There are advantages and disadvantages of starting a new food business you pay nothing for goodwill and you can stamp your own personality on the outlet from day one, but it is riskier.
RECIPE FOR SUCCESS INGREDIENT CARDS
Ingredient 1: Keep Within the Law
Question:
What are the advantages and disadvantages of starting a new food business?
Answer:
A new business is riskier. It takes time to grow and mature and you need to have sufficient monetary reserves to support yourself and the family during the early periods.
Advantages of starting a new business
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- You make all the decisions and choices; location, image of the business, design your own premises, determine products, hire employees, choose suppliers.
- You control the management of the business; marketing, finance, administration.
- You do the work and reap the rewards; in fact, you are the determining factor in the success of a business.
- It will usually be less expensive to start a business as there is no goodwill to pay.
- You are able to expand the business at your own pace as the profits will allow.
Disadvantages of starting a new business
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- It is more time consuming to start up a new business; from the planning stage to the day you open the door you will need to resolve many issues before you start.
- Choosing the ‘right’ location and set-up for your business, that is, will it work the way you want it, are the fixtures and fittings you have chosen right for your needs and in the right places? Only time will tell!
- No established client base; you will have to build your own. This takes time and money and may mean the business has very little income in the early stages.
- You have no proven track record to show a lender, so it may be difficult to obtain a loan.
- You may have difficulty arranging to receive credit from suppliers, again because there is no track record. As a result, you may have to pay cash for all supplies in the initial period.
- You have no established supply lines.
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