Starting your business with a plan and support
Everyone needs a business plan. It does not matter whether you are starting your very first business or growing an existing one, you always need a plan.
It is also important to know whether entrepreneurship is right for you and where to find the services and support available to help you get started.
In this section you will learn:
- if entrepreneurship is right for you and available support services
- why you need a business plan
- the key elements of a business plan
- how to research the information you need for your plan
- where to find support for your business
Is entrepreneurship right for you?
Take a few minutes to learn more about the reality of being your own boss and what it takes to succeed. The Ontario Ministry of Agriculture, Food, and Rural Affairs (OMAFRA) and the Government of Canada have information that could help you decide. To learn more, see:
- Is Entrepreneurship Right for You? Think You Are Ready to Run a Food and Beverage Business?
- Starting a Business in Canada
Even experienced business owners can benefit from coaching or counseling. If you are ready to take the next steps and want some support, try these resources:
Business development centres and consultants
Do you need help writing your business plan, doing your research, or developing the skills you need to be a business owner? Small business development centres or a consultant can help. Make sure you do your research and select a consultant that is right for you and your business. You may need to spend some time before contacting a consultant to identify your business needs and your budget for this service.
Here are a few resources to help you get started:
- Small Business Access
- Community Futures Ontario
- Business and Industry
- Federal Economic Development Agency for Southern Ontario
- Federal Economic Development Agency for Northern Ontario
You’ll find more resources in Appendix A.
Seminars and workshops
You may be interested in attending seminars or workshops on how to start up a new business. Many are free or cost very little. Topics include taxes, business planning and marketing. To find one, check with groups like these:
- Banks and other lenders (for example, Business Development Bank of Canada or Farm Credit Canada)
- Ontario Small Business Enterprise Centres
- Food sector associations (for example, Food and Beverage Ontario or Baking Association of Canada)
- Industry conferences and tradeshows
- Food festivals and events
- Government agencies
- Regional economic development organizations
- Manufacturing organizations (for example, Excellence in Manufacturing Consortium, Canadian Manufacturers and Exporters)
- Chambers of Commerce
You may also find other helpful tutorials and webinars by searching the Internet.
One of the best ways to learn about the food processing industry is to work in it. Consider volunteering, job shadowing or working as an intern. This will give you valuable experience and connections. To find a position, get in touch with an industry association or a career and placement centre.
Business incubators and commercial kitchens
A business incubator is an organization that offers a wide range of services and resources to help grow your new business. These include physical locations, mentoring assistance, management assistance, business counseling and advisory services, technical information, financial advice, training, networks and more.
Some incubators are general in nature and will accept new clients from a variety of sectors, while others focus on specific industries or technologies.
A commercial kitchen is a food production facility that has all the licenses required to produce safe food. It is also inspected regularly by a health authority depending on the type of food that can be produced in the kitchen (that is, municipal, provincial and federal food safety requirements). They generally offer for rent a food production kitchen as well as dry, cold and freezer storage among other services.
To find a business incubator and/or commercial kitchen, see Appendix A.
Think you are ready to run a business? Now it is time to learn more about why you need a business plan.
Why you need a business plan
A business plan is a critical management tool for the creation or expansion of any business. It is a game plan — a concise, written record of objectives and how to obtain them. It describes, at a minimum, a product or service, customers, competition, management and financial arrangements. It should also outline production and marketing plans. It will outline the steps needed to start and grow a successful business, identify necessary resources, resolve potential problems before they occur and highlight areas where you need financing.
Others expect you to have a plan
If you need money to help get your business going, investors, the bank and any government funding programs will require a plan.
Planning takes research — lots of it
Writing your business plan will take a lot of research. The more research you do, the better. Research can show you the hurdles you need to overcome, identify unexpected costs, and help you avoid spending time and money on a project with little or no chance of success.
Research can be the difference between seeing your business being successful or your being business being exposed to risk.
Key elements of your business plan
Business plans come in many different forms and lengths, but they all contain the same core information. You can find many business plan templates online.
Your business plan should include:
An executive summary of your business plan can be one to two pages in length. Investors especially will look at this section to see if they are interested in learning more about your business. Everything here is detailed elsewhere in your plan, so keep it brief.
The executive summary should include:
- a general description of your product
- the market(s) in which you are entering
- what differentiates your product from your competition
- short-and-long term goals for your business (start up, growth potential, new markets and expected income)
- ownership structure (sole proprietorship, partnership, corporation and the management team)
- financial highlights and other financial requirements
The executive summary is the first thing readers see, but it is typically the last piece of the business plan that is written.
Include a general description about your business, such as:
- vision, mission and values
- goals and objectives — what are the timelines to accomplish your goals and objectives
- ownership structure (sole proprietorship, partnership, corporation) — outline share ownership if multiple investors are involved
- leadership and/or management team — what experience, credential and expertise do they bring to the business and how will they contribute to the success of the business?
- business location — where is the business located? Are facilities being leased or is the business co-packing or just starting and using a commercial kitchen/incubator?
Also, see Setting up your business.
Demonstrate the potential success of your business by discussing the size and growth of your industry and the key markets within it. Be sure to include:
- market research, gap analysis and SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the market
- major players in your industry including competitors, your customers and potential consumers of your product
- relevance and key attributes of your product, that is, unique selling proposition (USP)
- industry and economic trends affecting your industry — this is also sometimes referred to as a PESTEL (Political, Economic, Social, Technological, Environmental and Legal) analysis
- certifications, insurance and industry or government regulations required
- overall growth potential of your industry
Also, see Stages of business growth for food and beverage companies.
Go into details about your product(s) including:
- features and benefits
- competitive advantages
- how and where your products will be produced and packaged
- where your product is going to be sold
Also, see Developing your product prototype.
