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Post by BlueDiamond on Feb 16, 2017 20:35:58 GMT
An idea came to my mind today, about starting a home food business. I'd like to get advice from people who have been there and done that. Thanks!
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perumbula
Pearl Clutcher
Posts: 3,439 
Location: Idaho
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Post by perumbula on Feb 16, 2017 20:46:22 GMT
The very first thing you need to do is research your state's cottage food laws. I toyed with it, but my state was kind of a don't ask don't tell state about it with very few actual laws on the books at the time. (I think that's changed in the last year.) I didn't want to chance things going wrong.
Make sure you follow all the proper legal steps.
Good luck!
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luckyexwife
Pearl Clutcher
Posts: 3,067
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Post by luckyexwife on Feb 16, 2017 20:53:05 GMT
I don't, but our area has something really cool for start-up businesses like you are thinking of. Someone owns a commercial kitchen, and they rented out to small businesses by the hour or by the day so that they can prepare their food in a health inspected kitchen. I know of several businesses in my area that have started at that kitchen, and then growing big enough to where they now have their own kitchen space. I have no idea what kind of business you are looking at, but if your area doesn't have something like that, it's very successful around here, and perhaps you could start it as part of your own venture.
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keithurbanlovinpea
Pearl Clutcher
Flowing with the go...
Posts: 4,272
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Post by keithurbanlovinpea on Feb 16, 2017 20:55:56 GMT
I second researching your state and local ordinances regarding food based businesses. Plus you HOA, if applicable. Food based businesses sometimes have very strict regulations regarding who, where, and how, plus training and certification
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 16, 2017 21:55:10 GMT
I do!
But I'm in Canada, and we don't have cottage food laws. You need to check with not only your State regulations, but also any local health/town regulations.
I'm allowed to have a commercial kitchen in my basement, separate entrance was not required by the health unit, but by me! I didn't have to have Township approval (they don't license businesses) but I have to adhere to their business in the home regulations. Which were pretty tame, but still need to be followed.
It cost me $20,000 to do my kitchen (unfinished basement) and that included a 3 piece bathroom right next to my kitchen space. I have a full commercial oven, triple sink, hand sink, all the bells & whistles!
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Post by tenacious on Feb 16, 2017 22:06:04 GMT
I have. I just sat down for a rest, but, I will try and get back to this thread tonight.
Erin
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Post by papersilly on Feb 16, 2017 22:46:11 GMT
I have a full commercial oven, triple sink, hand sink, all the bells & whistles! what a dream! |
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Post by BlueDiamond on Feb 16, 2017 23:33:54 GMT
I was looking at my state's Cottage food regulations, and it has to earn less than $20,000 a year, which I'm pretty sure I won't. I was thinking of doing 'gourmet' chocolate dipped pretzel rods. I was thinking for graduations, holidays, etc. with custom colors and various sprinkles.
There's really nothing around me that does it to the extent that I was thinking (lots of colors, cool sprinkles). I would deliver myself, no shipping.
My thoughts are to start making them for my friends and family for the next year or so to get some feedback. One of my friends always tells me to go into business making cake balls, but I don't feel like I make them well enough to sell them. If I decide to do it, I could buy ads in the high school programs, newspapers, etc.
My mind has been going over everything - I can't stop it! I even worked out a flowchart for orders, researched boxes, bags and ribbons.
Anyway, those are my thoughts for now. Thanks everyone for your input so far!
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Post by tenacious on Feb 16, 2017 23:46:50 GMT
Okay-so, yes. Before anything else you need to research your state and especially county Health Department regulations. In my county, in relation to requirements, baking is the easiest, most other foods would come second, and canned foods would be most restricted. Your city will have their own restrictions on home occupation businesses, as well. People don't realize that there are many government agencies that regulate their business and it is your responsibility to do your research with each one.
That is the biggest obstacle--the government. The rest is easy in comparison. I love the food biz. It is very rewarding, but, very hard in the body. I developed pretty serious back and feet issues that unfortunately kind of ended my food career. Mine was mobile woodfire pizza and was extreemely physical with lots of heavy lifting and extended time on my feet on hard surfaces. We were basically setting up a restaurant and taking it down at every event. Not every food biz will be that physically demanding, but, you do need to make sure you are ready for the physical demands.
Another challenge is staffing. Always a challenge. You may not need staff.
Any specific questions?
Erin
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Post by tenacious on Feb 16, 2017 23:47:57 GMT
LOL! Well, I wish I would have seen your post before I posted.
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Post by BlueDiamond on Feb 16, 2017 23:56:47 GMT
LOL! Well, I wish I would have seen your post before I posted. That's ok! I'll take any advice I can get! I won't do anything concrete until I feel my idea is viable. I figured if I make them for friends and family for holidays and other occasions, I can take some good pictures, and get some (hopefully) honest feedback. I really don't plan on going big at first (or even at all), just personal delivery to my city as well as some neighboring cities. SaveSave |
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Post by BlueDiamond on Feb 17, 2017 1:47:55 GMT
This business idea works for me because I'm pretty darn good at it, is flexible for me (I'm a SAHM and my kids are still in school) and it appeals to my creative side.
