Don't bother with copy and paste.
Get this complete sample business plan as a free text document.
Food Preparation Business Plan
Start your own food preparation business plan
What's For Dinner?
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
What’s For Dinner? is an exciting, new business with a unique approach to helping people enjoy home cooked meals with their families. Customers will come to our Plano, TX location and prepare 12 meals that they pre-select from a menu in a party atmosphere. In two hours, they will have a month’s worth of meals to put in their freezer.
By focusing on our competitive edge (no direct competitors in the Dallas/Ft. Worth area), our customers, and their needs, What’s For Dinner? will increase sales to a point that exceeds $1.3M in three years.
What’s For Dinner? is owned jointly by Alan and Kim Kirby as an S Corporation. Alan and Kim have 15 years of experience in the food service and entertainment industries, as a party planner and personal chef, respectively. They know the kinds of food preparation available in the Collin County area. With two teenaged children, have experienced the frustration of trying to feed a whole family healthy food both cheaply and quickly. Alan’s existing contacts with local social and community groups, and Kim’s ongoing relationships with food distributors, specialty grocers, and high-end clients will all help to generate high sales from early in the first year.
What’s For Dinner offers several advantages to its target market:
- Relatively inexpensive meal preparation: ~$15 for a four-person meal.
- Fun, social, party atmosphere.
- Convenient: eat your prepared meals in your home, when you want.
- Saves time: no shopping, no prep, no clean up.
- For seniors, special menus and transportation assistance make meals easy.
- And, best of all, not having to decide “What’s For Dinner?”
The purpose of this plan is two-fold. The first is to acquire funding of $259,708. The second is to lay the foundations of the company’s vision, philosophy, and strategy, to ensure that we know where we are going and how to get there.
What’s For Dinner? is a specialized business that provides a variety of people with the opportunity to prepare health conscious, yet savory meals that can be frozen to take home and eat at a later time. The purpose of this process is to both optimize the time investment needed to prepare the quality of meals that What’s For Dinner? will become known for, within the clients’ current schedules, and also for them to practice the proper health conscious behavior that has become the target lifestyle of a health deficient society.
What’s For Dinner? will provide a unique and distinctive service that will unite a party-like atmosphere with professional food preparation that will attract a growing repeat customer base. What’s For Dinner? will allow families and busy professionals the ability to prepare a variety of meals quickly in a fun atmosphere, away from home, thus giving people more of what they are looking for – time.
Our goal is to be a self-sustaining corporate enterprise within 3 years from the company’s inception to begin expanding our menu offerings within 3 months and its location offerings within 4 years. What’s For Dinner? will employ 4 individuals full time within 3 years, and will hit net profit goals of $100,000 by the end of its second year of existence.
In short, we will be in the business of helping our customers to relieve their daily stresses of what to fix their families for dinner by providing them with a great menu choice of meals that they will prepare.
1.2 Keys to Success
The keys to success in this business are:
- Creating a high level of customer satisfaction in our service and products, which will lead to customer retention each month.
- Marketing: getting our name out to the public, primarily through an intensive marketing campaign driven by our customers (word of mouth) with a supplemental vehicle of standardized and conventional marketing tactics.
- Great product quality and variety that will be used to aid in customer retention and growth.
- Finances: as our customer base increases we will be better able to lower our supply costs by buying more in bulk through food service distributors.
- Variety of menus offered based on seasons, trends and customer preferences.
- Exceeding our customers’ expectations by offering them a higher quality of food for a competitive price.
- What’s For Dinner’s website will be an efficient and convenient place for customers to register and pay for parties.
The objectives for What’s For Dinner? in the first three years of operation include:
- To exceed customers’ expectations for food service and food service products.
- To increase the number of clients served by 25% per year through superior service.
- To develop a sustainable start-up business that is profitable.
- To achieve an after tax net profit of $134K by year three.
- To achieve a net income of more than 10% of sales by the third year.
Start your own business plan
Your business plan can look as polished and professional as this sample plan. It's fast and easy, with LivePlan.
The quickest way to turn a business idea into a business plan
Fill-in-the-blanks and automatic financials make it easy.
No thanks, I prefer writing 40-page documents.
Plan, fund, and grow.
Easily write a business plan, secure funding, and gain insights.
Achieve your business funding goals with a proven plan format.
How to Start a Food Business From Your Home
Do you enjoy cooking? Are you constantly baking, kneading, whipping, blending, stewing and roasting? Your house always smells amazing, and your neighbours, family, and friends all love tasting your latest creations. And everyone constantly tells you, you could profit from your efforts.
Perhaps your heritage gives your recipes an edge, or you are reinventing recipes your great-granny used to make but now with a twist. Maybe you have discovered a niche and are working on recipes with dietary restrictions. Whatever it is, you are now thinking about the possibility of starting your own food business from home.
Many people love the thought of doing something they enjoy and earning a living from it. With home food businesses, often people can feel they don’t have any professional experience or training, and it can be hard to know where to start.
Our guide will show you how to start selling your homecooked food to the public. It provides practical information that’ll help you ensure you are legally compliant, gives you the knowledge to operate best practice in your premises, and helps you get comfortable with spreading the word about your goods.
Want to learn more about successfully starting your own food business from home? We offer a range of online training courses and, whilst our Level 2 Food Hygiene and Safety for Catering course will cover your hygiene requirements, our Starting a Home Food Business course goes into depth about everything included in this article and more.
Why Should You Start a Food Business From Home?
Starting a business from home can be daunting, but there are numerous positive aspects to getting going. You don’t need to have any work experience or background in retail or manufacturing products. You don’t even have to be a marketing guru, or have a business degree – there is help out there for everyone!
The number one ingredient you must have is a passion for your product. Making your offering the best you can will speak volumes when you come to selling your homecooked food to the public. If you’re still not sure this is the right venture for you, we’ve compiled a list of reasons why a food from home business can be an attractive option. For inspiration, we’ve also included some success stories below:
Most people develop food businesses at home because they are already creating their product there. This means that when they want to get started with their business, they generally already have most of the equipment and the knowledge they need.
Spice Kitchen was set up in 2013 by a mother and son team. It was begun without any investment or loans, and has never sought any since. When starting up, you will need to make sure you have capital to cover immediate key expenses, such as ingredients, equipment, packaging, labelling and potentially distribution. You may need some help with accounts and tax returns, so bear that in mind.
The ability to be creative in your job
What you produce is entirely up to you and your passion – you can make whatever you want and market it any style you wish to. Just make sure you research your intended audience, so you know it will be well received.
Higgidy Pies were deliberately marketed to women. The first flavours they did had great feedback, such as their Beef, Stilton and Ale pie, but there were many comments asking for smaller and lighter dishes. In response, Higgidy developed a range of vegetarian quiches and tarts. These are now a huge part of the business.
A simple business model to follow
In business terms, the concept of making something and selling it is very straightforward, which is probably why starting a food business appeals to so many.
The husband and wife team, Camilla and Nick, who started Rude Health didn’t have a business plan when they first set out. Having studied Japanese at university and enjoyed a career in Marketing, Camilla soon realised she needed to devote her full attention to Rude Health. They had great support from Nigella Lawson, Abel & Cole and Riverford organic vegetable box schemes. They are now also stocked in Waitrose and Tesco.
The ability to create your own working schedule
There’s no doubt that starting a business from scratch requires huge effort, and you will likely want to be working 7 days a week, every hour of the day. But that will be your choice, there is no one to tell you when you should work.
From Dorset With Love began in 2010 while Chrissy was on maternity leave. She started it as a hobby and went back to work when her maternity leave ended. Her passion for preserving never wavered and in their first year, two products attracted 1 Gold Star and 2 Gold Stars from the Great Taste Awards. Inspired to continue, Chrissy now works full time on the business, with her husband Karl, their two sons, and a family friend helping with design and ad-hoc production in their spare time.
Diversification opportunities once the business takes off
The business could have unlimited potential, depending on which route you want to take. You have the freedom to choose your own path.
Yorkshire Provender was originally founded as The Yorkshire Party Company, where they catered mainly summer, private events. In order to develop income year-round, Belinda began experimenting with homemade soups in 2004, and Yorkshire Provender was born. Recognising that the soups had more potential allowed her to grow and develop the range. Yorkshire Provender is now available in Sainsbury’s, Booths, Waitrose and other independent shops.
The business can be run from home
This is a huge plus for many people. Being able to work around other commitments, and having no additional overheads if things don’t work out, can ease the pressure on you to make your fledgling business a quick success. However, it can make the start of your home business difficult to manage, especially when there are boxes and products all over the house!
Debbie & Andrew’s Sausages . When Debbie and Andrew lost their herd of pigs, they had to be creative and think of something else to provide for them and their family. As they already knew how to make sausages, it seemed like a logical step to take. They began making sausages and wrapping them by hand, at the kitchen table, and selling them to the local pub. Now they have stock in supermarkets up and down the country.
You can create healthy products with minimal ingredients
Many people start creating food at home to satisfy a need they have, be it honest food without preservatives and ingredients you can’t pronounce, or an allergy that has you reaching for free-from recipes. Knowing what is in the food you eat is a real concern to consumers, so you may have discovered a niche in which you can satisfy a growing demand.
This is what happened with Proper Nutty . On returning from living abroad in 2012, Stuart and Kathryn realised they couldn’t get hold of any good quality peanut butter, that wasn’t full of additives, so they started to make their own. Quickly they moved from their kitchen table to a small factory in Dewsbury, installed a roaster and grinder imported from Italy and began producing on a big scale. They only have two products: “Nowt but Nuts” is 100% peanuts and “Slightly Salted” which only contains peanuts and 0.5% natural sea salt, and that’s it. Now, they supply shops around the country, including big supermarkets.
What Do I Need to Start My Home-Based Food Business?
There are certain legal requirements you will need to meet when setting up a food business from home. Use the drop downs below to go through each stage. Our helpful step by step guide will get you ready to begin your business.
Creating A Business Plan
Having a business plan is really important as it makes you think about what you want your business to be, where you see it going, and what you want to achieve from it . Whether you want to start a catering business from your home, a decorative cake company, or anything else in between, it will help you set out your objectives for your home-based food business. It will also help you to prioritise your next steps.
