Category: FC Archive

Recently, I was reading the autobiography of an entrepreneur. He described the demise of his gift catalog business: “Finally, after the program grew so that it produced revenue of three-quarters of a million dollars and only cost us approximately $750,000, we decided to drop it.”

As someone who loves a good excel spreadsheet, this statement left me wanting to know more: Was $750,000 sufficient revenue to support a catalog business in general? Did they need to manage costs or increase revenues?

The only way to know would be to evaluate the revenue and cost structure… and to do this, we need to have benchmarks, a standard by which performance can be measured. Did they appropriately mark-up catalog prices? Were their shipping and handling costs in-line with industry standards? If they answered yes to these questions, then perhaps they needed to increase revenues to support the fixed costs involved in maintaining a warehouse and printing the catalogs.

We could apply these same principals to a restaurant or farm.

If you look at your bottom line and realize you’re not making as much profit as you’d like (or need), then you can look at the benchmarks to see what areas of your business need improvement. Is your food cost between 25% – 35%. Is your rent less than 10% of sales? And for farms, is your labor less than 35% of sales?

You can set your benchmarks to industry best practices or to a customized goal that is suitable for your business. Not all businesses fall into the same mold; only you can judge if these are appropriate for your business.

Here a few industry-standard benchmarks for restaurants and farms:

Restaurants
Food Cost: 25-35% of food sales
Labor Cost: 20% – 40% of total revenue
Occupancy: 8% – 12% of total revenue

Farms:
Labor Cost: 35% of sales
Operating Expenses 40% – 50% of sales
Capital Improvements: 2% – 7% of sales

For further assistance in evaluating the financial health of your business and ways you can improve your bottom line, send us an email.

Click here to receive my monthly Food Consulting newsletter by email.

 

From April to November, farmers drive into Boston from the rural fields of Massachusetts, New Hampshire and Rhode Island, flooding the farmers’ markets and restaurants with fresh local produce. Given that most food travels an average of 1,500 miles from the farm to the plate, this is a welcome improvement; reducing this number to less than 100 miles.

For some locavores, this isn’t good enough. They want their food sourced even closer. Chefs like Chris Coombs at dbar are building rooftop gardens. Urban planners like Glynn Lloyd at City Growers are converting vacant lots into urban farms.

Roof top gardens offer several advantages beyond fresh, hyper-local produce. These green spaces can reduce a building’s energy cost by insulating the roof. And they are perfectly situated to take advantage of natural resources: rain and sun. With the additional installation of a greenhouse, urban gardeners can grow year-round.

As easy as it may seem to build a rooftop garden by installing several raised beds and planters, you must considered the engineering impact on the building – that is, can the roof support not only the extra weight of the soil, but also the rain water the soil absorbs.

Urban, land-farms are easier to implement than roof-top gardens, but also have a few challenges: mainly in the soil health. City soil can be filled with lead and other toxins. Before starting an urban farm, be sure to test your soil. Chances are good you will need to amend the soil for safe gardening.

Several entrepreneurs are making urban farming even easier for the uber-locavore:

For roof-top gardens, Top Sprouts and Sky Vegetables

For urban, land gardens:Green City Growers

For further assistance in developing your urban garden, send us an email. We can help you create a business plan to support this venture.

Click here to receive my monthly Food Consulting newsletter by email.

 

The barriers to entry for food manufacturers make entrepreneurship difficult. Many of us have the perfect recipe for a rich, chocolate sauce, frozen food line or catering business. Getting your product to market is lined with pitfalls, the first on the list: finding a commercial kitchen to produce your products that complies with state and federal regulations, as most prevent entrepreneurs from producing most food products in residential kitchens. Funding a commercial kitchen for a start-up is neither financially feasible nor prudent.

Nuestra Culinary Ventures had filled that void for food entrepreneurs by offering a culinary business incubator: a commercial kitchen that offered space for up to 25 food businesses at a time. NCV wanted out, and now Crop Circle Kitchen has taken over the space in Jamaica Plain, continuing to offer food entrepreneurs a certified kitchen to launch their business. To date, they have helped launch 25 new food businesses, and continue to take applications

For more information about Crop Circle Kitchen

CropCircle, Inc. – A shared use kitchen in Boston
Contact: Jonathan Kemp and Jeffrey Walker
31 Germania St I/J. Jamaica Plain MA 617-438-2904 info@cropcirclekitchen.org

Non-profit 24/7 shared-use kitchen facility. Provides testing area, overflow use, cooking classes, food safety managers course, technical and business support.”, “22 burners, walk in freezer, walk in fridge, dry goods storage area, meat slicer, 30 qt mixer, grill, convection oven, conventional oven, and proof box”, Storage, 8hrs/quarter hours.

Click here to receive my monthly Food Consulting newsletter by email.

The books proliferate. The newspapers cover it, and the movies mainstream it: people want to know where their food comes from, and think more about creating a sustainable food environment. Meanwhile, commercial agricultural has demonstrated to have a profound, negative impact on the environment, some say worse than carbon emissions from cars, airplanes and factories.

The silver lining in our food system is just next door – with the local farmer, food producer and green restaurants.

Local farmers, whether organic or not, tend to use sustainable farming practices: composting, crop rotation and cover-cropping. Further, locally sourced food travels less than 100 miles to reach your table. It tastes better because the fruits and vegetables are left on the vine longer to ripen and spend less time in a truck.

As a business manager, it can be challenging to justify spending more on COGS and other resources, when profit margins are already razor thin. The numbers are just coming in, but several businesses (like Stonyfield Farm) have shown that marketing costs are lower due to a higher quality product and customer loyalty generated.

Here are 10 tips for Supporting the Local Food Systems, Sustainable Agriculture and Local Economy, many of which you can start with today:

1. Purchase produce, meat and fish from local farmers and sources. Commit to increasing locally sourced ingredients by 25%
2. Employ a composting program to turn food waste into fertile soil.
3. Switch from disposable products (like coffee cups and to-go containers) to recyclable or compostable products.
4. For food products not produced in New England, consider using local businesses that import (such as MEM tea and Taza Chocolate).
5. Eliminate convenience products from your menu that use high-fructose corn syrup.
6. Offer filtered water instead of bottled water.
7. Create incentive programs for employees to walk, bike or take public transportation to work.
8. Use environmentally friendly linen services.
9. Have an energy audit to find ways to improve energy efficiency with the equipment already installed in your business.
10. Offer discounts to customers that bike. For more details, click here.

For further assistance in creating a sustainable business, send us an email. We can help you create a plan to support the local economy while growing your business.

Click here to receive my monthly Food Consulting newsletter by email.