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Is this a good time to be starting a food and drink business?

/ Categories Tricks of the trade, Guest Chefs & Friends of Leiths / Author:

Is this a good time to be starting a food and drink business?

As an entrepreneur, the answer has to be yes; intuitively where there is failure, there is a chance for success, but what are the market conditions which make a leap into business feasible?

Location, location, location is a major factor, and all of a sudden sites are far easier to come by, and much cheaper to operate. Given that in the last boom cycle, private equity and corporate investors ploughed millions into property on the assumption they would get a tidy ROI, the UK hospitality estate in general, has had a massive upgrade.

Many of these sites are available to let on new leases, hence no premium as the previous incumbents no longer exist. So you can walk into a near perfect site for nothing, or very little, add some new signage and personalise with some soft touches, and away you go.

So first thing is that rather than spend say £600k on a start up, that can now be a fraction of that and you can forget the need for partners or bank/asset finance loans.

Food retail is also on a high, with even supermarkets seeking more artisanally branded products for their shelves, and direct selling being far more acceptable and ‘normal’ than ever before.

The market has also changed significantly, the pandemic has seen an acceleration in the appreciation of artisanal, home cooked food. British wine, spirits and beers, and all things independent are popular; the power of the chain brands has been eroded and mass produced ‘same old’ is not good enough for a consumer who has learned how to cook, and how to eat well.

The basics of starting a food or hospitality business have not changed though, the idea has to be good, the service exemplary, the brand clear and the numbers just have to stack up.

Huge inflation on wages and ingredients is a potential banana skin, with 60% or so of experienced F&B labour returned to their home nations and unlikely to return, we will have to adapt. This means a smaller brigade, smart working practice and the use of ingredients which enable a profit to be made whilst offering value to the market. So quite a conundrum, but all solvable.

For many years I have been running a start up business course at Leiths School of Food and Wine, helping countless entrepreneurs either finesse their existing business plan or come up with a unique idea over four sessions of workshops, talks, debate and instruction. Importantly, I teach the secrets of business, enabling you to think and analyse like a food and drink business expert. I also reveal the magic numbers, the key metrics which define success or failure, armed with this information you have the best chance of success.

As a consultant, I have helped some hugely successful people in the early steps of their career. Jyotin and Karam Sethi approached me when Trishna was just a twinkle in their eye; they clearly were stars of the future and it is no surprise that they are now amongst the best and most successful in the business. Hello Fresh, now a household name, was brainstormed, strategized and helped to launch from the kitchen of my own home with the young German entrepreneur who brought it to the UK. There are countless others and some big names who have dabbled with hospitality and retail, including tennis star Novak Djokovic and model Eva Herzigova.

From my Leiths course many have gone into business, often gaining practical work experience before starting up themselves. Currently, the wonderful Kolamba in Kingly Street was partly founded by one of our graduates. Tom Smith has launched an excellent Cambodian street food concept, Barang Street Kitchen and Keythorpe Hall has just launched as a gastronomic private hire venue in Leicestershire, founded by 2 graduates from the course.

After a pandemic break, the business course is back on so whether you are thinking of a career change, are destined to start a business or are just curious, click here to visit the course webpage to find out more and for the next course dates running in March/April 2022.

Author: Chris Barber, Leiths Food Business Ambassador and Consultant


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