There are a number of things to consider when planning your business, so we’ve asked the key questions below to get you thinking:
- Who is your target market? Do you have a niche market in mind, or have you discovered an old family recipe you feel modern day consumers would love? Understanding your target market will help you focus your brand . This will influence how you market your product and interact with your customers. For example, with the rise of milk or lactose allergens, maybe you are making a range of hot chocolates using milk alternatives – who would buy these? What else do they buy, where would you find them shopping for other goods, could you use social media such as Instagram to reach out to these consumers?
- Do you have a unique selling point? Why do you think people will love your product? Consumers love a back story – they want to know where your inspiration and love for your product comes from. Having this in mind will come across in your product design, and it will help you sell too.
- Where do you want to sell your home-baked goods? If you are looking to sell your product at local markets, research into the best places near you, keeping in mind your target audience. For example, cakes and sweet treats could sell well at craft fairs, as well as at farmers markets.
- How do you want to sell your food? Have you considered selling online ? eBay, Facebook and Amazon Pantry can be great platforms for getting your goods out.
- Will you be delivering items yourself, posting or using a courier? Factor in the time spent delivering, as well as the monetary cost.
- Will you make to order? Or could you batch make your product in bulk and keep some in reserve? Making to order could reduce waste on products with a short life, while bulk batching could keep profit margins high, but it would require a bigger initial spend for ingredients and possibly packaging and storage.
- How are you going to know if your product is liked? There are potential product testers everywhere, you could use your friends and neighbours for initial feedback but the real test is how paying customers like it. Approach some local cafés, delis or shops to see if they would take some goods in return for some feedback.
- How much start-up capital do you need? For example, when starting a mobile catering business, you may need to buy or renovate a food truck. If you do need to ask for a loan, having a good business plan will help your chances of approval.
Remember: Play to your strengths. If you have an eye for detail, and patience to create intricate cake designs, focus on niche markets like wedding cakes. Even if you have better contacts in other markets, you can research your chosen market, develop your knowledge and make new contacts.
You may want to look at our Starting a Business Course for essential start up topics. We have also provided a one page business plan template, which provides you with a great place to get thinking and start your business plan.
Download the One Page Business Plan Template Here
When you’ve written your business plan, you are ready to move onto the next step!
Registering Your Home Food Business and Setting Up as a Sole Trader
Once you have a working business plan, you will need to register your business from home, before you can go on to sell your home-cooked foods to the public.
You should register your business with your local authority at least 28 days before opening. Registration of your food business is free and can’t be refused. If you are already trading and have not registered, you need to do so as soon as possible.
Anyone who serves customers directly in food operations will need to register. According to the Food Standards Agency, food operations includes:
- Selling food.
- Cooking food.
- Storing or handling food.
- Preparing food.
- Distributing food.
Furthermore, you must register every premises where you carry out food operations, such as your home, mobile catering units (i.e. food vans), and temporary premises (i.e. food stalls).
‘If you make, prepare or handle food that comes from animals, for example meat or dairy products, other than for direct sale to the consumer, your premises may need to be approved by the council before you can undertake the activity.’
An example of this would be making meat pies and selling them to a restaurant, who would then sell them onto the consumer. If you think this may apply to your business, you can check the section on the government website for Food Premises Approval . Alternatively, register your business first, and apply for approval if your local authority then requires you to do so.
When starting your business from home, you should check if you need permission from your mortgage provider, or landlord. Remember to check your home insurance policy, as you may need to take out a separate policy to cover your business.
You will also need to set up as a sole trader with HMRC. You are classed as a sole trader if you run your own business as an individual and are self-employed. Once you’ve done this you will need to file a Self Assessment Tax Return annually, so keep a record of all your business’s sales and expenses. There is a helpful calculator on the HMRC website to help you factor this cost into your plans.
If your business turns over more than £85,000 annually, you must also register your business for VAT. You can register voluntarily if your turnover is less than £85,000. Some businesses will do this if they buy or sell products with other VAT registered businesses and want to claim the VAT back.
Most food and drink from caterers and take-away services are zero rated, but there are some exceptions. To find more about which products you need to charge VAT on, check the VAT notice on the gov.uk website.
If you run a food business without registering, you may be fined, and you could be imprisoned for up to 2 years.
Once you have submitted your registration with your local authority, you can begin trading. You may receive a visit from the Environmental Health Office (EHO), usually within 28 days from submitting your completed registration form. The EHO will also check to ensure you are compliant with all the relevant food hygiene legislation.
Getting Your Food Premises Ready for Approval
There are several things you need to do to make sure your home is fit for purpose. These are:
- Preparing for an EHO visit
- Completing the legally required food hygiene training .
- Understanding and implementing your due diligence and HACCP requirements.
- Understanding the regulations around food allergens and food labelling , and implementing these where necessary.
- A practical assessment of your working environment
1. When you receive a visit from the EHO, the inspectors will give your business a Food Hygiene Rating. You will probably recognise the sticker they award as every food premises has one, from your local cafe to your favourite butcher’s shop.
You can view our full report on food hygiene scores, and find out how your hometown compares to others here: Food Hygiene: Know the Score.
When checking your food premises for approval and issuing your Food Hygiene Rating, EHO inspectors will assess three areas of your home business:
- Hygienic food handling – Checking the safe preparation, cooking and storage of food. They will also look at if and how you cool and/or reheat your product.
- Physical condition of the premises and facilities – Whether your home is appropriate for your needs, if you have a high standard of cleanliness, suitable ventilation, and pest control measures in place.
- Food safety management – Evidence that you take food safety precautions seriously, such as having a HACCP (Hazard Analysis and Critical Control Points) system in place and following those procedures.
2. To make sure you are compliant with these areas, anyone working with food in your business will need training to an appropriate level. In order to be prepared for the visit, get yourself up to speed with the relevant training. Training can be done quickly and easily online with our compliance courses. In particular, our Level 2 Food Hygiene Course For Catering takes just 2 hours to complete, it will make you legally compliant with all the above, and will teach you best practice of work.
3. There are a number of other online training courses you can take, as it is crucial that you understand risk and where it could occur in your business. If you do ever face a food safety issue, having due diligence records is the primary legal defence accepted under the Food Safety Act 1990. Due diligence in food safety means being able to prove that your business has done everything reasonably possible to prevent food safety breaches. Following and recording a suitable HACCP system is an effective way to evidence this – our Level 2 HACCP Training Course will give you knowledge on safe food management practice.
4. Another very important part to consider for your home business is food labelling. Any pre-packed foods must be labelled and there is mandatory information you will need to include on your labels. Non-prepacked foods do not require labels, but businesses must be able to provide allergen and intolerance information to customers. You may want to consider our Food Allergen Awareness Training Course to learn about how to control the risk of allergens.
5. Practically, you will need to make sure your kitchen is safe for you to work in. As a registered business, you will need to meet certain health and safety requirements. If you have 5 or more employees, you will need to have a written health and safety policy. All businesses are legally required to implement and maintain sufficient fire safety measures, so you will need to carry out a fire risk assessment . You should also consider your first aid arrangements , as the Health and Safety (First-Aid) Regulations 1981 (as amended) require all employers to provide adequate and appropriate first aid equipment .
Being prepared and knowledgeable about food hygiene, safety systems, allergens and labelling is the best way to ensure your home food business is legally compliant. It shows that you have relevant knowledge and that your customers can have confidence in your product. To help with this, we have developed a food hygiene inspection checklist , which you can download for free.
How to Spread the Word About Your New Food From Home Business
Social media is perhaps the easiest way to get your brand out there, and best of all, it’s free! Use social media tools like Instagram, Facebook and Twitter to get the word out. Taking pictures of your creations and becoming a personality that people follow will get them invested in your product. Make sure you sign up for one of each account in your business name, and add it into your business planning stage.
Go and introduce yourself to local businesses who may be interested in your product. Be prepared with sample stock and know your business plan back to front. If they are keen, they may ask you about prices, so research similar products and have a price in mind. Think also about your ability to deliver the product regularly, and try not to overcommit.
You may want to trial different approaches and see what works best for you and your business. Whichever way you choose, remember that your customers are buying into you as much as your product. Your customer service will be what brings people back to you time and time again, so value each sale. Knowing their custom is valued will generate a positive experience and a happy memory for each person who buys your product.
Starting a food business can be a complicated and daunting process. There is a lot to consider, and do, before you even start producing your food from home.
Food businesses can take years to establish and will likely develop naturally over time. It is possible your product will also evolve as you hone your own skills, and as you receive feedback from your customers. Don’t be afraid of trial and error when it comes to branding, packaging and marketing; many well-known products have undergone marketing transformations over the years.
- HACCP Information
- Food Standards Agency, Registering a Food business
- Safer Food Better Business – for England and Wales
- Safe Catering – for Northern Ireland
- Cook Safe – for Scotland
- Guidance on Food Labelling
- HM Revenue & Customs – www.hmrc.gov.uk New employers’ helpline 0845 607 0143Helpline for newly self-employed people 0845 915 4515VAT registration 0845 010 9000
- Health and Safety Executive – www.hse.gov.uk
We hope you find this guide useful as a beginner’s step by step checklist of how to start your own food business. To learn more about starting a food business from home, click through any of the links highlighted in this guide. You can also use the ‘Contact’ section of the High Speed Training website where we’ll be able to aid you further with the online training courses that we provide.
We wish you the best of luck with your business!
We will always treat your personal details with the utmost care and we will never sell your details to other companies for marketing purposes.
Her favourite article is How To Start A Café Business
You may also like
How to Write a One-Page Business Plan to Start Your Food Business
- Food & Beverage
- Retail Small Business
- Real Estate
- Nonprofit Organizations
- Import/Export Business
- Freelancing & Consulting
- Event Planning
- Operations & Success
- Becoming an Owner
- Montclair State University
- Saint Joseph's University
Too many food entrepreneurs get bogged down with traditional advice on the business plan process and lose sight of whether or not their idea is feasible.
