Tuesday 16 October 2018

Will customers develop a taste for my artisan ice cream?

The good news is that I am hearing more and more examples of businesses securing bank loans. (Stock photo)
The good news is that I am hearing more and more examples of businesses securing bank loans. (Stock photo)

Problem Solver with Feargal Quinn

Q: I am thinking of starting an artisan food business and was considering making ice cream to sell to supermarkets, etc. Would you view this as an opportunity that I should consider?

A: It is always great to hear from entrepreneurs considering starting a business. Well done! It takes a lot of courage to step into this area and certainly in the initial years a lot of dedication to get to where you want to be.

Before I answer the question specifically about ice cream, one of the things you need to be clear in your mind about is, what is your objective for the project? Is this a 'lifestyle' business to generate extra cash, or does it need to pay a salary etc? Being able to answer these questions will help determine whether you have the right product for your project or not.

Specifically talking about ice cream, there is always a small market for locally-produced ice cream in cafes, restaurants and food service operators. The retail market for artisan ice cream has not been great in recent years, predominantly because the big brands of luxury ice cream are constantly on promotion selling at half-price and it is therefore quite difficult for a specialist artisan product to compete.

In my local supermarket I noticed that there was not even one artisan ice cream for this very reason.

You will certainly find some cafes and restaurants that will be interested in having a locally made ice cream and they will call this out to customers on their menu. Other restaurants and cafes will make their own, and others are quite content with a cheap mass market product as they will dress it up with a fancy sauce, etc.

Set out a clear objective as to what you want this project to do and do lots of research in the market to determine if a gap exists and matches your objective. Talk to your local enterprise office about a range of supports they could offer you to help determine where the opportunities lie.

Q: I am starting a manufacturing business and need €25,000 to get up and running. I have €15,000 and I am unsure about how to raise the balance.

A: The good news is that I am hearing more and more examples of businesses securing bank loans. Four or five years ago this would have been a real struggle but increasingly people seem to be able to secure funds through banks.

That might still be a challenge because you are pre-startup and anybody giving you money will like to see some progress and evidence that the concept is going to work before they approve borrowings.

You have not mentioned grant assistance in your email but you should go and have a conversation with your local enterprise office. In many cases, manufacturing can be grant-assisted up to 50pc if you are eligible. You should first research the feasibility study grant and priming grant section of your local enterprise office website and then make an appointment to see one of their team. Do be aware that you need to pay all of your bills in full and then claim back your grant. In other words, you need the full amount of money to claim back the grant assistance element.

Whether it is a bank loan you are applying for, or grant assistance, you will need to demonstrate that you have conducted lots of research and that you have a robust business plan in place.

It is very unlikely that anyone will give you money based on an idea only. Do make sure that you put time and energy into researching your idea thoroughly, identifying a gap in the market and creating strong route to market plans supported by marketing initiatives etc. Again your local enterprise office will probably be able to assist you with a mentor who could guide you through this process.

Private investors are always an option and perhaps that investor might come from within family or friends. As with everything else, it can be difficult to attract investors at the early stage as very often they want to see evidence the project is working.

Good luck with the venture and I applaud your entrepreneurial spirit.

  • Send your small business questions to himself@feargalquinn.ie

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