How to Know if You’re Ready for Large Food Production Runs
Have you been producing in your home for quite some time? Are you ready to make the leap to a larger commercial kitchen?
If so, I’ve got some nuggets of knowledge for you.
Making the transition from one kitchen to another is almost always a challenge. Just think about moving homes. You have to get reacquainted with the space, find a new place for everything, and figuring out what changes you want to make (if you can make any at all).
It’s similar to moving your food production.
When you realize you need to make the leap to a larger space, you should be excited, nervous anxious, and well, jumping with joy! It’s a big deal to be the proud owner of a growing food business. Congratulations!
With any growing food business comes growing pains. And sometimes it’s hard to address them all so I put together a quick list to make sure you’re ready to make the leap to full-scale food producer.
1. Larger Cash Investment
It’s no a surprise that moving into a bigger kitchen requires money. How much is the better question. You’re probably talking anywhere from $5,000 up to $250,000 for a full fit-up. Be prepared for the cash sinkhole you’re about to fall into. Make sure there’s enough to not only make the transition, but sustain it, too.
2. Ingredient & Inventory Management
You’ll go from buying 5 pounds of sugar at the grocery store to 50# bags from a food distributor. This takes time, money, and management. You don’t want to buy 300# of sugar when you don’t need it, right? Tying your money up in ingredients is a risky way to try and remain profitable.
3. Greater Pressure to Meet Revenue Goals
A big move means you’ve got more operating expenses than you know how to handle. When you were producing in your house, you had much less to worry about. Make sure you know how many units you need to sell each month to cover your increased costs. And, what you’re going to do to get your revenue back up to where it should be should it take a dive during busy season.
4. Convince Friends and Family
This one is always tough. When you know in your heart you want a bigger kitchen, it can be tough to pull the rest of your family on board. While they probably believe in you, they are taking a lot of risk, too. Everyone has skin in the game. Get your friends and family on-board early so they can help you – not hold you back.
5. New Health Codes & Inspections to Pass
New building. New health codes. Before you step foot into your new space or sign a lease, give your local health department a call. They’ll make sure the building is up to code and you’re able to produce your products. And remember, health inspectors have surprise inspections. This means you can’t “let that slide” anymore. Keep your facility clean as a whistle.
Think you’ve got what it takes to make the move to a bigger facility? Great! Keep pushing forward and growing your food business. Let me know if you have any questions!
4 Comments on this post
on June 11, 2013 at 12:04 am -
Great summary of the issues and risks, Michael. I think that writing up a business and investment plan is essential to see if and when your new business will make it into the profit zone. A few hours spent on this will quickly reveal whether any of these issues will derail your great idea, or reveal what you can do to work around them.
on June 11, 2013 at 12:47 am -
Thanks for the comment and visiting the Gredio blog! You make a great point about the business plan. While I’m not a fan of bloated business plans, a couple times through basic financials reveals a lot!
on March 13, 2019 at 3:51 pm -
I’m looking to do a dry packaged beverage company, would this be something that I could create in my own kitchen or would I need manufacturers for this?
on March 17, 2019 at 12:50 pm -
I’d use a manufacturer simply to avoid hand-weighing your mixes and for consistency.