When you are contemplating a tasty new specialty food or beverage product to build a business around, you want to get to the feasibility of your idea—meaning how successful it might be. Feasibility is the first step in your food entrepreneurial journey because not all ideas are opportunities. An idea is only an opportunity when the consumer sees your product on the shelf, and they try it for the first time, getting your product on the consumer's plate. The biggest hurdle is getting them back the second time and beyond, the term being Repeat Purchase, which is consumer loyalty or consumer preference.
The sooner you get from an idea to an idea that has been vetted as feasible, the sooner you get started, go back and try another idea, and of course, this process increases your chances for success. Enter the one-page business plan.
Building Your One Page Business Plan
The one-pager as it is called forces the budding food entrepreneur to think clearly about the business idea and has a framework that forces you to put the essentials on one page. The thinking behind this is if you can't get it to one page, you will not be able to clearly articulate your opportunity to other stakeholders such as business associates, potential investors and banks, and retail buyers. Here are the essential elements that go into your one-pager:
- One-Line Pitch
Customer problem, product/services, target market, sales/marketing strategy.
Rather than give you generic details regarding the essential elements, we have created a hypothetical company to show you how an o-pager is constructed. Here are a few notes:
- [YOUR COMPANY]. Fill in your company name or, if more appropriate, the brand name of the product(s) you will be selling.
- [XXXX]. It is a placeholder for you to fill in your product or company-specific information.
- Customer Problem. In marketing, we refer to opportunities as problems. A problem could be "fixing" something to make it better for your target customer OR on the positive side, a gap that you see that no one else is addressing.
- Note. You may not be able to complete each area of the plan on your first attempt. It is more important for you to get this first draft done as completely as possible before you spend more than a few dollars on your business.
One Page Business Plan Outline
One Line Pitch: Feel good about satisfying yourself and family from your freezer any time of the day from the recipes you love. Heart-healthy, delicious foods to achieve a sustainable lifestyle and [XXXX]! [YOUR COMPANY] brand focuses on [XXXX] meal solutions with the scalability of a modern, multi-market, e-commerce, and retail distribution business:
[YOUR COMPANY] provides a direct-to-consumer [XXXX] organic and natural single serve and family-sized portions. Customers enjoy [XXXX] products based on familiar comfort foods recipes, facilitates [WHAT DOES THE PRODUCT HELP THE CONSUMER WITH] with a wide range of products.
With [XXXX], we believe that the [YOUR COMPANY] Management team includes more consumer products food experience than any company in the plant-based protein segment. [YOUR COMPANY] has added general management strength with start-up partners such as [XXXX].
Health-conscious customers are seeking tasty and convenient affordable meal alternatives that are based on familiar comfort food recipes that are convenient, easy to prepare, have substantial health benefits, and [XXXX].
[YOUR COMPANY] makes good food simple and easy. In our markets, we are the premier delivery service for natural single serve and family-sized portions meals as well as other healthy and tasty staples like milk, eggs, meats, bread, and grains. We grow, select, deliver, and manufacture food with the highest level of integrity.
We currently serve three distinct markets: (1) Texas (2) Oklahoma and (3) Southern Arizona. With a total population of approximately 4.2 million and average household size of 2.59, these markets produce a total addressable market of approximately 1.6 million households. Assuming 19% of those homes are interested in organics, our targetable market is 307,000 households, and current market penetration is 3.9%.
We currently sell approximately 7,000 boxes of produce/groceries per week to about 12,000 active customers across all three regions.
In [YEAR]: (1) internal sales force drives geographic expansion (by adding new community drop sites), (2) direct marketing efforts to in-fill Seattle and Anchorage markets, and (3) increase average order size by adding grocery items. Starting in [YEAR], we will begin exporting the business to new markets. We plan to add one new market in [YEAR] and one per quarter thereafter.
By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.
- About Our Concessions
- Concession FAQ
- Concession Gallery
- Concession Videos
- Custom-Built Food Service Kiosks
- Standard Concession Trucks And Trailers
- BBQ Concession Trucks And Trailers
- Pizza Concession Trucks And Trailers
- Coffee Concession Trucks And Trailers
- Custom Built Van Conversions
- Used Concessions
- How To Build A Concession Truck
- BBQ Smoker Videos
- What To Look for in a BBQ Smoker
- Mobile Medical Units
- Firefighter PRE-HAB
Fast & Easy Food Business Plan Template [Free Download]
Deciding to start a food business isn’t something to be taken lightly. You commit thousands of hours to learning, testing, number crunching, and eating (my favorite part). It takes over your dining room, basement, and garage.
In summary: starting a food business is your life.
It’s been my life since I was 15 years old. I started selling cookies, moved to energy bars, and now I sell super-premium mustard. While some of my businesses were more like hobbies, I learned a lot from one to the next.
And one things always stayed true:
I had a business plan for every food business.
I know, I know. When you read “business plan” you probably threw your computer across the room. I get it. Business plans are dead weight. They sit on your desk (or deep in the corner of a filing cabinet). Some say they’re useless. While others swear by them.
I’m somewhere in the middle.
- My plan for Adams’ Cookie House? On the back of a napkin.
- My plan for Eddie’s Energy Bars? Over 100 pages
- My plan for Green Mountain Mustard? Just over 5 pages.
And I’ve read a slew of food business plans over the past few years – all varying lengths. Basically, it depends. If you’re looking for a bank loan you need a solid business plan. If you’re just selling at farmer’s markets you need a napkin plan.
Regardless of length, the meat of all business plans can be boiled down into 10 main questions you need to answer. I’ll mention all 10 here. Then, below is a food business plan template free for you to download.
Before I get started, there are two main reasons you need some kind of business plan:
1. It gives you a plan – without a plan, you’re going to flounder because there’s “so much to do”. Plans give you focus every day to bring your vision to life.
2. It helps with investment – if you don’t have the money to get started, investors not only want to eat a tasty food product, but they want to know you have a plan for world domination.
These are two BIG reasons to sit down and write a plan – if you’re starting out or you’ve been in business for a while. Business plans a great way to get your thoughts down on paper.
Now, what goes in a business plan? Luckily, that’s the next section of this post!
10 Things to Include in Your Food Business Plan
1. Company Details & Structure
This includes company name, address, phone number structure (S-corp, LLC, Sole proprietorship, etc), as well as how your company is split up among it’s founders. This is important because it makes it easier for people to contact you. Plus, company structure shows the government how you’re setup as an entity – and if and when investors can get involved.
2. Product Mix (present and future)
What products are you going to sell? Is it one product line with four skus? Three product lines with 5 skus? Or just a single product? Are all of them going to be in production or are you going to introduce new products over the next few years? Product mix is as much about strategy as it is about operations. It’s integral to the success of your company. Pro tip: when you’re starting out less is definitely more.
3. Food Product Pricing
Right after product comes pricing. How are you going to make money? Are your margins healthy (here’s How to Price Your Food Product)? If you don’t sell to a distributor do you have enough margin to account for one later on? While pricing can be increased and decreased, it’s best to start with profitable pricing in place.
4. Sales & Distribution Strategy
How do you get your product to the people? Do you just do farmer’s markets? Do you ship to retailers? How do you ship? Or, all you all online? Without a distribution strategy, you don’t have a business (but you do have a TON of finished goods in inventory). In my experience, it’s best to write down your distribution plan. I first started out doing all the deliveries myself. As we grew, I brought on one distributor. Now we have five distributors. And I sell online. And I direct-ship to retailers. I do it all. But, it’s been a distribution plan put into place over the past few years.
Hate to tell you, but you don’t make the only non-gmo salad dressing on store shelves. You have competition. What are their prices? How many skus do they have? What’s their distribution like? And how are you going to be different? Your product may be cheaper or it may be free of preservatives, but that may not be enough to go up against the grocery behemoths on the shelves today. Be honest about who is out there. Get your footing and press on. Focus on your company – not your competition.
6. Basic Financial Projections
Numbers don’t lie. I’ve been told that all my life – and it’s true in the food business. No matter how delicious your cream cheese roll is, you have to be able to sell it for a price people are willing to purchase it for. This means calculating healthy margins, determining your break even point (the number of units or sales dollars you need to sell to cover your expenses). And if you – or someone else – puts money on the table, they’re going to want to see how they get it back. Basic financial projections include: income statement, break even point, three years of sales projections, and a balance sheet (a list of the company’s assets and liabilities at a certain point in time).
Starting a solo food business is hard. I wrote about it here. It can be done, but successful food businesses are built with teams — of 3 people to be exact. Someone to operate, someone to sell, and someone to run the numbers. It’s the company trifecta. If you want to build your business, find the people to help you. Include bios, past experience, and why they are part of the team to bring your food product to the masses.
If your food business was a car, it would be an 18-wheeler because there are so many moving parts to your company. You need to find a place to buy ingredients, find a kitchen space, get product produced, ship and fulfill orders, and manage the back-office. How will this all happen? Write it down – and be specific.
9. Customer Analysis
Who buys your product? You can find this out by test marketing your food product. Or, you can take a wild guess. I’d personally trust the data you collect by talking to people. Do they have families? Are they wealthy? Do they follow certain diets? Where do they live? Are they educated? Where do they buy groceries? By answering some of these questions, you begin to learn about your customers. It influences how you market to them and the channels you use. Plus, it helps you develop new products and expand your product line.
10. Marketing Plan
Speaking of getting in front of your customers, you need a marketing plan. As one of my favorite food company founders has said “it’s easy to get on the shelf. The hard part is getting off the shelf.” He’s right. You need a plan to move your products off the shelf and into your customer’s homes.
Once you’ve answered these 10 questions, you have a basic business plan to send to friends and family. But, there’s more. You can go beyond the basics and make a great presentation for the reader’s of your plan. Let’s explore 5 of them below.
How to Make Your Food Business Plan Rock Solid
1. Create a pitch deck
Reading through a business plan is boring. There are no pictures and it’s typically long paragraphs. Make it interesting by building a Power Point presentation. This makes it much more exciting for investors – and easier to send along, too! Want to see some great pitch decks? Check out Pitch Envy (mostly tech companies, though).
2. Have an appendix
If you find yourself drowning in market research, graphs, and pictures of your product, think about creating an appendix. This puts the need-to-know information at the forefront and supports what you’re trying to build in the back.
