A Home-Based Food Business.

Though frosting cakes or bottling your homemade barbecue sauce may seem more fun than work, a home-based food business is still a business. As with any business, you need to plan and research before picking up your mixer or designing labels for your salad dressing. A home-based food business might be a great way to earn extra money while doing something you enjoy, if you have gotten countless compliments on your cupcakes or find yourself with requests from your friends to be their personal chef for special occasions.

Here are a few things you should know before opening a home-based food business:

Regulations

• Be sure to carefully review the regulations to understand how they apply to your unique set of circumstances.
• Local and county health agencies inspect food service and food retail establishments, provide technical assistance to food facilities, and educate consumers about food safety.
• If you are starting a home-based food business, you will need to understand the regulations of FDA and your state and local health department.
• In some cases, home-based food business is exempt from certain FDA regulations.
• An example of an exemption: if you are not entering into interstate commerce (selling your product outside of your state), you may not have to register as a facility.
• However, all imported food is considered to be interstate commerce.
• If you are importing food products, conducting internet sales, and/or shipping food products outside of your state, you must register as a facility.

Prices

• Don’t keep the prices too low; it could set a precedent that is hard to break.
• You might get clients, but you won’t make a reasonable profit, which can be frustrating and make you feel as though you’ve wasted your time.

• Spend time researching comparable products and determining your costs before setting prices. Price products based on ingredient costs, remember to include your time into the price or you will quickly realize that not all cooking jobs are created equal.
• You cannot make a profit if you charge $20 for a baking job that takes you four hours to complete, on top of the price of ingredients.
• However, if you price things too high, you risk alienating your customer-base.
• Carefully weigh out all factors before pricing any job.

Alternatives

• Keep in mind, too, that if you want to sell food online, you’ll be limited because the FDA doesn’t allow food made in a home kitchen to be sold in interstate commerce.
• What are your alternatives if you can’t get a license to make food for sale in your home kitchen?
• Some states offer startup food businesses the use of incubator kitchens.
• You may be able to rent a commercial kitchen in its off hours, such as in a church, a fire station or a state park.
• Once your business is producing a positive cash flow, consider installing a commercial kitchen in your home that will pass state and local health-code inspections.
• Before spending big bucks, make sure local zoning allows commercial kitchens in homes in your area.
• And some institutional buyers, like universities, have policies stating that no food prepared or stored in a private home may be used or sold in their food facilities.

Sale

• Lack of experience doesn’t have to be a negative thing.
• Sometimes, your lack of experience in the area might be helpful, because it mean you will approach everything in a fresh way and will not necessarily be following the industry protocol.
• Becoming an entrepreneur is daunting, but sometimes swotting up on the general way of doing things, whether pitching to investors or pitching an article to a journalist, can be counter-productive.

People do business with who they know, like, and trust. To attract new clients in your business you must build a relationship. The brutal truth is that nobody will invest in you until they know you. I’m not saying a dinner date with your client is a must, but you do have to allow them to enter your world. Start with connecting with people on your website. Daily updates, responses, feedbacks etc. are a good way to manage and maintain contacts. We, at HyperEffects, offer a one-hour free consultation session to all business owners to help them understand ways to grow their business relationships. We also work with your specific needs to create a website that may help you connect with your desired audience at a personal level.