Navigating a fledgling food business

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    It has been several months since the national government has implemented community quarantines in the country’s regions to address the threat of the COVID-19 pandemic. And while the lockdown has led to financial difficulties for Filipinos, it has also prompted a significant increase in entrepreneurs, many of whom have taken to selling food products made in their homes.

    However, having a home-based food business is not an easy task, especially for individuals who are new to both cooking or baking, and running a business. This is made more difficult as industry players face stiffer competition due to the number of options that customers now have.

    To help these budding entrepreneurs, San Miguel Foods Culinary Center hosted an online seminar with chefs JJ Viel and Dave Cervantes which tackled the effects of the pandemic on the food industry, the rise of home-based food businesses, and the challenges that these businesses will have to address in order to succeed.

    Both chefs were in agreement that initially, the pandemic severely affected their food businesses. “I think it’s safe to say that just like everyone, we all felt the clench when the pandemic first hit,” JJ shared.

    For chef Dave, the difficulties in the lockdown prompted him to rebrand and trim down his offerings. “I put up a lot of items in the original brand. I was doing wedding cakes and 12 different cupcakes back then,” he said.

    However, social media played a pivotal role in helping the business survive and blossom despite the difficult circumstances. The Philippines is considered the social media capital of the world and leveraging the reach and availability of social media platforms is a powerful way to attract customers.

    “We picked up most of our clients via Instagram, Facebook, and ideally, all of the social media platforms you can think of. You just have to put it out there and it’s like a bright light,” chef JJ shared.

    “Everything can now be done on your smartphone. If they want to place an order, they can just go to the Instagram or Facebook page and there is an order form that customers can fill up and send to us,” chef Dave added.

    Ease of ordering plays a significant role in closing sales. Unlike traditional brick and mortar businesses which use cash or card terminals for payments, home-based shops focus on online payment methods. To make it easier for both the customer and the seller, chef JJ advises home-based shops to have electronic wallets such as PayMaya and GCash as well as bank transfer options as payment methods.

    Starting a food business can be difficult and for chef Dave, taking that first step and having the focus and fortitude to push forward is key in any business. “We all know that these are uncertain times but if you’re not going start then it won’t happen. Just make sure that when you start, you have a focused product and you adapt to the market. Mental fortitude is very important because it is key to surviving. We have to focus on what we do and if we remain focused, we’ll be able to create efficient and effective procedure to start and run the business,” he said.

    Chef JJ echoed the sentiments, saying it can be difficult to break into the market. “Do not get discouraged in the beginning because there is a huge possibility that not many people will really bother to try your product. But keep on pushing and keep on promoting,” he added.

    Keeping track of finances and strictly monitoring costs are also necessary in a home-based business. “Be sure to check everything. Double check your food costs. Make sure that you’re still making a profit from what you’re selling. However, also remember that customers have a budget so you want to find a good balance between making a good profit and still catering to those who would still want to spend for your products,” chef JJ said.

    “The problem that some online sellers have is that their products tend to be too expensive.

    So right off the bat customers will instead look for cheaper options,” he added.

    As the food business grows and revenue starts increasing, it can be tempting to expand the business to earn more. However, both chefs cautioned against this, saying that with expansion comes a set of challenges that owners need to address.

    “The first thing that you’ll want to do is invest in manpower. The bigger the demand, the more manpower. You might have to trim down your menu based on what products sell the most. The bigger the menu, the more equipment you will need, the more costly the investment. You will also need to consider space. The bigger the production, the bigger the kitchen space needed. But for me, the only time you should even consider going big is if you’ve been receiving a constant amount of orders for at least two to three years. And these should be regular orders, not sporadic large orders. Keep everything small and do not think about going big just yet, because we don’t know where we will be six months, one year from now,” chef JJ said.

    A lot of individuals enter the food industry because of their love for cooking but cooking for friends and family is different from running a business. And while the passion for food can be fuel for the business, there are also sobering decisions that home-based food businesses will have to make as time passes. However, adapting to the market and supporting fellow entrepreneurs can help make the business venture more enjoyable for everyone.

    “No one can truly predict what will happen next and the only constant is change. You will always have to adapt to changes and keep finding ways to do so. Don’t be afraid to ask for help and at the same time, be ready to help others. Support your counterparts, support your friends,” chef JJ said.