in small and micro businesses far too frequently. Just last week I spoke with a woman who was spending hours upon hours each month, handling her business’s books, oftentimes at night, after her children had gone to bed, when all she really wanted to do was curl up on the couch and spend some time with her spouse. But she knew that it was important to keep on top of this task, so she was diligent and focused and got the work done. When I asked her what she had to show for her hard work, she paused and there was an extended silence on the line. After almost a minute, she replied, “You know what? I don’t know! I don’t think there’s much to show for my efforts! I mean it’ll be easy to do my taxes, but that’s about it!”

So I requested the opportunity to review her books and provide some feedback, both based on my own analysis and by providing her with our Story Behind the Numbers Report. After a brief review of the books she had so diligently prepared, I was able to uncover hidden gems within the numbers.

Based on our feedback, she quickly took steps to cut over $300/month from her business expenses. This information was always available to her, she just hadn’t known where to look! So a simple shift in how she was approaching this aspect of her business is now saving her a bundle! That’s money she can now invest in a monthly bookkeeping service (which her spouse will really appreciate, since he’s been craving some couch cuddle time)… All in all, a win for her, a win for her business, and a win for her family!

So take a moment today and answer these three questions for yourself and your business:

Do I enjoy doing the bookkeeping?

Is my business’s bookkeeping up-to-date?

Is the bookkeeping helping me grow or improve my business?

And you’ll be that much closer to answering the question of “how do I know when it’s time to hire a bookkeeper?” within your own small business!

Reprinted with premission from Jessica Reagan Salzman.   Click here for more information about Heart Based Bookkeeping or to contact Jessica and her team.

Apr 13

Is Your Business A Business Or A Hobby In the Eyes of The IRS?

Not long after I was married my husband’s accountant, who was responsible for filing our personal taxes, asked me point-blank if my business was real or not.   Having just dedicated what felt like my life and soul to getting the business up and running I just about hit the roof when he asked that.  How could it not be real?  I was working like a madwoman frantically – albeit unsuccessfully in Year 1 – to turn a profit.  But real, of course it was real!

 As the accountant calmly informed me, the Internal Revenue Service (IRS) has a different definition of what constitutes ‘real’ then you or I may have.   No matter how hard you work, there are certain hurdles the IRS wants to see small startup businesses crossing so that they can be confident this is a business you’ve started with the intention of making money and not simply a hobby.   Why all the fuss?  For Partnerships and LLCs any profits the business makes flows through to the shareholders so the shareholders report that money on their personal taxes and pay the IRS accordingly.  Along those same lines though, any losses the business experiences also flows through to the shareholders which can be used to offset income earned elsewhere.   Understandably the IRS doesn’t want you to create a “business” that has no intention of ever making money simply as a way to increase your deductions.  Hobbies – regardless of how much money you put into them – should be done on your own dime according to the IRS.

 The most straight-forward way to prove to the IRS that your business is in fact focused on making money is by showing that the business has been profitable in at least three of the last five years including the most current year.  Straight-forward yes, but not always easy to accomplish especially if you’ve just started a business and don’t have five years of tax returns.

 In this case the IRS will look at how you conduct your business and whether it’s done in a businesslike manner.  This may sound highly subjective but by doing things like registering your business, keeping up-to-date accounting records of all your transactions, and by keeping separate bank accounts for the business you will go a long way in proving to the IRS that you are running the business with the goal of turning a profit.  You should also show measurable improvement year-over-year to show the IRS that you are working to get your business towards profitability even if that doesn’t happen in the first several years.  Showing a decrease in losses every year will illustrate that you are working towards profitability and help keep your tax return from drawing unwarranted suspicion.   

More information about the IRS definition of business vs. hobby can be found here but, as always, if you have questions about taxes you should consult a certified accountant.

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