Friends and family members sharing their enthusiasm for your homemade jams and jellies might seed the idea of starting a home-based business. These homemade products can provide a healthier alternative to the commercially available items that contain non-organically grown fruits, additives and unhealthy sugar substitutes. With time – and your shrewd business skills – you can develop and build a jam and jelly business that provides a nice little profit as long as you take the time to research your options first.
Items you will need
- Business license
- Tax identification number
- Wholesaler license
Visit your county extension office to find out if you can legally make jams and jellies in your home kitchen. Some states and counties allow you to do that, while other governmental agencies require a health-certified or commercial kitchen. If you must use a certified kitchen, there are some less expensive ways to accomplish your goal other than renting out one full time. Some restaurants, bakeries or coffee houses aren't open at night or in the morning. Talk to the manager about renting the kitchen facilities. Other possibilities include churches, community centers or senior centers.
Brand your product. Come up with a name that not only says jams and jellies, but is something that people will remember. You'll also want a logo as unique as the name you've chosen. If you aren't good with graphic arts, have a professional put your ideas into something concrete. Use your logo on all of your labels, stationery and business cards.
Apply for a business license and a tax identification number if your state collects sales tax. You will also need this number to obtain a wholesaler's license to purchase your materials wholesale.
Price your product. Before selling your jams and jellies, ensure you can make a profit. List all of the ingredients that goes into one jar of each type of jam or jelly you plan to sell. Include the rent for a certified kitchen, if necessary, and you may have fees for markets at which you will sell to the public. List all of your extra expenses. You must include these in your product price. After you know what your jams and jellies cost you to make, a good rule of thumb is to double that amount to arrive at a good starting retail price.
Sell your jams and jellies at local farmers' markets, Saturday markets and holiday fairs. Make taste samples available as this can increase your sales.
Reach out to local restaurants, gourmet food and gift stores to ask about becoming a supplier. Be ready with printed marketing materials as well as taste samples for the buyer or manager. If they are not taking appointments, leave a business card with your sample for the manager or company's buyer.
Create a website to sell your jams and jellies online. Include other ways to market your products such as online banner advertising and social media sites. Contact the local newspaper about an article for your new business after you purchase advertising from them or send them a press release. Many local newspapers look for feature stories about home-based businesses. Add a weekly column to your website to draw readers in and include a feature that allows them to subscribe to your article updates.
Maintain accurate business records. Your jam and jelly business will run more smoothly if your bookkeeping records are up to date. You will need to be able to find information easily without having to shuffle through a mountain of paperwork that you haven't taken care of. Besides, whether your state requires you to collect sales tax or you will need to file and pay income taxes, having your books in order makes a distasteful job manageable. Check with an accountant as to how and when you will need to pay your taxes.
When you start your jam and jelly business, keep the business checking account separate from your personal one. When you begin making a profit and wish to pay yourself, just write a check to yourself from the business account.
Another consideration is small business insurance. You may need "contents" insurance and liability insurance. Discuss this with a professional insurance agent.
Know your competition. Accurately research to see what others are selling successfully in your area. Verify you have competitive prices and test their products to determine if yours stand out from theirs. Ideally, you want your products to offer something different, something more, something special.
Some states place limits on how much you can make in a year from a cottage food business. Check your state's requirements, as it may cost more than you can make to operate this kind of business.
Complete your business and research homework before jumping off into this venture. Make certain the project is doable to avoid a costly failure. Most new businesses fail because of lack of thorough research and planning. Calculate how much money you need to keep the business going for at least a year, as it usually takes that long to get a business off the ground.
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