This guide outlines the 8 important steps and things you need to consider in how to start a food business.
When you’re ready to start a business, and you know you want to make delicious food, figuring out where to start can be a challenge. Can you start a food truck? What about a cottage foods business? There are different regulations in each state to comply with as well. But running a food business is a wonderful endeavor. As you make delicious foods that people love and keep coming back for, you will gain a sense of pride in what you do.
How to start a food business: 8 things to know
You Need a Business Plan
Starting with a plan is the most important part of any business and certainly crucial in how to start a food business. This document will discuss what your business is, its products and services, its finances, and its future goals.
It helps you define your business, set goals, and manage your business. You can even leverage a business plan to help you get bank financing. Your plan is also a living document and can be adjusted as needed.
Follow Local Regulations
Because improperly prepared food has the capability of making others sick, you need to follow local regulations. These regulations might include getting proper licensing, food safety training, and even using the right kind of kitchen space in how to start a food business.
Most food businesses need to use commercial kitchens to prepare food items. These kitchens have workspaces that can be easily cleaned and sanitized, making them perfect for preparing a variety of food items. You should also check with your city or county government about any additional rules they may have regarding how close your business can be located to other types of businesses.
Consider it can Be a Cottage Foods Business?
A cottage foods business is one that is operated from a home kitchen. Many states allow for specific types of foods that are typically low-risk for bacterial growth and can be easily transported and kept safe without refrigeration.
Some examples of cottage foods include jams, jellies, preserves, baked goods, and dried fruit mixes. Check with your state for specific regulations. The benefit of a cottage focus in how to start a food business is that it allows you to start small, grow a customer base, and then expand into a larger restaurant if needed.
Understand Your Customers’ Needs
You should know who your customers are and what they want before you start selling anything. This will help you make sure that your product is geared toward them and not just something you enjoy.
If there’s no demand for a food product in a particular area then you won’t waste your time and resources making it when looking at how to start a food business.
Market Your Business
Marketing your business can include any number of options. Many people leverage social media and advertisements to get the word out there. With a restaurant business, you’ll need to know your customers and what they want.
When you choose different communication channels to share your brand and your message, you need to know the ones that will be most effective with your target demographic in how to start a food business.
Be a Legal Entity
If you want to start a food business, it’s important to check your state and local laws. You may need to be an LLC, corporation, or partnership in order to register your business name with the state.
You’ll likely also need to get a sales tax license for you to be able to sell. You can also hire an accountant to help with taxes and financial services.
Find the Right Suppliers
Once you have a product, it’s time to find a supplier. When choosing a supplier, make sure they can meet your production needs without breaking the bank or causing delays in the process.
Look at contracts, obligations, and minimum orders before you choose a supplier for your food business. You’ll want to find suppliers not only for ingredients but also for packaging.
Grow at a Steady Pace
Grow at a pace that will not overwhelm you or your small business’s cash flow. If you have a great idea for a food business, but don’t have the cash for the full idea, start with one product at a time. You can rent commercial kitchens when they aren’t in use if you need them to make your food items. You could even leverage cottage foods regulations to sell locally at places like farmers’ markets.
Photo by Rajesh TP