ONE of the biggest mistakes that any entrepreneur can make is to start too big.
The risk is of burning up precious start-up capital by hiring fancy offices or taking on an expensive retail outlet before confirming that there is sufficient demand for the product or service he or she intends to provide.
One solution is to start small and test the water for your idea with a low-key approach.
That way, if your product or service proves not to be the hit with customers you had been hoping for, at least you will not have lost everything.
One good way of doing this is to tap into the growing nationwide success of farmers’ markets. By taking a stall for just a few pounds a week you can meet your customers face to face and find out exactly what their opinion is of your products.
While farmers’ markets were originally set up to provide an outlet for local farmers to sell their produce directly to the public, the National Farmers’ Retail and Markets Association (Farma), the organisation that is charged with certifying the markets, is keen to encourage so-called non-farming secondary food producers. These are people that are allowed to take stalls all year round to sell quality homemade products such as chutneys, bread and cakes.
Rita Exner of Farma said: “If you have never sold to the public before, then taking a stall at a farmers’ market is a great way of learning because you are presenting your products and seeing if they are something that people will actually pay for.
“It’s an excellent way of keeping in touch with your customers because if they enjoyed your product — or if they didn’t — they will tell you. It’s a great first step.”
She added: “Secondary producers are a valuable addition to a market because in general they are not seasonal and so are able to come to the market all year round. It is a trend we would like to encourage.”
Jo Burrill, 54, started baking when she was made redundant from her job as a tour guide, and now sells her home-made bread and cakes at the fortnightly farmers’ market at Hexham in Northumberland, where she also acts as the market’s co-ordinator.
She said: “I’ve seen quite a few businesses start off at a farmers’ market and then really develop. It’s a good starting place.
“A year ago we took on a man who grows chillies in the northeast of England and he has managed to turn that into a successful business.
“And we recently had the people of another business tell us that they were now far too busy to come to the market — and that’s just such a wonderful story.”
Burrill uses local flour from a farm only some 10 miles from Hexham to make her bread and at present sells 300 to 350 loaves at each market session.
She said: “I get a lot of feedback from my regular customers. Sometimes I feel like my business is a bowl of dough and I have to keep punching it back to stop it expanding over the sides.”
Cheryl Cohen is a director of London Farmers’ Markets, which runs the 15 farmers’ markets in the London region.
Her organisation is happy to give advice to budding entrepreneurs wanting to take a stall for the first time.
“We’ll talk to them about how to present and package their products and tell them what customers are looking for.
“We’ll talk them through pricing, we’ll put them in touch with existing producers on markets — we do whatever it takes.”
Cohen said that prospective sellers should be prepared to commit to taking a stall for several months if they are accepted, and be prepared to adapt their products to meet demand.
“We get many calls from people saying they want to sell brownies, but we have brownies coming out of our ears, and we want Victoria sponges and flapjacks.
“People think that these are too old-fashioned nowadays but we have people making Chelsea buns now and they sell really well.”
However, she stressed that there was no place in the markets for hamburger vans or hot-dog sellers.
Cohen said that farmers’ markets, as well as providing direct contact with customers, can also act as a great showcase for new products, with many restaurateurs, chefs and food-shop owners coming along to check out produce.
Pinki Sharma, 43, started selling her homemade chutneys, pickles and preserves at Queen’s Park farmers’ market in northwest London about a year ago after being made redundant from her job in information technology.
She took the plunge and now has stalls at four markets in the London area, where she sells some £400 worth of products each week.
She said: “I always wanted to run my own business, and this is fantastic because the customers really want to know about food.
“It’s not a hobby. In fact, I would like to take it further.”
Several delicatessens have asked to stock her products after seeing them on sale at the market, and she is in the process of branding and relabelling her products.
Kim Fletcher at the Kent office of Business Link, the government agency that provides advice and information for new and small businesses, said the one drawback to selling on a small scale was that it could be a big hurdle to move into larger-scale production as your sales grow.
“There are all sorts of operational lessons you need to learn, from how to get the label on straight to how to make sure you don’t break the icing when you put ten in a box.”
He said, however, that the big advantage of selling products at a local market was the quality of the feedback you get from customers.
“One of the big problems when you start up a business is getting good market research,” he said.
“This is about the cheapest way you can do it. You can really see what people will buy and at what price — and that is gold dust.”
What to do to set up your stall
THE first farmers’ market opened in Bath in 1997; nine years later there are more than 500 certified farmers’ markets across the country, with Winchester the largest.
Markets typically run for three to five hours at a weekend, weekly or monthly depending on the size of the local population. In total, customers spend £166m a year at them.
Before applying to take a stall at a farmers’ market you need to have your production premises approved by environmental-health officers and any weights and measures approved by the trading-standards authorities.
You will also need to be registered with the local council. The next step is to visit your local farmers’ markets and talk to the market manager about the products you wish to sell. Secondary producers must ensure at least 25% of the ingredients they use are bought from local producers.
Most farmers’ markets charge sellers a fixed fee averaging £25 a market, although some, such as the London markets, will charge a percentage of how much money you take on the day, starting from a minimum of £15.
Farmers’ Market of the Year 2006 was Haverford West in Pembrokeshire, which attracts 9,000 customers to its 25 stalls every other Friday.
Useful contacts: Farmers’ Retail and Markets Association www.farmersmarkets.net Tel: 0845 458 8420
London Farmers’ Markets www.lfm.org.uk 020 7833 0338
