THE BUSINESS MIND
By Christine Zialcita

Is Food The Answer?

When I ask people the types of businesses they would like to get into, a great majority say that they’d like to get into food business and put up a bar, café or restaurant. This does seem to make a lot of sense. People need to eat, and so if one is able to provide quality food at reasonable prices, there’s no reason why the business should not flourish.

So, is this enough to go on with?

When my friends and I ventured into the restaurant business, it was because we felt there was a market for Singaporean/Malaysian cooking. At that time, there were only a couple of established restaurants serving this kind of food besides the hotels. We came up with an almost unique set of dishes to make up the menu (of course, we had our own Hainanese Chicken Rice), a set price range for our dishes, and an established way to replenish the ingredients from Singapore. Everything was set. We had a good idea and our plans were all laid out. We wanted to build our own place and chose one that fit our budget but was away from the busy section of town. This was a limitation that we did not pay so much attention to, since people were traveling to all corners of Luzon like Tagaytay City and Angeles City to eat at specific restaurants.

The restaurant had a good run and though we’ve closed shop, we still continue to take food orders. However, looking back, it seems that we were too caught up with the idea and the fun involved in the creation of the restaurant more than the running of the business. We failed to take into consideration the Filipino characteristic of wanting things the easiest way. Our location was an inconvenience because it was not in the heart of the business districts and that limited our client patronage.

From experience, I can say that getting into the food business is much too far from being easy. It is not enough that you have a good cook or exceptional recipes to work with. One must consider the consistency and quality of the supply and the product. Most important, you must establish a client base. Food is a very delicate product and highly perishable. Therefore, one must be very careful and responsible not only in choosing the raw materials but also in the handling of the food itself.

In the food industry, it is common practice to maintain the food cost at 40 percent (and beyond 60 percent). This means that when you put together all the electricity, gas, labor, materials and incidental costs to make a dish and divide it by the number of servings you can make out of it, this will translate to at best 40 percent of your selling price.

Ever wondered why a lot of people start getting into the food business by offering packed lunches to offices? The overhead cost is kept to a minimum by working from one’s home kitchen. Also, the only staff to be hired are either members of the family or kept to the least number of hands required to help in performing the volume of work required by the order. If you can get a good and trustworthy person with very good sales and interpersonal skills to go around the buildings to offer your food, you’re in pretty good shape to start.

So for all of you who are looking at getting into the food industry, it is not enough that mom cooks very well and that you want to make a business out of it. I’ve mentioned this in my previous article and I say it again, work out all the nitty-gritty of the business – What kind of service do you want to offer? Who will comprise your client base? Where do you want to set up? What is your target price range for your products? How much capital do you have to work with?

After coming up with all the answers, that's when you sit down and plan.

[Christine B. Zialcita is a businesswoman and a Placement Consultant of Jobsdb Phils Inc. She is also an instructor and partner of The English Chatroom, an English-language training center for professionals. Christine may be reached at Christine.z@jobsdb.com.ph.]