This apply to most businesses, not
just specialty or natural foods businesses. Comments
are the collective input from Deb Mazzaferro’s
network in the specialty foods arena and have been
condensed for easy reading.
Not pricing correctly
right out of the gate. Not enough room for
suspect distributor charge backs, deductions, or
enough room to market and promote.
Not having a business
plan. Components include:
Defining your target
market
Recognizing, comparing
and defining your products and prices to
your competitors.
Being aware of FDA
rules and regulations.
Understanding your
COGS (cost of goods sold) and gross margin.
A launch strategy and
marketing plan.
A cash flow analysis
realistically defining sales projections and
the expenses associated with them.
Being undercapitalized: it
takes money to research, develop, launch,
promote and build your market. If you don’t
think about this and plan for it you may end up
with your home equity gone, credit cards max’ed
out and no money to finance that big order when
it finally comes in.
People fall in love with
their product and thus do not think clearly when
getting into the business.
Understanding how to work with
and manage brokers and distributors. They don’t all
cover every channel of trade. Know where you you’re
your product to be and then hire the appropriate
contract sales team to get you there. You should not
abdicate the responsibility for your sales to anyone,
but remain open and curious about how to get your
goals met.
Taking small orders that end up
costing more than you make and not putting minimums of
things.
Not having a good accountant,
financial partner, bookkeeper: not keeping good
records
Not having the right people
working for you: hire good help to compliment your
strengths and offset your weaknesses.
Using up all the profits.
Changing packaging too often.
Not changing your prices when
needed.
Chasing unfeasible product
concepts.
Not using a coach, mentor or
other business pro as a sounding board.
Not recognizing that the word
"specialty" doesn't have to make it the highest
priced items on the shelf.
Forgetting that sampling is the
best way to gain a customer base....it's food....not
jewelry....that we sell - make enough product for
sufficient sampling.
Not joining the NASFT.
Not forming a network with other
specialty food manufacturers, brokers, sales reps.
Knowledge is everything!
Don't grow so fast that you
can't keep up with the consumer demand and thus ends a
business that could have been triumphant rather than
bankrupt.
Not checking State laws
regarding some ingredients in products, i.e., liquor
percentage.
Being in business with family
without a legal agreement, making concessions for
family members.
