Food business growth isn’t a one-size-fits-all technique. The most effective business growth strategy is one you adapt to suit your business model, business size, concept and future goals.
As a food business owner, you know that success doesn’t happen overnight. Building a thriving food business takes time, effort, and strategic planning. One key aspect of that planning is creating a business growth strategy to help you scale up your startup and take your business to the next level.
Business expansion can involve a range of tactics, from extending your sales channels to building your brand awareness, but one effective growth strategy that is sometimes overlooked is renting a commercial kitchen.
Whether you want to move your home food business into its first commercial kitchen, open a second location, or plan global domination, these expansion strategies can help guide you to the next step – IF you apply them to your situation correctly
Understanding Growth Potential
Before creating a growth strategy, assess your current business and set realistic organic growth goals. To review your business effectively, you should closely look at your business operations, identify strengths and weaknesses, and determine what changes you need to make to achieve your desired level of growth.
Where to begin?!
Are your sales growing over time, or have they plateaued? What is your food business’ profit margin, and how does it compare to industry benchmarks? Are there areas of your business that are particularly profitable or challenging? Consider conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to identify areas for improvement.
Once you understand your current business status, you can start business planning and set realistic growth goals. Be specific and measurable in your goal-setting; for example, instead of a general goal like “increase sales,” set a niche goal such as “increase monthly sales by 20% within the next six months.” Setting niche goals gives you a clear target to work towards and help you measure your progress over time.
Developing Your Business Growth Plan
Now that you understand your current business and growth goals, it’s time to develop a plan to achieve those goals. Outline the strategies and tactics you will use to grow your small food business and the resources and timelines needed to execute those strategies effectively.
When developing your growth plan, you can consider the following:
Sales channels
Are there new sales channels you can tap into to reach a wider customer base and increase revenue? You could sell your products or services, partner with local retailers or restaurants, or expand your product line.
Brand awareness
How can you increase your brand visibility and awareness? Firstly, think about where your target market is. You might invest in a foodie marketing strategy consisting of social media advertising, attend trade shows or events, or partner with influencers or media outlets.
Operations
What changes can you make to your business operations to increase efficiency and productivity? You could streamline your supply chain, optimise your production processes, or invest in new equipment or technology.
People
Do you have the right team to support your growth? Hire new employees, outsource certain tasks, or invest in training and development programs to upskill your existing team.
Customer loyalty
Reward customer loyalty and motivate them to spend more by offering personalised discounts, special offers, or loyalty programs.
Customer acquisition
Entering new markets can be tricky. Attract new customers with first-time promos, referrals, or influencer marketing.
Technology
Introduce new commercial kitchen technologies such as online ordering for e-commerce food sales, food delivery apps, or CRM software to improve customer experience and streamline operations.
Connections
Make connections among local businesses and influencers to increase brand visibility and reach. Building connections is also a great bit of market research
Marketing
Social media marketing should be part of any market penetration strategy. Have a constant social media presence and advertise your restaurant offline to reach a wider audience.
Customer experience
Make customer experience a priority by offering excellent service, a clean and inviting atmosphere, and consistent quality.
Innovation
Offer consistency, but don’t be afraid to shake things up by introducing new menu items or updating your brand identity if it is outdated and needed.
New revenue streams
Add new revenue streams such as catering, delivery, or merchandising to diversify your business and increase revenue.
Mobile concept
Mobile businesses are taking the food market by storm. Create a mobile concept such as a food truck or pop-up restaurant to reach customers in new locations.
Expand your space
Expand your existing space or move to a larger location to accommodate more customers and increase revenue.
Open new locations
Consider opening a second, third, or fourth location to reach new markets and increase revenue.
By developing a comprehensive growth plan that includes some or all of these strategies, you’ll be able to stay focused and organised as you work towards achieving your business growth goals.
Ways to Scale Up Your Startup Business
Scaling up a food business involves taking steps to grow your business beyond its current size, whether that means expanding to new locations, diversifying your revenue streams, or increasing your production capacity. For many startups, scaling up can be an important part of their business growth strategy, as it can help to increase revenue, improve efficiency, and ultimately position the business for long-term success.
Common obstacles of scaling up
Despite the many benefits of scaling up, there are also a number of challenges and obstacles that can stand in the way of success. Some common issues of a food delivery business:
- Limited resources: Scaling up sometimes requires significant investment in equipment, marketing, and personnel that can be a challenge for startups with limited resources.
- Production challenges: As demand for your product increases, you may encounter production challenges, such as managing inventory, ensuring quality control, or managing supply chain logistics.
- Hiring the right talent: Scaling up often requires hiring new employees or expanding your team, which can be challenging if you’re not sure where to find the right talent.
- Managing cash flow: As your business grows, you may encounter cash flow challenges, such as managing accounts receivable and payable or obtaining the necessary funding to support your growth.
