Wednesday, February 8, 2012

Help! I Can’t Find Kitchen Space! (and other items related to your food business)

Must be the start of a new year as I’ve been receiving calls and emails from people asking questions about getting their food businesses launched and looking for kitchen space. We’ve stopped renting to small companies and individuals as it’s not feasible for us to have others in our space, but I still like to try to help when/where I can as getting off the ground is not easy.

I don’t have time to answer many of the emails individually, but thought grouping them together in one blog post could help everyone out.

How much does kitchen space in the Portland area cost?
That’s subjective, as in my previous post a lot is tied to the overhead of operating the space. However, for those of you looking for short term or every once in a while rentals you should expect to pay more per hour/day. Why? Because most kitchens that rent space to businesses are looking for longer term reliable tenants (which equates to rent). Landlords tend to give better deals to companies willing to commit to terms. You as a short term rental could be disrupting other tenants production time, and you have no basis of relationship with the kitchen to trust you with the equipment, other tenant’s ingredients and/or products thusly increasing everyone’s risk.

What if I can’t find kitchen space on sites like Craigslist?
Craigslist really is the go-to place in looking for space. Second to that I would try getting in touch with local churches (almost every basement/reception hall has a commercial kitchen) and stopping in to your local (small) restaurants to see if they’d be interested in some extra rent off hours (be prepared to be flexible with your time/usage demands).

I need special equipment to produce my product.
Be prepared to buy it yourself. Not all kitchens have buffalo choppers, robot coupes, or double boilers. Most outfitted kitchens that rent either have equipment the landlord uses or a broad scope of items based on what they think the majority of their tenants might use.

I’m working with common allergens or potentially noxious ingredients.
Be upfront with whomever you speak with about your product. Some kitchens are specifically “free” like “nut free”  or “egg free” environments. Also if you’re roasting things like a lot of garlic or chiles some places may ask you to produce during off hours or in times of light usage to prevent scents from permeating other products.

Ultimately, don't give up if you think you've got a good product. Building a business is much about resourcefulness and (at times) sacrifice.

Friday, October 7, 2011

Can Portland Support a $50/hr Rental Kitchen?

Yes, I’m back, well at least for now. Time will tell. As you can see, something incited me to put fingers to keyboard. I almost titled this post “The dudette does not abide”, but in the interest of not attracting just Jeff Bridges fans, I thought better of it.

When I was still living in NYC and doing cost analysis for whether it was feasible to get my business off the ground there (which, it wasn’t), commissary (or rentable commercial kitchen) time was running about $25 an hour. Yes, costs have gone up everywhere so I imagine the same space, if it was available would be closer to $50/hr. However, everything is relative to location and what the market will bear.

So let’s do some math, I’m assuming you’re just starting out or have been in business for a short time. Let’s take the $50/hr as a base hourly rent you’re paying for kitchen rental space. Now let’s assume you’ve budgeted rent as 20% of your forecasted income (Note: everyone has their own formula of how much rent/sales ratio should be, I’ve seen it as low as 8% and high as 32%). This means you need to produce $250 an hour of product, outside of additional labor, food costs, and packaging.

Perhaps you’re a cake baker, and selling your cakes wholesale at $25. Can you bake, cool and frost/finish 10 cakes an hour to stay with your budgeted percentage? Say you’re scheduled for a four hour kitchen rental - $200. That’s $1000 of product (or 40 cakes).

The pricing could work a little better if you were a caterer and only needed 4 hours to put together a $1500 event, where your margins tend to be higher than wholesale.

Is there a market demand in the Portland area for this level of pricing? Time will tell, and if so, prepare to have your favorite $2 coffeehouse cookie set you back $4. 

Sunday, July 10, 2011

Nothing Was Fishy…The Case(s) Of The Would-Be Food Business Owners

Why yes, a garlic scape does make a decorative hat band!

In the past couple of weeks, I’ve been privy to a couple of diametrically different conversations about starting and running a food business, both unsolicited. I’m always willing to proffer an opinion or point people in a direction when I’m able to. (Note to those seeking advice - while I’m happy to help, please email prior to picking up the phone and calling especially on weekends, some of us aren’t up at the crack of dawn on Saturday mornings (or Sunday for that matter)).

The recap below shows that everyone approaches solutions and what motivates them differently (esp. in different stages of business). Do you think one of these has a better chance?

Business One: Owner is just in the getting off the ground stage, with a business idea that  is a take off from something they’re currently doing for an employer. They’re in the research and planning stage, where the owner has investigated the market viability (which looks positive) and is looking at costs for getting the project off the ground. This person (the owner) wanted a little guidance as to where to begin figuring out what they’d need for infrastructure and permits for getting to the next stage (which includes perhaps building our their own production space). I was left with the impression that this person was motivated enough to do whatever it took to get their idea to fruition (and had the support of their loved ones to do it). I think they were also burnt out from their current gig.

Business Two: Owner has been in business for about three years with a ready to eat product, and has had some big ups and downs with their product in the marketplace (including a cafĂ© which opened and shuttered quickly). Owner is at a loss as to how to keep going and seemed somewhat unwilling to accept that they are the one that needs to keep their company moving forward. At this point, putting the company up for sale would probably not be feasible (they’re renting a facility, and the market value of the customers might not garner much). I’m not sure what they had in terms of a support network of friends and family. I told this person that they might want to look for a partner who was more sales oriented to foster some growth. There is no easy answer to keeping a business going without the willingness to put in the effort.

I don’t pretend to have all the answers (mostly opinions), and part of being willing to talk to people seeking advice is to gain my own perspective on issues and ideas. The post I wrote about renting commercial kitchen space is still the top visited post here. Wonder if that’ll change when I post about our newest fruit tart flavor….