Can I start a real food business out of my home kitchen? I’m going to show you how to start a food business from home and give you 10 steps that will help you be successful and make money in the new year. We’re going to start right away. (digital music) Okay, my name is Damian, and this is Marketing Food Online, the best food business channel on YouTube. We have more than 900 videos that can help you start a food business, a food product, or even that awesome food truck you’ve always wanted. So now we’re going to talk about a question I’ve been asked a lot lately. This is because a lot of you are either at home or maybe even out of work and looking for extra ways to make money, but you love to cook and bake. Can a food business be started from home? You can, and the answer is yes.
Now that the exemption is real, I think New Jersey is the only state that doesn’t let you do it from home. I’m going to make sure, but I think that’s the only one I’ve ever seen that doesn’t have what’s called a “Cottage Food Law.” This is a law that lets you sell food products from your home, and it says where you can sell them, how many you can sell, and all that. So I’m going to get into all of that, tell you how it works, and even tell you how to find out what state you live in. Now, just a quick note about our channel: we already have videos for almost half of the states in the United States. You can find them by going to the top of the page and typing in the name of your state followed by the words “cottage food.” For example, we have a lot of videos for Texas, California, Florida, Georgia, and so on. So let me get into this and tell you how it works and what you can and can’t make.
NUMBER 1
So, the first and most important step is to make sure your business is legal. You need to take care of the legal aspects of your business right away. First, you need to find out what you can legally make in your state and what licences and permits you will need. Now, keep in mind that the state can make cottage food laws, but those laws trickle down to the local cities and counties. The local cities and counties where you live may have additional rules and regulations that let you do certain things or tell you that you can’t do certain things in their city or county.
So you need to find out not only what the laws are in your state, but also what the rules are in your city. So, if you lived in Atlanta, Georgia, for example, the state of Georgia has cottage food laws, but the city of Atlanta may have some extra rules, restrictions, or even licences and permits. Now, believe it or not, many states don’t require you to incorporate as a business. This is very unusual, but it’s true. I’m going to give you a tip, and this is to protect yourself. I really think you should incorporate yourself as a business, whether your state requires it or not. This will separate you from any possible liability. When I first started my food business, my wife and I had a bakery, which was different from a cottage food bar. But we did definitely set up an LLC. And you can make an LLC for a business you run from home. I’ve put a link for Inc files and Swift files down below.
There are actually websites that let you set up a business entity in less than 10 minutes, maybe 15 minutes, and you’re done. You can do this in any state, but check out those websites because they have great prices and deals for setting up an LLC and making sure you’re protected by limited liability. So, when it comes to business laws, my advice is to do this, even if your state says you don’t have to. This is an extremely good thing for your liability factor. It will limit what you as a person would be responsible for. Of course, if you have an LLC, they can only go after your business. If someone gets sick or eats food that wasn’t cooked or baked right, or if someone with an allergy eats that food, they could cause illnesses that could cost you a lot of money.
So, if you want to incorporate, please do yourself a favour and do so. I also always try to tell my clients that this is the best way to go. So, Damian, what kinds of permits and licences do you need to run a business from home? Well, it depends on the state, but in general, some states require a food handler’s card, like a class you can take to get a permit or a small card that lets you do that, while others do not. Some people have licences and permits from their city or county that have nothing to do with their state licences. So you should definitely find out what is needed. Again, you can just look that up on Google. And if you are in a city, say Miami, Florida, you could type in “home-based food business Miami, Florida permits,” or you could use the name of your city instead. It’s easy to find exactly what you need, but it has to be in your city.
NUMBER 2
The second question is where to sell. Now, some states don’t let you sell things online, but other states do. Now, some states do let you sell online, but most of the time you have to sell within the state. Usually, you can’t sell something online and ship it outside of your city and state limits. This is called interstate sales. So you should definitely check to see if that can be done online. I’ve gotten a lot of questions about this in the comments from people who are starting their own businesses. They say things like, “Hey, Damian, did you know that we have a website up and running? Our state lets us have an online website to take orders, and I think that’s great.” I hope that other states do the same thing. Now, it would be things like farmer’s markets, local events, and events held outside. Now, with everything going on right now, there are a few things that have either cut down or limited the number of people who could sell.
But I’m going to tell you something I’m pretty sure of: in 2022, there will be a lot more events outside, obviously with more air, the six-foot distance, and so on. So I really think you shouldn’t give up on the idea. Don’t give up hope that you won’t be able to do this in the next year. There are going to be a lot more outdoor events that will need food vendors, and that’s where you can come in. Farmer’s markets, festivals, fairs, different outdoor events, and music festivals are going to start happening again, maybe not as big as they used to be, but they’re still going to need food vendors.
NUMBER 3
Third, what kinds of food are you able to sell? So, what foods can you sell? That’s a great question, and it’s probably the most important one, because everyone wants to know if they can start cooking chicken, ribs, meats, proteins, and fish. Sadly, no, that’s not possible. California is the only state that has a law that lets you almost open a restaurant on the state level, but many of the counties and cities in California haven’t yet adopted the law that lets you do it within the city limits. One of the tricks they have to play on these cities and counties is that they have to let this happen in their own cities and counties. The state can write it into law, but it won’t be allowed unless those cities and counties agree to it and follow it. But that doesn’t stop you from making other things.
