“An entrepreneur without funding is a musician without an instrument.”
― Robert A. Rice Jr.
Let me guess, you have the ambition, idea, and plan to pursue your entrepreneurial dream, but you lack the money or resources to truly breathe life into your food business.
If that’s the case, you’re experiencing one of the most deflating feelings in the world. You have something you can practically taste, yet it seems so far out of reach.
I know this sinking feeling because I’ve been there before. It’s a period where all you want is a miracle, but day-after-day nothing comes to fruition.
Except this article…
The plan is to help you gain access to seed money or real resources to get your business finally up and running.
But, before we begin we need to evaluate something first…
Your Business Plan & Spending Habits
In order to bring your food business to fruition, you must have a plan and be fully aware of your spending habits.
Before we continue, can you answer yes to these statements?
- You have a written business plan.
- Your business plan has been reviewed by at least one professional in the niche you plan on operating.
- Your business plan accounts for every penny you plan to spend on the business.
- You know exactly where every penny of your (personal) money is going.
- You are thoughtful and strategic about your spending – always.
Pass the test?
I hope so because getting money or resources on top of poor planning or spending habits is simply a recipe for disaster.
If you didn’t pass the test, take a look at 5 Steps for Aspiring Foodpreneurs and use the resource for a business plan listed in the article.
Now we can begin!
With pioneer sites like Kickstarter and Indiegogo, the web is now full of crowdfunding sites.
Businesses are getting seed money left and right, which enables them to ignite and begin gaining traction.
The key to crowdfunding is having a compelling story and executable plan. Some even think there is a scientific approach to getting funded, so review case studies before you dive head first.
There are typically two types of crowdfunding, reward-based or equity-based. Meaning, you either create various levels of rewards for monetary pledges, or you give equity in return.
Each has benefits and drawbacks, so depending on your business plan, you will want to review them carefully.
Here are some food-related crowdfunding sites, in addition to some of the most popular out there on the web:
- Circle Up
- Foodie Crowd Funding
- Food Start
- Crowd Fooding
- Go Fund Me
- Equity Net
2. Peer to Peer Lending (& Microfinancing)
The peer-to-peer lending option can be great, but with it comes financial terms to consider which differs from crowdfunding.
This type of funding is essentially getting a loan without sitting across from the typical banker. You use the capital from others, but are required to repay according to the agreed upon terms.
Some of the lending networks are lenient with their requirements in relation to a typical bank, however, you’re paying for this leniency often with increased interest rates.
Be that as it may, it’s still a great option for getting funding to get your business up and running.
There are tons of sites for peer to peer lending now, so here are a few:
- Lending Club
- Street Shares
- Funding Circle
- Apple Pie Capital
3. Service Exchange
Ever heard of the kid who traded his cell phone on craigslist and eventually got a Porsche? It’s the perfect example of bartering to get some desired outcome.
Trading your services with people who can help your business get off the ground, is “almost” the same as someone giving you money. However, this model is better than cold hard cash.
Because the individuals you swap services with are experts in a field required to help your business get off the ground.
For instance, perhaps you prepare meals with simple instructions (using the other individuals’ groceries) for an expert marketer to make and eat throughout the week. As a bonus, these can be healthy meal options to combat any health or weight problems (upsell!).
In return, they help you identify your target market and create a marketing campaign to draw in customers. It’s a win-win situation.
It may take some work finding the right people and time to build the relationship, but it can be worth the effort involved.
And personally, I think this is one of the best options if you just take the time to find people who are willing to engage with you.
An example online is SwapRight, who has close to 9,000 visitors each month. It means you’re bound to find someone who can help fuel your business by providing some great services in return.
Surely you’ve won a medal in something before – cooking competition, 5k, or even a spelling bee. Which means, you know what competition is all about.
With an incredible plan in place and perfectly delivered pitch, you may win seed money and invaluable resources to get your business moving.
What does it take?
Simply put…GOING FOR IT!
Yes, it takes the courage to put yourself out there and try. Then try again. And finally, try some more.
Think about the number of individuals who shy away from competitions, which means, you can actually have a real shot!
There are food related and general contests out there so here’s a few:
- MYC Next Idea Competition
- The Institute for Entrepreneurial Leadership Business Plan Competition
- Hatch Pitch
- Fast Pitch Competition
- MIT Entrepreneurship Competition
- Shopify Build a Business
- The Big Sell
- FedEx Small Business
- Sam Adams Pitch Room
5. Incubators & Accelerators
Over the past several years, culinary specific incubators and accelerators have sprouted.
What are they exactly and what is the difference?
Typically, an incubator is where you take an idea and it launches into the startup phase. Private companies or non-profits have incubators that help aspiring entrepreneurs shift their dream into first gear.
Different from an incubator, an accelerator is where you take your seedling of a business and get expert advice and resources to hockey stick its growth. Think of this as hyper-drive.
Some incubators and accelerators have a waiting list and some are only penetrable by knowing someone on the inside. However, aspiring entrepreneurs and startup founders are connecting with incubator and accelerator programs every month and experiencing very real traction.
Incubators and accelerators can be geographically specific, so here’s a list of some that cater to a variety of areas:
- Culinary Incubator
- Canvas by Marriott
- The Yield Lab
- Royse Law
- Reimagine Food
- Good Food
- Fund the Food
- FARM 2050
- Your Pro Kitchen
As they say, “Necessity if the mother of invention.” So if you believe you “need” to get your business going, you’ll find a way to get it started.
I hope these resources come in handy!
For anyone reading with a food business already started, what resources did you use to get going?
Want articles sent directly to you?
- Success Secrets w/Restaurateurs Kevin Boehm & Rob Katz - June 19, 2017
- 5 Questions w/Robert Irvine on Food Entrepreneurship - April 15, 2017
- Stephanie Izard: The Art of Building An Empire - April 3, 2017