Opening a butcher shop seems to be a profitable business. The illusion is created that it is enough to find a couple of thousand dollars and a reliable supplier to establish this business, and everything else is technical details. But it is precisely because of the underestimation of possible minor problems that fatal mistakes are made in the meat business, leading to bankruptcy.
Pitfalls of the meat business
You can learn how to build a successful business plan, but few people think about the pitfalls of this business. Here are some of them.
- Low prices of suppliers can be deceptive
Livestock farms want to earn no less than the owners of butcher shops, so do not think that they will sell carcasses cheaply. Animals are different, so they can sell stale products or carcasses with a reduced percentage of meat for a lower price. Therefore, if you, for example, want to buy high-quality hungarian meat, then its price should be appropriate to the quality.
- Untrained low–paid staff – the path to failure
If you open a butcher shop and do not want to work there yourself, you will have to hire minimal staff. The main employee of the butcher shop when buying carcasses or half-carcasses is a meat separator. It is he who is responsible for the beautiful appearance of meat import laid out on the showcase. With unprofessional cutting, 10-25% of the carcass is obtained unsorted. They can only be sold at a reduced cost. Therefore, with large sales volumes, a qualified butcher will repeatedly recoup the cost of paying for his labour.
- Profitability cannot be higher than it can be
Do not think that the income from the butcher shop can be infinitely increased by expanding the assortment and improving the quality of service. The profitability of a butcher shop has its own ceiling, which is due to factors such as seasonality, the level of income of the population. After reaching the profitability ceiling, any actions aimed at increasing sales and attracting new customers will be ineffective.
Considering these points, you will be able to open a meat business without any problems.
Photo by Kyle Mackie on Unsplash
