Lack of Barriers & the “Passion” Mirage

April 4, 2018 by in Fusion Blogs

K Sridhar,
Managing Director,
Fusion Foods and Catering Private Ltd

How often it is, that I hear someone say, “I have always dreamt of being in the business of food.” The fancy for the food business continues to run unabated; people call it a ‘passion’. There are many, many who let go of the routine of their regular day jobs, hoping to find satisfaction and an interesting life in running what they are passionate about.

But while passion is one thing, business is quite another.  The threshold for starting a business in catering is very low. The impression is that the business has huge margins and therefore the passion. All you need is two burners, and a small team, perhaps a husband and a wife. The business of food retailing is all set to begin.

Food retailing means, cooking and serving food, and collecting cash. As long as the cash is in hand, no importance is given to costing. The business seems to be going good, there are customers and cash is in hand.

However, short shrift is given to basics like hygiene, food safety and processes. No standards are followed and the business is “mom and pop” style, with the accent on food delivery and cash collection.

Finally, when the bubble on the margin bursts, there are a hundred reasons that are given as to why they want to exit the business.

So What Could Have Gone Wrong?

  • Cash flow dries up
    • Mismanagement of funds
    • Lack of financial discipline
    • Non-banking of daily cash
    • Bad creditor management
    • Not working within budgets
    • Miscalculation in pricing
  • Lack of Standards
    • Hygiene issues
    • Foreign particles in food
    • Poor service
    • Hygiene maintenance in kitchen
    • No pest management
  • Limitations
    • Lack of variety in food, leading to food fatigue
    • Menu planning
    • Client servicing

While the barriers are low in the starting up of the business, there are some things that you can check off before you start.

One major criterion for this is your ability to be in for the long haul. As in any business, the turnaround can take a little over a few years or even more, depending on how you grow and the clients you take on.

Below, I offer you a checklist that can help you negate the issues that could take your business down the wrong path, as I have listed above.

The checklist

  • Procurement is the key – quality and pricing have to be balanced.
  • Every pricing for an order has to be supported by costings.
  • Statutory obligations and compliance are very important.
  • Basic standards of hygiene and food safety to be followed. You can read up on these, or consult someone in the industry to help you get started.
  • Diligence in cash handling and good accounting practices are a must.

So if you think this is the line for you and you are keen to start a business, pause to think of the above. Putting in the checkpoints when you start, and following them diligently, come what may, is key. Growth then, is easier, for as you grow, these checkpoints become more robust and healthy, and of course, you learn from your mistakes.