Starting up a vegan business

Donald Watson - inventor of the 'vegan' word

There are some enterprising vegans out there wanting to make and sell lovely products. ActiVeg claims no great knowledge about setting up businesses, so always get professional advice and talk to others who have done similar. However, here are a few ideas to consider to get you going. Feel free to add your experiences and comments below.

Building your ideas

Firstly, get as much advice from people with experience as you can, such as similar businesses in other areas that you won't be in competition with, and potential outlets for your products.

Consider all possible ways of selling your products, such as through the web, other vegan and veggie businesses, school and village fetes, craft fairs, specialist wholesalers, independent wholefood stores and delicatessens, local markets, vegan and veggie festivals and roadshows.

Building your business plan

Think of all the main costs and equipment you'll need and what kind of prices you'll need to charge. Get advice on making a business plan to help think things through.

The first thing to do is to contact your local Council telling them you want to set up a local business. They are likely to provide business support and also tell you what standards you need to apply, particularly with respect to food hygiene and public liability insurance. If it is likely that you will need to get a food hygiene certificate they can tell you about local courses, or you can train on line too.

Ask the organisers of markets if they have any plots available and what requirements they have of sellers as well as what they charge so you can work out your costs. Ask if they will do you a lower rate for a start up business, as the worst they can say is no.

Promotion

Once you are certain you are going to set up, it's never too soon to get people to know about you.

These days it is pretty much essential to have a web presence, even if you are not selling through the web. ActiVeg's suggestions for making use of the Internet as a contact or group are pretty relevant for small businesses too.

Tell your local vegan and veggie contacts and groups about your products and even ask them to be your first point of call for feedback on your developing products so you can get an idea of which ideas work best.

A good way to increase your profile is to offer to bring your food or other products into your local radio station for sampling, especially with a seasonal theme, like Christmas or Easter or Valentine's or Vegan Week/Month (November). Mention your business name and where you sell while on air and enthuse about health benefits, etc.

Also tell your local paper and think of something photogenic like you and your most colourful/exciting products for them to feature and suggest this.

Veggie festivals and vegan free food fairs in your area would be good ways to get your products known about and tasted by your potential market. Also think of other niche groups, such as religious and health issue groups that might have similar needs (eg egg-free for Hindus, dairy-free for asthmatics) and look out for local events or organisations for them.

You may also think of getting the Viva Trademark. You could also get the Vegetarian Society Trademark.

You can gently and positively tell customers about veganism too, by providing information on your website and materials, or simply having relevant vegan leaflets with your merchandise, or to hand if people ask questions.

Tell ActiVeg!

We love to celebrate new vegan initiatives, so tell us and we'll tell the world!

Advice form the horse's mouth

Yaoh, a successful long-standing completely vegan business that also supports vegan campaigning, has some strong words of advice. This is owner Tim Barford's take on it, full of sense:

It would need a book written, it's such a minefield starting a business and getting it to be successful. I believe the figures are something like 80% of small businesses started go out within two years. To then make it through another 3 years is even rarer.

The trouble about giving advice to people like this is there's just so many variants etc, literally it would take a book to properly advise. Probably the best advice is to invest in a 'business advisor' to see you through the first two years, someone who can tailor advice to the business concerned, and advise throughout setup and the eventual slow road to success and perhaps even one day profitability......but in the meantime here are a few more tips that perhaps need to be added, focused on:

1. Margins margins margins. Most of us don't get our margins right. The main thing is to leave enough room for people to resell your product/service. Most of us have no idea at all, even people who are established. If you are selling food/Bodycare - are you selling direct to public? Or direct to a shop who sells to public? Or to a distributor who sells to shops who sell to public. Everyone will want a wage - does the margin allow for this? Do you know what the trade standard margins are? For instance with natural Bodycare its 33% POR (Profit on Return) That means if the shop sells at £1, they pay £0.67. However, for food its 25%, which means they pay £0.75 for every pound they take. If you want a distributor to sell on to shops, which is how the shops like it (they don't like loads of small accounts and suppliers, too much work) then the distributor will want min 25%, and free shipping. So that means you as the supplier receives from the distributor £.50 for Bodycare, but £0.56 for food. Can you survive on that? Is it enough, after costs, materials, promotion, taxes, etc? If not - put the RRP up!!!! So many people fail to get this. So they do all the hard work, get a good idea going, and then find it isn't sustainable.
2. Costs - be scrupulous - don't ignore a cost, even if it is small. It can soon mount up. Here's a good one - my mate Fred drinks water all day at work, and I buy reverse osmosis water from Wild Oats. I worked out the other day that since he started work he's drunk over a grand's worth of water whilst working here!!!! You have to take into account absolutely everything into how much things are gonna cost to function, otherwise you don't get a big enough margin to be sustainable. So many people mess this one up
3. Don't get TOO ethical and restrictive - you have to flexible. Bear in mind if you are in the vegan market, 99% of your potential customers are not vegan. And don't be shy of making some kind of margin for yourself, it's not a crime to make a few quid in life. It's how you earn it and what you do with it that is far more important, and so many people in this trade are scared of actually making anything for themselves in case they get accused of being 'breadheads' or 'in it for the money' or some other heinous accusation. A good example of this is our Bristol Vegan Fayre. I've never put in for a wage, despite paying everyone else, and the last show over 1000 hours unpaid work, then we lost 5 grand. That is not a sustainable approach. I've got to grow up, put myself on a wage, and make sure the next one doesn't wipe me out. That would be a real shame. Happens to so many well intentioned people. And so many good ideas and businesses go down the panny cos people are afraid to make a pound note out of something ethical.
4. Are you reliant on one product/one source for your business? Can you diversify? If not - what happens if you lose your supply or competition comes along and takes over your product/sales
5. Think of it like a marriage. Do you still want to be waking up to the same person in 5 years time? Or are you going to be fed up, and stuck with it? If you don't wake up in the morning enthusiastic, passionate and motivated in 5 - 10 years time - is it a good idea to get started?
6. be prepared for failure. There's many many reasons why businesses don't succeed, and sometimes it's just not your fault. Are you gonna beat your self up mercilessly for the rest of your life just because something doesn't work out the way you wanted? Are you prepared for failure as well as success?

There's a lot more - so get as much advice and help and thought as you can before you start and as you go along.

Authors: Sophie Fenwick-Paul & Tim Barford

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Story posted by on 2007-10-11 11:38:14.

Story last updated by on 2010-12-06 16:50:46.

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