Food Starter helps entrepreneurs break into the competitive food and beverage industry

By Elizabeth Crawford

- Last updated on GMT

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Launching a food business takes more than secret family recipe – it also takes money, equipment, space and in-depth knowledge about regulations, distribution and marketing, which can be hard for some startups to coordinate by themselves. 

In Toronto, Canada, the non-profit incubator Food Starter can help young companies check all these boxes and accelerate growth by providing shared production, packaging, storage and distribution infrastructure in addition to a four-phase program focused on developing, launching and scaling food businesses.

“Food Starter is both a facility as well as a program,”​ explains Michael Wolfson, the food and beverage sector advisor for Toronto economic development and culture business growth services. “People who want to start a food business in Canada need to produce them in a commercial kitchen that has been inspected and passes municipal inspection. So, they come to Food Starter because they can use the facility, they can use the equipment, they get assistance from industry professionals to grow their business,”​ and all at a slightly reduced rate than if they opened their own space.

Develop a business plan

But Wolfson says in order to take advantage of all Food Starter has to offer and to excel in the competitive food and beverage industry, entrepreneurs need a well thought-through business plan that includes more than just a beloved family recipe.

After reviewing hundreds of applications for Food Starter, he explains the most common mistake he sees is entrepreneurs who want to start a business because their friends tell them they have the best recipe for a food or beverage.

“That is not a reason to be in business,”​ he said, adding, “To have a proper business plan means you need to have something that has a unique selling proposition – something that sets you apart from everybody else and that may be the product, may be the package, it may be the market that you are servicing.”

Sufficient financing is a must-have

Wolfson also said solid financing is a key aspect of a successful business plan.

“We ask the companies to have $25,000 of what we call unencumbered finance. This is not money that they need to live on. This is money that they have set aside for the business venture,”​ he said, explaining, “By the time they get their package together, by the time they get their ingredients, by the time they do their research development – they are going to spend the majority of that money.”

He added that at this stage many companies are too small to qualify for a loan from a bank, and so they will need to raise the funds from friends and family or other means. While this can be a big ask by entrepreneurs, without sufficient funds, Wolfson said they will quickly exhaust their money and probably back out.

Don’t quit your day job

The other advice that Wolfson offers serious entrepreneurs entering the food and beverage space is to be prepared to work hard and to hold on to their day jobs, at least at first.

“Food Starter was set up so people can come any time. It is a 24-hour, 7-day a week operation,”​ Wolfson said, adding this allows entrepreneurs to “make sure their business has a strong foothold and is stable before they say, ‘Okay, you know, I can make a business out of this. I am going to give up my day job.”

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