Yaneek Page | How to turn a drink concoction into a business
ADVISORY COLUMN: SMALL BUSINESS
QUESTION: I did a course in hospitality and villa services at the Portmore Community College, where I developed a recipe using nuts and seeds and oats along with other ingredients to make a smoothie, which is highly nutritious, and I firmly believe it would do well. I can use 12-ounce bottles for this product. Could you advise me on how to get it started as a business?
BUSINESSWISE: Now that you have developed the formulation for a product you believe could be viable, the work is only just beginning.
Assuming that you may already have some financing in place or set aside for this potential start-up, there are still many things you need to accomplish before you are ready to launch a business.
Some of these include concept testing and validation; business modelling and planning; labelling and packing; standards certification or compliance; production and quality control; distribution; sales and marketing, including pricing strategy; and customer service and after-sales support for final consumers and customers, respectively.
For simplicity, I have condensed some critical next steps you may wish to consider into an eight-point action list.
Safety first. Your starting point, even before taste testing as part of your concept test, should be to secure a copy of the food-safety standards for fresh juices from the Bureau of Standards of Jamaica. The most important factor in food manufacturing, distribution, and sale is adherence to established food-safety protocols that protect the public from injury, and, by extension, yourself from reputational damage and adverse consequences of producing unsafe beverages for public consumption
Now clarify who exactly will buy your product. Identify your target market, and create a detailed profile of your ideal final consumer. This may include your prospective customer’s age, gender, education or job status, and geographic location, among other factors. You need to define and understand your prospective customer so that you understand what they like, how much they can afford, what they spend on, where they buy, how to advertise and promote your product to them, etc.
Do a profitability analysis and flesh out the business model. You can use the business model canvas methodology, which is a lean start- up method for simplifying, detailing, and visualising your business model on one page.
There are thousands of articles and videos online about how to complete a business model canvas with illustrations and examples if you need assistance. This is also the time to engage possible distributors for your product and understand the costs and nuances involved to be included in your business model and financial projections.
Conduct a concept test to help validate your ideas and assumptions about the potential of the business. You can do this with a few focus groups of about eight to 12 persons each. A focus group is where several people who fit the profile of your target market – which you would have defined in Action 2 – sample your smoothie and provide feedback.
You would ask for detailed feedback to help improve your product as well as for understanding potential buying behaviour. Therefore, you would ask them to sample the product and comment on taste, texture, smell, feel, appearance, and so on. You would also ask about how they feel about the name, logo, what packaging they prefer, price point, what they buy now, where they buy, and how many they would buy, among many other questions.
Use the feedback from the focus group to revise your financial projections and analyses and finalise your product development. This may include engaging a food scientist or the Scientific Research Council to test shelf life stability and scalability based on ease of accessing or substituting ingredients, among other considerations.
You may explore with the Jamaica Intellectual Property Office whether your final formulation may be registered and protected through them, however, many businesses simply protect their formulations by keeping some ingredients a secret.
Bear in mind that a product that is highly perishable and in need of refrigeration is usually more risky and expensive to produce and deliver to the consumer.
Choose packaging, get appropriate labelling, and organise production facilities. This may be from your home or with what is called a co-packer. Note that there are special food-safety conditions that must be met in order to produce at home, including using a separate kitchen.
A co-packer is a factory that would produce your beverage using your formulation and deliver the final product to you. One major benefit is that you don’t need to invest in building-production facilities at the outset, but instead, can leverage that of your co-packers.
Complete your business plan with detailed actions related to factors such as finance, marketing, sales, and customer service. Your plan is ultimately your road map and guide to launching the business.
Register your business, relevant trademark and/or logo and proceed with a soft launch or pilot, depending on your strategic decision based on the business plan.
Yaneek Page is the programme lead for Market Entry USA, a certified trainer in entrepreneurship, and creator and executive producer of The Innovators and Let’s Make Peace TV series.