Food pantries provide food free for those in need. It is majorly a non profitable venture that is handled by an organization that provides free food for the needy. However, food pantries are subject to local regulations, and so before starting this kind of business, you would need to find out the pertinent regulations by contacting nearby food charity agencies or your local government.
You can, if you carry out your research properly, partner with an existing agency that will provide you with some resources. It is only after going through this step that you can then define your mission. Food pantries are normally designated a 501(c)(3) tax exempt organization by the Internal Revenue Service (IRS).
However, you have to realize that there are exceptions to this rule, so you might need to check with the local authorities as regards your tax status. Local authorities also have rules that require the safe and secure storage of excess food. Regulations include temperature, size, location and equipment.
Next is to find funding, whether from a charity fund, grants, donations or other legal sources, to establish a cash flow that will cover the costs of food, rent as well as other expenses. You would also need to recruit dedicated and reliable people to volunteer at your food pantry, although some pantries pay employees, but it is vital that you keep your staff feeling happy and purposeful as part of the team.
The food will require collecting and sometimes distributing, this would mean that you would need a reliable and consistent transportation to meet the needs of your pantry. You also would need to keep a detailed account of all the food and donations you collect and of the food you give out. You would need to learn how to keep a detailed list of clients and their households, as well as how much food they can be given and when. You would need to keep accurate financial records too.
With a high rate of the prevalent hunger and poverty in the world, you can start a food pantry that will reach out to a huge number of people. However, if you are looking to start this business, then it is important to note that it is almost free to start, as you do not need a lot of things to pull off. The sole aim of the business is to contribute against poverty, as well as help make the world a better place to live in.
24 Steps to Starting a Food Pantry Ministry at Home or Church
Table of Content
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- 8. Choose a Catchy Business Name
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Write a Business Plan
- 14. Prepare a Detailed Cost Analysis
- 15. Raise the Needed Startup Capital
- 16. Choose a Suitable Location for your Business
- 17. Hire Employees for your Technical and Manpower Needs
- 18. Write a Marketing Plan Packed with ideas & Strategies
- 19. Work Out a Reasonable Pricing for your Services & Products
- 20. Develop Iron-clad Competitive Strategies to Help You Win
- 21. Brainstorm Possible Ways to Retain Clients & Customers
- 22. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
- 23. Create a Suppliers/Distribution Network
- 24. Tips for Running a Food Pantry Business Successfully
1. Understand the Industry
As at 2010, the food pantry service industry was expected to increase moderately for five years. This was due in part to the volatile employment market, and due to this, food insecurity rose. The vulnerability of individuals to hunger led to a greater demand for the industry’s food aid and social services, thereby allowing industry organizations to secure the needed government and private contributions and donations. However, in the coming years, as the economy expands, the contributions of corporate and individuals in the industry are likely to increase.
Interesting Statistics About the Industry
The food pantry industry is highly dominated by nonprofit firms that rely on government funding as well as private charitable contributions for revenue. Research experts estimate about 60.0% of the industry’s revenue comes directly from public and private contributions.
However, food pantry organizations can only receive funding if they provide food services to needy individuals and families. This means that products and services are segmented based on the type of food aid services provided.
Services associated with the collection and distribution of donated food accounts for 67.2% of industry service. The industry generates revenue of $9 billion, with 46,929 people employed in 5,485 businesses. The projected growth between 2010 and 2015 was pegged at 3.1%.
In 2013, according to the united states Department of Agriculture, at least 15.8% of American households were food insecure. This means that they lacked reliable access to a sufficient quality of affordable and nutritious food. The percentage was up from 14.5% in 2012. This was due to the fact that the federal government scaled back the funding for the Supplemental Nutrition Assistance program (SNAP).
However, struggling families tend to have food as one of their elastic but largest expenses, which means that there is an increase in demand for food pantries, and not enough to go round. As at 2012, 50 million Americans struggled with food insecurity (about 1 in 6 of the population).
According to a New York City Food Bank reports, the scaled back funding occurred just as unemployment decreased but this didn’t make it easier for struggling families. Nonprofit organizations reported that the majority of 522 food pantries and 138 soup kitchens had reduced portion sizes and were even turning away visitors after an 85% increase in traffic.
Apart from humans, there are some organizations in the United States that provide pet food, especially dog and cat, whose owners qualify for food assistance. As at 2012, in Georgia, the largest pet food aid distributed over 800,000 pounds of dog and cat food.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
When it comes to the demographic and psychographic composition of those who require the services of a food pantry, it obviously includes;
- struggling families
- homeless people
- senior citizens
- young children
- those in shelter
Food pantries are used by those who cannot afford it, which cuts across all demographics, and specific psychographics except middle and upper class.
