Food Business Startup Problems and Their Solutions
One of our viewer Madmags asked; and he says “I started a roasted chicken business two weeks ago. This is a physical store, almost all who have tried our products say it was good, butuntil now almost everyday we still end up negative. What should we do?”
Alright. I have a lot of questions to ask behind this question, because I don’t know why you’re negative. There could be a lot of reasons why you’re negative. It could be excess manpower. It could be a rent that you don’t really need. It could be you’re not selling so much. And there is a question mark with how good your product really is. Maybe people are saying your product is good, but compared to some other chicken brand out there, it’s okay. Because you have to qualify the question. Is it good compared to all the other chicken brands out there? Or is it good, and that’s it? So not selling so much, alright.
How you can improve this is by improving your product. If it’s not selling so much, there are only two reasons why. You improve your product or you improve your marketing. An average product can sometimes sell a lot if the marketing is good. So there are two ways you can go about it. Product. What can you improve about the product? I am not an expert when it comes to food and chicken. I love eating chicken, but I’m not an expert in chicken. I’m not sure how you can improve your product further, but there has to be something that differentiates it from the others.
One example is, there are lots of roasted chicken businesses out there, right? Baliwag, Sr. Pedro, Andoks, Chooks To Go, and some of these players came in late into the market. But they did well because there’s a differentiator. They all have a unique selling proposition. Even if it’s how you sell, if you have this certain promo, or this and that. It’s not the taste, but it’s how you sell, it’s still a product differentiator. It’s still a unique selling proposition.
Another way you can go about it is marketing. How much are you marketing your product? Are you posting on social media? A lot of people are on social media right now. A lot of people are posting, taking really good photos. Actually, if you’re in the food business, what you need to do is make people on social media hungry. That’s it. People on social media should know about and see your product. They might not order yet. Maybe not for the first time. Maybe not the second time. But maybe on the third time, they’ll place an order. Who knows? But if your food is not in people’s faces and social media, they will not remember you and they will not even try to inquire for it. There’s really no way that people are going to get in touch with you and place an order. That’s the other way to go about it.
In my opinion, the marketing has to be done. Marketing has to be done. Even if you tell me that, “Sean, it’s already saturated. There are already a big number of posts about food, it is already a crowded place.” But it works. That’s why they’re doing that. And if you’re not doing that, you’re missing out and you’re leaving money on the table. You could have converted those chances into profits. So can you do both? Yes. Improve your product and USP, and then market that on social media. That’s definitely gonna work. So you have to figure this out because if you’re not selling so much, but people are seeing your product is good, there is something they’re not telling you and you have to figure that out
One way that you can is not by asking them, is the food good? But by asking them, if you didn’t know the product or you didn’t know me, would you still buy this product? Would you still buy my food? Or would you refer this food, this roasted chicken to a friend or to a family? And if you would refer it, how strongly would you recommend it from a scale of 1 to 10?
So you know, if they’re going to promote the product by word of mouth, word of mouth marketing is still the best form of marketing. What you would want to know is, how strongly are they going to promote your product to their friends and family? That’s a question that I’d probably ask them, not about how good is the food, but more of how strongly would you promote this roasted chicken to your friends and family? If they answer a 9 or a 10, fantastic. You’re quite sure that they’re going to promote it. If they answer a 7 or an 8, probably not. They’re probably neutral. If the answer is six or less, they have something wrong with your product that they’re not telling you. We call these people – detractors.
Six or below yung sagot nila, we call them detractors. There’s something wrong with your food, your product, or your service, the way you serve your roasted chicken, and they’re not telling you that. So believe in the net promoter score, not in whether they say your food is good or not. And I always ask open-ended questions. Don’t ask questions with a yes or no.
So open-ended questions would be that example. You answered 9 or 10, why? Why would you, why do you feel like you’re going to promote it strongly to their friends and family? And if they say, because it’s the first time that I ever tasted a chicken this good, then, you know you have something working for you there. That’s an open-ended question, it cannot be answered with a yes or no. If they answered 7 or 8, which means they’re neutral and they’re probably not going to do anything, then your question would be, what can move that to a 9 or a 10? What can make you a promoter? What can move that score to a 9 or a 10?
And if their answer is six and below, an open ended question could be, well, what can we do to improve that to a 9 or a 10? Or what can we do to improve that even to a 7 or an 8? So that they’re not detractors anymore. So you ask these questions, you will get more info and you’ll learn more so that you can improve your product. I hope I answered your question there.
We have a follow-up question from Madmags. Do you think food businesses can survive and grow if I go full online? Yes, definitely. Especially now, again I think, this new normal that we are in is gonna go all the way till, realistically speaking in my opinion, 2022. We’re going to be living on this “new normal” for 2 years or more than that, at least here in the Philippines, then going full online with your food business, it’s going to work. Actually, I think it would work better than having your food stall business, having a physical store because you’re going to pay for your rent and stuff, so just do it all online.
You can’t really say that, “but Sean it is really saturated.” It’s saturated because it works. That’s why people are doing it. If not, then people won’t be there. And also how visible can you get? Online is where people are. As many have said we’re in a low touch economy? Low touch, yeah, low physical touch, but all the touches went to smartphones and laptops and computers because the sessions that we see right now and the analytics behind the client’s websites, at least on our clients, is huge. There are a huge amount of people browsing, and businesses that went online. There are lots of people who are buying from e-commerce websites, a lot more than when it was you know, when things were normal back then.
So definitely that is something that I recommend. Have an online strategy. Maybe start with a Facebook page. Start with the free stuff. Right? Don’t spend too much money going online, especially if you don’t really know what you’re doing yet and you’re testing things out. Don’t spend too much money, just be frugal about it. I’m not saying be cheap, but be frugal, be wise in how you spend. If you really need to invest some money because it’s going to make money for you, then by all means spend it there. But don’t be cheap, especially to your business or even to your suppliers.