How to Start a Packaged Food Business

Starting a packaged food business can prove lucrative, as packaged foods have grown in popularity. The U.S. market for packaged goods was nearly $58 billion in 2009. Many families do not have time to cook, so packaged foods come in handy at a reasonable cost. Packaged foods have a longer shelf life than their fresh counterparts which helps cut down on spoilage. An entrepreneur interested in starting a packaged food business needs to have a clear business outline. Determining the organization's target market and creating a niche is vital to the success of the business.

Decide on the target market of the food business. Design the goals and outline them in a business plan. Select the packaged food the business will sell. Packaged food comes in a wide variety, from full cooked dinners to candy. Match the type of food sold with the businesses target market.

Decide if the business will buy the packaged food from a wholesaler, and if so, which companies it will buy from, or if the business will create its own packaged foods to sell. Trade information from an industry magazine such as Gourmet Retailer can provide current statistical and business information to assist in making an informed decision.

Research the laws and guidelines in your state for food handling organizations. Some states require food handling training, other states do not allow a food handling business to operate from a residential location. The Public Health Department must inspect the food and location where the food is prepared. If the company ships food to other states, federal regulations set in place by the FDA apply.

Raise the capital needed to buy food packaging equipment and shipping materials and pay staff. The Small Business Association provides helpful local and national resources and information on raising capital for a packaged food company.

Select the location for the food business. In order to establish the company with permits and licenses, the business must already have a set location for inspections, according to researcher MarketLooks. Acquire a business license from the county clerk's office. The licensing offices will inform the business owner of all of the licenses and permits required by the state. Individuals who hire employees need to apply for a federal employee tax ID number.

Create a pricing structure for the packaged goods. A smaller packaged food company usually has to sell food at a higher cost than a large company. Finding a niche allows the business to cater to the customers who want the product. These customers will pay a higher price, especially if the product is hard to come by. Gourmet Retailer provides current information on niche markets in the food-packaging industry.

Market the packaged product. Offering free samples of the packaged items allows potential customers to sample the product with no obligation. Join social networking sites and create a page for the company. Create a website or have a website designed.

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About the Author

Rose Smith has been writing professionally since 1992. Her how-to and relationship articles have appeared in "Family Circle" and several other national publications. She has also written the books "Sizzling Monogamy" and "101 Ways to Date Your Mate." Smith holds a Bachelor of Science in mass communications from Illinois State University.