3. Decide Which Niche to Concentrate On
As regards the niches within the food pantry business industry, it is obvious that there is no clear cut factor that differentiates one food pantry from another, they tend to offer uniformed services and some might go all the way to offer additional but related services.
In essence, some of the areas of specialization in the food pantry business industry are; offering of food services to struggling families, food banks, food aid to pets and so on. However, it is important to note that all these areas of specialization are easier for smaller entrepreneurs to choose from and then specialize on it. It is more common however to find bigger food pantries offering more than one of the services listed above.
The Level of Competition in the Industry
The food pantry business is a business that is regarded as non profit, and so hardly comes with the competition that trails profit making businesses, especially as its aim is in the provision and distribution of food to those who cannot afford it.
Starting a food pantry business is not difficult but stringent as there are several regulations attached to it. The competition in this industry can only come from private donors or companies who would seek to outdo each other in trying to fulfill their corporate social responsibility. Also, food pantries might compete amongst themselves for donations from private individuals so as to be able to give more food to more people.
4. Know Your Major Competitors in the Industry
Becoming a well known brand in this industry means being reliable and consistent when it comes to food aid services; reliable in terms of distributing food services on the day you ought to, and consistent in maintaining this service over the years. Even though food pantries are charitable courses, not all have been able to sustain themselves throughout the years, especially with cuts from the government, and reduced donations from private organizations due to the economy. These are some of the well known food pantry businesses in the United States:
- Bryant Community Center
- Ann Arbor Senior Center
- Food Gatherers Community Kitchen
- Maize and Blue Cupboard
- Northside Community Center
- Peace Neighborhood Center
- The Backdoor Food Pantry
The fact that the food pantry is a nonprofit business does not mean that you go into it blindly. You would need to thoroughly carry out your investigation and be certain of your target markets before you start or set up the business. In recent times, food pantries have had to cope with reduced funding from the federal government coupled with more people losing their jobs and eligible to free food services for themselves, households and pets where necessary.
Even though, the food pantry industry is projected to experience a growth in the coming years, experts have cautioned that the growth is merely a moderate one. This is because more jobs are expected to be created, which will boost per capita income and see an increased funding for food pantries from individuals and private organizations.
It is essential to note that the surge in demand for food pantries and related services is fueled somewhat by the 50s and 60s baby boomers who are now seniors and demand more attention especially with the economic downturn. Food pantries depend on willing donations from the private individuals and organizations, and funds from the federal government to be able to cater to a large number of people. This however means that, food pantries always need to keep their overheads as low as possible.
5. Decide Whether to Buy a Franchise or Start from Scratch
As this a non-profit business, starting from scratch with all the attendants regulations isn’t a bad idea. Anyone going into this business must treat it as they would any other profitable business venture they were starting up. This means carrying out a thorough research on the food pantry business and knowing if it would be easy enough to start it all the way from the scratch, especially as there is no franchise in this kind of industry.
Knowing that there is no franchise in this industry doesn’t mean that all food pantries are independent of each other. There are strategic partnerships in most cases, as food pantries can team up with one or more food banks or pantries so as to be able to deliver quality service to the people or cover a large area than they would have on their own.
6. Know the Possible Threats and Challenges You Will Face
The food pantry business like any other business will likely face threats and challenges during its startup. Most challenges likely to be faced is in securing donations and funding so as to be able to reach out to a large number of people, especially in a recessed economy, where funding have been reduced, and donations are barely trickling in. another challenge is in ensuring that one gets the right kind of workers that are also passionate about feeding people for free or for a little fee, either as volunteers or paid people.
Another challenge would be in inequitable distribution of food. There is no business that does not come with its challenges, as one who is determined to make a difference, this should not act as a dampener, but spur you into achieving more than you thought you would.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
The nature of the food pantry business makes it a nonprofit corporation. A nonprofit corporation is a legal entity that has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders.
A nonprofit corporation is one that is formed to carry out specific – charitable, educational, religious, scientific, or literary – purpose. This means that a nonprofit organization unlike a profit organization will not pay federal or state income tax on profits that are generated from the activities it engages in to carry out such objectives. Due to its exemption from tax laws, a nonprofit corporation can only perform certain functions listed in those laws, once it strays, it is liable to pay tax, penalty, or entirely lose its exemption.
