Saturday 24 February 2018

Problem Solver: I'm all wrapped up trying to open before Christmas

Feargal Quinn
Feargal Quinn

Feargal Quinn

Q: I am planning to open a new business before the Christmas rush but I am finding it terribly difficult to get on top of everything. There seems to be so much involved. Can you give me some advice as I am struggling?

A: Opening a new business is a complex matter and should be treated the same as any other project you might undertake. The chances are you are working on your own or with a small team and getting the business opened on time will heavily revolve around your ability to be organised.

Pick your target launch date and list every single action which needs to be completed between now and then.

You will also find that every action probably has half a dozen sub-actions to make it happen so you need to grab hold of these also. Get all of this information onto a giant chart or similar project planning software. This will show you, at a glance, every single work stream and where there might be overlap or too many work streams to possibly complete during one period.

I am sure you are paying others like contractors, builders, etc. Make sure you hold them accountable for their work streams and be strict on them meeting deadlines.

Depending on the type of business you are opening, you may find that your suppliers are able to offer you enormous help. They will be used to new business openings as they will have gone through it with many of their customers and you may be able to lean on their expertise to also help and guide you.

When opening new Superquinn shops we used to always ensure that we employed the new manager three months ahead of the store opening and we brought the team of staff in ahead of schedule in order to ensure a smooth opening.

If you are planning on employing a supervisor or manager it might be an idea to engage with them at a much earlier point so that they can assist you with the work streams in hand. You might also find it very beneficial to talk with your Local Enterprise Office and request a mentor who might help to structure your approach and challenge your thought process.

Q: How much cash would I need to set up a food-manufacturing business?

A: This is always a difficult question to answer but let's see how I can help. Certainly a lot will depend on where you plan to sell your product.

For example, if you plan to sell at a farmers' market, the items you will need to think about are relatively simple, eg your stall, a simple brand, packaging, display utensils, food safety training and some cash set aside to cover insurance, market stall rental ,etc.

As an estimate I would say you could probably get started for €1000 or less. On the other hand if you decide to supply the retail sector and intend to grow the business relatively quickly, there are a different set of considerations for example shelf life testing, nutritional analysis, branding (which could be a significant cost), packaging, website and promotional material.

Many producers forget to allow for cash flow. Remember, in the farmers' market you are selling directly to the customer so the minute you produce the product, you sell it and get paid.

When you sell through a third party, like a retailer or a café, the probability is that they won't pay you for approximately 40 days or longer, so you end up with an awful lot of cash owed to you. This is the piece that many new producers forget to take into account. Between your set up costs and allowing for cash flow, I would estimate that you probably would have to set aside €7000 to €9000 at a minimum.

It would be a real shame if your products were popular and you were attracting new retailers and foodservice operators at a rapid base, but you were unable to supply the new ones as you simply didn't have the cash. I hope that has helped to answer your question.

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