Is the Cottage Food industry becoming the new part-time gig industry? It’s no secret the COVID-19 pandemic has had a huge impact on the ability of many consumers to find work.
While the public is waiting on an instant snapback from a virtual existence, good-paying jobs are not materializing as quickly.
Cottage Food Gig Economy
The cottage food industry is not without its challenges.
- You can work from home (in most cases).
- You can sell to people in your community.
- The products sold are non-potentially hazardous.
Stop! Before you jump in with both feet, there is something you need to know.
We all have to start somewhere in the cottage food industry. Knowing where you want to go is important.
Think about what drives you. What is your motivation? Why do you want to start a food business and from your customer’s standpoint “What’s in it for the customer?”
How will a potential customer benefit from your product/service?
The key to having a successful cottage food business is to first, “just start.” Everything does not have to be perfect. Learn, and follow the food production rules and regulations and take your product to market. See what consumers are saying about what you have to offer. Initially, the start-up is the time to test and learn. Pivot when necessary and test again.
It takes time to “hit the nail on the head.” You will need to practice, and make mistakes. This is how you learn. Listen to your customers.
You can do months and months of research and get out in the marketplace and consumers end up hating your offer. As quickly as possible get a representative read of how folks feel about what you have to offer.
The key is not to be super proud of what you are doing. But to meet the needs of the consumer and offer them the value they are seeking.
When starting your cottage food business strive to make it scalable.
Do cottage Food Operators offer customer lifetime value?
- How much is your customer worth, both revenue and margin depending on your business model?
- How much will you generate from a customer over a given period of time?
- How much will you make from the customers before you acquire the customer and how much you will make from that customer over a given period of time?
For example, if you sell hot sauce and your customer only buys hots sauce twice a year, the amount you make overtime may not sustain your business unless you are selling thousands of bottles.
Substitute that food product for a seasoning used for cooking that may need to be purchased 4-5 times a year depending on the product size and you can quickly see how the customer sales become more valuable, sustaining your business even more over time.
It is not only important to think about how you acquire customers, but also how you improve the business so it is operating more efficiently. Today’s small business owners must have a big vision and long-term goals. Business is like running a sprint, not a marathon,
Have a strong focus on brand – this is the customer experience. Customers are going to do a lot more research than before, seeking out those products and services that give them exactly what they want.
If you are going to build a business that is scalable and sustainable you must create a great customer experience. You are then building a stronger business because you have the customer experience in mind at every turn.
Stop working in the business and start working on the business. (Busy work is not productive.)
Enhance the team you’re building.
You must have a team-machine. You cannot operate for long being a one-man/one-woman show. Develop a team of professionals that can help you scale and take you where you want to be.
Building a team means investing in your business. It can be scary but it is hard to be a one-person machine operator. When the machine breaks down, everything stops until it is repaired.
- How do you know when it is time to ask for help?
- When do you plan to hire an employee?
- What will that mean to your business?
These are all questions that will assist you in scaling your business and increasing your earning potential. Avoid operating in a vacuum. You deserve to surround yourself with quality people willing to support your business goals.
Got Grit? Are you developing stamina and perseverance? It is essential to your success.
The reality of operating any business is that:
- Business is hard.
- You will have setbacks.
- There will be challenges.
- Haters will cross your path.
- Personal and Professional setbacks are inevitable.
- Building business muscle is essential.
If you are interested in learning from other food entrepreneurs, join the Foodpreneur Institutes private Facebook page, Foodpreneurs Online. We have the answers you need to move your business forward!