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Do you love to cook in your own kitchen? Do you want to know how to start a small food business at home?
In this article we will give you a step by step starting a food business checklist, beginning with the important question of whether you need a permit to sell food from home.
Different states have very different rules on selling food from home. The State of Texas expects you to take a $10 online food handlers course and then lets you start sealing, no licenses, permits, or inspections required. The State of Washington expects you to send in a check for a non-refundable $230 application fee after you have verified all of your food ingredients are permitted by the state, file a business plan, get your recipes approved, certify that you do not have more than 50 products and do not expect to earn more than $25,000 a year, file a business plan, and submit your products for periodic moisture and acidity testing.
Until recently, the State of New Jersey did not permit any at-home cooking businesses at all. It is very important to learn all applicable rules and regulations up front, so you won't lose your business to health or tax inspectors once it starts making you real money.
There actually are fine-dining establishments run from homes although they are illegal. There are people who have rare talents for making every kind of cake and every kind of cookie.
If you are one of those wonderfully talented cooks, give some time to editing the food items you will offer from your home. When you operate a cooking business online, you are dependent on organic search on Google (or costly pay per click advertising) to get your customers. Google doesn't know what to do with broad categories on small websites. You need to establish yourself as the maker of a single kind of food item and make yourself known as the master of that one food. at least when you are starting out.
Too many wonderful at-home cooks fail to consider how much they need to pay for quality ingredients and how much they need to charge to make a profit. Find out how much you will pay for ingredients (minus sales tax, since you will be registering with your state for a sales tax exemption) to make the foods you want to sell. Add an allowance for electricity, gas, transportation, insurance, labels, packaging, shipping, and website maintenance. Then double or triple that amount to be sure you earn a profit.
You must make a profit to stay in the online business you love. You need to have these figures worked out and double-checked before you cook your first food item.
Most states place limitations on the kinds of foods that can be made at home for sale to the public. States generally permit the sale of dry foods, like cookies, popcorn, and certain kinds of cake, or acidic foods, like fruit jellies and jams, as well as pickles, because these foods are unlikely to get contaminated by bacteria.
If you are a master tamale maker, or you make amazing fried chicken, or your greens are to die for, you may need to find out how to get around cottage food laws. Or maybe you really want to run a food truck. Getting started isn't as hard as it sounds. You may simply need to borrow or rent a commercial kitchen from a school, a church, or an organization that makes its mission to support at-home food entrepreneurs. You may have to cook in a kitchen with special equipment and permits from your health department. But there may be whole organizations ready to help you get started. Some are even free.
There is one more major consideration every entrepreneur needs to consider about how to start a food business from home. Can you really do it over the Internet?
Every at-home food business can use a website for promotion and social media for keeping in touch with customers. Actual sales of food, or deliveries of food, however, may have to be in person. Make sure you know the rules of your state regarding selling homemade food online—and save your plans for federally regulated sales across state lines for when your business is up and running strong.
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