This is a complete guide on how you can open a Small Food Business with little money or low capital business in the Philippines 2020.
This the Complete Definitive Guide that can help you build your dream food business, it can be a restaurant, eatery, food kiosk or food truck or even food park. There are many ways you can create a business with little money or sometimes without money by asking for investors or real estate owners to help you build your great business plan that can benefit them from it while you also earn from it.
Food is the most basic need of every human being in the world. Business food is a business that every businessman wants to get into because it is a prospective business that will never get a lack of customers.
But getting the food business is not an easy matter. The fact that there a lot of restaurants close down the business only within a year. However, the food business is still a popular business over time.
If you are a new entrepreneur and you would like to choose a food business as a start, you may consider the tips below of how to start a food business.
Funding Based on Your Tax Structure
The first and most important consideration is how you will be structured as a taxable entity: a sole proprietor or a limited liability company. Once this is established, you can determine the financing approach to take.
A sole proprietor would focus on borrowing, while a corporation can borrow or issue equity/ownership. For example, you may be able to borrow on the equity of your home or other property as collateral or you can apply for unsecured borrowing. Unless you make a compelling business case, traditional banks are probably not going to finance your restaurant dream if you have bad credit. However, others may look beyond your credit score and offer you financing at significantly higher lending rates.
Some institutions offer loans to those with poor credit. No-credit-check loans, such as short-term cash advance or “pay-day” loans, come with high-interest rates, as the lender takes on a higher risk of not being paid. Many experts recommend that you avoid these types of loans or at least read the fine print of the lending agreement carefully, as the loans may be predatory in nature and can lead the borrower into a long spiral of debt.
Personal installment loans, which come with credit checks, are the simplest type of financing to repay, as they allow monthly payments over longer periods on more budget-friendly terms. Lastly, you can look into obtaining a revolving line of credit, which is an open-ended line of credit that the lender makes available to the borrower. This type of loan is similar to a credit card, where the lender may increase the loan amount if the borrower makes consistent, timely payments.
The term “angel Investor” refers to a wealthy person who helps finance an idea or business plan. Traditionally, an angel investor will give you a certain amount of money for your business venture in exchange for ownership equity. Despite the angelic name, these types of investors don’t give money away because they’re nice. These investors see the value in your business idea and think that they will get something in return for their investment. This can help you build your small food business in the Philippines for 2020.
Because angel investors have their fingers in a lot of pies, they don’t always provide cash. For example, an angel investor might help you offset the cost of launching your startup by refinishing space in a building they own. In return, you sign a long-term lease with the investor, ensuring that they have a long-term tenant in the building that might attract other tenants.
Have a Business Plan Ready
It there’s a well-known businessperson in your area who invests in real estate or other ventures, think about reaching out. Just make sure you’re prepared before you make the contact. Have a well-thought-out written business plan ready that outlines your concept, target audience, start-up costs, and projected sales. This should include the type of restaurant you want to open, your identified target audience, and a detailed budget. Also, include your own qualifications as a business owner. If you don’t have any restaurant experience, think about what other kinds of experience you bring to the table, including any pro bono work.
On the other hand, you might be a seasoned manager, you’re great with numbers and have experience keeping books, you’re a phenomenal chef, or you’re an outgoing individual who can work the front of the house and function as a gracious host. Remember, you aren’t just selling your restaurant idea. You’re also selling yourself, and you need to demonstrate that you’re capable and knowledgeable with a skill set to offer.
Consider Operating a Food Truck
A little less daunting than opening a new restaurant is starting your own food truck. Food trucks require an initial investment of between $5,000 to $25,000 for a used truck to over $100,000 for a new truck. The beauty of a food truck is that there’s virtually no overhead. You don’t need to pay rent or electricity. You don’t need to keep a fully stocked bar of liquor or hire a bunch of cooks and servers. Marketing can be done exclusively on social media, negating the need for a website and other traditional advertising material. Food trucks are still a lot of work and require the same attention as any small business, but the initial start-up costs are far less than a traditional restaurant. This is also popular in some cities in the Philippines like Makati that have food trucks that provide breakfast, lunch, and dinner to employees in the cities. This is a great idea for small food businesses in Philippines with low capital.
