Tips for Starting a Profitable Food Business From Your Home
You don’t need a brick-and-mortar location to break into the food industry. Whether you’re launching a food truck, making cottage goods at home, or selling premade meals online, you can reach customers and make sales in just a few clicks. How? Here’s how you can start a profitable food business from your home.
First, make sure your food business is legal. Every state but New Jersey allows entrepreneurs to sell some types of cottage foods. However, exactly what is permitted varies from state to state.
- 32 states allow cottage food businesses to sell online. Sales are restricted to buyers within state limits.
- 20 states permit cottage food producers to sell through retail outlets like grocery stores.
- 5 states have “food freedom” laws that allow the sale of homemade refrigerated goods as long as they don’t contain meat.
- 2 states explicitly permit the sale of home-cooked meals containing meat under microenterprise home kitchen laws. However, inspections are required.
Foods not permitted under a state’s cottage food laws must be prepared in a certified commercial kitchen. Still, you don’t need a brick-and-mortar location. Local food businesses can rent space in shared-use kitchens rather than investing in a commercial kitchen of their own.
Alternatively, convert a shipping container, RV, or garage into a private commercial kitchen. When cooking on your property, you’ll want to ensure that you invest in a professional-grade range hood to remove smoke and odors. Also, if you’re converting your garage, make sure to document all the upgrades you make by holding onto receipts and taking photos. Depending on the types of improvements you make, you could raise your home’s value.
Follow labeling requirements - Most small-time food businesses aren’t required to post nutrition data on labels. However, you will need a label that includes the product name, quantity, and business address in order to sell online. Packaged foods should also include an ingredient label with ingredients in decreasing order of prominence and allergens clearly listed.
Get your inventory in order - Managing the high product turnover in a food business is a constant challenge for entrepreneurs. In addition to knowing what’s in stock, owners need to track expiry dates and lead times to keep a fresh supply of high-quality product in stock at all times. That’s much easier when you utilize inventory software.
The best inventory management tools also prevent overbuying with automated inventory forecasting. Margins are slim in the food business and you can’t afford to waste money on unsellable food. Inventory management software can eliminate the guesswork with automated ordering rules that order only what you need when you need it.
Establish a storefront - Now that you have the back-end organized, it’s time to put a public face to your food business. Online food businesses need an ecommerce storefront where customers can learn about their product and place orders. 99 Designs asserts you should weave your unique brand identity into your business’s storefront with marketing promotions, behind-the-scenes videos, and engaging content.
Technology has made it easier than ever to start a business from home. While home-based food entrepreneurs still have complex laws to navigate, one thing they don’t have to worry about is finding helpful tools to launch and run their business. So what are you waiting for? Take these tips and start turning your tasty idea into a thriving online business.
BY: Guest Writer - Derek Goodman