To qualify for the nonprofit corporation status, the corporation must be seen to be formed to benefit a specific group of individuals, the public, or the membership of the nonprofit. However, an important thing to note for this kind of corporation is that, it isn’t owned by the founders but belongs to the public at large, once dissolved; all assets must be given to another nonprofit organization with a similar business purpose to the dissolved one. If the assets have been misapplied or used for private benefit by the officers, the state attorney can seize them.
8. Choose a Catchy Business Name
If you are looking to start your own food pantry business, first of all you have to know that you have to be known to have an attractive name for your business. Here are some names that you may want to use;
- Helping Arms Food Services
- One Individual at a time food pantry
- Mother Theresa Food Pantry
- Florence Fortnightly Food Pantry
- Staying Full Food Services
- For Pets Food Pantry
- Seniors Only Food Services
9. Discuss with an Agent to Know the Best Insurance Policies for You
There are laws that require you to have insurance, regardless of the fact that you run a nonprofit corporation. The insurance is expected to protect the business from any liability that might jeopardize the business. This means that before going into this business, you should be aware of the types of insurance available, and weigh the risk of a loss against the cost of a policy. It will be wise to get quotes from different insurance agents and compare them, after knowing the benefit of each policy.
Some of the basic insurance cover you should consider purchasing if you are serious about starting your food pantry business in the United States of America are;
- Workers’ Compensation
- Hazard Insurance
- Automobile Insurance
- Health Insurance
- Employee Theft
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting the food pantry type of business, then there is no need for you to worry about applying for intellectual property protection, mainly due to the fact that this is a charitable service that involves distribution of food, and barely has any intellectual property attached. However, you can secure an intellectual property protection for your company logo or slogan, but the truth is people in this industry do not bother about all that or even make that their topmost priority.
11. Get the Necessary Professional Certification
This type of business does not require one to possess a professional certification, as almost anyone can start and operate this type of business in the United States of America, all that is needed is passion.
Be that as it may, knowledge on food and nutrition will be of advantage especially as regards people with special needs or illnesses such as diabetes. The industry might be regulated as regards entry and have all sorts of stringent rules, but once in, the ability to ensure that as many people as possible have food is the utmost priority.
12. Get the Necessary Legal Documents You Need to Operate
Listed below are some of the basic legal documents that you would need to successfully run your food pantry business in the United States of America;
- Business Plan
- Insurance Policy
- Letter of Statement
- Written Agreements
- Tax Credit Forms
- Agency Eligibility
- Certificate of Incorporation
- Card Files
- Inventory Records
13. Write a Business Plan
Food pantries vary depending on the area or niche in which they specialize or operate in, but they all have the same thing in common which is to help collect surplus food from suppliers, or buy at a cheap rate from food banks, and distribute it to needy families, individuals, and pets.
They are usually a non-profit organization, supported by donations and also relying heavily on volunteer workers, and yet regardless of all this, they must be run as businesses. Food pantries like any other profit businesses need to get money that will be used in operations, and this makes it imperative for a food pantry to require a business plan.
A food pantry business plan is a guide or road map that explains where the organization is now, where it wants to go, and how it intends to reach there. It also helps you plan for emergencies, and anticipate possible problems ahead of time.
The whole idea of writing a business plan is not just to draft strategies that will help you effectively administer and manage your food pantry business, it is also so that a financial spreadsheet can be created that will show all of your income and expenses especially through the first year of business. The spreadsheet gives you an idea of what will be needed in the first year, and when it will be needed.
A business plan should start with an executive summary which would outline the basics of the intended plan spelled out in detailed sections. This is usually regarded as an overview for the food pantry. The business plan also should explain the type of services the food pantry hopes to provide and the clients it will serve and explain how they all relate to the total operation. It should also seek to explain the differences among clients and how distributions or services might be improved.
The food pantry business plan should also define the principals, both operating administrators and community partners, and identify specific assets, such as continuing donors, experienced personnel, and supporters. Also, prospective changes like a new administrator or major donor, and even potential loss of support from government or donors should be outlined.
A food pantry business plan needs to also include a marketing plan that would describe how the organization will develop new sources for donated food as well as create additional income from new donors, and help spread the word to other food pantries or kitchens. The plan should also include goals that will expand or improve, and the methods by which these goals will be attained.
The business plan will also need to give a good analysis of finances, a record of assets and liabilities. It will also need to provide a record of donors and identify potential new donors as well as sources of income, and also explain reasons for any projected increase or decrease. The business plan should also identify the strengths and weaknesses of an organization, with specific steps on how to maintain or improve its function.
