How to Start an Organic Food Business

Organic foods are becoming extremely popular as individuals are being educated on proper health. As a result, more organic food stores are opening up. It is a new trend and a potentially profitable one. If you have a passion for eating right and a knowledge of the organic food industry, then you would be a prime candidate for starting your own organic food business.

Instructions

1. Find a possible location for your store. Make sure it is in a popular area that gets a lot of traffic. Often small stores off of side streets end up closing their businesses within 2 years. A popular area also means less advertising expense, especially if you have a large sign that people can see from far away. When you find a possible location ask how much the rent would cost. You will need this info to create your budget.

2. Create a business plan so you can get start-up funding. Things to include in your business plan are all of your expected expenses: rent, electric, phone, Internet, organic food and advertising costs. Make the list as detailed as possible. Now include some paragraphs that show a prospective loan officer how you plan on making money. What would your mark-ups be? Will you create some of the organic food yourself from scratch? How will your accounting be handled? Will you have a business partner? Tell them a little bit about why you want to start an organic food business.

3. Get certified. If you want to produce any type of organic product, you will need to be certified by a USDA-accredited certifier. You don't need this certification if you are just selling food that is already deemed organic. You only need the certification if you are the one making the organic food.

4. Buy organic foods from a manufacturer. Several manufacturers specialize in different organic products so you will need to create a relationship with several of them. A link to a list of manufacturers and their specialties in given for you at the bottom of this article.

5. Make a deal with a local farmer's market. You can negotiate a good price with them and then resell the foods for a higher dollar amount creating a profit. It would be beneficial to farmer's that are local to work with you, because they could save tons of money on shipping costs. Arrange to pick up the food and you should be able to negotiate a good price.

6. Get all necessary local permits and register with the IRS so you can submit your taxes quarterly. If you have any questions about the legal aspect of starting a business, you can contact the SBA (Small Business Administration). Their website is listed for you below.

7. Get advertising and hold a grand opening. You are going to need to advertise a lot in the beginning, but it will not always be like this. You need to get people to know you are there. Once they do, you won't need to advertise as much. Make sure you have added this cost in to your budget. Your first year will include your biggest advertising expense.

8. Consider starting an organic food franchise. This would give you an established name plus provide you with all of the contacts you would need. It gets you insurance, training, signs, advertising, furniture, fixtures, computers and software you will need to run the business and so much more. This is an expensive option but one definitely worth considering. You will basically have a success manual, so if you follow it and your neighborhood has a demand for organic food, you should do very well.

Tips & Warnings

• If you are not the best accountant, you may want to consider getting a business partner. The partner doesn't have to own 50% if he isn't doing half of the work. You can negotiate an appropriate amount based on how much work he is willing to commit to.

• Do your research first. If your town has not yet caught on to the benefits of buying organic, then your store is going to flop! They must first realize they need organics and then they will start buying it. Take a survey or talk to a grocery store to see how many organic products are being purchased.

Resources

• Read this Article in Spanish
• List of organic food manufacturers
• SBA