One of the first steps in developing a successful food business is to develop a market strategy and a business plan.
Visit potential retail sites, observe and take notes on details such as competitor products, lighting, packaging graphics and shelf-space allocation. If you plan to market your product on the Web, take note of graphics, product descriptions and the ways used to gain customer attention.
Find out all you can about the range, variation and trends in prices of the product or service. Be fairly conservative when projecting revenues from a new enterprise, especially for future years.
The following questions are intended to help determine the specific product that will be marketed, its price, the place where it will be sold and the means of promoting the product.
The Package Design:
Types of Legal Business:
Sole Proprietorship: Single owner, total control and responsibility; simple and least regulated, but owner is personally liable for debts and/or claims.
Partnership: Association of two or more persons acting as co-owners of the business; combines funds and assets; easy to set up; terminates upon death, withdrawal or addition of partner.
Limited Partnership: Owned by limited partner and at least one general partner; liability of limited partners for claims and debts against partnership is fixed at the amount they have invested in the partnership.
Corporation: Separate legal entity formed by filing articles of incorporation with the Secretary of State in Columbia, South Carolina. It is costly and complicated to establish. The owners of a corporation are known as stockholders. Liability is limited for managers and stockholders.
Subchapter S Corporation: Incorporated as a regular corporation but asks for special permission from the Internal Revenue Service to be taxed as a partnership.
Statutory Close Corporation: Small, closely held corporation, professional corporation, or wholly-owned subsidiary corporation. This type is most beneficial to businesses with one to two owners.
Obtaining Business Financing: There are two main ways to finance a business.
Equity: An investment made directly toward business with no set payment schedule for disbursement to investors. Equity is necessary to obtain a loan.
Loan: Necessary when owner’s equity investment is insufficient to finance the company’s startup or expansion. Sources of loans can include banks, government, trade organizations or private organizations.
Location of Business:
Registration & Licensing:
Basic insurance may include the following:
Accurate financial records are extremely important for managing the business. Good record keeping is important not only for the Internal Revenue Service, but also for tracking sales, determining cash for payroll, tracking outstanding bills and controlling inventory.
Contact the South Carolina Small Business Development Center at Clemson University at (864) 656-3227 for assistance in developing a market strategy and a business plan.
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