Start With a Catering Business
Opening a new restaurant requires a lot of planning and implementation, not to mention an infusion of cash. An easy way to test-drive owning a restaurant is to do some self-catering jobs. Catering events, even small home parties, require all the elements of running a restaurant including menu planning and pricing, marketing, budgeting, food preparation, customer service, insurance, and bookkeeping. After a couple of catering jobs, if you still feel excited and committed to opening your restaurant, then go ahead and take the plunge. This a Profitable food restaurant business in the Philippines.
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Table of Contents
7 Tips for Starting a Food Business
1. Do the research
2. Be specific
3. Try to start from the small step
4. Get financial support
5. Start your business in the right way
6. Recognize the food laws and regulation
7. Find the mentor
7 Tips for Starting a Food Business in the Philippines in 2020 with low capital.
1. Do the research on how to start a food business at home
In starting a business, any kind of business doing the research is always the initial thing to do. Since the food business is a very competitive business to do it is a must that you do the research before you start your food business.
First of all, you do the research of a successful restaurant in your town. Find as much information as possible about the business. What works for them, what doesn’t? What difference would they make if it doesn’t work for the business? If possible, meet the owner and do the interview.
If you know any failed restaurants, try to find out what happened. Identify why. Evaluate why did it fail?
Go around the community and ask them about the local services which offer food business. Make a questionnaire if necessary.
Make use of your online community. Get information about what they expect from the food business and what they don’t like about it.
Then use the data and information as your considerations on your making decision for your business that you would like to start.
By doing research you will learn about the target market, chances of your niche, predicting the risk to the greatest ones, so that build a strong preparation and go for it.
2. Be specificDon’t try to be all things for all people. That would make your job harder. Focus on giving unique and quality of the products. People will note that for you. You will be known for that specialty, and it’s a good start for how to start a food business.
3. Try to start from the small stephow to start a small business of food
Great success is derived from many small successes. Getting into the food business is tough. Moreover, if you have never get into it before, in the beginning, why don’t you consider how to start a food business from home first.
Make your home as your office, your kitchen as your restaurant. If you cannot invite customers to come to your house yet think of how to start a food delivery business from home.
Always start from the small steps, consistently do it, be patients. When the time is yours, the success won’t slip out of your hand.
To do a great business plan needs a lot of support from many sides. When your home business has already well, and it’s ready to grow, try to talk to customers, partners, and maybe even investors. Then try to start to think big. Try to convince them that you are ready for the bigger food businesses.
Make sure that you know what you are talking about whey you try to persuade them when it comes to your business.
4. Get financial supportGetting capital or investment is one way of how to start a food business. But if you start your business small you may not need financial support. You can use your own savings to start the business. But when you consider growing from how to start a small business of food and turns it into a big one, then you can think about getting a loan. The easiest way is to go to the bank and get loans from the bank.
But if you try to find the investment, you should be careful. You need a very good plan and knowledge for a loan proposal or investment plan. Plan it carefully. Your prospective investors would like to know for sure about your business idea and the plan of the investment will be like.
Find trustworthy investors. It’s better for you if you know your investor well before the investment plan. It could be your friends, or your relatives or any other good people you know around your neighborhood. And, remember, be realistic for how much money do you need to run your business; considering using the local products and buy surplus equipment, which will help you to save a lot of your capital.
5. Start your business in the right wayhow to start a food delivery business from home
On this tip of how to start a food business here, you need to pay attention to the regulation and policy applied in your area about new businesses. Ask the local authority about the license and permit of new business. Don’t forget to ask about the taxes as well. It sounds simple, but don’t underestimate this part. Don’t let your business down just because you are being careless in this matter.
6. Recognize the food laws and regulationThis actually includes the first step of how to start a food business. You should know it before you start your business. You should already have the information when you do the research at the very beginning of part of starting the business.
Each town, each country may have different regulations to apply. Make sure your business doesn’t break any laws and regulations in your area.
7. Find the mentorhow to start a food business from home
In how to start a food business, finding a mentor is quite important. As a starter, you may find some difficulties or problems in running your business. The presence of the mentor will help you determine what to do when a problem comes. He or she will give you the advice you need relevant to your business that you are doing now. Find a good and trustworthy mentor that willingly to help you to run the business.