Food safety instructors need business-building guidance

September 9, 2012
The entrepreneur

Restaurant operators and owners are often required to complete training to become certified. Food safety instructor Mark Shain made his living driving from one small town to the next, delivering training seminars in person. His son, Ryan, saw an opportunity to take the training online – an idea that had never occurred to Mark or to most people in the industry. The duo created a series of online webinars. They started the Food Safety Administration in May 2010.

The pitch

Ryan Shain

“The Food Safety Administration offers online courses for food service professionals to earn certifications in food and alcohol safety. As legislation continues to strengthen across the country, the annual market for these certifications has the potential to reach more than $250 million. For example, in the Washington-Maryland-Virginia region, all establishments serving food must have a certified staff member, and regulations can be even tighter depending on the county.

“Traditionally, food establishment workers have earned these certifications by attending all-day training seminars and taking a pencil-paper exam. These seminars are often run by small one- or two-person proprietorships, with travel constraints leading to inconvenient frequency, consistency and locality of these seminars. The Food Safety Administration’s online solution changes this landscape by providing food service professionals with the flexibility and ease to study and test on their schedule.

“Originally a one-man operation, the business has become a lean business with eight employees that have helped more than 15,000 professionals earn a certification. We are proud to have been bootstrapped since day one.

“Our target market to date has been primarily under-served rural areas with small mom-and-pop operations. These clients have been great for our initial business, however they have very high service costs and require a lot of hand-holding. A lot of competitors are in the space with the online offering. We want to start going up the food chain to land larger clients. We really think our next move will be to get out of the retail offering and move more toward larger business-to-business clients or a reseller market. We are looking to scale the business more quickly and efficiently by targeting larger clients that will net us more accounts per point-of-contact.

“We’re still figuring out what business-to-business clients want, but we are assuming it is going to be a bit of a different offering. We are trying to determine whether we can serve those types of clients with our existing team of great customer care representatives, or if we need to hire an additional team to specialize in this new line of business. Is it better to have a cross-functional team able to handle anything, or specific people equipped to handle specialized lines of your business so they can provide high levels of service at all times?

The advice

Harry Geller, entrepreneur-in residence with the Dingman Center for Entrepreneurship

“It seems like your initial marketing strategy was to capture the ‘low hanging fruit’ with one-off clients located in underserved areas. This enabled you to gain some market share quickly and establish a foothold in your industry. As you’ve experienced, this strategy will only get you so far when you don’t have proprietary technology and there are many competitors in your sector.

“I don’t believe you are entering a new business-to-business market. You are already serving small-business clients; you are now looking to serve larger ones. I think it would be a good time to review and redirect your marketing strategy. Is it feasible to target the national chains or should you do a more localized approach. What is it that larger clients are looking for? Is your market limited to food sales establishments or are institutions such as schools, hospitals and catering also potential clients?

“By better defining your market you can determine what staffing needs are required to service the business, but in concept your team should be able to handle larger business-to-business clients as well as the smaller ones. I don’t view it as a different line of business.”

Reaction

Shain

“Thank you for the advice, Harry. As you mention, right now we are in the process of better understanding the needs of the new market segment and how we can align our company to service those needs. My question was specifically targeted at operational alignment, but I agree that we will also need to readjust our marketing to reach these new clients.

“You raise a very interesting point related to market verticals. As you correctly point out, there are potential clients in a number of places besides traditional restaurants: schools, hospitals, caterers, even a booming food truck trend. Perhaps it would be to our advantage to not view larger restaurant groups as a new segment — inherently their needs are similar to smaller restaurant groups — but to instead focus on non-restaurant verticals as new target groups. For example, hospitals serve a very different and sensitive population, so it is possible that we could build a tailored training for that vertical. Tailored content would create a differentiating factor and strategic advantage for each opportunity we can identify.

“We will reach out to potential clients across these new segments to determine the market need. This will help inform our thinking as we look for new ways to grow efficiently.”

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