3. Re-read and edit it
There’s nothing worse than a spelling error in your business plan. If you’re not the best proofreader, send it to a friend to read over. Edit out what you don’t need (including unnecessary paragraphs, words, and sections).
4. Pair it with an elevator pitch
Pitch decks and business plans go hand-in-hand with an elevator pitch. It’s a quick 30-second pitch of your company – including business, product, distribution, and growth plan – to get investors interested. Elevator pitches are perfect for networking events, too, when you’re trying to answer the question “Now, what do you do?”
5. Find a business partner
I mentioned having a great team above — it’s important. Why? Because you get things done quickly – and you’re held accountable. And the most important person to partner with is your business partner. Find someone who compliments your weaknesses and brings TONS to the table. A business partners also strengthens your chance to secure funding for your food business venture.
After these five sections are completed, your business plan will be so well done you won’t banish it to the filing cabinet. This is a plan you could bring to the bank to see if they’d lend you initial funding – or to friends and family to get you started.
Business plans don’t have to be long. Just include the relevant information, skip the fluff, and remember this:
Your plan will change.
The second I finished my business plans, my company went in a different direction. But, you adjust. The true mark of any entrepreneur is their ability to change and think on their feet. Small business owners are perfect examples.
The more you have on paper, the better direction you have. When you have a plan, stick to it. If you blow your projections out the of water, go with it. If your product hits the market three months late, simply focus on selling it.
Your business plan is there to guide you when you don’t see a path. It’s there to remind you why you’re doing what you’re doing. And it’s there to serve as a piece of evidence to hold you accountable in pursuing your dreams.
Don’t spend time on the details. Get out there and make it happen. Start your food business, get the truck up and running, and land your first catering client.
You have a plan now. Download your template below to get started! Let’s go!
Share This Story, Choose Your Platform!
Leave a comment cancel reply.
Save my name, email, and website in this browser for the next time I comment.
- Create Your Online Account
- Account Home
- Confirm Your Card
- Statements & Activity
- Account Services
- Card Benefits
- Small Business
- Merchant Home
- American Express @Work
- Savings Accounts
- Membership Rewards® Point Summary
- BlueBird Alternative to Banking
- International Payments for Businesses
Credit Tools and Support
- Free Credit Score & Report
- Set Your Credit Score Goals
- Forgot User ID or Password?
- Security Center
- Download the Amex Mobile App
- View All Credit Cards
- Check for Pre-qualified Credit Card Offers
- Travel Credit Cards
- Cash Back Credit Cards
- No Annual Fee Credit Cards
- Credit Intel – Financial Education Center
Business Credit Cards
- View All Business Credit Cards
- Most Popular Business Credit Cards
- Travel Business Credit Cards
- No Annual Fee Business Credit Cards
- Flexible Payment Business Credit Cards
- View All Corporate Programs
- Corporate Green Card
- Corporate Platinum Card
- Corporate Purchasing Card
- Personal Card Annual Credit
- Prepaid Debit Cards
- View All Prepaid & Gift Cards
- Personal Checking
- Personal Checking Help
- View All Savings Products
- High Yield Savings (HYSA)
- Certificates of Deposit (CD)
- Individual Retirement Account (IRA)
- Savings Help & Support
- Log In To Your Savings Account
- Personal Loans
- Personal Loans Help
- Business Checking
- Kabbage Business Checking
- Business Line of Credit
- Book a Trip
- Book Fine Hotels & Resorts®
- Book The Hotel Collection
- Book International Airline Program
- How to Pay with Points
- Manage My Trips
- Get Inspired
- Explore Destination Experiences
- Find a Travel Insider
- Why American Express Travel
- Travel Checklist
- Corporate Travel Solutions
- Meetings and Events
- Foreign Exchange Services
Other Travel Services
- Travel Insurance
- COVID-19 Travel Insurance FAQ
- COVID-19 Information Hub
- Travelers Cheques
- Find a Travel Service Office
- Global Assist Hotline
- Membership Rewards® Home
- Points Summary
Card Rewards and Benefits
- Explore Your Cards Rewards Program
- By Invitation Only ® Events
- Entertainment and Events
- Refer a Friend
- Amex Offers
- Cash Back Rewards Home
- Business Solutions Home
- Business Class: Trends & Insights
Checking & Payment Products
- American Express Go
- FX International Payments
- View All Payment Solutions
- Accept the Card
- Merchant Payment Solutions
- Get Support
Related topics, how to start a food business from home..
August 30, 2022
Running a food business from home requires some specific knowledge – from local laws to understanding ingredients and pricing – to be successful. Learn how to start and grow your food business from home.
If you've gotten countless compliments on your cupcakes or find yourself with requests from friends to be their personal chef for special occasions, a home-based food business might be a great way to earn extra money while doing something you enjoy.
But even though frosting cakes or bottling your homemade barbecue sauce may seem fun, a home-based food business is still a business. As with any business, you need to plan and research before picking up your mixer or designing labels for your salad dressing.
Here are 10 things you should know before opening a home-based food business.
Since home-based food businesses often are built out of a hobby, many food entrepreneurs make the mistake of continuing to run their business in a casual way.
1. Learn your local laws.
Your first step is to determine the rules for a home-based food business in your area. Some states, such as California, have a law that allows home-based food businesses meeting certain criteria to operate without being certified as a commercial kitchen.
According to John Gerber, founder of law firm Upstart Legal, there can be additional local requirements to consider, including zoning, business licensing and permitting, and production and safety requirements for the specific product you sell.
“Failure to do this correctly will jeopardize the company’s ability to produce and sell product,” Gerber noted.
2. Know your market.
You could have the best cupcakes on the planet or the tastiest dry rub ever invented, but if there's not a market for your product , you won't generate enough revenue.
Chef Veronica Rains, author of Sell Your Organic Food Product, recommends doing focus groups, making small batches with inexpensive packaging, and selling your products to a few retail locations before fully investing in the business.
3. Conduct your business as a legal entity.
Since home-based food businesses often are built out of a hobby, many food entrepreneurs make the mistake of continuing to run their business in a casual way. Gerber recommends forming an LLC or corporation , as well as carrying insurance, keeping business accounts separate from personal accounts, and registering all products as trademarks in the company name.
“The legal entity, if properly managed, will keep the liabilities of the company separate from the assets of the individual owners,” Gerber notes.
4. Hire professionals.
While you may have designed a website for your homeowners' association or taken a college class in accounting, carefully consider hiring professionals for tasks that are outside of your main expertise. Although you could do these tasks, your time can often be better spent growing the business, and the result can be a smoother, faster-growing operation.
5. Put everything in writing.
To protect yourself and your company, aim to put all relationships and work-for-hire provisions in writing. This is also true for friends and family who help invest to get your business off the ground.
“If people other than the owner of the business are involved in creating or preparation of the product, the company needs to have them assign to the company any ownership rights they may have in their work,” Gerber says. These provisions should also be in place for vendors, such as website designers.
6. Have professional images.
Even if you bake your goods wearing your pajamas while your children do homework in the next room, you want to look like an established and polished company. Take the time to have a professional, well-designed website, social media presence, brochure, and business cards. Your product packaging should also clearly communicate your brand.
7. Make marketing a main priority.
Many food entrepreneurs assume that since many people love to eat, selling food products is easy. Steve Brodsky, owner of personal chef company 3 Star Chefs, says that's the biggest mistake he sees home-based food businesses make. It's vital to spread the word about your business.
“Put as much money as you can afford into marketing/PR/advertising right out of the gate,” Brodsky says.
8. Prioritize pricing.
Spend time researching comparable products and determining your costs before setting prices. When Myriah Zaytoun, a fashion designer and former food business owner, first started out she would price her products based on ingredient costs, but would not add her time as part of the price. She quickly realized that not all cooking jobs are created equal.
“You cannot make a profit if you charge $20 for a baking job that takes you four hours to complete, on top of the price of ingredients," she explained. "However, if you price things too high, you risk alienating your customer-base. I've learned to carefully weigh out all factors before pricing any baking job.”
Chris Henry, owner of personal chef service Fresh!, also cautions against pricing too low because that might set a precedent that's hard to break. You might get clients, but you probably won't make a reasonable profit, according to Henry.
9. Flex with ingredient fluctuations.
Prices for the items that you will use on a daily basis, such as flour, butter and eggs, are not static and will change based on the economy, availability, environmental factors, and more.
“When you price out your products, (leave) room for the prices to fluctuate so you can weather the increases and just revisit it on a semiannual basis,” says Kelly Delaney, owner of Cakes for Occasions .
10. Buy in bulk.
When Delaney was starting out, she aimed to save on expenses by only buying items for the upcoming week. She quickly realized that while the financial outlay was more up front, that she saved considerable money by planning ahead and buying common items in bulk. “When you purchase ahead, in bulk, you save in the future,” Delaney says.
Tips to Start a Food Business from Home
If you don't start somewhere, you'll never start at all! Get your gears turning by thinking through these action items.
Which home-based food business is the most profitable?
This depends on several factors, including the type of food you produce, your target market, location, and marketing efforts. However, some popular home-based food businesses include:
Meal delivery services
Food truck businesses
Online food businesses
How do you start a simple food business?
Choose your niche.
This will help you focus your marketing efforts and attract the right customers.
Create a business plan.
A business plan will help you map out the details of your business, including your goals, marketing strategy, and financial projections.
Get the necessary licenses and permits.
Depending on the type of food you're selling, you may need a license from your local health department. You'll also need to register your business with the IRS.
Find a location.
If you're selling packaged goods, you can sell online or at farmer's markets and specialty food stores. If you're offering catering or meal delivery services, you'll need to find a place to prepare and store your food.
Promote your business.
Create a website, advertise in local publications, and participate in food-related events.
A version of this article was originally published on October 24, 2012.
Photo: Getty Images
Build your dream business for $1/month
Start your free trial, then enjoy 3 months of Shopify for $1/month when you sign up for a monthly Basic or Starter plan.
- Sign up for a free trial
- Select a monthly Basic or Starter plan
- $1/month pricing will be applied at checkout
- Add products, launch your store, and start selling!
- Start free trial
Start selling with Shopify today
Try Shopify for free, and explore all the tools and services you need to start, run, and grow your business.
