The following is a list of the basic steps in starting a specialty rural food business. While each specialty food business is unique and subject to specific product requirements, the list outlines the overall process.
The steps are grouped by topic, and each topic affects the others: your product type and packaging affect your labels; the ingredients to make your product affect your cost and production plans.
THE PRODUCT
1. Develop a prototype.
Test it out on family and friends. (You may need to have an approved process for making your product before testing it out on strangers . See Step 5.) Collect and incorporate feedback on flavor , texture, and appearan c e .
2. Determine the market form you would like the product to have (shelf-stable, refrigerated, frozen, baked, canned, etc.).
3. Determine the batch size you will need for commercial operation. A good start- up size for a liquid product (dressings, etc.) is 5-10 gallons. For a solid product, consider a 15-25 pound batch.
4. Consult a Process Authority to scale up your recipe. Consider:
a. The formulation may change due to regulatory and food safety requirements.
b. Testing (pH, water activi t y , etc.) may be required to comply with regulations.
c. It may take sever al attempts to achieve a scaled-up product comparable to the original. Ingredient amounts may not change proportionately. For example, you may double the tomato sauce in a BBQ sauce recipe, but find you only need to slightly increase the amount of garlic.
5. Get approval for your recipe from a Process Authority. The resulting document, a Scheduled Process, will help insure product safety and quality.
6. Determine the cost of ingredients based on your approved, scaled-up recipe.
BUSINESS PLANNING
1. Write a Business Plan to help focus your business goals and determine if you need funding.
2. Consider liability insurance.
It is affordable and can protect personal assets in the event of a problem with your product.
3. Determine what form your business will take.
4. Register your business with the state and county. Submit a completed DBA (Doing Business As) form.
5. Get assistance from business resources: state agricultural departments, state extension organizations, SBDCs, SCORE, NECFE, local economic develop- ment agencies.
LABELS
1. Decide on a product name.
2. Determine applicable regulatory requirements. Ask state regulatory officials for help or contact NECFE. Consult the FDA Food Labeling Guide.
3. Determine what storage information must be on your package (refrigerate, refrigerate after opening, etc.).
4. Choose a label size and shape that is compatible with your packaging.
5. Put as much thought into your labels as possible. They are the first thing customers will see.
6. Make test labels for small, initial batches on a computer printer to cut costs.
7. Decide if you wish to make health or nutrition claims. If you do, your product must undergo nutritional analysis, and you will invest time and money for FDA compliant nutrition labeling.
8. Decide whether or not to invest in bar coding. The registry fee is $500, but most large stores and chains will not consider your product without one. If you do not plan to sell to large distributors, you do not need one.
MARKET DECISIONS
1. Write a Marketing Plan.
It is a framework for research on competition, ceiling prices, target markets, etc., and structures your marketing goals and methods.
2. Decide where you will sell your product.
Generally, start off small (farmers’ markets, fairs, road-side stands, etc.). These are also good places to test mar- ket your product.
3. Determine a selling price for your product, taking into account the compe- tition and your financial needs.
4. Develop a distribution method (your car, the mail, a fellow specialty food entrepreneur, distributor, broker, etc.).
PRODUCTION
1. Decide where you will produce your product (commercial kitchen, pilot plant, co-packer, etc.).
2. Find storage space for ingredients, packaging, and the final product.
3. Schedule time with experts at the production facility to learn about equip- ment.
4. Determine when, based on ordering supplies, you can produce and pack- age product.
5. Schedule time at a processing facility to produce your product.
