Who's on your team? How outside advisors can boost your business
It’s common for small food and beverage processors to wear multiple hats, especially when attempting to get a business up and running. But the food and beverage sector is complex, with many factors to consider beyond a delicious product - regulations, recipe refinement, staffing, marketing and more.
There are key advisors you will likely need early in your food and beverage processing business who will help you succeed.
Michael Mikulak, executive director of Food and Beverage Manitoba, says entrepreneurs who attempt to handle all key aspects of their business usually do it to save money. The results can be mixed.
“It can be beneficial in some cases, but at a certain point, it can backfire,” Mikulak says, adding the business owner’s valuable time and money can be eaten up by a job better done by an expert. There comes a time, or job, when bringing in an outside advisor is the next best business step.
Here are some key advisors you will need early in your food and beverage processing business and how they can help you succeed.
Business consultants can play a crucial role in the success of a fledgling company, helping an owner determine everything from how much a product should cost, what they need to do for marketing and how to build their customer base.
Some processors may not realize the full cost of production, and that’s where a business consultant can help. One processor Mikulak dealt with, for example, was worried about an $8 price tag on the company’s mustard, figuring consumers wouldn’t want to pay that much.
But an analysis by a business advisor found the proposed price was in line with the cost to produce the mustard.
“We see a lot of people undervalue a product because they feel the market’s not going to bear that cost,” Mikulak says, so the business loses money from the start since they aren’t charging customers enough to cover the cost of production.
In a complex industry like food production, with public health implications and strict guidelines around everything from labelling to product safety, a lawyer is a must-have team member for a processing business.
Bernard Verkaaik, president and CEO of The Greater Goods, a food consulting business in Ontario, says even from the onset of the business idea, a lawyer is necessary to ensure business basics like not choosing an existing product name and reviewing the purchase or rental agreement for the production facility.
Translating your grandmother’s beloved strawberry jam recipe into a product for store shelves comes with various challenges, including food safety and preservation, determining nutritional values, cooking times and ingredient matching. All fall under the expertise of a food scientist.
For example, the additives and preservatives used to ensure longer shelf-life can impact taste and everything from a product’s texture to the mouth feel. Verkaaik has worked with a company to bring a vegan shrimp product to market.
“It’s challenging to create a vegan shrimp with the same texture and functionality that you can fry,” Verkaaik explains. “It’s a science.”
Often associated with universities or provinces, food development centres such as FoodTech Canada and its provincial members, food scientists also work with companies to transform food and drink items into commercial products.
“They’ll work with you on translating a recipe that a home cook would make to what’s required to have a safe product on the shelf,” says Mikulak. “That is not something people can teach themselves.”
There’s funding available to entrepreneurs in the form of grants and interest-free loans but knowing how to access that money requires someone who is both knowledgeable about the programs available, and how to properly apply to obtain that money.
It can be a worthwhile investment to have someone experienced in sourcing funds, Mikulak says.
An HR consultant can be pivotal for a company, says Mikulak, by providing expertise on everything from managing performance to ensuring proper employee compensation. He says these are highly specialized factors, and it’s unlikely a founder-operator will have enough familiarity with the topic.
A processor might have a superior product, but it won’t matter if they fail to make customers aware of it. And while marketing is traditionally viewed through advertising, it can extend into other aspects of the business, such as the label and the brand.
“It’s the first thing that people see, and I think a lot of early entrepreneurs don’t realize the importance of that,” Mikulak says. “Designing appealing packaging is not easy, and can seem expensive initially, but can also be helpful.”
Focus on the long-term value
The key to success with hiring consultants is not to focus on the short-term expense of bringing them in, but rather, these critical points:
- The value their expertise brings to your business
- The value of your time they’re freeing up that lets you do other work
- The savings incurred from not having to search, interview, hire and onboard a staff member.
Article by: Chris Powell