- How To Find a Product To Sell Online: 12 Effective Strategies (2023)
- AliExpress Dropshipping- How to Dropship From AliExpress
- 10 Best Paid and Free Business Card Makers (+ Templates)
- How To Source Products To Sell Online
- How to Start a Candle Business (with Examples)
- 130+ Dropshipping Products To Sell for Profit
- The Ultimate Guide To Dropshipping (2023)
- Free Business Plan Template- A Practical Framework for Creating Your Business Plan
- How to Make and Sell Enamel Pins
- 17 Unique Business Ideas for You To Try This Year
How To Sell Food Online: A Step-by-Step Startup Guide (2023)
- by Dayna Winter
- Find an Idea
- Oct 28, 2022
- 26 minute read
When Bob McClure was ready to level up his family business, McClure’s Pickles , he found shared commercial space in a tofu factory. The healthy bacteria in the air—caused by the fermentation process of the soybeans—ruined his entire first batch of pickles.
Every industry comes with its own unique complications. The food industry, though? It’s in its own league. There’s an increased risk of legal consequences, the delicate dance of inventory and expiry dates, and a volatile supply chain that can be affected by anything from weather to, well, healthy airborne bacteria.
But for some, there’s nothing better than making great food and feeding the masses. If you’re ready to take on the challenge and realize your dream of starting a food business, you’re in the right place.
This step-by-step guide will teach you how to sell food online, with expert advice on navigating food law, maximizing your marketing dollars, and building a mouth-watering brand.
How to sell food online in 13 steps
- Research food laws
- Find your niche
- Decide on a business model: produced vs. curated
- Source ingredients
- Determine your food production model
- Build your brand
- Run the numbers
- Price your food products
- Set up inventory management
- Plan for growth and product development
- Set up shipping
- Choose your sales channels
- Market your food business
1. Research food laws
Normally, the first step to starting a business is landing on a great idea. With food businesses, however, it’s important to understand the complexity of food laws before diving in.
When making and selling food online, safety is always a concern. Government organizations closely regulate and monitor the food industry to ensure public safety, but the onus is on the business owner to stick to the rules and be obsessive about quality.
Provided you do your homework, acquire the proper licenses, and meticulously track everything, the likelihood of getting into hot water with the health department is low. But if you do, the consequences can be severe, says food lawyer Glenford Jameson . “The government can throw you in jail, take all your products and destroy them, shut you down, or give you a big fine.”
Food inspectors offer you some pretty sage and, frankly, free advice on how to make sure you’re making a good and reasonable product. Glenford Jameson, Food Lawyer
If your product is complicated or requires additional licensing (meat, fish, and some agricultural products, for example), you may want to consult a lawyer with experience in the food industry. Though the upfront cost may be high for a new business owner, it could avoid even costlier consequences down the road.
However, Glenford says, “with the understanding that there’s this broad, significant regulatory framework,” there are some best practices if you choose to navigate the legal bits on your own:
- Properly handle and store food. Learn how to properly handle and store food. Keep tabs on food preparation practices. Make sure you do what it takes so people don’t get sick eating your food.
- Trace the supply chain. Ask questions of your suppliers and get referrals.
- Work with a lab to test your products. Labs can help identify and trace elements that may be known to cause allergic reactions.
- Keep thorough records. Track everything coming in and going out of your facility.
- Make friends with the food inspector. They are there to identify issues and set you up for success. “Food inspectors offer you some pretty sage and, frankly, free advice on how to make sure you’re making a good and reasonable product,” says Glenford.
- Get liability insurance. Be sure you’re covered in case anyone does get sick.
🚨 Note: Every country and region differs in terms of food laws and licensing requirements, and some industries, like dairy and alcohol, may be subject to additional rules. Be sure to consult with a lawyer and your local government for information specific to your business and region. For the purposes of this article, information and tips will be general, and should not be taken as legal advice.
2. Find your niche
In many cases, the best online business ideas are born out of a passion or a hobby . The same is true for selling food. For example, if you make jams for friends and family from strawberries grown in your own backyard, that’s a good place to start. You already know the process and have had experience honing and testing the recipes.
Bob McClure and his brother Joe grew up making pickles with their grandma Lala, and it was her family recipe that ultimately inspired their business, McClure’s Pickles. An actor and a psychology major, respectively, they didn’t know the first thing about business or manufacturing, but their tried-and-true family recipe was their foundation.
If you don’t yet have a product idea , look into current food trends for one. The Food Network listed plant-based fish, creative condiments, and coffee alternatives as trending foods for 2022. Other places to watch food trends include Google Trends, food publications, and social media platforms like TikTok.
Jumping on a trend means you’ll likely find plenty of competition out of the gate. Ask yourself how your product can stand out in a noisy market.
When the McClures decided to offer a premium pickled product, they had very little competition. More than a decade later, though, pickling gained popularity alongside the slow food movement. Bob sees the competition as a good thing. “It’s the right type of competition if it’s bringing awareness to highly specialized, quality-driven entrepreneurial products,” he says. “It helps improve our entire category.”
More food business ideas
Another way to discover a great idea is to find a gap in the market. Many profitable food business ideas start with solving a problem or filling the needs of a niche market.
- Custom or novelty products
- Gourmet, artisanal, and small batch food
- Dietary restrictions: allergen free, gluten free, or nut free
- Certified organic, natural, and fair trade ingredients
- Ethical and religious: vegan, vegetarian, kosher, or halal foods
- Trending diets: paleo, keto, or low carb
- Other: food videos, recipes, meal kits, and cookbooks
Jodi Bager’s business, Grain Zero , was designed to help her manage ulcerative colitis, and her audience is made up of people also living with colitis and other forms of bowel disease. She produces healthy snack options without the ingredients that commonly trigger her condition. “We also address the needs of the growing paleo community,” Jodi says, “and we’re appealing to a wider audience than ever before.”
Ideas for beginners
If you’re new to food, look into easy small business ideas that require a low investment, minimal equipment, and fewer shipping challenges and legal restrictions.
- Packaged snacks
- Canned and pickled products
- Dried herbs
- Baked good ingredient kits
- Bulk nuts and seeds
- Raw ingredients (flours, etc.)
- Curated resale (products made by other vendors)
- Coffee and tea
Thirteen-year-old Charlie Cabdish makes and sells candied pecans from his family’s home. It’s a business he can still run from a domestic kitchen—between school work and basketball practice—nearly five years after launch.
If you have an idea already, test its viability. Is there a market for this product? If it’s a saturated market, how can your product differ? Is there an untapped niche or underserved customer?
Your market research should include looking into the rules that govern the specific industry. Is selling your product online and shipping it even possible? Here are a few questions to ask:
- Is it legal to sell your product online in the region where you operate or plan to ship? Think liquor or cannabis infused products.
- Is your product too fragile to ship? What special packaging would be required to protect it? Think flaky pastries or glass jars.
- Does the shelf life of your food product make inventory too challenging? Think bakery goods or guacamole.
- Does your product require refrigeration? If so, how does that limit your shipping radius or carrier options? Think meats or fresh dips.
3. Decide on a business model: produced vs. curated
There are many ways to start a business in the food industry from supplying raw ingredients to manufacturers to opening your own restaurant, but if you want to sell food online, there are two main business models.
Producing food products to sell
This business model refers to producing food in either a home-based business or commercial facility and selling it direct to consumers (DTC). You may choose to handle the full supply chain and be personally involved in production or work with a third-party manufacturer that produces and packages a recipe to your specifications. In this model, you may also expand your selling channels and consider wholesaling to other shops.
Legal note: Many regions have cottage food laws that allow you to produce certain food items in a domestic kitchen without meeting the same requirements as commercial kitchens. In the US, be sure to look into each state’s cottage food laws, as they can differ by region.
Curating and reselling food
This model involves reselling by curating other brands’ products under your own banner. Your unique selling proposition (USP) may be that your shop brings the best of a single product type (say, mustards from around the world) to a single shopping experience. Otherwise, you may try dropshipping to bring another brand’s products to a new market.
Note: Much of this article applies to food production businesses. If you’re looking to curate existing food products, skip ahead to step 6 to start building your brand.
4. Source ingredients
Glenford stresses the importance of doing your homework when sourcing your ingredients. “Trace the supply chain,” he says, so that your packaging claims match what’s inside and you’re working with trustworthy companies.
If you plan to produce a product that will be labeled organic, for example, be sure your raw ingredient supplier has the proper certification before making claims on your packaging. Developing a relationship with your supplier improves trust and makes them feel a vested interest in your business. “Sometimes our suppliers make suggestions based on something new that comes to market,” says Jodi. “It’s a collaborative partnership.”
- When you’re just starting out and producing small batches, it may be cost effective to shop for ingredients at consumer warehouse club stores like Costco or Sam’s Club.
- Make connections. In certain industries, finding suppliers may rely on word of mouth and personal introductions. The founders of Soul Chocolate networked in the industry to make connections with regional cacao farmers.
- Alternatively, for commodities like cacao and coffee beans, look for a distributor or broker who works directly with farmers.
- Team up with other small-batch producers to purchase bulk wholesale ingredients together.
🗒️ Helpful resources:
- FDA food ingredient and packaging guide , including allergen and food additive information (US)
- Food Composition Database (Australia)
- Licenced Natural Health Products Database (Canada)
5. Determine your food production model
Though McClure’s Pickles started in their family kitchen, the family continuously upgraded their production. “When we were first starting out, we rented a kitchen that had a larger stove,” says Bob, “and we would call up our friends and say, ‘Hey, I’ll buy you pizza and beer if you come make pickles with me on the weekend.’”
The company eventually landed in a 20,000-square-foot factory space where they still operate today. McClure’s serves as a great example of how to scale production as you grow. Starting from a home-based facility is a low-risk way to test your business model.
Selling food from home
Some food items can legally be produced and sold right from your domestic kitchen, but look into the regulations surrounding your chosen product. In the US, the FDA requires you register your home-based business as a facility . You may need to make upgrades to your home setup, such as improved ventilation. Be sure you secure the required license to sell food from home in your region.