Anyway, thanks for all the advice!
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 17, 2017 1:58:19 GMT
I have a full commercial oven, triple sink, hand sink, all the bells & whistles! what a dream! Here's a "virtual tour": Cake Diva's Cake space |
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Post by BlueDiamond on Feb 17, 2017 2:09:04 GMT
cakediva - such a beautiful space for creating!!
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Post by Eddie-n-Harley on Feb 17, 2017 2:14:30 GMT
I would want to have a chat with my insurance agent, first about any coverage I might need for the business itself (doesn't sound like you're at a high risk for food-borne illness, for example, but ya never know) but also about coverage you might need while doing deliveries-- some times regular auto policies exclude coverage while you're engaged in a commercial activity.
Also, what about sales tax? (Must you collect it, and how do you remit it to the government?)
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Post by BlueDiamond on Feb 17, 2017 2:16:10 GMT
Just had some more questions:
1. Tools and supplies - I know this would be an upfront cost, but should I amortize it into the cost of the product? Like molds, pastry bags, etc.
2. Would the usual pricing model work: time + materials = cost, cost * 2 = wholesale, wholesale * 2 = retail? When I look at other similar items being sold on-line, it's hard to figure out the pricing method.
3. Cost of overhead (forms, gas for deliveries, etc.) ... include in the cost of product?
4. What would turnaround time be? It doesn't take too long to make these, as opposed to a cake, but would it be a few days? A week? 2 weeks?
That's all the questions I have for now.
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Post by BlueDiamond on Feb 17, 2017 2:17:09 GMT
@eddie-n-Harley - thanks, hadn't thought about that stuff!
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Post by papersilly on Feb 17, 2017 2:19:50 GMT
Wow, I had to take a moment to gather myself---that was great. Beautiful space! I love your display space too! |
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 17, 2017 2:21:37 GMT
cakediva - such a beautiful space for creating!! Thanks!! It is an INSANE mess right now - I have two more mixers on the mixer table now, and two of my middle stainless tables are kind of 'stuff holders' - about half of each one. And I now have two shelving units right in front of my wall decal because I needed the storage! |
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 17, 2017 2:25:53 GMT
Just had some more questions: 1. Tools and supplies - I know this would be an upfront cost, but should I amortize it into the cost of the product? Like molds, pastry bags, etc. 2. Would the usual pricing model work: time + materials = cost, cost * 2 = wholesale, wholesale * 2 = retail? When I look at other similar items being sold on-line, it's hard to figure out the pricing method. 3. Cost of overhead (forms, gas for deliveries, etc.) ... include in the cost of product? 4. What would turnaround time be? It doesn't take too long to make these, as opposed to a cake, but would it be a few days? A week? 2 weeks? That's all the questions I have for now. Here's my answers: 1. no, this is not something I include in my cake costs. They are "equipment" and get added to my accounting as just that. 2. This is something you really have to do the math on - you need to add up your overhead (heat, hydro, supply costs, paying yourself, profit, all those things) and then calculate your costs based on those factors. It's a pain in the ass to do the math, but it needs to be done! 3. Not for me - my cake cost is based on the supplies for actually baking the cake & decorating it, plus the board & box, plus my time, plus hydro for the oven. The forms, gas, all those other things are costs of doing business. 4. I require 2 weeks notice for what I do. I can sometimes fit a cake in with a week, but it depends how busy I am already that week. |
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Post by BlueDiamond on Feb 17, 2017 2:32:25 GMT
cakediva - thanks! More questions: 1. I want to get feedback from friends/family, but I also want to do some on-line surveys possibly to see what more people think. I also plan on doing some market research, but is there anything else I should consider? 2. As far as local marketing, I know that word of mouth is one way, but I also thought about local advertising, ads through the high schools and middle schools, and possible donations to a local pre-school auction as a way of getting my name out there. Should I go so far as flyers or direct mailing? I think that's it for now!
