Factors to Consider When Creating a Home-based Food Business

Updated on October 19, 2020

Look at any food publication channel on YouTube and you’ll see a lot of features on thriving home-based food businesses. There’s the famous “All Flavor, No Grease,” which started out as a neighborhood pop-up restaurant. Its owner now serves his delicious tacos and quesadillas from a food truck in Los Angeles. A lot of these businesses are popping up during this quarantine, too, as people are looking for new ways to earn. There’s also demand for them, as customers are looking for new food delivery places to try out apart from their usual fast food joints. 

If you’re passionate about cooking and baking, but don’t have the capital to rent out your own professional kitchen and commercial dining space.

However, cooking prowess alone won’t net you success. A lot of factors go into starting a home-based food business. 

Here are the essential things you should consider.

Your Niche

Almost every restaurant and food business you go to have their own niche or specialization. A lot of fast food places offer American staples, like fried chicken, sandwiches, french fries and more. There’s also the growing niche of Korean barbecue places where the customers themselves cook the meat and enjoy them with other Korean delicacies.

Having a niche means that you keep the experience consistent with your customers. When you stick to one cuisine or specialization, a lot of the ingredients will overlap. It’s just more cost-efficient, especially for a small, home-based business. It’s easier to get better at what you do when you’re specializing in only one thing, too. So if you offer baked goods, stick to it for now. You could even specialize further and only do cakes or cookies.

If you don’t have a niche yet, try looking at the latest food trends of the year:

  • Healthy and Sustainable Food – According to Food and Wine’s biggest food trends of 2020, where they interviewed different chefs, 2020 is the year of healthy kitchens. This means healthy dishes, like brown parboiled rice with seasonal vegetables, made with sustainably-sourced ingredients.
  • Hyper-regional Cooking – Hyper-regional cooking is also on the rise, which means customers are looking for simple menus that feature authentic food from a certain region (e.g. Creole and Appalachian). Think of your grandma’s great food and try to replicate their recipe.

Following the trends also ensures that your niche actually has a market, too. You don’t want to sell food that’s too outlandish for your local community to want to try out. You still have to make money out of your business, after all.

Your Sources

From yourflavor-infused sparkling waterto your vegetables, you need to make sure your sources are trustworthy. If you’re just starting out, warehouse club stores that provide discounts on bulk items. If you want to get the best prices and the freshest ingredients, however, you want to eliminate the middleman and get as close to the source as possible. Try to look for small-time farms and butcher shops in your area.

Look for FDA certification to ensure that their products are safe for you to use and sell to customers. Before buying from an ingredient supplier, look for reviews to see if they’re favorable. You could also contact their previous customers to see if they’re satisfied with the services and products they get.

Your Kitchen

Apart from optimizing your kitchen for maximum productivity, you also need to ensure that it’s actually legal to use for your business. Regulations and requirements for a food business are different in every county and state. If you live in California, you may be in luck, as the governor signed a bill in 2012 that permitted the sale of specific homemade food items. Such products should be non-hazardous and don’t support rapid bacteria growth. 

Examples of these include:

  • Baked goods without any meat, custard, or cream fillings, like churros
  • Candy
  • Fruit pies
  • Waffle cones
  • Jams, preserves and jellies

If your state doesn’t have such laws or you want to create food that’s a bit riskier than the ones above, you need to register your place as a commercial kitchen. You should also register your kitchen as a facility for your home-based business with the Food and Drug Administration (FDA). This makes sure that you fully meet the expectations of the government when it comes to making, packing and delivering food.

Opening a home-based food business is great if you want to dip your toes into the restaurant industry. However, it’s not as easy as it looks. You need to find the right sources for ingredients, get proper licenses and certification, and create a hit concept that customers love. These take a lot of time and effort to do, but they’ll be worth it when you become a community favorite.

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