Renting from shared commercial kitchens
Many facilities offer shared or co-op kitchen space that you can rent hourly or monthly, depending on your production needs. The benefits are:
- Reduced costs. You don’t need to buy equipment from scratch and the shared model means you’re not covering rent on your own.
- Less paperwork. These facilities are already registered as commercial space and have appropriate insurance.
- Shared knowledge. Exposure to other small business owners allows you to learn from others and build community.
Setting up your own commercial facility
Have full autonomy and start from scratch with this model, building a facility that meets your needs from the start. This is the most expensive option and one that requires due diligence—you are responsible for ensuring your facility meets code and is properly licensed.
This may not be the best option for new entrepreneurs, but rather a future goal. “We started small in our home kitchen and then grew from there,” says Jodi. “We did not move out until we were bursting at the seams and knew we had a big enough business to support the move.”
It is really impressive how much diligence goes into running a USDA-inspected facility. Daniel Patricio, Founder, Bull & Cleaver
Working with an existing manufacturer
This option is great for hands-off entrepreneurs who are more interested in the business than the production. It’s a safe option for industry newbies, too, as the manufacturers should already be versed in food safety and regulations. While the idea, recipe, and brand are all yours, the execution is left to the pros. This gives you more time to invest in other aspects of the business.
“We partnered up with someone that had a USDA-inspected facility so that we could ship across the US sooner, without any food safety issues,” says Bull & Cleaver founder Daniel Patricio. “It is really impressive how much diligence goes into running a USDA-inspected facility.”
6. Build your brand
Selling food online is especially challenging because the most important decision-making sense—taste—can’t be accessed. Because customers can’t sample your product, branding is especially important. Package design, photography, website, product page, and copy need to work together to tell your story and help customers imagine how your product might taste.
💡 Tip: Because packaging is extremely critical in this industry, consider hiring a designer to help with your needs.
Building a brand starts with answering a few questions about how you want customers and the world to perceive it. “We chose our name and our identity—everything from the label, the look, the feel, the text—to be something that connotes handmade and family, yet urban,” says Bob.
To get started explore more in depth branding resources:
- Simple and Low Cost Ways to Build a Memorable Brand Identity
- How To Design a Memorable Logo in 8 Easy Steps
- Food Photography 101: How to Take Perfect Pictures of Your Food
- What Is Brand Voice and How To Create One for You Business
- Selling Through Storytelling: How to Craft a Compelling Brand Story
🛠️ Free tools: Stuck on your brand name? Try our free business name generator and domain name generator . If you already have a great name for your brand, turn it into a professional logo with Hatchful .
Packaging and labeling laws
Aside from the visual appeal of your packaging, each country has its own labeling requirements, which may include best-before dates, nutritional information, allergen warnings, and country of origin. If you plan to ship your product across borders, especially to retailers, be sure to check the destination country’s rules around labeling.
- FDA food labeling, ingredients, and packaging information (US)
- FTC Fair Packaging and Labeling Act (US)
- CFIA food labeling requirements (Canada)
- Food Labeling Information System (EU)
- Food labeling and packaging (UK)
7. Run the numbers
How much does it really cost to start a food business ? If you were to open a restaurant or physical food store, your upfront costs could be upward of $200,000 . But there are many ways to get started with much smaller startup costs.
Small-batch producers who start home-based businesses have far less overhead and can expand into commercial spaces later as the business grows.
Without expensive leases or staffing costs, you could realistically start selling food online with just a few hundred dollars to cover ingredients, website and marketing costs, and packaging.
💡Tip: You may be able to claim some of your housing and utility costs at tax time if your living space doubles as your business space.
If it’s not possible to run your business from home, consider the monthly cost of a commercial facility when calculating your startup costs. Production facilities can be expensive, but many co-ops and incubators offer shared kitchens to entrepreneurs for a fraction of what you’d spend in a dedicated space.
8. Price your food products
Most entrepreneurs, regardless of the product they sell, will agree: pricing is hard. Ultimately there’s no one pricing formula that will work for everyone. Know your costs (both fixed and variable), and keep adjusting until you get it right.
Daniel suggests forgoing profit at first to get your product in front of as many customers as possible. “Over time, those cost savings will come,” he says.
Bob has a different philosophy: if you believe in the value of your product, price it accordingly. He stands by McClure’s pricing. “We’re not the cheapest product out there,” he says, “so we have to compete on something that’s truly unique, otherwise you just become one of the other commodities. And then it’s a race to the bottom.”
Profit margins for food businesses also depend on many factors—what you’re selling or how and where you’re selling it, for example. Restaurant margins are usually less than 10%, while meal-kit services may have margins of up to 40% .
📚 Additional Reading:
- Pricing Strategy: 14 Ways to Find the Perfect Price for Your Products
- How to Price A Product in 3 Simple Steps
- Free Tool: Profit Margin Calculator
9. Set up inventory management
Grain Zero’s brand is built on products that contain natural ingredients and no preservatives. The shelf life on most of the company’s products is only five to six months. Jodi, therefore, keeps inventory tight, turning it over every one to two weeks.
While McClure’s Pickles have a longer shelf life, Bob wants to be sure customers get his product while they’re as fresh as possible. For that reason, the company’s inventory strategy errs on the side of producing too little of the product, rather than too much.
“It’s a juggling act, and we’re always getting better with forecasting our needs,” he says. “We have to make so much to justify a production run, while also ensuring there’s a sales channel or outlet and enough demand behind it to really make it work.”
- Investigate the inventory tools available in the Shopify App Store —they’ll integrate with your store to help you sell online.
- Use batch numbering or bar codes to keep inventory organized.
- Educate your team on your inventory management best practices.
10. Plan for growth and product development
The McClures found success by focusing on their brand’s namesake product, perfecting and iterating on their grandmother’s recipe.
Low-risk ideas came next. Tried and true pickle flavors, for example, were applied to other products, like chips. By popular demand, their Bloody Mary mix followed.
Initially, the McClures expansion moves were made in response to customer feedback. Since then, however, product development has become more sophisticated, and the family relies on data to inform their next move.
You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch. Bob McClure, founder, McClure's Pickles
While the family still loves engaging with customers and hearing their ideas, Bob warns to take them with a grain of salt. “Not all ideas are like gold,” he says. “You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch.”
Expanding to food-adjacent products
Dominion City Brewing Co. sells its beer locally via its online store, but liquor laws prevent it from selling beyond Ontario’s borders. Fans of the brand who live outside the province can still shop for branded merchandise that they sell online, like glassware and clothing.
For your food brand, consider complementary items to extend your reach beyond your local market, increase average order value , and build brand awareness:
- Branded merch like totes, t-shirts, and mugs
- Complementary food products (say, third-party crackers to upsell with your cheese)
- Relevant kitchen and serving tools like aprons, cutting boards, and tea towels
- Recipe books, ebooks, or subscription recipe content
When Wil Yeung hit his stride on YouTube, amassing thousands of followers on his vegan cooking channel, he was ready to monetize. Now, Wil sells cooking classes, e-cookbooks, and physical cookbooks through his own online store.
11. Set up shipping
We’ve spent a lot of time building resources to help ecommerce entrepreneurs streamline their shipping processes . It is, after all, one of the most common pain points for business owners.
And, no surprise: shipping food carries additional challenges, especially when shipping outside of the country. “When you’re exporting food, there are a series of foods whose export is regulated under commodity legislation,” says Glenford. “Those have their own rules.” Look into whether your product is subject to specific laws in the countries where you’re shipping to—and from.
Consider, as well, the potential restrictions on your product in its destination country. Technically, once products are in the shipping stream, they become the problem of the purchaser, but a poor customer service experience can be bad for business. Mitigate the customer’s ultimate frustration by versing yourself on the laws where you ship.
For example, a cannabis-infused product may be legal in Canada where you produce, but may not be in many US states.
Alternatively, to avoid the red tape, you may consider working with a fulfillment service if you do most of your business across the border. “We found the cost of shipping individual orders to the US was prohibitive,” says Jodi. “For that reason, we ship bulk orders to the US where they are warehoused and shipped directly out to US customers.”
Packing and shipping fragile or perishable items
Many food items are fragile or are packaged in fragile packaging. As such, they may require extra shipping materials to offer enough protection from breakage. Factor in the extra cost of materials, shipping weight, and staffing time when setting your shipping and handling rates.
Products requiring refrigeration aren’t ideal for cross-border shipping, but Vegan Supply in Vancouver successfully ships its cold products nationally across Canada using cold packs and expedited shipping . You can also work with carriers that use refrigerated vehicles, or opt to only ship and deliver locally.
Order pickup and local delivery
If you’re selling an item that simply cannot be shipped by post (say, cupcakes slathered in fluffy icing), consider alternatives that still allow you to sell food online. Offer online options to customers who preorder your product: in-store pickup or local delivery.
At the start of the pandemic, many retail stores pivoted to selling food online and set up contactless curbside pickup in lieu of in-store shopping. In response to these challenges, we’ve put together a comprehensive guide to help you set up these delivery methods for your store, too.
Launch your own food business and try Shopify free
12. choose your sales channels .
The best way to start a food business is to sell online through your own website. This method gives you full control over your brand and ownership of your customer list. Reaching your target audience is a bit trickier with an online store than with a marketplace, so you may wish to explore other sales channels as you grow.
Building a website
As with branding and packaging, the look and feel of your website is important in helping influence the customer to buy a food product without tasting it first. In some cases, it may also be a visitor’s first impression of your brand.
Use product page copy to describe your product’s taste and texture in detail. Online product descriptions should include ingredient and allergy information in full. Product photography is also important here (we’ll talk about this in more detail later). Also consider including on your product page: customer reviews, user-generated content (UGC), and recipes that include the product.
To keep the product page uncluttered, invest time in a thorough FAQ page to answer additional questions about ingredients, dietary information, and production methods.
Even if your website isn’t supplying the bulk of your sales, it’s important to nurture it as a tool to connect with customers and tell your story. “We’re in 5,000 stores worldwide,” says Bob, “but we still have a core group of people that come to our website, purchase every year, like to see what we’re doing, and get connected to our brand, our story.”
🍔 Operating a restaurant? You can still sell online with Shopify. Try our online ordering system to help you expand take-out orders and spend more time doing what you do best: making delicious food.
