Gong Garden
When Sarom Heng-Calanni moved to Fredonia from her native country of Cambodia in 2001, she started planting flowers. “I didn’t even know they were edible,” she says. “They just made me happy.” Today t...
From Concept to Market
Aspiring Food Entrepreneurs Need More Than a Winning Recipe
We all love a good story about people selling baked goods and jellies and hot sauces with a smile. In other words, people living their food dreams, happily ever after.
Unfortunately, the more you dig into the realities of starting a food business, the more the story becomes about finances, paperwork and red tape. It’s a cold, hard narrative that frustrates many people, including Carolyn Welch, executive director at the Westminster Economic Development Initiative (WEDI). The nonprofit organization is one of a few regional outfits dedicated to supporting local entrepreneurship for the economically disadvantaged.
“Someday when I’m independently wealthy,” Welch muses, “I will help some of these businesses get to the place where they can start up on their own. There’s so much paperwork and other BS that you have to deal with. It makes access to a lot of great business resources prohibitive, because people don’t have the capacity to navigate the bureaucracy. Unfortunately, it pushes a lot of people out of the running for being a business owner.”
The first thing aspiring bakers, chocolatiers and other makers of shelf-stable foods must do is to get their legal affairs in order. New York State typically requires food manufacturers, wholesale bakeries and other food businesses to obtain an Article 20-C Food Processing Establishment license. However, under New York State's Home Processor Exemption, residents can sell baked goods and some other shelf stable foods out of their homes. Businesses that receive the exemption can prepare food at home for sale at farmers’ markets, farm stands, craft fairs and flea markets. Exempt businesses can also sell their products over the internet and offer home delivery. These foods must be properly packaged and labeled in accordance with the exemption rules.
Aspiring entrepreneurs should also create a business entity, such as a sole proprietorship or limited liability company (LLC). Establishing a company helps to protect personal assets from potential legal action. It's also critical for startup food businesses to follow all health department regulations and get an insurance policy.
Once the legal issues have been tended to, business owners must set up their finances and plan to pay all of their taxes. This starts with establishing banking for the business that is kept separate from personal finances. New York State and Erie County both require businesses to collect and pay sales tax, and entrepreneurs need to keep careful track of their sales for this purpose. In order to turn a profit or at least remain viable, food startups need to properly price their goods to cover costs associated with labor, ingredients, overhead and other essentials. This requires a bit of math and it’s more complicated than simply looking at the prices being charged by the competition.
Finally, there’s the issue of marketing. You might make the best sourdough bread or croissants in the world, but nobody will know about them if you don’t do any marketing. While most food startups rely heavily on word of mouth, paid advertising is a must, and it isn’t cheap.
All of that is just the tip of the iceberg and WEDI is one organization dedicated to helping aspiring entrepreneurs sort through these issues with all kinds of business assistance. At the West Side Bazaar’s new location on Niagara Street, there is a commissary kitchen available for rental and WEDI also offers food safety training in the kitchen. Additionally, the organization provides referrals to small business organizations, and it is a Community Development Financial Institution (CDFI) that provides loans to people who aren't otherwise able to get one from the bank, ranging from $500 to $25,000.
WEDI is focused on helping economically disadvantaged folks on Buffalo’s West Side. That usually means prioritizing women, people of color and recent immigrants. However, access to the facilities at the new West Side Bazaar and assistance from WEDI aren’t dependent upon gender or skin color.
“What we’re really looking for are businesses that wouldn’t otherwise have the capacity to meet their existing demand,” Welch says. “If you are on the verge of growth and you don’t have the money to rent an elaborate kitchen space, we’re here for you.”
WEDI offers all kinds of other services, including business assistance for companies outside the food and restaurant industries.
Facilities and financial assistance may be WEDI’s most high-profile offerings, but Welch says the biggest service the organization provides is business education.
“We’re always working with people to make sure they understand what they are getting into, and once they open up, how they need to manage all of these seemingly impossible tasks, like getting permits and dealing with the city,” she says.
WEDI isn’t the only local organization providing assistance to aspiring food entrepreneurs. The Small Business Development Center at Buffalo State University, SCORE Buffalo Niagara, and the Women’s Business Center at Canisius University are just a few of the many organizations supporting local food startups.
Jannell Eason is one person who received assistance from these organizations, and her company Nikki’s Chocolates is a great example of what a successful food journey looks like. Eason started making chocolates and selling them to people she knew as a side hustle while working in corporate business. Looking back at the nascent phase of what would become Nikki’s Chocolates, Eason says she may have been a bit naive when it came to understanding what she was facing as an aspiring food entrepreneur.
“When you do things for fun or you’re just taking food to coworkers and friends, you don’t really have to consider the legal side of it,” she says. “Just because my food tastes good, that doesn’t mean I can open up my door and sell to the public. Retail food needs to be professionally packaged and sold legally under food safety requirements.”
In 2017, she got serious about starting her own chocolates business.
She engaged with local business organizations like SCORE and the Women's Buiness Center at Canisius, where she received advice and networking support. She also enrolled in several business classes.
“Even though I have a business degree, I didn’t really know how to be an entrepreneur,” Eason says. “Those services helped me to understand what I should be doing. They provided the bits and pieces that I was missing.”
After two years of continuing the side hustle, saving up capital, taking classes and networking, she quit her job in 2019 to do Nikki’s Chocolates full-time. Then, COVID hit.
Unfazed, Eason continued to work her network to pivot to the new normal. She got into farmers’ and craft markets at Roswell Park. When events started happening again, Eason was able to connect with event planners through the Women’s Business Center at Canisius College and sell her chocolates to organizations holding events. Having rented a commissary kitchen on Chandler Street, she partnered with neighboring businesses for the Chandler Street markets, which were held during the pandemic.
Today, Eason can finally say she’s living her food dream. The business is on stable financial footing, and she’s planning to rent another kitchen space in North Tonawanda to scale up production.
She notes that two years of savings and being married to a Buffalo firefighter with health benefits and a steady source of income gave her the financial wiggle room to not only have a successful business but to find success during COVID.
“Had I not been financially sound on a personal level, I would have been closed immediately!” she says. “That’s what kept me afloat when business was slow.”
Eason adds that aspiring food dreamers need to understand that there’s a lot that goes into a successful food startup, and the last thing they should expect is to get rich.
“The biggest thing I’ve learned is how to remain disciplined,” she says. “I’ve learned you’re the last one to be paid. I’ve learned to not give up on myself if something doesn’t work. I’ve learned how to pivot and make the necessary changes. I had to plan things, and when the plan didn’t work, I had to change the plan!
“My advice to others thinking of doing this is to invest in yourself and don’t be afraid to pivot your strategies.”
Related Stories & Recipes