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Food Businesses Require Prep Time to Succeed, Says University of Scranton SBDC

Seminar attendees
From left to right: Mark Toda of PennTAP; Maria Montenegro of the Scranton SBDC; seminar attendees Thomas and Marlèn Kostiw; and Winifred McGee of Penn State Cooperative Extension, Lebanon County with a potential spice product for manufacture.

Auntie Anne’s, the Lancaster-based franchise that made Pennsylvania’s soft pretzels famous across the nation, has inspired countless aspiring foodies to take home recipes to grocery store shelves. Requirements for this niche market can get a bit knotty, however.

In the specialty food business, each business decision affects the next, cautions Maria Montenegro, business consultant at the University of Scranton Small Business Development Center.

“Someone considering the manufacture of food needs to be able to see the big picture,” Montenegro said. “Besides product type, you need to be able to think about your target market, the size of your market, packaging, label requirements and how you can source your ingredients to ensure product quality and still have cost-effective production.”

The food processing industry in Pennsylvania accounts for over $22 billion in sales annually and is home to nearly 1,500 food processors.

To help small businesses participate, the SBDC teamed up with the Appalachian Regional Commission late last year to launch the Agribusiness and Food Specialty Centers in an effort to deliver practical information to those looking to enter this industry.

 

By the summer, the SBDC had joined forces with the Penn State Cooperative Extension, Susquehanna County to add an educational component to the program. Eighteen individuals attended the program’s first “Building Your Food Business” seminar in July. Topics included the details of starting a food-related business, steps for developing a business plan, required licenses and permits, safe food handling, and the benefits of shared-use kitchens, such as the Kitchen Incubator at the Carbondale Technology Transfer Center in Lackawanna County.

Representatives from the SBDC, the Penn State Cooperative Extension, the Pennsylvania Department of Agriculture, and the Pennsylvania Technical Assistance Program offered expert opinions, and attendees also heard from local food entrepreneurs, who provided insights into the realities of the everyday challenges in the industry. “You might truly enjoy cooking and get consistent feedback about how delicious and unique your sauce is, but that does not necessarily mean you’ll also enjoy being in business,” Montenegro said. “Our goal is to be the client’s first stop on the road to success. We want them to think this decision all the way through – Can it be profitable? Can it be easily expanded? – before they make the investment.”

Food manufacture is one of the more popular small business ventures as it can be profitable as a home-based business for those pursuing a side business as a hobby. But the SBDC has also helped individuals with bigger plans, such as Marian and Oliver Butler of Pag-Omar Farms Market, Inc. Consultant Susan Dillon of the SBDC assisted the client with financial analysis and projections needed to expand the business from a tent-based operation into a permanent store which would house its produce and new ice cream and deli operations.

Could you be the next Auntie Anne’s? For more specialty food resources and information, visit www.pasbdc.org/agribusiness or contact the University of Scranton SBDC (570-941-7588 or sbdc@scranton.edu). Article End