Website building and design
Building a website from scratch may be a daunting idea, especially if your talents lie in cooking, not coding. Good news: you don’t have to. With many ecommerce platforms, like Shopify, you can set up a site quickly, with no technical experience necessary.
Choose from a set of standard website templates in the Shopify Themes Store then customize it with your brand colors, logo, and copy.
A few of our favorite themes for online food businesses include:
- Taste (free)
- Crave (free)
- Editions ($$)
- Canopy ($$$)
- Fresh ($$$)
💡Tip: If site design isn’t your strength, hire a Shopify expert to help tweak your chosen theme or build custom features.
You can opt to DIY your photoshoots or hire a professional who has experience with styling and lighting food. Food photography can be especially tricky due to capturing natural-looking color and glare from reflective surfaces (say, package jars or glossy sauces).
For product pages, shoot food product photos against a clean background. These should include packaging from several angles and close-up details of the product to show texture and color.
Lifestyle photography can be used on the homepage, in marketing campaigns, and in recipe content. Photos of your food products used in recipes or paired with other foods help your customer see how your product can be used in their own cooking or entertaining.
Retail and wholesale
McClure’s initially grew its business through retail partnerships. Success with that channel relied on seeing retailers as partners in the business and inviting them to care about the company mission. “Some of our retail partners take on more familial partnerships. We’ll work with them to do menu pairings or specific events that focus around our products and theirs,” says Bob.
🗒️ Resources for finding retail partners:
- National Association of Wholesaler-Distributors (US)
- Directory of food and beverage trade expos (US/international)
- Handshake wholesale marketplace
- How to Create a Wholesale Channel and Sell to Other Retailers
- Wholesale Case Study: The Story Behind Soul Chocolate
Other sales channels
Many brands expand their sales channels to reach even wider audiences when selling food. If you don’t plan to open a retail store, there are other offline opportunities. Online marketplaces are another option for your business. You can sync your Amazon or Etsy shop with your Shopify store to make inventory across channels seamless.
13. Market your food business
Marketing is one of the most important aspects of running a business. It will be one of the biggest learning curves for new entrepreneurs when starting a food business. In the case of selling food online, connecting your customers to your story is extremely important. If they can’t taste your food, you’ll need to appeal to their other senses.
Your online store is a great place to start. Investing in search engine optimization (SEO) can help your store rank in search engines for relevant terms your target audience is searching for.
Content and social marketing
McClure’s dedicates a significant percentage of its site to community—extra content, recipes (its own and customer generated), and prominent social calls to action. Social media is very important to the brand. “That’s where our core consumer goes,” says Bob. “We want to be engaged with our community because they’re the influencers. Word of mouth can take your brand extremely, extremely far, as we’ve seen.”
Due to the nature of your product, it’s important to take your brand to the streets—and to the mouths of your potential customers:
- Generate buzz locally by participating in farmers markets
- Run a pop-up shop
- Partner with restaurants or other complementary brands to host a tasting event
- Host a private dinner for influencers
- Periodically invite customers into your process (like brewery or factory tours)
- Launch your brand at a consumer food and beverage expo
Other marketing ideas for food brands
Building a successful online food business relies on a consistent effort to drive customers to your ecommerce store. As algorithms change and new social platforms emerge, it’s especially important to build your own customer lists. Incentivize signing up to your email newsletter or creating a customer account. Offer discounts or membership perks in exchange for an email address.
Other marketing tactics to attract customers:
- Send product to food influencers
- Partner with complementary brands to run a promo or develop a limited time co-branded product
- Incentivize reviews and user-generated content
- Run contests or giveaways on social media
- Sponsor an event by providing your product as part of the catering offering
- Create gated recipe content for subscribers only
No more half-baked business ideas
Selling food online today has never been easier. As direct-to-consumer (DTC) food businesses become increasingly popular and new ecommerce technology emerges every day, now is the time to go for it. Build your dream and turn your love of cooking into a profitable business.
Over a decade after its launch, McClure’s employs dozens of people who make and ship its product to thousands of consumers and retail partners around the world. Though Bob can’t confidently say he has it all figured out, his journey has been a rewarding one.
“Some challenges are big enough to break you,” he says, “but how you use them as a learning experience in the future is what really makes for a great ongoing success story. If we don’t learn from what we do as entrepreneurs, we don’t truly grow.”
Feature illustration by Pete Ryan
Selling food online FAQ
Can you make food at home and sell it.
You can make food at home and sell it online or in-person. Certain countries and states have specific cottage food laws that govern the production of food like baked goods in domestic kitchens. You can run an online food business while also selling at local farmers markets.
What is the cheapest food business to start?
he most cost-effective way to start a food business is to make your products at home and sell them online. This model allows you to bootstrap your food business and grow it slowly.
How do you price food for sale?
hen pricing any product, a simple formula is to add up your variable costs plus your fixed costs plus profit margin. It’s also important to keep in mind who your consumer is and what they’re willing to pay for the food you’re offering. Compare your products to other successful online food businesses and use the average pricing in the market as a benchmark.
How can I sell food on the internet?
To sell food on the internet, first determine what kind of food you want to sell and your production model. Next comes branding, setting up shipping, building an ecommerce site and considering other sales channels like online marketplaces.
About the author
Dayna Winter is a Lead Writer at Shopify, telling stories about the humans behind brands and the moments that motivate them to create. On the side, she resells vintage, runs a film-themed vacation rental, and is working on her green thumb.
Join 446,005 entrepreneurs who already have a head start.
Get free online marketing tips and resources delivered directly to your inbox.
No charge. Unsubscribe anytime.
Thanks for subscribing.
You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify.
Start your 3-day free trial today!
Try Shopify free for 3 days, no credit card required. By entering your email, you agree to receive marketing emails from Shopify.
- Dark kitchens
- Delivery Kitchens
- Central production unit
- Catering kitchen
- Cold storage
- Chase Road, Ealing
- 214 Acton Lane, Ealing
- 190 Acton Lane, Ealing
- Britannia Way, Ealing
- Coronation Road, Ealing
- Portal Way, Ealing
- Arcadia Avenue, Barnet
- Whetstone, Barnet
- Cumberland Avenue, Brent
- Kitchen talk
- Talk to a foodie
Home-Based Food Businesses: Getting Started and Scaling Up
2020 has been a turbulent and unsettling year but with lockdown forcing us to take a breather, it has also has been the prime time for self-reflection and development. With many finding comfort in the kitchen during these uncertain times, cooking skills have sharpened and for some, a hobby has turned into a career!
In addition to new food businesses blossoming, some catering and hospitality workers have changed their business model by transforming their own kitchen into a delivery kitchen , allowing them to operate food delivery businesses from home.
Starting a business can be daunting and overwhelming (even from the comfort of your own home); t here is a lot to consider and do before you even start producing food from home . We’ve covered all the essentials needed for starting a home-based food business and tips for scaling up.
Benefits of Setting up a Food Business from Home
- No limit to your creativity
- Flexibility: the ability to create your own working schedule
- Running a business from the comfort of your own home
Starting a Food Business: Checklist
Construct a business plan.
First things first; create a business plan. Having a business plan helps you set achievable goals and milestones and is proven to help your business grow 30% faster. I t makes you think about what you want your business to be, where you see it going, and what you want to achieve from it. It will help you set out your objectives for your home-based food business. It will also help you to prioritise your next steps:
- Who is your target market? The market research you do will influence how you market your product and interact with your customers.
- Do you have a unique selling point? Where do you draw your inspiration from? What types of foods do you use in your cooking? Ensure these points are reflected in the design of your product, as this will boost sales.
- Where do you want to advertise your product: local markets or selling online? Research the best places near you and which online marketplaces are most suited to your target audience.
Register your Business
Once you have a working business plan, the next steps are as follows:
- Register your business with your local authority at least 28 days before you start selling. You’ll be pleased to know registration is free.
- Inform HSRC that you are self-employed – verify your account and confirm the specifics of your food business.
A food business is categorised as preparing , cooking, storing, handling, distributing, supplying or selling food. The below businesses require a licence to become a part of the food industry:
- Restaurants, cafes and take-aways
- Catering businesses run from home, mobile catering
- Food stalls, food pop-ups and food trucks
Getting your Food Establishment Ready for Approval
Good food hygiene in the kitchen is essential; it ensures that the food you serve meets food health and safety rules and regulations and hygiene standards . The Food Hygiene Rating Scheme gives businesses a rating out of 5 so that consumers can make informed decisions about where they buy their food.
Ratings are a reflection of the standard of food hygiene found at the time of inspection from an environmental health officer . As a business, it is your responsibility to comply with food hygiene laws at all times to ensure food is always safe to eat.
- Handling of food
- How food is stored ( cold storage )
- How food is prepared
- Cleanliness of facilities
- How food safety is managed
General Food Law
Before you begin trading, you should brush up on the General Food Law requirements you’ll have to abide by as a professional caterer. The Food Standards Agency has a guide that covers the following areas:
- Food imports and exports
- Food safety
- Labelling and product withdrawals and recalls
Scaling Up Your Food business
First step: find the perfect kitchen space.
Scalability describes the ability of your business to grow when production increases, without being held back by available resources. Acquiring a professional kitchen is the biggest leap a home food business will take. Your business has grown and evolved and now requires a long-term and sustainable business plan. Buying a food production space is very costly for small businesses or startups and isn’t always achievable. The answer to cutting costs and reducing your overheads: renting a commercial kitchen .
To ensure your suppliers are the correct fit for your business, visit trade shows or exhibitions to help you decide on the best and most cost-effective manufacturers. It’s also a great opportunity to network.
Acquire your Kitchen Equipment
Safety, workflow and space efficiency should all be taken into consideration when acquiring the necessary kitchen appliances . A commercial kitchen requires industrial-grade equipment that can withstand the wear and tear of heavy-duty use.
Invest in Technology
Technology makes it easier and less expensive to scale a business. You can grow quickly and efficiently at a lower cost by investing in the right Customer Relationship Management (CRM) software, digital marketing tools and Point of Sale (POS) systems. Evaluate not only software but also networks and hardware such as servers and computers.
