Are you interested in venturing into the food business market but skeptical about the investment costs? Would you like some affordable and modern food business ideas? How about some tips for starting a small food business? In any case, first-time food business owners should focus on smaller and more achievable goals.
For instance, you should focus on cost-effective avenues instead of investing in physical restaurants. Operating a brick-and-mortar restaurant can cost between USD 175,500 and USD 750,500. However, it depends on the concept, food items offered, management, and location.
In 2022, the food service industry was worth USD 2.39 trillion. Hence, it proves the popularity and competitiveness of the market. That is why you should invest in unique and cost-effective food business ideas. In this blog, we will discuss the benefits of choosing some underrated ventures.
Approximately 51% of restaurants shifted to virtual or ghost kitchen avenues. The main reason was the dwindling dine-in activities. In 2020, there were more than 1,500 ghost kitchens.
Of course, ghost, virtual, or cloud kitchen trends are growing due to their low cost and low-risk nature. You can run more than one restaurant under a single brand. Moreover, ghost kitchens do not require minimal investment, making them the perfect option for new food startup founders.
You can expect to spend USD 5,000 to USD 10,000 to start the cloud kitchen. It involves the staffing, inventory, premise, equipment, utility, and license costs. Some believe that people are ditching the traditional restaurant experience for virtual kitchens. Moreover, you can expand these business ideas to multiple locations with minimal investment.
Remember to choose a business model that fits your needs and kitchen requirements. An inventory management software would be the most crucial tool for ghost kitchens. With this, you can track your product inventory in real-time. It helps you generate reports, monitor inventory in different locations, and offer a digital order history.
According to CheddrSuite, this user-friendly computer software can help streamline business operations, save costs, and ensure scalability. It will come in handy when your customers order food online. For instance, you can categorize or keep your inventory in check to anticipate demand and plan ahead.
After the pandemic, 85% of Americans altered their food habits. For instance, they are more aware of fresh produce and healthy snacks. Moreover, online food ordering traffic has seen a 300% increase in the last few years.
People prefer ordering out after a long day at work. Only 10% of Americans love to cook. However, they look for meal kits, pre-packaged snacks, and weekly meal services. That is why a home-cooking startup idea can help you gain exponential growth in the coming years.
Are you an experienced chef or a cook with over ten years of experience? In that case, a home-cooked food business is perfect for you. A meal delivery service from your home can cost between USD 80,500 and USD 183,000.
You can be the sole proprietor of this venture or partner with a restaurant for better reach. All you have to do is buy the products, cook them at home, package them, and deliver them to your customers.
Everyone loves home-cooked meals. Therefore, you can use your knowledge, exposure, and experience to build a business from your kitchen. It is a low-risk investment opportunity. Moreover, enhanced online delivery platforms and food technology services have made it easier to start this food business.
Statistics suggest that 60% of new food businesses fail within their first operational year. The main reasons include inexperience, inadequate location, disorganization, lack of marketing, improper pricing, etc. However, your low-investment business will thrive if you have a singular goal.
Take a look at the following tips to help you start such a food business venture:
- Find your niche and stick to it for the first few months
- Research your state’s food laws and source ingredients locally
- Decide on your business goal, type, and model
- Build your brand name through food business marketing
- Do not forget an inventory management tool
- Choose a sales channel and price your food products
- Keep a check on the numbers and reviews from customers
You need to decide what food product you want to sell. For instance, you can initially focus on baked goods and slowly transition to pre-packaged snacks or homemade organic food.
Consequently, the initial stages involve validating that product and developing a business plan. After that, you can start building your brand and online presence.
Any food business will have a high margin if the startup founder has the proper skills and determination. At first, sales will be slow. But you will soon learn from new experiences and change your business model.
Either way, you must look for telltale signs of potential food business failure. For instance, an increased turnover rate, bad reviews, and food quality issues are all signs.
Remember, the best-selling food items address a common pain point. For example, you can sell gluten-free food since 25% of Americans follow that diet. Your business model or venture can be a ghost kitchen or a meal delivery service.