How to Start a Small Food Business at Home

The growing cottage food industry consists of entrepreneurs who produce and sell homemade foods. They can earn extra income or test new ideas before investing in commercial kitchens. In recent years, the industry has benefited from less restrictive laws and rising public interest in food delivery. Many individuals market baked goods, such as cookies, cakes and muffins. Others prepare salty snacks or sweet toppings like strawberry jam. If you want to know how to start a small food business at home, read on for details about selling options, state laws and different products you can make.

Cottage food producers often sell their goods at farmers markets. They might use roadside carts or stands as well. Many states allow further sales venues, such as supermarkets and natural food stores. However, you may need to undergo a kitchen inspection before you benefit from this option. If your state permits selling homemade food online, you can ship or deliver items to customers. Buyers could also pay online and schedule a pickup time at your home. Regardless of how your product reaches the public, it's wise to protect yourself by getting insured.

Rules on Selling Food From Home

Each state has cottage food laws designed to safeguard people from foodborne illnesses. In most places, you can't offer items that spoil without refrigeration. Labeling rules and earning limits often apply as well. Texas lets an individual earn up to $50,000 per year from homemade edibles, according to Investopedia. Florida raised its limit to $250,000 in 2021. On the other hand, Wisconsin caps this income at just $5,000. Some people simply ignore the rules, but there's a penalty for selling food without a permit or disregarding other regulations. Cottage food violations can lead to fines as high as $1,000 in Texas, according to KRIS-TV. People have also faced large penalties in New York City and Wisconsin.

Starting a food business checklist

Ready to start your own home-based food business? Here's a quick list of things you should look into. Remember, each state's laws are different, so there may be additional steps required.

• Research state law
• Name your company
• Write a business plan
• Obtain kitchen equipment
• Acquire insurance
• Gain necessary permits
• Purchase ingredients
• Set competitive prices
• Create a website
• Promote your business

Learning how to get a permit to sell food from home is different in every state. Some places don't even require permits. For those interested in selling food from home in California, 2021 brought significant changes. Residents can now sell online and offer their products to shops or eateries in bulk, according to PickYourOwn.org. The state caps annual earnings at $50,000.

Do you need a license to sell baked goods from home in Florida? The answer is no; you don't have to apply for any licenses or permits. In 2021, the Sunshine State revised its law. Floridians can sell at events or online, but wholesaling isn't permitted. What is considered cottage food in Florida? The state allows various baked goods, honey, pies, preserves, dried fruit, candy, mixes, popcorn, nuts, pasta and vinegar. Under Florida cottage food law, buttercream and similar items aren't acceptable. Most products remain exempt from sales tax (like all groceries).

Selling food from home in Florida isn't dramatically different from running a cottage food business in Texas. The Lone Star State has a similar list of approved items. It also allows mustard, pickles and coffee. You can sell homemade products at most locations, but the rules ban wholesaling and internet commerce. Acceptable options include local fairs, roadside stands, farmers markets and direct at-home sales. Do you need a license to sell baked goods from home? No, there isn't any licensing requirement. Likewise, you don't need a permit to sell food from home in Texas or any of its cities, according to Nolo.

When selling food from home, NYC residents face relatively strict regulations. The same rules apply throughout New York state. Cottage food laws allow popcorn, granola, cakes, brownies, fudge, cookies and breads without any vegetable or fruit content. They also permit some candies and most jams. You may sell pies if they contain fruit and have two crusts. Unfortunately, pickles aren't an option. New York allows in-state wholesaling and retail vending at events, stands or markets. While it lets people deliver items to customers, the state forbids direct at-home or internet selling. You'll need to test your water if you have a private well.

Selling food from home in Washington state is also somewhat complex. Although the law forbids drinks, pet treats and mustard, it allows a wider range of items than most states. Acceptable products range from kale chips to peanut brittle. The rules on selling food from home limit annual income to $25,000 per year. They don't allow indirect wholesaling. Do you need a permit to sell food from home? Yes, you'll have to fill out an application and pay a $230 fee. Washington allows direct sales at your house, farmers markets, farm stands and certain events. You can sell online with pickup or delivery options, but shipping isn't approved.

Pennsylvania is known for its popular snack and dessert products. If you're thinking about selling food from home in PA, you'll appreciate its lack of sales venue restrictions. The Keystone State lets residents sell edibles online, at any location and even out-of-state. It also allows unlimited earnings. Pennsylvanians can offer jams, baked goods, pickles, candy and certain sauces. Rules about pH levels and written processes apply to some items. State law generally forbids selling homemade foods that need refrigeration, such as meat pies, creams and cheesecake.

How to Start Online Food Business From Home

If you prefer not to invite strangers into your house and don't live near a popular farmers market, you might decide to create an online-only homemade food business. Nearly 40 states give residents this option, according to the Institute for Justice. A downside of this approach is that you can't hand out free samples. Consequently, attractive packaging and closeup photos hold great importance. Thoroughly describe how your products taste using highly appetizing language. Offer a small size or sampler so people can try new items affordably. BizFluent supplies more tips and information on how to start a packaged food business.

Online selling is an excellent option if you want to learn how to start a food business with no money. Today, you can use free software like Castiron to sell food on the internet without any upfront expenses or coding skills. It's still important to carefully calculate all the costs of producing and delivering goods. Don't make the mistake of attracting numerous customers only to lose money by charging too little. If you ship food, avoid dark-colored boxes and place padding on every side of each item. Check your shipping carrier's rules about liquids and perishables. Keep in mind that chocolate often melts when shipped in the summer.

How to Start a Takeaway Business From Home

Some states even let residents prepare and sell homemade takeaway meals. They include Oklahoma, Utah, North Dakota, Montana, Wyoming and parts of California, according to the Washington Post. As Forbes points out, takeout and delivery have become primary revenue sources for many traditional eateries. The lack of a public dining room is no longer a big disadvantage. When chefs offer takeaway from their home kitchens, some people call these businesses "virtual restaurants." Customers order meals and pay online or by phone after browsing a web-based menu. They can quickly and contactlessly collect their food at the seller's house.

Like standard restaurants, some of these entrepreneurs combine takeout and delivery options. Tips to start home food delivery business: Remember that some meals taste delectable when you serve them at the dining table, but they don't survive delivery well. You might have happier customers if you leave things like french fries off the menu (or find a way to prevent them from getting soggy). Order samples of different takeaway containers before you buy them in bulk. Make sure they're sturdy and don't leak. When you package a meal, include a paper menu and something else that reminds the customer to come back. You could provide a coupon or a small promotional item, such as a notepad.

Food Business From Home Ideas

While techniques and strategies certainly hold importance, a business becomes far more likely to succeed when it starts with a great idea. The best idea differs based on your local economy, climate, culture, laws and other factors. If you're looking for an easy food to sell to make money, consider simple blueberry cakes or sugar cookies without toppings. Food business ideas with small capital requirements include things like trail mix, seasonings and fruit pies. Try to choose something that you can prepare swiftly and consistently. Most consumers want the product to taste the same every time they purchase it.

If you're searching for street food business ideas, think about offering snacks and desserts. For example, you could make popcorn or tacos. Many pedestrians prefer something they can eat right away without utensils. Hot beverages like coffee could help attract customers during cold weather. Try selling hot chocolate in appealing flavors like mint or cinnamon. Online food business ideas range from themed birthday cakes to meal kits and dried pasta in unique shapes. The best food products to sell online aren't too crumbly or brittle. They withstand temperature changes during the delivery process. Consider soft cookies, granola, fruitcake or honey. Some homemade food to sell ideas cater to people with specialized needs, like nut-free pesto for customers with allergies.