However, not everyone can write a business plan, as some find it too complex. You can as well get a consultant or one who writes a business plan and get them to come up with one for you, or you can simply go online and download a business plan template for food pantries.
14. Prepare a Detailed Cost Analysis
From research, it can be deduced that starting a food pantry business isn’t something that comes cheap, especially if you are starting off without donations at first and will have to get a couple of the basics yourself. A significant portion of the cost of a food pantry goes to intensive items such as trucks and collection vehicles for food, as well as a storage facility, while the remainders are the normal expenses accrued in opening an office. Therefore, you would need to have had your plans in place, especially as regards donations, before starting off.
There are those who have low capital, haven’t secured funding and really want to go into the business, the advise would be to either wait or go into partnership by volunteering for other food pantries or helping to deliver food that are needed by individuals that cannot come to the food pantries themselves. It really isn’t safe operating this kind of business from home, as you might get attacked by some unscrupulous elements that do not care for your safety but want more than their share of the food.
Listed below are some of the items you would need checked if you are looking to launch your own food pantry business in the United States of America:
- Legal expenses would cost $700
- Brochures would cost $700
- Stationeries would cost $500
- Food collection supplies would cost $10,000
- Insurance would cost $1,000
- Rent facility mostly for storage of food stuffs would cost $1,000
- Warehouse equipment would cost $20,000
- Trucks and Vehicles would cost $50,000
- Harvesting/Farm equipment would cost $15,000
- Website would cost $200
Going by the above report from detailed research and feasibility studies, you will need an average of $100,000 to run a food pantry business on a small scale in the United States of America.
If you want to start off a medium scale food pantry business in the United States, you would need nothing less than $200,000. And if your intention is to start a large scale food pantry business in the United States of America, then you should look towards raising well over $400,000 as your start – up capital.
15. Raise the Needed Startup Capital
Even though your food pantry business might be one that is for a charitable course, if you do not get the necessary financing for the business, it would at best remain a mirage. Finance is a very important factor of any business, be it profit or non-profit. Even though getting funds or donations for this business might not be easy, but it is a task that other food pantry business owners have gone through and therefore shouldn’t deter you.
However, before getting finance for the business, a well detailed business plan has to be drafted. The business plan helps you in getting the required funding, as donors will use the business plan to gauge your seriousness in starting the food pantry business. However, you need to be aware that no matter how good your business plan might be, it would be useless to the bank, as due to the nature of your business, they cannot offer you a loan. This kind of business only attracts willing corporate and private donors.
There are several options available when it comes to raising money to finance your food pantry business start-up. Some of the options are;
- Getting donations from local growers, retailers, wholesalers, and processors
- Grants from philanthropic trusts
- Funding from corporate sponsors
- Funding from the federal and state government
- Donations from individuals
16. Choose a Suitable Location for your Business
When it comes to choosing a location for your food pantry business, it is important to first and foremost look for a location where the people can easily access and that is not too far for those that do not have cars to locate. This is very key, as the aim of a food pantry is to distribute food in a convenient way to those that require it.
Another key factor that you should look for before choosing a location for your food pantry business is the financial status of the residence in the location you want to start your food pantry business. The truth is that if you locate the business in an area filled with high income earners or in a place where the people feel above the services of a food pantry, then it would be hard to ensure that the food in your care is distributed well, except you decide to engage in delivery services. If you also locate the business in an area that has many senior citizens, you would also have people to distribute food to.
When it comes to the facility to use for this type of business, you don’t need to break the bank to source for money to rent or lease an office facility. You can get a medium sized space that is just enough for you to store food inside, and concentrate on proper distribution of the food to those that need it.
Those that would go for a big warehouse, probably wants to start off on a large scale, and have donors already lined up, as well as staff to employ and volunteers to help out.
17. Hire Employees for your Technical and Manpower Needs
There really are no technical details required for a food pantry business, except those that are planning to run the business on a medium or large scale and are looking towards creating an app that will allow people to be aware of when the next distribution services might be, though even this cannot be regarded purely as a technical detail. However, if you would be going into harvesting of food produce, then you might need some farming equipment or tools.
Some of the equipment that you would need to fully launch your food pantry business is listed below:
- Filing Cabinets
- Mobile Phone
- Trucks and Collection Vehicles
- Package Boxes
Basically, the nature of the food pantry business requires that one works in pairs and never be alone, this therefore means that one cannot work from home or run this business alone. The reason why you would need to secure a facility is purely for your own safety as well as the good of the business. However, the fact that you must get an office facility that will double as a storage facility does not mean that you have to break the bank to secure one.
