So, it’s finally happened. Your passion for delis has led you to the idea of starting your own deli business – which is great! Few people are lucky enough to do something that they love, and fewer still are motivated enough to build a business around their passion. The fact that you are serious enough about pastrami to throw your hat in the ring is impressive. But you need to be deliberate in how you move forward with your dream. You can establish a successful deli business, but you have to make sure you take the right steps on your journey to build a firm foundation.
Although the general idea of a deli is pretty well understood, you know that there can be a lot of variation in delis from region to region and even within the same region. You probably have a certain type of deli in mind for your business – if you don’t, you should brainstorm and try to identify what you want most in your deli. Once you have a good idea of what you want, you need to find out what your intended market wants and needs. They may be dying to get what you are going to offer. If they aren’t, you might want to experiment with some variations on your idea to find some overlap in what the market needs and what you want to do with your business.
Once you have a business idea ready to go, it’s time to write a business planLearning about your market is one step in writing a business plan. There are others that are just as important, like determining how much it will cost to open for business and how much it will cost to keep the deli operating over the coming months. You also want to estimate how much you can expect to earn and find out when you think you will break even. You need to know these things so you can plan for the future and make certain that the business idea is right for you.
Creating a business plan tells you if your deli idea is going to work. If you find out that your current idea isn’t going to work, it’s ok. Although it can be frustrating, it’s better to find out now before you spend any money. Chances are, you can make some alterations to your idea and figure out a way to make it work. Even if you have to scrap it entirely, you will be happy you did when you eventually build a successful business.
LLCs are not right for every business – but they are right for many small business owners. Forming an LLC offers several benefits that are worth considering for your deli business including:
· The corporate veil. Operating as an LLC separates your personal assets from the assets of your LLC. If something goes wrong with your business, like you lose a lawsuit and have to pay extensive damages, only your LLC’s assets could be lost. Your personal assets would be off the table as long as you did a good job of keeping your business finances separated from your personal finances.
· Legitimacy. Your business will look more legitimate if you are an LLC. This improved look can be useful for things like seeing business investments and applying for loans with lenders.
· Pass-through taxation. LLCs can choose to use pass-through taxation – which means that your business profits pass through to your personal taxes and are taxed at your income tax rate. You don’t have to do separate corporate taxes like you would if you were a C-Corporation.
Serving customers delicious deli products will generally lead to happy customers and great profits – but there is always the chance that someone could sue your business. It may be because they get injured on your property, they think your product caused them injury, or for some other reason. When you are sued, your business needs to hire an attorney immediately and fight for your good name. Of course, hiring a lawyer is expensive, and losing a lawsuit can be catastrophically expensive.
Business insurance is designed to protect your business from these types of situations. You can get insurance coverage for a variety of things, such as product liability insurance, that will kick into action and pay your legal fees – including damages if you lose a lawsuit – as long as they are within the limits of your policy. You just contact your insurance company if you get sued and they will usually take care of the rest.
Hopefully, you never get sued and your business is never held liable for an injury. But just to be safe, you should definitely carry business insurance.
As a food service company, you are going to need to adhere to certain regulations concerning food safety and possibly a number of other regulations. You will need specific permits to serve food and you will be subject to inspections to verify that you are operating a safe establishment. It is extremely important that you take these requirements seriously because failing to do so can lead to your business being shut down – which means no profits while you are closed and can really tarnish your reputation.
You should do sufficient research to know what regulations apply to your deli business long before you open your doors for business. That way, you can design strategies and systems to keep you and your employees within the requirements for your business. If you can establish a culture of compliance, you can often avoid getting in situations where you break the rules and have to deal with the fallout.