Foods seems an interesting game. Highly profitable with margins up to 70% but there are many facts a FBO (food business operator) is unaware of-
1. Running/operation cost -
During initial stage a FBO only consider the cost of machinery and raw material but forgets about the inventory cost, market credits and losses due to other elements such as rodents, pests etc.
2) Initial funding/Setup cost:
A food business requires a very high setup cost. So the returns comes after a long time as compare to tech business where business returns are very fast as compare to setup cost.
3) Food regulation:
The food regulation varies from country to country or region to region, so it becomes very difficult for an FBO to maintain standards of each and every location.
4) Shelf Life of the product:
The shelf life of a product plays a very big role in market, if the product has low demand and smaller shelf life chances of product deterioration is very high and result on the pocket of FBO.
5) Man power:
Man power plays a very big role in food industry, a single person can run a food business and one need skilled labour to do a task which is very difficult for a business to manage initially.
So if you are planning to enter into food business make sure you consider all these point.