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 17, 2017 2:39:51 GMT
cakediva - thanks! More questions: 1. I want to get feedback from friends/family, but I also want to do some on-line surveys possibly to see what more people think. I also plan on doing some market research, but is there anything else I should consider? 2. As far as local marketing, I know that word of mouth is one way, but I also thought about local advertising, ads through the high schools and middle schools, and possible donations to a local pre-school auction as a way of getting my name out there. Should I go so far as flyers or direct mailing? I think that's it for now! Research is a great idea. I did LOTS - now mine was wedding based though. I called the city offices in my radius to see how many marriage licenses are issued in a year. And I did a full on business plan. I was going to my Mom for the money, but if she wasn't able to loan it to me, I was going to a bank. I needed a fair chunk though to turn our unfinished basement into the kitchen I have now. So I needed a proper plan. And really, the research I had to do for the numbers I had to provide for projections for it was pretty thorough. There are plenty of online sources for creating a plan! Word of mouth is my biggest marketing tool next to social media. I Instagram - share it to Facebook when I do - which then Tweets it out for me. All 3 in one post. Flyers and direct mailing do not work for me. The best way for me to get customers is to hand out free samples. I did the local Home & Garden show for 4 years, I do wedding shows (2-4 per year) and I did a LOT of treat sharing. We have a local community radio - not for profit and mostly volunteers. I do treats for them, and in turn I get free air time for ads. I will sometimes drop in with treats for the morning show, and get a shout out on air. Even local community craft sales would be a better way to get the word out than a flyer or ad for you (my opinion anyway). A tray with samples on it? And then some to buy right then and there? Good plan! |
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Post by BlueDiamond on Feb 17, 2017 2:42:51 GMT
cakediva - THANK YOU! Your knowledge is invaluable! So many things I hadn't thought of. I am going to make a list of questions as I think of them, rather than posting her and over! In a couple of days, I'll revisit this thread with queries. And thanks to everyone else, too!
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cakediva
Drama Llama
Making the world a sweeter place one cake at a time!
Posts: 7,444
Location: Fergus, Ontario
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Post by cakediva on Feb 17, 2017 2:43:50 GMT
cakediva - THANK YOU! Your knowledge is invaluable! So many things I hadn't thought of. I am going to make a list of questions as I think of them, rather than posting her and over! In a couple of days, I'll revisit this thread with queries. And thanks to everyone else, too! No problem! And if I don't answer next week - I'm off to Cuba on Thursday so I won't be online for a week!! LOL |
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Post by BlueDiamond on Feb 17, 2017 3:28:11 GMT
cakediva - THANK YOU! Your knowledge is invaluable! So many things I hadn't thought of. I am going to make a list of questions as I think of them, rather than posting her and over! In a couple of days, I'll revisit this thread with queries. And thanks to everyone else, too! No problem! And if I don't answer next week - I'm off to Cuba on Thursday so I won't be online for a week!! LOL Oooh!! Lucky you!! Well, I'm not going anywhere, so I can wait. In the meantime, anyone else is free to give me advice! SaveSave |
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Post by crazy4scraps on Feb 17, 2017 4:04:03 GMT
DH and I owned a start up restaurant at one point so I know a little bit about this. Where we live, there isn't any kind of food based business that could be run from a home kitchen, anything involving food prep has to be done in a commercial kitchen with NSF utensils, etc. There had to be at least one person who had gone through food safety certification which was (I think) a one day class.
For something like you've described, I think you might be able to rent out space periodically at a commercial kitchen or possibly even use the kitchen facilities at a school or church for making your products. You might also need to have the finished items labeled with nutrition facts, ingredients and possible allergens.
Your state's Small Business Administration probably has a book you can buy that will tell you everything you need to do to set it up with your state, including getting a tax identification number for collecting and remitting sales tax, setting up an assumed name with the Secretary of State if you need to do that, etc.
Sounds like it could be a fun little side business! Good luck!
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leeny
Pearl Clutcher
Posts: 4,637
Location: Northern California
Site Supporter
Jun 27, 2014 1:55:53 GMT
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Post by leeny on Feb 17, 2017 4:55:49 GMT
I was looking at my state's Cottage food regulations, and it has to earn less than $20,000 a year, which I'm pretty sure I won't. I was thinking of doing 'gourmet' chocolate dipped pretzel rods. I was thinking for graduations, holidays, etc. with custom colors and various sprinkles. There's really nothing around me that does it to the extent that I was thinking (lots of colors, cool sprinkles). I would deliver myself, no shipping. My thoughts are to start making them for my friends and family for the next year or so to get some feedback. One of my friends always tells me to go into business making cake balls, but I don't feel like I make them well enough to sell them. If I decide to do it, I could buy ads in the high school programs, newspapers, etc. My mind has been going over everything - I can't stop it! I even worked out a flowchart for orders, researched boxes, bags and ribbons. Anyway, those are my thoughts for now. Thanks everyone for your input so far! I have a friend who makes the pretzel rods and peanut butter pretzel bites (think Andersons from Costco) as a year round fundraiser for her many cancer-related walks and runs. She is very successful. I think she sells the rods 3 for $5 and she packages the bites a few to a bag and then 3 bags for $5. She carries them in a basket always on the ready! Good luck! |
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pinkmochas
Junior Member
Posts: 89
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Post by pinkmochas on Feb 17, 2017 5:01:57 GMT
We started as cottage foods and now built a kitchen in a nearby space that we use and sometimes rent to others. Dipped pretzels should qualify for cottage foods if allowed in your area. We started with farmer's markets and craft shows and then when we knew it would be a viable business, we got our commercial kitchen and wholesale license. Now we can sell on etsy and sell in retail stores.
Good luck!
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