2.3 Risky Business
Once you have drafted your operations calendar and have tested your assumptions using the break-even analysis, it’s important to keep in mind some of the risks to the success of your venture. What would you do if your planned location fell through? How will you handle weather alerts? What if your produce doesn’t sell? What is your food waste reduction strategy? Being proactive in identifying these and other risks will enable you to create and employ strategies for removing or reducing the impact on your venture in the short and long-term.
Identifying Threats and Taking Action
The following are some guidance based lessons we’ve learned directly and indirectly over the years:
Bad Weather
Weather can be unpredictable, and these days it seems even more so. That-being-said, unless there are safety concerns, you’ll need to ensure your market is set up come rain or come shine. Your customers will expect this, and importantly, your consistent commitment will build trust. Trust is especially important for building ties with low income communities who have traditionally been under-served.
If you aren’t able to make your market stop, you must ensure you communicate to your customers who were planning on showing up, leveraging all the possible channels to reach them. It’s advisable to create a policy for your market that specifies when and how to communicate updates and schedule changes to your customers. Ensuring you and all your team members are aware of and act in accordance with the communication policy will retain trust with your community.
Parking
When choosing your location to park, make sure to find parking partners who align with your mission, who will help promote your market. A good parking spot has to be a win-win for everyone, so select locations that your mobile market will compliment. Perhaps the city will give you privileged parking spots. It’s worth asking.
Gas stations and dollar stores can be great partners as they generally don’t offer fruits and vegetables, so your mobile market can easily complement their business and create a reciprocal relationship. For your market customers, there’s easy parking and access to bathrooms , if needed.
When selecting your parking partners, ensure you meet with the manager/owner and ensure that an agreement is in place for at least a year’s term. If you want to make use of some of the on-site services, you might wish to include access to the washrooms in your agreement - and be sure to include a commitment to clean up to keep relations in good stead. A good business relationship starts with agreement and it can help ensure expectations are made clear for everyone.
Stories from the Road - Saved by the MOA
In 2022, we had been operating our mobile market for 4 seasons in partnership with the local mall. When we first started, the property manager was a strong advocate for the market, promoting the market through the malls’ channels and regularly inviting us back season after season.
At some point during the 5th year, there was some turn over and the property acquired a new manager. Unfortunately, the new manager did not see value in the market and upon learning about us using a section of the mall parking lot, he asked us to cease operations immediately. Fortunately, we had a signed MOA in place which necessitated 30-days notice. While we did not like the decision of the property manager, particularly since one of the tenants of the mall was a non profit clinic that prescribed vegetable prescriptions in partnership with the Mobile Market, we used those 30 days to clearly communicate with customers about the change and why it was occurring. We were able to partner with a nearby church within eyesight of the original location. Thanks to the 30-days notice and moving the market to an adjacent parcel helped us stay operating in the community which had grown to enjoy the mobile market.
Unsold Produce
While your mobile market isn’t a grocery store, your customers will expect you to be as good or better than one in terms of your offerings. Customers will come expecting to be able to do a full grocery shop at your truck, so this means ensuring it is well stocked with the flavors of your community in order for your market to be worth their time.
The challenge this creates is one of potential food waste. As a retailer of fresh, perishable goods, you will always have to have a plan for your unsold produce. What if you have $2K in perishable goods and only sold 50%? You’ll need to have a disaster recovery plan! Sometimes you can do a deal with farmers to sell goods on consignment, but this can be difficult. There will always be some waste, so your response will be based on the quantity and kind of produce that remains unsold. Shelf-life of your products will vary, so you should have several opinions up your sleeve. Perhaps you can make soup, sell to restaurants at a low cost to recuperate the costs, or perhaps you have a partnership with a food bank to help move your products.
Tax incentives for donated food
Did you know that you might be eligible to claim US federal tax incentives on food that your market donates? Both general and enhanced tax deductions can be claimed on donated inventory. Find out more about these incentives at https://policyfinder.refed.org/federal-policy/federal-tax-incentives
You may also be interested in the following resource from Healthy Food Access that lists state and local policy initiatives as well as state-specific projects supported by federal Healthy Food Financing Initiative (HFFI) grants: https://www.healthyfoodaccess.org/take-action-now-policy-efforts-impacts
Risk Management Plan
Use the following checklist to help control the costs and waste that present a risk to the sustainability of your business.