Food production foibles
Having a licensed product along with a licensed facility are a great beginning. What could possibly go wrong? Plenty.
Starting any business is difficult. Food processing, while well defined by product and production legalities, has its own unique set problems. The Michigan Department of Agriculture and Rural Development’s website helps to guide those wishing to establish, remodel or convert an existing facility. By going to the website and typing in the search box “Plan Review,” you will bring up the necessary documents to obtain operational approval. Sound simple enough?
Well, if not, guidance can be obtained by registering with the Michigan State University Product Center (click on counseling request). There is no charge for this business counseling. Moreover, counselors can assist with packaging, labeling, marketing strategies and financial details, like pricing and viability.
Additionally, MSU Product Center Counselors are trained to assist clients with determining the whether their product will require special processing to be safe for human consumption. This is determined by the acidity of the ingredients and the water activity, a measure of the free moisture in a product. A process authority review is also required for low-acid and acidified foods. Fees will be incurred if testing is required.
So far, so good! An MDARD approved licensed product and facility will enable production to begin. Every entrepreneurial enterprise requires three aspects to be met for success; production, marketing and management. This article intends to point out some of the managerial glitches.
The basic requirements of managing a business involves the balancing act of production meeting sales, with marketing being effective enough to meet production capabilities (and having sufficient financial resources). Just as not enough sales can lead to financial embarrassment, unexpectedly fast sales growth can also be problematic. Increased sales require increased raw and finished inventory, and additional accounts receivable along with managing a larger labor force. This all requires financing that a bootstrap business cannot afford.
It is little wonder that the time commitment is more than a 40-hour a week job. If the individual has poor organizational skills for taking care of production scheduling and related paperwork, it can easily lead to burnout of the initial spark that ignited the desire to be an entrepreneur.
Proper planning for measured growth, consistent with resources, will reduce stress on owners and provide a measuring tool that will allow the business to determine plan success. Any business plan changes after the first day. Those owners who are continually conscious of where they are on their path and who update as needed should be successful.
Michigan State University Extension educators working with the MSU Product Center assist new and existing food entrepreneurs in developing and adjusting the business planning process.