If you’ve been spending the holiday season whipping up goodies to share with family and friends, you might have caught yourself wondering whether you could turn your prize-winning peppermint bark or mouthwatering marmalade into a tasty sideline business or retirement income.
Maybe so. In fact, this is a great time to savor the increasing opportunities for food entrepreneurs.
Specialty Foods Are Hot
Consumers are embracing specialty and artisanal foods like never before, buying $75 billion a year worth of such products as honey-infused herbal teas, natural ginger sodas and organic handcrafted chocolates from farmers markets, food festivals, gourmet shops and online retailers. According to the National Association for the Specialty Food Trade, which knows about such things, 66 percent of U.S. consumers purchased specialty foods in 2012, up from 59 percent in 2011.
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Selling food products for profit is tricky, though. For example, there are a host of health and safety issues to deal with when you’re starting a food-based business. In addition, your state probably has special rules regarding making money from a home kitchen.
Consequently, it’s important to do your homework before you start dishing up your delectables.
3 Questions Before You Start
Here are three important questions to consider as you sift, bake and mix your way into the world of food entrepreneurship:
1. Which government rules will impact my ability to sell food? It should come as no surprise to learn that this is a highly regulated industry.
In many states, it’s illegal to sell food made out of a home kitchen (although some states have looser regulations for vendors selling at farmers markets).
Assuming you don’t want to incur the astronomical cost of building your own commercial kitchen, you might look into renting a commercial kitchen space or participating in a commercial kitchen co-op share.
Renting space will run upwards of $25 an hour. So to cut costs, investigate the option of renting out licensed kitchen space at a church, college or a community-based agency. They sometimes rent out their facilities at a discounted rate.
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The rules regarding permits and licenses to operate a food business vary depending on where you’ll be running the business, whether you want to incorporate and the type of food you plan to sell. Check with your state’s Food or Agriculture Department and your local health department for specifics. Be sure to consult with an insurance broker to ensure you have adequate coverage to operate the business.
Keep in mind, too, that food labeling is required on almost all prepared foods. The Food and Drug Administration’s website is a good source of information about food safety and labeling requirements.
2. Where can I sell my food? The easiest places to launch your operation are probably at small local markets and online. If you’re interested in selling on the Internet but don’t want the hassle and cost of creating your own website, consider signing up as a vendor on an online marketplace, like Fooducopia.com, Foodoro.com or Foodzie.com.
If you prefer meeting (and enticing) customers in person, your local farmers market can be a great place to get feedback and build a fan base for a minimal investment. There are more than 7,500 of them across the country, but you’ll need to pay a fee to sell your food at one; the cost varies from market to market. You can find a comprehensive listing of farmers markets and contact information at Farmersmarketonline.com.
3. Where can I learn more about the food business? A big part of being a successful food entrepreneur involves learning about the non-food elements of running the business, like marketing, product design, scaling and pricing. Fortunately, there are numerous free or low-cost resources you can tap.
Start by contacting SCORE, the nonprofit dedicated to helping small businesses, and ask for a free consultation with someone from a local chapter who has experience in this industry and can mentor you. (Next Avenue has a number of how-to articles from SCORE on our site.)
The U.S. Small Business Administration and the roughly 1,000 Small Business Development Centers around the country are also excellent resources.
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The New England Extension Food Safety Consortium has compiled its favorite food-business sites, too. (You don’t need to live in New England to take advantage of them).
If you’re willing to invest in advanced training, look into classes offered by local community colleges or webinars from the National Association for the Specialty Food Trade.
Also, the Food Craft Institute, an educational institution for artisanal food businesses, will offer a week-long course called Business Intensive for Food Businesses from Jan. 14 to 18, 2013, in Oakland, Calif. (Cost: $1,250).
If, after due diligence, you ultimately decide that life as a food entrepreneur isn’t your cup of tea, but you still would like to work in this field, check out GoodFoodJobs.com. This site is a self-described “gastro-job search tool designed to link people looking for meaningful food work with the businesses that need their energy, enthusiasm and intellect.” You’ll find postings from farmers, food artisans, purveyors, retailers, restaurateurs and even policy makers.
Who knows? You might discover a backdoor way to make some extra money working alongside other foodies.
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