Ways to overcome these obstacles
To overcome these obstacles and successfully scale up your food business, consider the following tactics:
- Focus on efficiency: To maximise your limited resources, improve efficiency throughout your operations, such as streamlining your production processes, optimising your supply chain or outsourcing tasks.
- Invest in technology: Invest in technologies that can help you to manage your business more efficiently and effectively, including point-of-sale systems, inventory management software, or online ordering platforms.
- Build a strong team: Invest in building a strong team that can support your growth and help you to overcome challenges as they arise. This might involve offering training and development programs, hiring new employees, or outsourcing certain tasks.
- Manage your cash flow: As your business grows, it’s important to keep a close eye on your cash flow to ensure that you have the funds you need to support your growth. Consider things like invoice factoring, lines of credit, or other financing options to help manage cash flow challenges.
By focusing on these tactics and being prepared to adapt and pivot as needed, you can overcome common obstacles and successfully scale up your food business.
Renting a Commercial Kitchen as a Growth Strategy
Renting a commercial kitchen can be a smart growth strategy for food businesses looking to expand their operations. A dark kitchen is a licensed facility designed specifically for food production, and renting one can offer a number of advantages over trying to produce food in a non-commercial setting.
In this section, we’ll look at the benefits of renting a delivery kitchen and provide examples of businesses that have successfully used this strategy.
There are a number of advantages to renting a commercial kitchen, including:
- Compliance with health and safety regulations: Commercial kitchens are required to comply with strict health and safety regulations, which can help to ensure that your food is safe for consumers. By renting a commercial kitchen, you can benefit from these regulations without having to invest in the infrastructure necessary to comply with them.
- Lower overhead costs: Renting a commercial kitchen can be more cost-effective than building or leasing your own production facility, as you won’t be responsible for the same overhead costs, such as maintenance, utilities, and property taxes.
- Flexibility: Renting a commercial kitchen can offer greater flexibility than owning your own production facility, as you can adjust the amount of space you’re renting based on your needs.
Increasing Sales in Your Food Business
As your food business grows, it’s essential to focus on increasing sales to sustain and expand your growth. In this section, we’ll discuss how to identify potential sales channels and offer tips for optimising pricing and promotion strategies.
Potential Sales Channels
To increase sales, it’s important to identify potential sales channels. Here are a few options to consider:
- Catering: Consider offering catering services for corporate events, weddings, or other special occasions. You can also partner with event planners or venues to promote your catering services.
- Food Delivery Services: Partner with popular food delivery services like Deliveroo, Uber Eats, or JustEat to offer your food products to customers who prefer delivery services.
- Wholesale: Consider partnering with local grocery stores or specialty food stores to sell your food products in bulk.
- Meal Kits: Selling meal kits is another string to add to your bow. Having boomed in popularity during lockdown, their popularity remains strong!
Optimise Pricing and Promotion Strategies
Once you’ve identified potential sales channels, it’s essential to optimise your pricing and promotion strategies to increase sales.
- Competitive Pricing: Research your competitors’ pricing strategies and ensure your pricing is competitive. You may also offer discounts or promotions to incentivise customers to buy more.
- Cross-Selling: Offer bundles or package deals to encourage customers to buy more than one item. For example, offer a discount for buying a combo meal.
- Loyalty Programs: Offer loyalty programs to reward your regular customers and incentivise them to continue purchasing from your food business.
- Promotions: Offer special promotions or discounts to attract new customers and increase brand awareness.
By identifying potential sales channels and optimising pricing and promotion strategies, you can increase sales and sustain the growth of your food business.
Expanding Your Brand Awareness
Building brand awareness is crucial for any food business to grow and reach new customers. In this section, we’ll discuss the importance of brand awareness for food businesses and offer tactics for building brand awareness.
The Importance of Brand Awareness
Brand awareness is critical for any business to succeed, but it’s especially true for food businesses. In a crowded market, it’s crucial to make your food business stand out and build a strong brand image that resonates with your customers. Having a strong brand identity helps establish trust and loyalty with your customers, which can lead to repeat business and positive word-of-mouth recommendations.
Tactics for Building Brand Awareness
Social Media
Social media platforms like Instagram, Facebook, Twitter, and LinkedIn offer an effective way to reach a broad audience and promote your food business. Consistently posting high-quality photos and videos of your food and engaging with your audience can help build a strong social media presence.
Influencer Marketing
Partnering with local influencers or food bloggers can help expand your reach and tap into their audiences.
Local Partnerships
Consider partnering with other local businesses or organisations to host events or sponsor local community initiatives. This can help build a sense of community around your brand and make your food business more visible.
Public Relations
Creating a media kit or press release to share with local media outlets can help generate press coverage for your food business.
Branding
Creating a unique and recognizable brand identity, including a logo, website, and packaging, can help establish your food business as a reputable and trustworthy brand.
By implementing these tactics, you can expand your brand awareness and reach new customers, leading to increased sales and growth for your food business.
