All of us need to eat in order to survive, but it isn’t enough for us to simply have food on the table. When we buy food from restaurants, food stalls, specialty grocers, and other food and beverage (F&B) establishments, we aren’t buying simply to fill our stomachs. We also buy with things like flavor, variety, nutritional value, accessibility, and value for money in mind.
The F&B industry will never be obsolete because food service entrepreneurs know they need to cater to these needs. But simply joining the industry doesn’t guarantee a business immediate success. In fact, many entrepreneurs acknowledge that F&B is one of the hardest sectors to break into. For one, running an F&B business is more difficult, more time-sensitive, and more costly than running a business that deals in non-consumable products. For another, there is extremely steep competition in this field, and entrepreneurs have to work extra hard to distinguish themselves from their peers. Nevertheless, many entrepreneurs will still pursue this high-risk, high-reward business for a genuine love of food and genuine belief in their products and the service they provide. To those who are passionate about their business, few things are more satisfying than seeing a happy customer appreciate their food—then recommending it to others.
If you’re just starting out in the F&B business and want these good moments to define your career, what should you take note of? You can start by avoiding these six common but costly mistakes made by other entrepreneurs. Being aware of these pitfalls will help you launch your business on a stronger note and prepare it to succeed in this highly competitive industry. Take this advice from PayMaya Enterprise, a fintech company that has helped many Filipino F&B businesses take off through its many business solutions.
Pricing is the number one mistake cited in this list because it’s an area where many F&B entrepreneurs lose money. Entrepreneurs often do the creative work on their products first, and reserve the math for costing these later. Too many still base prices on gut feel or set permanent prices without having explored more economical strategies for pricing.
Not having benchmarks for the most economical prices could lead entrepreneurs to spend too much on putting products together. This can also lead them to bloat their prices, which may not seem worth it to their prospective customers. That’s why the first thing you should do as a food service business owner is to set benchmarks on your prices, for example, relative to standard retail pricing. If you’re in charge of finishing the product, for instance putting together a dish, do your homework about the most economical way to price it. Find ways to produce or distribute your offerings at the most affordable price, all without compromising quality or delivery.
This item is second on the list because it’s often in the field of technology that F&B entrepreneurs fail to realize new opportunities for revenue. Technology cannot be divorced from the future of the food service industry, however, and tech can help even the most old-school of F&B entrepreneurs find lucrative new markets. What those in the F&B business need to do is adopt more modern strategies for advertising, sales, and purchasing. These can be done through the use of dedicated websites or apps.
If you’re in the F&B business, include your online presence as part of your business plan. For starters, you can invest in a professional-looking business website, make your food available online, and guarantee easy online payment for your customers. If you want to allow your website to accept payments from PayMaya e-wallets, for example, ensure smooth integration with partner technologies like third-party APIs. You can also put your offerings on a delivery marketplace and take advantage of the third party’s logistics infrastructure. This will be especially helpful if it’s too hard or too expensive to handle delivery yourself.
While they might put all the focus on their food offering, many F&B entrepreneurs also fail to capitalize on the payment aspect of doing business. This is a costly thing to ignore, as payment options can determine whether a customer does business with a restaurant or not. If the business’s current payment options are too sparse and only include cash or credit, the customer may end up patronizing some other business. Conversely, if they have a variety of options like cash, credit, debit, and QR code payment via an e-wallet, the customer will be more encouraged to
Aside from exploring the payment technologies listed above, you may also want to invest in an all around payment processing device for face-to-face payments. The PayMaya ONE can be used onsite in one of your resto branches or kiosks. The PayMaya ONE Lite, on the other hand, can be used on the go for meetups and deliveries. These two machines will open up a lot of possible payment methods for your customers, and they’ll be thankful for the added convenience.
You will not be able to launch an F&B business successfully without having a reliable network of suppliers to back you up. Your suppliers for raw materials and finished food products have a huge role to play in sustaining your business. If supplies are lacking or inconsistent, it will show in the pricing or quality of your offerings—and your customers will pick up on it. So, if you haven’t finalized your list of suppliers and ironed out a regular delivery schedule with them, do so as soon as possible. Otherwise, your business may soon be on edge
To avoid this mistake, be very stringent about the suppliers you onboard. Once you find the good ones, be active in preserving your relationships with them. It will be a bonus if you can source local products or ingredients for your business. These are often cheaper and faster to procure, plus you’ll be supporting your fellow local businessmen.
There will always be the timeless favorites on a restaurant’s menu. But it would be a shame to depend on these all year round and not launch new items from time to time. Selling seasonal dishes or limited edition food offerings can draw greater public interest in your establishment. It’s also a good opportunity for your restaurant to test market reception to new products. If they succeed during their limited run, there’s a chance that they may become your next bestsellers.
You can also try new strategies to make your food offerings more attractive and suited for the times. For example, to accommodate the environmentally conscious crowd, you can update your product packaging to be more eco-friendly. Needless to say, it’s good to innovate every once in a while.
The last big mistake that F&B entrepreneurs often make is continuing to do business without surveying how things are going. Oftentimes, business owners only speak with the rest of their staff when something’s wrong. You must do the opposite and make it a regular habit to check in with your staff, even when things seem like they are going smoothly.
During these check-ins, you can learn what you’re doing right and what business practices you should continue. You can also learn where you can stand to improve, such as in your financial reporting, your customer service, or your quality control. Hold regular meetings where you can discuss these and set your expectations for the coming months.
Succeeding as an Entrepreneur in One of the World’s Most Challenging Businesses
Making it big in the food and beverage industry is no mean feat. The competition is evolving very quickly, and customers are continuously heightening their standards for quality food service and delivery. Your success lies in meeting the challenge head-on and knowing the road you have ahead of you.
Hopefully, this article will have demonstrated some practical tips for managing your very own food and beverage business. Here’s to keeping your customers satisfied and excited to try your offerings!