Kitchen incubator business plan

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Kitchen incubator business plan

Since then, the food landscape has evolved pretty dramatically. We are now flooded with artisan products or specialty, local, small batch — insert your favorite food movement here!

In a classic chicken or egg problem, this explosion of small food businesses was either fueled by or paved the way for the evolution and growth of the kitchen incubator.

Regardless of which came first, kitchen incubators have undoubtedly helped to sustain the rise of specialty products, making it significantly easier and less expensive for aspiring entrepreneurs to enter the market.

Small, but not simple For many of us, when we picture a kitchen incubator, we think of a certified, fully equipped commercial kitchen that food entrepreneurs can rent on an hourly basis to produce their goods. These incubators allow entrepreneurs to be in business without having to secure and pay for their own commercial kitchen space — an expense that would be prohibitive for most.

We have learned a lot from our research on kitchen incubators. This post describes the many different ways they can be structured and some of the common challenges they face. Perhaps you are considering whether or not a kitchen incubator might be right for your community.

And for anyone already running a kitchen incubator, we hope this post spurs you to consider other services you might incorporate and ways to address the challenges you may be facing.

What is most challenging? What has been most successful? What advice do you have for people or communities interested in developing one? These are covered in the following sections. Mission Though most incubators have a number of different components to their mission, they tend to focus on one core mission above others.

For some, such as LA Prep Los Angelesthe focus is predominantly on operating as profit-driven enterprises that have been developed in response to a commercial market opportunity. Others, such as the Western Massachusetts Food Processing Centerhave a strong focus on providing agricultural producers with a location to process surplus produce and develop value added products.

Organizations such as La Cocina San Francisco and CommonWealth Kitchen Bostonfocus on supporting businesses owned by minorities, women and low income individuals. Still others, such as Wisconsin Innovation Kitchenowned by Hodan Community Services, prioritize workforce development and the employment of people with disabilities.

Basic structure and core services A shared use kitchen is the most common way to structure a kitchen incubator. Type of clients served Clients can range from caterers to food trucks, agricultural producers, food product companies and food service companies such as meal delivery services.

For example, some incubators may be able to work with food trucks as clients, but may limit the number of tenants based on their parking and plug-in capacity. Some incubators may not have the appropriate certifications to accommodate food businesses that handle raw meat.

Other incubators may have invested in specialized equipment, such as a coffee roaster or equipment for juice pasteurization, and therefore seek out specific types of food businesses to utilize their existing equipment.

As an example, Bake, Boil and Brew San Antonio, TX invested in a state of the art brew kitchen, making it one of the few incubators that is set up to support microbrewers. Some organizations, such as Kitchen Chicagowill provide different rates for different times of day with lower rates at night while others will provide discounts for businesses that have high usage rates.

Additionally, some kitchens may increase the hourly rate if the company brings in more than a certain number of staff members, or if they take up more than a specified amount of room for their production.

Recently, more and more kitchen incubators — such as Union Kitchen Washington DC — are operating on a membership basis, with a monthly rate that offers a set or unlimited number of hours of access. Kitchens such as LA Prep and The Hatchery, which provide entrepreneurs with private space, will charge a monthly fee akin to a lease.

Those offering co-packing services usually price this service as a fee per unit or as a percentage of revenue that the food business receives for their products.

In fact, some entrepreneurs we have interviewed have suggested that storage for finished goods is the most valuable component that an incubator kitchen offers them. If storage is located inconveniently, this can add substantial time and hassle to the production process. While the following list is not exhaustive, it highlights some of the most valuable and common services provided by incubators.

kitchen incubator business plan

Business expertise and support: Almost every kitchen incubator we have researched offers these types of services, sometimes as a core component of their kitchen or as a separate service for which entrepreneurs are charged an additional fee.

The common thread is that incubators are recognizing that beyond access to production space, entrepreneurs need support with all aspects of building their business — including business plan development, sales and marketing support, and financial planning. By helping their clients succeed, incubators are securing their own future revenues by keeping entrepreneurs in business and utilizing their incubator kitchen, and demonstrating their value to new inbound clients.

And, in many cases, these business services are a critical component of how incubators accomplish their mission to support local entrepreneurs.

Sourcing and collective purchasing: Small food businesses are often a one man or one woman show. A single person will often run sales, production, procurement, social media, label making, distribution, etc. Incubators such as CommonWealth Kitchen are beginning to offer sourcing and collective purchasing support, helping their entrepreneurs gain access to great inputs without spending extensive time finding the right suppliers, and gaining more competitive pricing from common vendors leading to significantly improved profit margins.

Establishing a Shared-Use Commercial Kitchen Incubator: Feasibility Study, Boise State University/Idaho Business and Economic Development Center, - This study, conducted for the Clallam County Economic Development Council, includes market research, budget, layouts and management plan. The proposed incubator model combines a structured curriculum of small business technical assistance with personalized mentoring and coaching to address the specific needs of each entrepreneur. HBK Incubates is a shared commercial kitchen space and business support program for high-growth food enterprises, run by award-winning food business Hot Bread Kitchen. In the capital-intensive culinary industry, our incubator allows entrepreneurs to mitigate start-up risk and grow their food ventures in a community of business owners.

This service is especially valuable to food businesses that are interested in sourcing locally but find it difficult to establish a relationship with a local producer given their capacity or volume constraints.

Incubators often charge a small fee for this service, enabling them to gain additional revenue while still passing on savings to their entrepreneurs. Many food entrepreneurs have full or part-time jobs and cannot be in the kitchen at any hour of the day.Aug 18,  · Demand for specialty and artisanal foods is booming, and new entrepreneurs want to get in on the action.

Incubators can provide shared commercial kitchen space and tips on . U.S. Kitchen Incubators: An Industry Update. Business incubators can be described as sort of shared kitchen space for entrepreneurs. In downtown Birmingham, The Annex Culinary Incubator takes that metaphor literally.

Overseen by Executive. Skip to content. HOME; PROGRAMS. Business Incubator Program; SBDC. SBDC Overview; Leading Edge Program. Hot Bread Kitchen, which is located in East Harlem, charges a fee, but aims to bring in 30 percent of its members from a low-income demographic and subsidize their use of the incubator's resources.

Food & Drug Protection Division Food Program Starting a home-based food business. Information & Resources for Starting a Home-based Food Business.

kitchen incubator business plan
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