So, you want to start a food company?
An easy guide for Food Entrepreneurs
BY Larry Dolley
This manual was brought about by two events, one being a similar but more concise document from Campden BRI (2013) and a push from a stalwart of the food industry (Mr Nick Starke). As luck would have it, a project funded by the Provincial Government of the Western Cape was in progress and this fitted neatly into the requirements of the project.
This could be called the South African version of the Campden BRI document, hence it being acknowledged here! Making and selling food seems to be a reasonably straightforward job. Working from your kitchen, you very likely know many people who make a living out of this type of activity. And you may even know people who have moved out of their kitchen into bigger premises and now have a successful business model.
Hint: Make friends with these people since they will very likely know everything in this manual from experience! However, micro- to large-scale processing is not as simple as it seems. There are many reasons why this is so. However, the main one is that you would be dealing with the health of the public in this business, no matter your size.
So you really want to enter the food industry?
This section refers to some of the questions which, as the Agrifood Technology Station, we frequently ask clients – or they ask us – keeping in mind that we deal with a whole range of people, from those who simply have an idea or a dream to those running successful companies.
Do you have an idea or a product?
An idea is far, far from a product in many instances even though it may seem to be a simple process to convert it to a product. Don’t bank on it as if you are already making money out of it.
If you have a product, are you selling it already?
If so, good. If you only sell to friends who all tell you what a brilliant product it is, wait until you sell it to strangers and then see what independent, unbiased opinion is given. If there is good feedback, you are on the right track! But don’t buy
the BMW yet!
Do you have an identified market yet?
To what type of person do you eventually want to sell your product? Is it low or high-income groups (these are known as LSM categories)? Have you tested this market? Do you have a vague idea of what your product is going to cost at this stage? If not, stick to the VW for the time being.
Legislation, regulation and compliance
Food is regulated through a set of laws (pet food even more so) that are obviously needed to protect the public in terms of safety and value for money. Here are some issues with a good dose of administrative matters.
– Have you decided on a name for your company? If not, you will have to make sure that the name you choose is not already taken. This can be done through CIPC (www.cipc.co.za).
– What type of business do you want it to be e.g. a (Pty) Ltd, sole proprietor or something else?
– You must have a business plan if you wish to apply for loans or other forms of financial support.
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