Include the four Ps of marketing — product, price, promotion and place (distribution).
- competitive advantage — does it fill a niche or specific market demand
- price point — based on costs, competition, or what the market will bear
- SWOT analysis — identify and outline strengths, weaknesses, opportunities and threats relating to the business (internal) and the market (external)
- identify and understand the competitors and consumers of the product(s)
- implications of change, trends, new technologies, new products, different lifestyles, ability of customers to afford the product
- targeted geographic area where marketing tactics will be focused
- product distribution — how will you get your product(s) to customer
Refer to the following sections of this guide:
Prepare a brief outline of how you plan to operate your business, including:
- how the product will be manufactured — for example, your own plant, co-manufacturing and commercial kitchen use
- where ingredients and supplies will be purchased and how the product will be packaged, warehoused and shipped
- what, if any, land, buildings and equipment will be needed
- business location — proximity to consumers, suppliers, transportation (include costs) and location of competitors
- production capacity that can be achieved (how you will react to market demand)
- how will the business meet food safety requirements and other mandatory regulations
Human resources plan
Human resources management is a critical component to the success of any business. Consider including details about:
- the key people currently involved in your business — include your management team and outline their experience, credentials and expertise and how they will contribute to the success of the business
- your plan to attract, retain and train employees
- additional skills needed to implement your plan and when you will need them
- how key areas will be handled and by whom. An organizational chart is recommended
- strengths and weaknesses in the management team and a strategy to overcome them
- salary and compensation of managers and employees
Some believe this is the most important part of a plan. The financial plan is an essential part of any business plan and will be a requirement for creditors and/or government agencies when evaluating your business needs and use of funds. Include at least three years’ worth of projected financial statements.
Your financial plan should include:
- income statement — discloses annual revenues and expenses of a business over the time period covered by the plan.
- cashflow summary — forecast how much money will come in and out of the business. This projection will budget what you can afford and predict when expenditures will be made. It will show how to keep the business operating on a month-to-month basis and indicates the projected bank loan requirements during the year.
- balance sheet — describes the assets, liabilities and equity of the business at a point in time. It is a widely used accounting statement that indicates the economic resources of the business organization and the claim on those resources by creditors. This information will allow owners, partners and creditors to compare the estimates against past performance and industry averages.
- capital sales and purchases — supply detailed information on the capital purchases of land, buildings and equipment that are anticipated during the planning period and disclose information on how these assets are to be financed and their life expectancy.
- financing schedule — snapshot overview including name of financial institutions for existing and new loans.
Be sure to document all the assumptions you used in forecasting your revenues and expenses (see Financing your food and beverage business).
Now that you know some of the key elements required in a business plan, it is time to start your research.
Researching information for your business plan
Invest the time required to research the information needed for your business plan. This is a key step and critical to your success. One great place to start your research is by looking at other food and beverage manufacturing businesses to see what they make, how they make it, their target market and more.
Conduct your own search of trade associations specific to your product or reach out to one of OMAFRA’s Business Development Consultants or Regional Economic Development Advisors for assistance. They can provide you with industry or sector reports or put you in contact with the right players.
For details and statistics on Canada’s food and beverage processing industry, it is recommended that you read the Government of Canada's information about food and beverage processing.
Learn about Ontario’s food and beverage industry on Ontario's Food and beverage statistics webpage.
Also, see Appendix A for links to other online resources and industry information.
Food product databases
Look for research, consumer surveys, business trends and developing technologies from all over the world on a wide variety of food product databases.
You can access some for free on the Internet. Others are available through data services for a fee.
Make a list of key words that describe the industry, the business and the topics you are researching. Examples include:
- company names
Learn from example
It helps to know how other entrepreneurs started their businesses. Keep informed through resources such as the Business Development Bank of Canada’s characteristics of entrepreneurs.
Once you have completed your research, you should talk to an expert who can help you finish your plan and provide advice and support for your business.
Now that you have done your research, you know about the demand for your product, how to make it unique and what it will take to get it produced. You are ready to speak to experts or others working in the industry for more advice and guidance.
This support can come from a wide variety of sources.
Industry associations are made up of businesses that operate in a specific industry. You can contact the associations for more information about your industry or to become a member to get regular updates on topics that will affect your business and the key factors for success. Some examples include:
- Food and Beverage Ontario
- Ontario Fruit and Vegetable Processors Association
- Meat and Poultry Ontario
- Canadian Sugar Institute
- Baking Association of Canada
Advisory board/food industry mentors
Many successful businesses have advisory boards. These are made up of experienced people who give the business owners advice and guidance. You might want to create your own advisory board or find a mentor to advise you. Look for someone with food industry experience who is willing to share what they know with you. Potential mentors, or board members, could be:
- retired/previous owners or managers of similar businesses
- non-competing business owners
- potential customers
- key suppliers
- financial planners
- technical experts
Successful businesspeople in non-food related sectors can also provide valuable advice on how to start up and manage your new business. Tips and experience from one type of business often work just as well for another.
Look for local or internet-based business professional and entrepreneurial networks that will share their support and information. These networks do not need to be food related. Peer networks are great for learning best practices, making industry connections, developing potential customers and promoting your business. These are some examples of peer networks:
- Chambers of Commerce
- local food groups
- women in business networks
- young entrepreneur networks
- I can describe my business concept (what my idea is) in one minute.
- I have set up a folder to file my information.
- I have gathered research information on my market and sector.
- I understand my product positioning (USP) and can describe the customer that would buy my product.
- I understand the demand for my product.
- I can list my competition and have begun gathering information on them.
- I know what makes my product better or different.
- I have researched other food and beverage manufacturers to see how they succeeded or failed.
- I have contacted industry associations to find experts who can advise me.
- I have a business plan template and have made progress in filling it in.