If you’re enrolled in or are thinking of enrolling in an Austin culinary arts program, it’s a given that food is a pretty big passion of yours. There are so many ways to explore that passion. When you think of a startup, you tend to think of a group of hip millennials working on a new app or gadget, but startups are actually huge in the food industry. Funding for food and beverage startups has increased fourteenfold over the past five years. According to the Angel Resource Institute, Texas angel groups have accounted for almost 30 percent of the investments in food and beverage companies, while accounting for only 8.7 percent of deals nationally. Texas angel investors are currently the nation’s lead funding source in the F&B startup scene and the state has ranked No. 5 in the nation since 2010.
Texas-based chef and entrepreneur Tim Love took his investing to primetime and is one of the investors on CNBC’s Restaurant Startup. He’s the owner and executive chef of White Elephant Saloon, the Love Shack, the Woodshed Smokehouse, and Lonesome Dove Western Bistro.
Starting a food or beverage business, whether it’s a product or a restaurant isn’t cheap. Not including real estate, a 2009 survey by Restaurant Startup and Growth Magazine found that the average restaurant cost about $451,966 to get up and running. After investing that much money into a local business, whether it’s out of pocket or with the assistance of an investor, you want to make sure the business is sustainable and people love it.
Some tips for a thriving food and beverage startup
- Know your audience: The most successful F&B startups have started with their customers’ benefit in mind. It’s a simple business concept. If customers want it, they’ll come. Do some market research before marrying an idea. There’s a difference between identifying a need and starting a business that nobody is interested in. Not to mention, potential investors will do their homework.
- Address your passion: What are you passionate about? Do you want to keep your grandma’s soul food recipes alive? Do you think your city needs a wine bar to balance out all of the breweries? Whatever type of food or beverage you’re passionate about, find a way to make it happen. If your city already has multiple soul food restaurants, don’t nix the whole idea, find a city that you think needs your grandma’s recipes! Don’t just follow trends, they don’t have the staying power for a sustainable business.
- It’s a team effort: Once your business takes off, realize that you couldn’t have done it on your own, and appreciate your staff. Allow them to contribute their ideas and involve them in decision-making. They probably have just as much pride in your restaurant, brewery, or venture as you do.
Check out the list of local startups in the Austin area. There are places Urban Roots, which provides teenagers with farming internships; and Cottage Cafe, a catering and chef service.