You can make anything from baked goods to salsas and hot sauces. You can also make snacks like popcorn, chocolate pretzels, chocolate cookies, and any other kind of cookie you can think of. Trail mix, Bundt cookies, and Bundt cakes. Okay, these are products that aren’t thought to be dangerous. So, things that could be dangerous are things that need to be kept at a certain temperature or eaten within a certain amount of time. Most states don’t let you make those kinds of food, but the list is huge in every state, and what you can make is pretty much the same in all of them. And you can still make a lot of money doing this as a side business.
NUMBER 4
Number four, rules and restrictions. So many of the rules and restrictions actually have to do with who can be in the kitchen when food is being made. Pets aren’t allowed, and you can’t smoke either. If you are cooking for your family, they ask that you do that on your own. So, if you’re making a food product for your food business, try to do it at a different time than when you’re making breakfast for your kids. They also try to stop you from making cookies to sell in your neighbourhood at the same time. The types of equipment are another thing that makes it hard. You can’t use commercial equipment or large mixers. Things that are common in commercial kitchens usually can’t be used in a home setting.
NUMBER 5
So the fifth step is to get insurance. Now, this is something that is not required in many states. I can’t stress enough how important it is for you to have insurance for your food business. Yes, you can get a food business policy for your home-based food business. I recommend that, and believe it or not, your auto policy, if you don’t have a commercial auto insurance policy, which you may not have because you haven’t started your business yet, check into getting an auto insurance quote for your vehicle that would let you use it for your business. So, if you drive around town and get things like ingredients, packaging, or whatever else you need, and you use your car to do it, there may be tax benefits to that. And make sure that if you can get a commercial insurance policy for your car, you can write that off as a business expense on your auto insurance. Now, the tax benefits and everything else are a whole other video, and I’ll talk more about them in another video. Having a business like this at home, though, can save you a lot of money on taxes.
NUMBER 6
Step six is labelling and making a logo. So, if you don’t have a logo, you should really dive into this and come up with something. You don’t have to design it yourself; you can go to fiverr.com. As I’ve said in a few of my other videos, I’ve used five about 30 times or more, maybe even a little bit more than 30 times, for a variety of services for my food business, and it’s very cheap. So, if you wanted to check out fiverr, I’ll put another link down below in the description section below this, in the comment section, and you can definitely click on that and see what you can get done. On our website, marketingfoodonline.com, you can find a lot of information about services you can get for 15, 20, 30, or even less than 30 dollars to help you get started. But it’s very important that when you make your label and put all the required information on it, you have a really cool logo that you can use to build your brand. Keep in mind that this is a small home-based food business, so your brand is just getting started. You can build on that and continue to use this to build a brand when you move into a commercial setting.
NUMBER 7
Number seven, packaging. Think about how you will put your product in a box. So, as I said in the beginning, there are a lot of different things. So, if you make good chocolates, you should think about getting a really fancy box for them. You want the presentation to stand out from the rest. You want your packaging to look professional and make people think of you as a professional food business. It says a lot about your business and your product. So think about the packaging. If it’s a bag, don’t just make it a plain bag. Instead, make a bright, beautiful logo and put it on the front. You’ve got a great label on the front of the bag, and all of the important information, like ingredients, allergen lists, and so on, can go on the back. However, you want your product’s packaging to be really eye-catching, so don’t underestimate the power of having cool packaging when you first start out. You can always change and grow in the future, and that’s fine, there’s nothing wrong with that.
NUMBER 8
So number eight, how are you gonna market and promote it? Well, believe it or not, I really think you should make a website, whether or not your state lets you sell things through it. And again, I’d like to recommend fiverr because they helped me with a couple of my websites. If you look at the link below, you’ll see that you can get someone to build a website for you. Don’t be afraid of the idea of having a website, even if you don’t have any technical skills. You can get a website made for you. But even though you’re not selling on the website, I’m telling you this because if you make a website when you start your home-based food business, when it grows and turns into a commercial business, you’ll already have an e-commerce website that’s ready to go. Once you reach that level, it will be easy to turn that website into something that can sell products. So, when I do consulting, I always tell my clients, “Start your website as soon as possible, okay?”
NUMBER 9
Next up, step nine. Keep track of everything you buy and how much you spend. As I said before, check your car insurance policy now. If you can change it to a business policy or upgrade it, let them know you’re using it and know how much each monthly payment will be. If you use receipts for ingredients or for packaging, and if you make a website with Shopify, Weebly, GoDaddy, or Wix, you want to make sure that you’re paying for all of the hosting domains you have out there every month. Use that, and keep the receipts because it’s an expense for your business. So, all of these costs that add up will actually be very good for your food business that you run out of your home. Wix, Shopify, and Weebly are all great ways to make websites quickly. And you’re probably looking at a $20 to $30 or $35 monthly fee, which can add up very quickly.
NUMBER 10
Step ten, just start. Okay, and I know you might be thinking, “I saved all the way to step ten just to hear that!” Yes, don’t wait and don’t put it off. Just get started. Now, are you going to know everything right away? No. Will you know how to do everything? No, I didn’t. Twelve years ago, I just decided that I was going to start a business, make it work, and make it successful, period. Did I know every answer? Not even close. Even though it’s been 12 years, I still have a lot to learn. So, be willing to learn and accept that you don’t know everything, because that doesn’t have to stop you from starting your business or getting it going. So, those are the top 10 things you need to do to start a home-based food business that makes money and does well. If you want a side business in 2022 and you spend a lot of time at home, as I know many of you do, you should look into this.
