Low Cost Marketing Ideas for Food Businesses

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You have started a business with no money, and figured out packaging and labeling. Now it’s time to find some low-cost marketing ideas for your food business. low cost marketing ideas

Marketing:

Marketing, especially advertising and promotion, can eat up your entire budget in minutes – without bringing a single customer through your door. New business owners often feel that they have to market the same way large food brands market. However, you cannot out advertise the big boys. Large food companies spend millions every year to paint the airwaves and magazines with pictures of their products. They pay grocers a slotting fee so that their products are on the shelves. It’s a scatter shot approach – by having their product everywhere it’s bound to find its market. Small food companies cannot play this game. We must carefully define our target market and promote directly to them. Luckily there are many ways to do this for little or no money. So, don’t start marketing your business by putting together even a  TV advertisement or a big ad in the local paper.

Low Cost Marketing Ideas:

  • Place a notice on Craigslist.
  • Create a web site, even if it is just a basic site that explains who you are, what you make, and how to contact you.
  • Write a blog that lets your potential customers learn about you and your product.
  • Use an old-fashioned sandwich board outside your store.
  • Send a monthly newsletter to your customers, either by mail or email.
  • Offer classes using your products at your location.
  • Teach a class using your products at your local community education center.
  • Host in-store demonstrations and free tastings.
  • Plan a special event around your product and invite the local newspapers and TV stations.
  • Get people talking about your products either through using social media or online forums.
  • Sponsor a local Little League or soccer team.
  • Donate products to further a special cause, but only if you know how it will be promoted (unless it’s a cause you would support anyway).

I was once asked to donate quite a bit of product to promote a worthy cause. That was fine and dandy, except that the product was put into individual gift baskets which were then auctioned. The basket winners didn’t know that those products had been donated, and there was no press release issued about the donations. So, while donating can be a wonderful way to both support a cause you support and to get your business name recognized, it can also be an expensive lesson in what-not-to-do. Now it’s time to set your food business started – and save money too! Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!

Starting a Food Business – What You Need to Know About Packaging and Labeling

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In a previous post I shared some easy, practical ways to get a food business started without spending a lot of money. Today I am sharing money saving tips concerning food startup packaging and labeling issues.

food startup packaging

Packaging:

Food packaging must be food grade, or food safe. There is no wiggle room here. You don’t want your packaging leaking toxins into your food product. Start with a packaging product that is made out of a FDA or USDA approved material. Luckily there are several options if you are creative.

Packaging can cost more than the food product that it contains. If you are targeting a high-end market, it might make sense to package your product in an uniquely shaped glass container. But even if this is your market, I urge you to start with a less expensive and more easily sourced jar. Consider using a plastic container while you are testing your market. This is a good place to practice your creativity too. Explore unexpected, but not necessarily pricey, packaging, like take-out boxes, clear tubes, and stand-up pouches. Search Ebay or Craigslist for other businesses selling excess inventory – so you won’t purchase 1000 coffee bags only to find out after using 10 that they don’t work for your product.

Labeling:

When selling food, by law you must have a label that includes your business name and address, ingredient list and an allergen statement. Most of us want our labels to be more than just the facts though, and to be a visual representation of the business itself.

You can hire a graphic designer to design your labels and have them printed in large quantities. This saves money over the long run. But once again I urge you to start small. If you have any design talent at all design your own label on the computer using copyright-free stock photography. If you are putting together initial food product samples, you can even print out your own labels on a laser printer.

Home printed labels won’t hold up to wear and tear though, so when you start selling a product in any amount over 10, have your local printer make up about 250 labels. When you start using 250 labels a quarter, you may want to re-consider and go the graphic artist route, which can cost up to $4000 for 1500 labels (includes set-up fees and designer fee).

If designing and printing your own label isn’t for you, get labels printed using an online business like StickerYou. StickerYou has no minimum order, so you can try several designs. They also have templates to help you easily develop a new label.

Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!

Starting a Food Business When You Have No Money

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If you have entrepreneurial dreams, but no money, a food related business may be the answer.

small business display Although food businesses come with more regulation than opening a gift shop or starting an errand service, there are plenty of ways to save money while getting a food business off the ground. Here are some of the money-saving tips I followed when I started my Specialty Food (dry mixes) Business, and some others that I learned along the journey.

Licenses and Permits:

This is not the place scrimp and save money. Make sure your business is legal by getting all the required licenses and permits. Spending a little money up front is worth it to avoid the legal headaches of getting caught without the correct paperwork. Besides, paying for all these licenses is still cheaper than a good lawyer’s retainer fee!

  • Business licenses. Most states require a State, or Master business license. Many municipalities also require a license. These fees are usually quite reasonable and will probably be less than $150 total.
  • Legal entity. I highly recommend that you form either a LLC or a S-corp when starting a food business. Operating your business as an entity separate from you (unlike operating as a sole proprietor) will legally protect you and your personal assets in the event that your business is sued. This may be your biggest expense when starting a food business, but if you do the paperwork yourself it will still be less than $500 – much less in some states.
  • Insurance. Liability insurance is a must when preparing food products for sale. You should have at least $2,000,000 in coverage. Shop around for policy quotes. When I first started I received quotes from $500 a year to $5000 a year, and everything in between.
  • Permits. Depending on the laws in your state and the food products you are preparing, you may need permits from the local health department and/or your state Department of Agriculture. Even so, these permits are usually less than $200.

Equipment:

Although you may have visions of mixing pounds of dough in a 60-gallon commercial mixer or filling packages of dry goods with an automatic hopper system, almost any food business can be started without specialized equipment. Start small and save your dollars until sales volume warrants equipment purchases a necessity, not a nice-to-have.

Even if you aren’t looking for specialized equipment, purchasing new measuring cups/spoons, baking dishes, bulk storage containers and the like can add up to hundreds of dollars quickly. Look for inexpensive equipment at dollar stores, estate sales, your local Goodwill, and yard sales.

If you need something not usually found in a home kitchen, like a soup cooker or a heavy-duty blender, search ebay or Craigslist for restaurant liquidation sales.

Supplies:

You can save hundreds of dollars – in the long run – by purchasing your product supplies in bulk. For example, when I ran my Specialty Food Business, many of our products included instant minced onion as an ingredient. To purchase a pound of this product at the grocery store costs about $6.00, but when purchased in bulk cost about half that amount. Of course, I had to purchase 50 pounds at a time. While the per pound cost was much less, instead of having $6.00 tied up in supplies, I had almost $200 tied up in supplies. That was fine when we were selling a lot, but when we were just starting out it made more sense to spend the six dollars.

Purchase as many of your supplies locally as possible. Visit restaurant supply stores if there are any in your area, or purchase at the local Costco or Sam’s Club. Many grocery stores and health food stores will also order products in bulk for you at a lower price. Instead of purchasing 25 one-pound bags of rice, see if your local grocery store would order you a case of rice, or one 25-pound bag of rice. When your sales increase order 500 pounds or more directly from a wholesaler or distributor.

Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!