5 Things I Learned Running a Food Company
August 11, 2018 | 5:00 PM | Personal Essay
In October 2017, I opened a Waffle Stand out of my dorm at The Master’s University in Santa Clarita, CA. I was hoping it could be a creative outlet for me to test out ideas that I had and learn more about how to run a business. Here are my five key takeaways that I hope you can learn something from:
1. Estimate High, Estimate Low
In general, I usually round up when estimating something I’m going to buy and I round down when dealing with money that I’ll earn. This usually turns out well and I end up always being on the safe side. When it came to Holey Waffles, I wrote out all the costs. Waffle maker; $30, mixing bowls; $20, and so on. I would estimate high on the price, but I didn’t quite estimate the correct amount of things I needed on my list. While I was at the grocery store I realized I needed napkins to go along with my plates and silverware as well as gloves to cover my hands. Things like this were left out and I realized there was a bit more overhead required than I had previously thought.
Luckily, when I got to pricing, I finally thought of everything and included all the costs into the final price for each item. One thing I never did calculate was fruit. This was difficult for me because sometimes we would cut up strawberries bigger or smaller and some waffles got more fruit than others. I never really got around to pricing out what the expense was on fruit. Unfortunately, fruit was a much tougher expense to deal with, which leads me to my next point.
2. Perishables Suck
It’s something that restaurant owners constantly grumble over. It’s the reason the restaurant you went to last night had run out of a particular ingredient. Food goes bad. After my first night of making waffles, I realized that my milk and fruit would eventually go bad. I figured that I would eventually understand how much fruit I needed, but it was always a tricky item to estimate. Kitchen managers at restaurants are usually very keen in this subject because it saves them a lot of money.
I worked in a movie theater (actually during the same time I was running Holey Waffles) and we were basically a restaurant that showed movies. The managers would estimate how busy it would be and that would tell them how much food to order. On occasion, more people than estimated might buy the coconut tenders for example. So they would run out and tell customers sorry, you can’t have that.
I probably should have estimated lower in the food area and told people that we were out of strawberries or blueberries or whatever. This might make someone upset, but it definitely would lead to less wasted fruit and spoiled milk.
3. The Positive, and Negative, of Instagram (for a food business)
Instagram, and every other social media platform can be tremendously helpful for any kind of business. It can be used as a way to show off your products and services to potential customers and keep them focused on your brand. Nowadays, there are even stores that have no storefront, but sell solely off of Instagram promotions. At my previous marketing job, I was in charge of account creation for new clients. I’d set up countless Instagram, Facebook, Twitter, Google+, and Snapchat pages every month. I was pretty quick to set an Instagram up for Holey Waffles.
I handed my friend Pablo (this guy is amazing at drawing! Go check him out @payblo_) a whiteboard and a set of Expo markers and he came back with a nice concept logo that I brought into Photoshop and produced the Holey Waffles logo seen at the top of this post.
To start marketing on Instagram, I took a picture of a waffle that I had made and was about to post it when I realized that it didn’t look appetizing in the picture. You can post pictures in almost any other industry and they don’t have to be top notch, but if you are marketing food, it must look phenomenal or else it can actually do harm. With this in mind, I spent some time setting up a tiny studio where I could take professional pictures of my waffles.
4. People Like Free
The first marketing experiment with waffles came when I started making them in the dorms and handed them out to students for free. Because my waffles were scratch-made and not out of the box, students really enjoyed them. This was a huge marketing success for us because it allowed people to try the waffles and realize that they were not ordinary, but delicious. At the end of the day, people like free.
5. Size Matters
On opening night, October 1st, 2017, we had 15 customers. The most sales we had in one night was 33. With an average of about $4 a sale we took in about $132 on a peak night. That’s not very amazing. One of our biggest problems was customers liking our waffles, but saying, “I just had one the other night.” The Master’s University has a little over 1100 students and a good percentage of them are commuters. In actuality, there is not a large base of customers for a waffle company or even a food company to make a profit from. The reason there is no big fast-food company on campus is because of the small customer base. The small demographic of TMU students that would pay for food is not great enough to outweigh the costs of running the business.
I hope you learned something useful! If you enjoyed this please leave a comment and share it with your friends. Also leave a comment for what you would like to see me write about next.