Selling your small farm products directly to restaurants can be a great way to increase profits and make your small farm business viable. Learning how to be professional and how to sell successfully to restaurants and chefs can help you grow your small farm business.
Pros of Selling to Restaurants
Once you develop a relationship with a chef or restaurant, you will usually have a steady customer that provides you with reliable, consistent income. The flip side is that you must provide your customer with reliable, consistent product.
Chefs often know what they want: maybe it's a specific kind of tomato, or a delicate herb that is hard to find. If you can provide chefs with tailored, personal service by growing them exactly what they need, you'll both benefit. You can command a premium price for your product and know that you will sell it all, as you can customize the volume you grow to the chef's needs. And the chef or restaurant can come to rely on you for the specialty products they can't get anywhere else.
Cons of Selling to Restaurants
There are a few potential pitfalls when selling to restaurants directly that it's helpful to know about up front. First, chefs want the freshest possible food, so you're going to need to time harvest perfectly to deliver them food that's as fresh as possible. And you may have to store a quantity of food until it's needed at the restaurant. You will also likely be required to deliver the product to the restaurant. Sometimes deliveries can be frequent, several times a week or even daily. You'll need to plan for these logistics before setting up a relationship with a restaurant.
Then there's the issue of payment. Restaurants often fold, leaving you in the lurch if they haven't paid up front. Consider requiring payment on delivery or at most, 10 days after delivery. This will help you stay afloat even if the restaurant doesn't, and avoid you spending a lot of time chasing after unpaid invoices.
Another consideration is liability insurance. What if a restaurant patron gets sick and the restaurant blames your produce? Talk with your farm insurance agent about options for adding this kind of liability protection to your farm insurance plan.
Tips for Selling to Restaurants
- As you develop your small farm business plan, consider what local restaurants you might approach. Decide on terms for payment, how often you can make deliveries, and where you will store the produce for restaurants.
- Developing relationships. Approach restaurants directly and ahead of the season, when you are planning what to grow. Bring top-quality samples and perhaps some recipe ideas. Make sure your invoices and any packaging are professional and neat.
- Give them quality. Don't, unless requested, bring any second-quality items to restaurants. Always make sure they get fresh, unblemished, top-quality produce.
- Grow a little extra. Skimping and then not having enough supply for a restaurant is worse than overestimating their need. Make sure that you count overage when figuring out price, but ensure that you'll always have enough to supply your restaurants.
- Diversify your markets. Sell in other markets besides restaurants; there are many to choose from. And try to branch out beyond a small handful of restaurants to develop a nice network of restaurants and chefs. This way, if you lose one or two, you still have others to sell your produce to.
- Keep great records. Make sure you have a good system in place for invoicing and for tracking payments. Gently nudge restaurants that are past due on accounts.
- Go the extra mile. Customer service is really important in any business endeavor. If you're the supplier who gives them some freebies or samples with their deliveries every once in a while, delivers on-time consistently, and always has a smile and a compliment for the chef, you'll be remembered. Developing good relationships and maintaining them is key to your small farm success.