These Tips Will Help You Quit Your Day Job and Start a Small Food Business
We reached out to Michael Madigan of KitchenCru in Portland, Oregon to find out. In short, be prepared to work harder than you’ve ever worked before.
All photos courtesy of KitchenCru
We have all entertained the thought at one point or another in our lives. Maybe it was while hosting your friends for dinner, and one of them drunkenly remarked, regarding your salad dressing, "Oh my god! This is so good. Why don't you bottle this and sell it?" Or maybe you thought about it while watching season five of Shark Tank for the third time while thinking to yourself, Man, my "insert-random-specialty-food-item-here" is waaay better than that.
But just how hard is it to start your own small food business and make it your full-time gig these days? Cue the thinking-face emoji.
We reached out to Michael Madigan of KitchenCru in Portland, Oregon to find out. He is the founder of this pioneering culinary incubator—which was also one of the first in the country—and has helped shaped the city's thriving food scene by helping food entrepreneurs such as Jacobsen Sea Salt and Finex get their start. Michael broke it down for us, revealing that in short, it really has everything to do with the individual, their passion, and their dedication.
MUNCHIES: Hi, Michael. What's the story behind KitchenCru? Michael Madigan: I came out of the tech world. I spent 26 years in the computer industry and you know, we had these things called 'incubators' that had started up. It was kind of an interesting concept and we had several successful ones in the tech world here in Portland. I just kind of said, "Well, what if we applied some of those principles to the culinary world? What would we come up with?"
In 2010, Portland was going through something of a food renaissance. I think part of it was because the economy was in the tank after the crash in 2008, so a lot of people were looking to start small, food-based businesses.
We just thought we could teach people how to get over the barriers [of] starting a food-based business in Portland. If they've got a passion for it and they've got the drive, we teach them the experience to turn it into a viable business. There are lots of talented cooks around, and lots of people who can make good food, but who don't necessarily have the small business experience to turn it into a growing [operation]. So, that was our inspiration.
How exactly would you define a culinary incubator? KitchenCru, as a culinary incubator, is a place where people can come and have access to licensed kitchens, commercial appliances, professional chefs who can help them scale their recipe, tweak their recipe, and then offer some level of business development assistance. We can teach them how to take all their passion and all that good food they want to make and figure out how to monetize it.
How much money nowadays to open a restaurant in Portland? I believe that to do a very small, bare-bones kitchen, you're going to spend at least $50,000 by the time you're all in, between utilities, appliances, code, all of things that you need to do. That's for a fairly bare-bones space, and that doesn't really get you very far or very much equipment. Unless you've got at least three to six months of your cash flow requirements in the bank, it probably doesn't make sense to even try.
How many of your food entrepreneurs end up making this into their full-time job? [I'd estimate] 35 percent have gone on and are doing some form of local, regional, or even national or international sales now. There are [also] some customers who are successful [but] they have not yet grown out—they just continue to work out of here.
What would you tell people are the first steps toward achieving their small food business dreams? The most important thing I tell people who are thinking about it is have a business plan. If you don't know how to write a business plan, there are organizations out there that can help you do it—things like SCORE, which is, you know, the Service Corps of Retired Executives; Mercy Corps; there's any number of organizations out there that can help you develop a business plan.
Number two: Develop your recipe to the point where it's foolproof. Because without the product, you know, nothing else matters. The product is the ante and the product has to be good, and it has to be the same every time, or people aren't going to want to buy it. So standardize your recipes so that you can make it—or, if you eventually hire employees, they can make it—and it's foolproof every time.
The third thing is, develop a brand, and the brand is more than your logo or graphic. The brand is the story of your product and the story of why you're making it. And it's such a crowded segment in the food world these days. There are a lot of people looking at it and jumping into it, and your ability to tell that story and to differentiate your brand to buyers and to consumers on a grocery shelf is what's going to be the difference between making it and not.
Are there any specific food items where you feel the market is just way too saturated already? Jarred salsa. On the shelf, jarred, refrigerated, whatever it is. I mean you can see this yourself. Walk into a supermarket and see how many different jars of salsa there are there. And I'm not saying people can't do it and be successful at it, but it's so crowded. So when people say they want to make salsa, I really make them take a hard look at their business plan and understand how they're going to do that.
Is there one general secret to success in terms of "making it" in this industry? Same as it is in any other business: Be prepared to work harder than you've ever worked before. I don't care what industry it is; if you're a startup, it's going to be the hardest thing you've ever done. You have to be ready for the fact that it's hard physical labor. You know, I don't care what you're making in the kitchen—you're on your feet, it's hot, you're working with commercial equipment, and sharp instruments, and they're long, grueling days. Everybody wants to think it's Iron Chef America or "I'm going to be a celebrity chef," but really it's the difference between making a couple of dozen cookies for your friends at home and making 2,000 cookies a week to sell wholesale. You know, you're a manufacturer at that point.
And you need to be ready for everything that entails. From the hard, physical labor, to the stress of the financial and management aspects of it. My advice? If you believe in it, just stick with it.
Thank you so much for taking the time to speak with me.