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Get Out Of Your Kitchen!

“Another batch?” my mom asked, almost in despair. What she really meant was, “What in the world are we going to do with more fudge?”

With another pound of fudge in the works, I was going through the inevitable ritual of any first-time food entrepreneur: perfecting my recipe. I felt like I was oh-so-close to perfection… about five pounds ago. I had eaten so much fudge that it all started tasting the same: I began wondering if the most recent batch was even better than the original! But I accepted it, as I knew that the first step in any food business is to figure out what you’re going to sell. Right?

Wrong. Very wrong. Please allow me to present to you a new first step in your food venture. Let’s call it Step #1: Get out of your kitchen!

A Cautionary Tale

When we first launched Forrager (our former online marketplace), it was almost perfect. We had poured over every little detail to make sure our new marketplace was just right. It took almost a year to get it ready for the world: it was beautifully designed, feature-rich, and… a complete waste of time. After months of nearly zero traffic, we finally shut the site down and replaced it with our thrown-together educational site, which is what you’re looking at today (fortunately it’s somewhat more polished now).

What went wrong? Why didn’t anybody use it? I’ve pondered these questions for years. I’m currently reading The Four Steps to the Epiphany, by Steve Blank, which is exposing some of the flaws in our original philosophy. One of his key points is that he does not define a startup as a business; rather, he defines it as an organization that’s searching for a business model.

I used to think that an entrepreneur’s job was to create a product and sell it to customers, then rinse and repeat. That’s what we tried to do with Forrager: we created an awesome (we thought) website, then stuck it in front of cottage food operations and said “Here you go… use it!” But in that year-long development process, did we ever ask CFOs what they wanted to buy? Did we ever listen to them? Never.

Your Kitchen Is A Dangerous Place

I hear from prospective food businesses all the time who haven’t started yet but are “perfecting their recipes” or “trying new combinations”. And I completely get it… working on recipes is fun! Experimenting, trying something new, and creating deliciousness are all the easy parts of starting a business. It’s instantly gratifying to have family and friends lining up for free taste tests. But unfortunately, you might not be doing your business any favors.

When you are in the kitchen, you’re closed off from your customers. If you have never sold your product, then you don’t have sufficient proof that there is demand for it in the marketplace. At best, you are making an educated guess that it will sell, likely based on fans who have always eaten it for free. Steve Blank likes to call “business plans” what they truly are: “business guesses”. If you are spending time improving one of these unsold and untested products, then you are skipping Step #1!

I realize that you need to spend some time preparing food in your home, but ideally, you will spend as little time as possible in order to prove your business concept as quickly as possible. I propose that you reduce your price if you feel like your product isn’t ready for primetime yet. For instance, if you would sell your tweaked and optimized apple pie for $30, try selling your current recipe for $20. The goal is not to make a lot of money… the goal is to find a business model that works by proving that enough people will buy an apple pie / sourdough bread / {your creation here} from you for a reasonable price.

When you have proven that your food product is definitely something that enough people are willing to pay for, then you head back into the kitchen and make it the best that it can be.

Cottage Food Laws Don’t Always Help

A primary goal for most cottage food bills is to remove much of the red tape that makes it so difficult to start a food business. Some states have been successful, but in others, getting started is a lengthy process. States like Washington, New Mexico, Pennsylvania, Montana, and North Carolina require detailed application processes that are difficult (and expensive) to change. Some counties in California also require CFOs to submit every single label variation for their products before they even start their business.

While the aim of those application requirements is increased food safety, the reality is that this makes startup failure much more likely. In the early days, it is absolutely critical for entrepreneurs to be able to adapt to the marketplace as they learn how to meet its needs. Deciding which products will be successful before you start a business is like deciding who you will marry before you even start dating!

In states that make things difficult by requiring labels in advance, I suggest testing the waters by doing some sales before getting your license. Yes, I know that’s technically illegal (UPDATE: here’s a legal way), and yes, I can only recommend this because a) I am not a lawyer, and b) I am not giving you legal advice. But I simply do not know of any way to mimic a consumer’s true commitment to your product, aside from getting them to pull out their wallet. Therefore, I believe that doing some initial under-the-table sales can increase your odds for long-term business success. And if the health department is being completely honest, they would probably prefer that you do that instead of sending them hundreds of labels of recipes that you might sell someday (it happens more often than you think).

Try Something Different

If you keep having trouble selling your products at events, try this: ask customers what baked good / candy / pastry they like to buy, especially ones they have trouble finding or making themselves. If you start to see patterns emerging among responses, try making that and selling those alongside your initial product to see how sales compare.

You might be thinking, “But I didn’t start this business to sell candy. I started it to sell grandma’s cobbler.” I think that can be the toughest part of entrepreneurship — figuring out when you need to let go of a product. When we shutdown our online marketplace, we also closed a year’s-worth of hopes, dreams, and effort. But the Forrager you see today wouldn’t even exist without that initial vision, so I guess it wasn’t a complete waste of time after all. It did get us here.

At some point, you may have to decide whether you want to start a hobby or a business. Are you determined to sell a specific type of food item (even if you make little profit), or are you willing to find what the market wants before fully committing to anything? If it’s the latter, you need to talk to customers and get out of your kitchen!

Comments

Hi! I enjoy reading your posts and am in the early stages of starting to figure out if what I bake can sell. :-). I’m a little confused, however, as to what, if any, licenses or state permits I need. I decided to spend the $125 on becoming an LLC mainly to protect my family, but since then I have received 2 letters saying I need to get “this” permit or license…at the bottom of one paper in tiny letters it said that this was a voluntary form but they made it sound required. Can you please tell me if I am required to pay for any licenses or permits if I have no employees and work in my own kitchen, cooking one type of cookie/candy. It has no hazardous food in it. Thank you very much!

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