Regarding the number of employees or volunteers that is needed to run a food pantry business, might vary due to a number of factors and also depends on if you are partnering with other food pantries. You would need someone to keep a good inventory of all the stock that is coming in and going out, someone to help in packaging the stock properly, someone to go for collection, another to help in distribution. This means that on an average, you would need at least five and at most ten or more employees or volunteers.
The Service Delivery Process of the Business
There is really no production process involved in the food pantry business as this is majorly a service based business.
The processes involved in this business is that of distributing food to those who are in dire need of it, partnering with farmers for excess produce, and also with food banks for cheap purchase of products. Other processes involved are packaging the goods and labeling them as they come in, attending to walk-ins and other services involved in running a food pantry.
18. Write a Marketing Plan Packed with ideas & Strategies
Just like any other business, you will need to generate income for your food pantry business, even though the income will not come from your clients. In order to market your food pantry business, you would need to leverage on all available networks to be able to source for donations, funding and grants. You will also need to partner with other food pantry owners, as well as food banks, so that they could help point you in the right direction that will be of immense benefit to your food pantry business, as well as those that you want to help out.
The aim of a marketing strategy is to increase the visibility of your food pantry in the community. If you hope to be able to serve a large number of hungry people in your region, then you would need to make it a point of duty to ensure that you apply appropriately for funding, from the federal and state government, as well as other private donors that you feel will be of immense benefit to your food pantry business. You would also need to partner with farmers so that they could help your business by supplying you with excess cheap farm produce.
Here are some tips that can be adopted to market your food pantry business effectively;
- Introduce your food pantry by sending brochure as well as introductory letters to prospective private donors and institutions.
- Allow retail stores carry information about your food pantry business and then award plaques to stores that have been outstanding.
- Send articles to newspapers and magazines about your food pantry business
- Network with fellow food pantry businesses, as well as food banks.
- Leverage on the internet to promote your business.
- Use word of mouth marketing.
19. Work Out a Reasonable Pricing for your Services & Products
This is a charitable non-profit business, which means you are not allowed to set any price on the products in your food pantry. There are therefore no factors available for setting the right price.
20. Develop Iron-clad Competitive Strategies to Help You Win
Again, this is a charitable non-profit kind of business, especially as the aim of this business is to serve, which means that it requires no competition as there are no competitors. However, the way you run your food pantry will ensure if people prefer to come over to your food pantry or go to another.
Healthy competitive strategies can be adopted internally though, either with other food pantries or within the food pantry itself. This could include tasking your food pantry on how many food it can distribute to individuals per month, and how to increase the number.
Another strategy could be between your volunteers or employees in determining the numbers of people each are able to distribute to, and awarding a plaque to those that are outstanding.
21. Brainstorm Possible Ways to Retain Clients & Customers
As any business, one of the surest ways of increasing customer retention in your food pantry business is to ensure that you deliver excellent and compassionate services at all times. If you continue this way, you will always have people coming to your food pantry business.
Another way is o also ensure that you keep essential information about individuals by knowing their preference and using this to distribute the proper food to them.
22. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
As with any business, it is important that you create strategies for your food pantry that will help in boosting its brand awareness, especially if you are just starting out. Below are the platforms that you can leverage on to boost the brand of your food pantry in order to create awareness about the business;
- Encourage word of mouth advertisement
- Promote your food pantry business via your official website online
- Leverage on social media platforms like Instagram, Facebook, and Twitter to promote your food pantry business.
- Distribute fliers and handbills in target areas.
- Network with farmers, other food pantries, as well as food banks.
23. Create a Suppliers/Distribution Network
Every standard food pantry sources for food supply from farmers, food banks, other food pantries, as well as well meaning individuals.
This means that regardless of the fact that you are running a charitable business, you still need to maintain a good relationship with these suppliers and distributors, as they will be very helpful to your food pantry business, and will provide helpful advice to help your business grow.
24. Tips for Running a Food Pantry Business Successfully
In order to run this kind of business successfully, you would need to be compassionate enough to serve others as well as recruit people who are on the same page with you, so that there could be a uniform of purpose.
A food pantry business is one that distributes food to individuals who for one reason or another cannot feed themselves. However, these people are appreciative of food pantries that know and remember their food preferences and are likely to come to your food pantry more.
Finally, if you locate your business in an area that has plenty of people who do not have the means to get their own food, you would likely have more people coming and therefore more donations from donors who would judge your success rate by how many people you attend to.
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