3 Things To Know Before Starting Your F&B Business
If you’re a foodie who loves to cook, it’s only a matter of time before you start thinking of starting your very own F&B business. It may start as small as selling to your friends and family and eventually grow bigger in time.
You know what they say, “Dreams and passion are more powerful than facts and reality.”
However, we don’t recommend you to follow your dreams without knowledge of the industry. There are many things to consider when running a food business. So many How’s, Why’s, Where’s, When’s that you’ll need to consider.
As starters, here are 3 essential things that you need to know before starting your F&B business.
1. Know Your Numbers!
Being an F&B entrepreneur, it is crucial that you know your numbers! The most important numbers that need to be on top of your list are rental, food, and labor costs
a) Rental Cost
Rental cost is determined by where you’ll be operating your business. A healthy margin we recommend is lower than 15% of the total cost—the lower your rental, the lower your operational cost, the more profit you can make!
However, lower rental doesn’t necessarily mean better sales. Physical restaurants need visibility to attract customers; therefore, they need to be in a high-traffic location to get sales and reach their breakeven point
b) Food Cost
Food cost is also a heavy part of your F&B business. The cost of goods sold for your F&B business should not exceed 30% of your cost.
What goes into your COGS (Cost Of Goods Sold)? That depends on the business itself but mainly would include the cost of ingredients, packaging, and labour.
c) Labour Cost
For various reasons, some F&B businesses prefer to keep the labour cost out of their COGS. If you are separating the two, a healthy percentage for labor is below 30% of your cost.
2. Know yourself
As cliché as it sounds, before starting your F&B business; or any business, knowing the business values and mission is essential.
Answer the big WHY, WHERE, WHO, WHEN, and HOW of your business before you start! With this, you will have a better view of the direction of your business and the path to pursue. Plus, it also makes hiring easier as you’ll know the type of person that fits well into your organization.
3. Knowing your customers
Most F&B businesses fail because they do not know their customers. Take time to actually do your research and learn about your customer avatar.
Researching your customer avatar includes where they are, what they like, what they value, and more. When you know your customers, you’ll be able to serve their wants and needs.
The ability to connect with your customers is essential, especially if you run an F&B business where a huge chunk of your success depends on returning customers.
These are the 3 big things to consider before starting your F&B business. Do you want to start a business without going through the headache and focus only on cooking great food?
We know just the solution for you! Cloud Kitchen!
Cloud Kitchen To The Rescue!
Already know your numbers? That’s great! Here’s how you can reduce your numbers and operational cost even further.
Cloud kitchen offers low rent for F&B business owners without being in high-traffic places. With a smaller space, you’ll only need a maximum of 2 staff to handle all the food preparation processes. Plus, you can operate two different brands in one space and optimise your kitchen’s cooking ingredients.
Need help getting to know yourself and your customers? Look no further, kEATchen can help you with just that! With the marketing support that we provide to our merchant partners, we can help you identify your target market and how to connect with them.
Interested? Reach out to us and book your FREE tour at https://keatchen.my/ today to learn more about our SMART kitchen space and our services.
If you’re a foodie who loves to cook, it’s only a matter of time before you start thinking of starting your very own F&B business. It may start as small as selling to your friends and family and eventually grow bigger in time. You know what they say, “Dreams and…