Opening a home-based food business can be fun and exciting, especially if you know what you'll sell, like mom's famous salsa or your wonderful barbecue sauce. Turning that family favorite recipe into a moneymaker can be highly rewarding. But before you begin your home-based food business, there are a few things to determine. You have to plan your food offerings, production and packaging operations, marketing campaign and retail location.
Figure out how to package your specialty items. Once you know what you'll sell, think about how you can effectively package it. If you sell salsa or barbecue sauce, do you know how to use canning supplies to safely preserve the product? If you sell brownies or cookies, do you know how to keep them fresh long enough to transport them?
Research local food regulations. Some cities and counties will let you make food at home and sell it, while others strictly prohibit this. Some municipalities will let you market certain foods, but not others. Once you know the regulations in your local area, look at alternate plans if you can’t make your product at home. You might rent a commercial kitchen or use a restaurant kitchen after hours. Additionally, you could partner with a bakery and use its equipment on a part-time basis. Once your business is turning a profit, you might decide to build a commercial kitchen in your home, if regulations allow.
Decide where to sell your food item. Depending on the item, you might decide to market directly to grocery stores, or to customers at craft fairs or farmer’s markets. If your food item has a decent shelf life, you might want to sell to customers via a website.
Market your business. It can be difficult to convince people to purchase a food product they haven't tried, especially if it’s a gourmet and homemade item that might have a slightly higher price tag than a similar, mass-produced items. In this case, offer free samples in grocery stores, or send out free giveaways of the product in small versions. If it’s something that’s available in various flavors, give free flavor samples when they buy a certain amount of food products from you.
Make your food venture cost effective. Your costs won’t just consist of food ingredients; you also must invest in packaging supplies, marketing and advertising materials, kitchen rentals and other business costs. Calculate your total operating costs before establishing food prices, because you want a fair price that still allows you to make a profit.
Make it homespun; consider adding a red-checked label or one made by a child.
Look into business and liability insurance. You want to be covered in case someone claims illness or injury from your food products.