Tips to manage a growing food business
How long have you been in business? One, two, three years or much longer. When was the last time you took a mental step back to review that your original unique selling point is still unique; that your target customer is still relevant; and your market segment is still matched to your product(s) and business ethos?
We suggest you do it every year at a minimum. With the significant market changes caused by the changed circumstances in 2020, it’s a critical task to ensure your business (and product) keeps up with changing customer expectations.
It takes time to thoroughly review your business, however, it is a chance to refresh your perspective and check that your business is still delivering a unique product of high quality to the right customers.
Unfortunately, we find that businesses that don’t stop and conduct some sort of annual review are highly likely to have troubles in the year ahead - reacting to changes rather than being proactive and ahead of the trend. This is especially true for new or smaller businesses with an artisan food product, as they tend to have less staff and limited capacity to adapt quickly to unexpected changes.
Reviewing your business is a task easier said than done and it relies on having kept accurate sales records and a proper understanding of your customer shopping experience. Here are our five tips to assist you break it down into manageable tasks and have a fresh action plan for the year ahead.
Keep an open mind
Remember to stop and clearly think about the process you are using to review your business, so that your inherent bias does not give you a false result. This can be hard to do, so remember to be patient and not rush. Give yourself time to work through our tips and think about the results of your review. If you can, include other trusted advisers in the process.
Are you too close to your business? Most small business owners are very passionate about their product and what they do, which we love. However, it can be hard to fully step back, so if possible find someone from outside of your business who can assist you or conduct the review on your behalf. This could be your business coach, your graphic designer, and/or your marketing manager. They will be more objective and present different points of view. Remember to be nice though when you get unexpected news!
Track sales data
It’s important to conduct a review using as much real data as you have. Not opinions, ‘guestimates’ or back of the envelope figures. The more real and relevant data you have, the more lessons you’ll learn.
Ideally you will have recorded who and how people buy your product. If selling at farmers markets, review your sales figures of which products sold at which markets and check for seasonal trends. If you sell wholesale, which store sells more than others i.e. does your product sell better in a health food store compared to a cafe? If selling online, run reports on the orders you have received.
Use this data to look for: repeat customers / or do you have lots of ‘one off’ customers; any extra specific detail about the customer who made the purchase; $ value of the purchase; typical number of items they buy; if buying as a gift; or for themselves occasionally / as a pantry staple; review past years/months (as relevant) look for any trends for when sales happen; if you wholesale / have a distributor arrange a catch up appointment to get their feedback specifically about your product. Also ask about any customer buying changes they have noticed overall and as relevant to your specific product / business.
You should have built a picture of your typical actual customer, who they are buying your product for and how much their typical spend is. All of this is critical data to review your perspective about your ‘ideal customer’ and how to reach them. [Check out our identifying your customer blog].
Review the effectiveness of your social media and website
Your website has built in analytics as do all social media platforms (of some type), even without Google Analytics you can run reports and match that with your sales data. Do your best to bring all this data together into one report and then look at:
what time are people online (Facebook / website)
what are the demographics of potential/actual customers (Facebook)
how are people finding your website: direct / search word / social media (website)
traffic to your website: unique visitors per month / up or down in numbers (website)
how many likes/ shares /comments on a post (Facebook / Insta / Twitter etc).
Compare the results of this data review with your sales data review. Can you see seasonal trends or shopping patterns? Take time to look into any unexpected positive or negative results and try to understand what has happened. For example, you have a spike on a particular day in social media traffic / people looking at your website / new likes. Did you run an extra promo / attend a large event / have an instore display - some type of extra activity that generated such a positive response. If yes, then look to see if that can be replicated.
For negative results, try and check what your messaging was: the language / time of day / delivery method / it was seen by the wrong audience - and obviously keep this in mind when planning social media action in the future and amending copy on your website. Remember when making changes to reinforce what your unique selling point is. [If need be check out our understanding your unique selling point blog.}
Has your customer changed
You will have some data that can be mapped directly to actual customers. It is most likely within:
email / subscription details
customer loyalty program details
repeat customers you have met / interact with online
customer feedback on social media via comments they have made (good, bad & the ugly)
any testimonials or reviews to you direct or via social media or Google Review etc
anything your wholesale / distributor has shared with you in the past that was direct customer feedback from someone buying your product
and don’t forget to chat with your customers - directly ask them for feedback when you can.
You know what we are going to say. Review all this data to look for trends, insights, common points that people are making. We suggest you consider anything negative or even suggestive of change and how your business could improve your product/service accordingly. Remember you can’t adapt to every suggestion and you have a business ethos to uphold, so you need to take time to find the trends / common points that align with your business ethos and adapt to those.
Prepare an action plan for change
This is the hardest step, but you are nearly there. Give yourself time to reflect on all your data analysis and if possible get a relevant expert to take a look as well (accountant / social media advisor / your web designer / The Business of Food via coaching sessions, etc.).
Pick the top three positive trends/points and look to make the most of those in your business. Is there material for testimonials OR have customers identified a new product (or tweak of a product) that you can launch OR is there a wholesale market segment you totally missed that aligns with your business ethos and could be a future priority?
Identify the top three negative trends/points and look at what is causing this feedback. Is it customer service - poor online sales / rude staff at markets / shipping of goods failed. Does it relate to shelf life not as promised, or maybe the packaging is not robust enough for retail shelves and needs to be improved. You may also get feedback on your price point, which overall relates to how customers perceive the value of your product.
It’s now time to bring all your hard work together to develop an action plan based on your research that has realistic timelines to implement it. You may find there is overlap with your actions, which is great as you will be able to streamline tasks to achieve the desired changes. If this is the case, we suggest you pick the next top three positive and negative trends and work through those as well to include within your action plan.
Need help?
If you have read this far, you are serious about working on your business and not just in your business. However it can be overwhelming doing this alone. The Business of Food offer Accountability Coaching Sessions structured to assist you in a way that aligns with the business ethos, product needs, your business and personal goals. Usually 6-8 sessions held over a period of two months, we will assist you refresh your perspective and prepare an action plan to improve your business and realise opportunities that align with your business ethos.
If you would like The Business of Food to be part of your team, providing practical advice and support as you prepare as you refresh your perspective, get in touch.