A marathon not a sprint: creating a new food & drink enterprise
Building your own business is a marathon not a sprint. Your new business will consume most of your time and energy so create something you enjoy and that gives you the satisfaction of ‘a job well done’. Critically, you need to build a business where there is a real demand for your products, a business that can adapt strategically, and one that, if you so wish, can scale over time. Right from the start-line you need to be aware of the value you bring to your existing and potential customers, and you need to have a long-term view. In this marathon, there will be times when you are running fast and times when you are walking. Persevering, and managing your pace is essential.
Some points to consider when planning that marathon of creating your very own food & drink enterprise.
- It’s not all about growth! Micro and SME businesses have a critical role to play in the Scottish landscape. In 2020 micro-enterprises (those employing up to nine people) accounted for 87% of registered businesses – and these businesses represent a larger percentage of the business base in rural areas. These businesses are critical to local economies. They support jobs, enabling people to live and work in their local communities. A thriving small business environment supports community development and is a reason to stay local. Local businesses tend to support other local businesses, so the economic multiplier comes into play supporting the overall local economy.
- This business is for you. Research in 2016 suggested that only 25% of micro businesses were growth oriented. Many micro businesses are lifestyle businesses, where the ambition is to cover personal income targets and that is okay.
- You’ve done your audience homework. You know your target market, have taken time to research the opportunity at both a local and national level. You know the needs of both your customer and end consumer. You have a clear recommendation for your customer.
- You know your key competitors, their products, their positioning or messaging (and how your product is different), and the opportunity in the market.
- You’ve planned your route to market. You have a secure supply chain both in terms of ingredients and distribution. This supply chain is relevant for the target market and is sustainable both financially and also in terms of the market’s environmental credentials.
- You’ve done your sums – make it work for you! Make sure you’ve researched and planned your pricing so everyone in the supply chain can make the margin they need to make – including paying yourself. At the beginning, money is likely to be tight… but always plan for a profitable business. Micro businesses in general have fewer reserves and tend to be financed differently. During crises, sources of entrepreneurial finance tend to fall. So, start-ups are more likely to be hindered. This is important because access to funding is critical to getting any new businesses off the ground.
- You have a memorable name and are building your brand. You know your values and that they are relevant to the current conversation. You have a visual identity for your business, clear and distinct messaging and can begin to build collateral to demonstrate your story and personality.
- You have a story to tell. Micro and SME businesses help to create the patchwork of heritage & culturally interesting businesses that are critical to the local and national economy. Consider where your business fits, capitalise on your local environment and be ready to tell your story on all the available channels, from social to web, podcasts or media - find as many mediums as you can. Your story will set your brand, services and products apart.
- Create a business experience. Food & drink experiences are a great opportunity in Scotland, and a small business relies on good customer relationships. Create those memorable experiences for your customers.
- There will be toil and glory moments. Risk is part of starting your own enterprise, the key is to manage that risk. The UK tends to be a great place for food & drink entrepreneurs with local markets, festivals and regional food group activities facilitating consumer concept testing on a small scale. The continuing interest in local food & drink, food heritage and food tourism means that the public is always keen to try new things.
Recognising the challenges faced by many of Scotland’s micro and SME food & drink and rural businesses, and the opportunities and rewards available to successful enterprises, SRUC and Queen Margaret University have collaborated to create THRIVE – an accessible, relative and innovative programme for entrepreneurs.
Over the last three years THRIVE has helped to create resilient start-up food & drink businesses and has helped many entrepreneurs at various stages of their enterprise development. They often didn’t have huge budgets to support their business development, in some cases they weren’t sure of the specific help they needed but THRIVE helped them to define the gaps in their knowledge, provided insight, supported skills development and expanded their networks. Essentially, THRIVE helped them avoid the typical new business or product pitfalls and create resilient enterprises.
One clear message from THRIVE participant feedback is the value in the opportunity to talk with your peers, learn from each other and take advantage of learning opportunities that come your way. Take a look at the feedback from two entrepreneurs who have already experienced THRIVE.
So why not push yourself out of your comfort zone and consider starting that marathon? Who knows what will happen along the road? It may take a while, but imagine the achievement when you cross that finish line.
Ceri Ritchie
Principal Consultant, SAC Consulting (Part of SRUC)
Posted by Ceri Ritchie on 11/07/2024