Create a Marketing Strategy
Marketing is the heart of every successful business; it’s the first step in creating awareness about your brand.
4 great tips to market your business;
- Subscription boxes: subscription boxes are collections of niche products aimed at your target audience.
- Influencer marketing: influencers use their social media accounts, blogs and websites to increase your brand reach.
- Social Media: t aking pictures of your creations on social channels with relevant hashtags and the correct tone of voice will engage your audience.
- Word of mouth – trade shows and exhibits: i ntroduce yourself to local businesses who may be interested in your business idea and product.
At Dephna, we offer flexible commercial kitchen spaces with 24-hour access and commission-free deliveries. If you’re looking to scale up your home-based food business and are interested in renting one of our commercial kitchens, dark kitchens or modular cold rooms , book a visit to one of our prime London kitchen locations now.
Share this article
Running a commercial kitchen is no small feat; it requires extensive knowledge of food safety, precise menu planning, streamlined workflows and efficient staff management. But with the rapid advancement of technology, modern kitchens are better equipped to meet demands and stay ahead of the competition. By leveraging the power of technology, chefs are able to […]
Sustainable kitchens are in high demand and as a result, adequate ventilation has become an integral ingredient for greener cooking spaces. Now more than ever, it’s essential to invest in efficient air cleaners and filtration systems that not only improve the overall atmosphere of your kitchen but also ensure more control over energy costs and […]
Food truck businesses are booming in the culinary world. In fact, the food truck and street food industry have estimated annual revenue of $2.7 billion. But with this continued growth comes increased competition. So how can you ensure your food truck business stands out from an already-saturated crowd? One way to do this is to […]
Is a Professional Culinary Program Right for You? Take This Short Quiz
The Complete Guide to Starting a Home-Based Catering Business
Blog > Food Entrepreneurship > The Complete Guide to Starting a Home-Based Catering Business
With lower startup costs than a restaurant and the ability to determine your own hours and dishes, a home-based catering business can be an exciting entry into culinary entrepreneurship!
With no brick-and-mortar, “customer-facing” space needed, starting a catering business from home can be more affordable, and a great way to either supplement your full-time income or replace it entirely.
Still, this is a big undertaking. However, you can follow this step-by-step guide to get your home-based catering business off the ground, and start wowing clients with your delicious food!
Table of Contents
On-site vs. off-site catering.
- Home-Based Catering Laws
Start Looking at the Numbers
Create your business entity, craft your menu, assess your equipment.
- Build Relationships with Vendors
- Marketing Your Home-Based Catering Business
Hire and Train Your Staff
Collect reviews and testimonials.
Catering services are generally split into two categories—on-site and off-site. With on-site catering, the food is cooked and completed at the event location, like a wedding venue or hotel. With off-site catering, food is cooked somewhere else and then brought to the event location. This is often the case with catered business lunches and private parties.
As a home-based caterer, you may have the option to work either of these methods into your business. You could do the prep work at home, and bring everything to the event location for the final cooking and plating. Or you could do all the cooking from your home kitchen, and deliver the completed dishes to the venue.
The method you choose could be influenced by your city and state catering regulations, so make sure to do your research before determining your business model.
The Essential Culinary Career Guide
What's your ideal culinary career: Fine dining? Your own restaurant? Pastry? Get our self-evaluation guide to find out!
We’ve compiled a checklist of all of the essential questions into one handy guide: career options, culinary interest surveys, educational opportunities, and more.
- First Name * Last Name *
- Campus of Interest * Location of Interest Online Austin, TX Boulder, CO
- Program of Interest * Program of Interest
Clicking the "Get the Guide Now" button constitutes your express written consent to be contacted via phone, text, and/or emails by Auguste Escoffier School of Culinary Arts at the number(s)/email you provided, regarding furthering your education. You understand that these calls may be generated using an automated technology. You can unsubscribe at any time or request removal of street address, phone number, email address via Escoffier website.
Know Home-Based Catering Laws
Before you file any paperwork or spend a dollar to establish your business entity, you need to know what is possible (and legal) in your area.
Does your city/county/state even allow for catering out of your home? And if so, does your kitchen meet the health department guidelines? These rules may require extra ventilation, a three-compartment sink, and non-permeable surfaces, like stainless steel countertops. Rules vary from state to state and city to city, so make sure to get the specific details for your region!
You may find that while you can operate the business side of your catering operation from home, you’ll still need a commercial kitchen rental where you can do the actual cooking for off-site catering. You may have to rent a shared commercial kitchen, or you may be able to cut costs by operating out of a kitchen at a local church, restaurant, or community center. Get creative!
There are two factors to a business’ profitability—income and expenses. Before you jump into your new venture, start sketching your financial outlook and making some projections so you build a profitable business.
What Will It Cost to Open Your Doors?
There are costs associated with every business—your job is to figure out how much you’ll need to spend starting and operating your catering business at home. Additionally, you should calculate your income to determine how long it will take to recoup those startup costs.
Keeping your expenses low at the beginning can help you become profitable sooner. Instead of buying all new equipment and serving dishes, what can you find second-hand or borrow? Can you purchase and store ingredients in bulk to save some money?
After you figure out your startup expenses, think about how you’ll pay for them. Will you be able to cover these startup costs out of your personal bank account, or do you need to seek a small business loan or grant? Even if you don’t need outside funds right away, you may want to secure a loan just to cover any possible emergencies that may occur as you get up and running. Unexpected expenses crop up, like higher food prices or broken equipment that needs repair.
Remember to factor in the cost of a rented kitchen space if you need one!
How Much Can You Expect to Bring In?
How many events can you reasonably cater per year? And how large do you plan for those events to be? This is a vital part of your planning process and goes to the very heart of your home catering business.
It’s not all about how many events you can do—it’s about how many you want to do. Flexibility is part of the appeal of this business model, so it’s up to you to decide what you want your business to look like.
Is this going to be a full-time venture with a team that serves large weddings and corporate events? In that case, you want every weekend to be booked.
Or do you envision it as a supplemental business to your full-time job, or a fun money-making hobby? If that’s what you envision, you may only plan to do one small, high-end dinner party per month, focusing on personalized service and top-shelf ingredients.
Do you plan to be a company of one? This will limit the size of the event you can manage, but it also reduces your expenses.
These factors determine how much income you can make per year. Build out a rough calculation of the amount you can expect to make versus your anticipated expenses to make sure there’s room for profitability.
If financial planning seems a bit daunting, Escoffier’s Online Food Entrepreneurship program can help you grasp the culinary math fundamentals to start a food business, such as money management, purchasing, receiving, menu pricing, inventory, and more!
Name Your Home-Based Catering Business
Time to brainstorm some names!
Check with your Secretary of State (if you’re in the U.S.) to make sure that the name hasn’t already been registered. It’s also a good idea to do a web search of the name to make sure there are no catering businesses that already hold that name. Remember, you want to make it easy for people to find and remember you.
Plus, putting in a little research upfront can allow you to avoid confusion or legal troubles from a similarly-named company.
Build Your Business Structure
Consult with an attorney and/or tax professional to decide what the best business structure for your company will be.
A sole proprietorship is the easiest to create, but it doesn’t keep your personal and business assets separate. A limited liability company will protect your personal assets from business debts or liability, but it is a little more complicated to set up. If you’d like help with setting up your business, consider contacting a local small business center.
Once you’ve established your business name and structure, you can register for an Employer Identification Number (EIN) with the IRS.
Set Up Your Business Banking
Keep your personal funds and business funds separate, so you can accurately track your profit and expenses. This will also make paying your taxes much easier at the end of the year!
Get Any Required Licenses and Permits
Each state, county, and city will have its own requirements for permitting and licensing. To start, you’ll probably need a business license. Contact the Small Business Administration (SBA) to get guidance on the rules in your local area.
If your state allows you to cater from your home kitchen, you may need an annual health inspection from the local health department. You may need a food handler’s or food manager’s license as well.
And if you plan to sell alcohol as part of your catering services, you’ll likely need a liquor license to stay in compliance.
Long story short: be diligent in your permits and licenses! An error here could lead to financial or even legal trouble down the road.
Get Liability Insurance
Even if you take proper precautions, any time you cook for others there is some element of risk. If someone gets ill from eating something you cooked—even if it’s not your fault—you may face liability. Liability coverage can protect you and your business if something unfortunate happens. A specialty insurance provider like the Food Liability Insurance Program may be a good fit for this type of business.
You may also need to update your homeowner’s insurance since you’re running your business out of your home. Contact your insurance company for details.
Now that all the paperwork is out of the way (for now), let’s talk food!
Caterers may choose numerous specialties, from regional cuisine to farm-to-table to plant-based catering. Choosing a specialty in your menu plan reduces your pool of possible clients, but it also makes it easier for you to stand out and market directly to your ideal customer. After all, if I’m a client who wants to serve guests a gluten-free, vegan meal, I’m probably more likely to hire the gluten-free vegan caterer than a “jack of all trades.”
“The most valuable part of my Escoffier education has been the knowledge I gained from all of the Chefs. Each one had a different take on things. It was a great experience.”* Kathy Gadison, Escoffier Culinary Arts Graduate
To avoid reinventing the wheel for every event, you can opt to offer a set number of dishes that customers can pick from. You may also want to establish “tiers” in your menu, with each tier having a different per-person cost. This gives your customers flexibility in choosing their dishes while still working with their budgets.
When pricing your menu, consider your food costs , labor costs, and additional overhead (insurance, kitchen rental space) to make sure you can cover all of your expenses and still have some profit left over from each event.
Also, consider your service method when designing your menu. If you’re only offering buffet-style catering, you may want to avoid dishes that rely on exquisite presentation or need refrigeration. Finally, think about on-site vs. off-site delivery. Food that you plan to deliver from your home kitchen to the venue must maintain quality through the transport and setup process.
Escoffier’s Online Food Entrepreneurship program curriculum also examines the various aspects of menu design and management, including how to use home-based catering menus as a strategic financial tool.
What do you have, and what do you need?
If you offer baked goods on your menu, for example, you may need a second stand mixer or multiple ovens. A dedicated catering refrigerator can give you extra cold storage, plus make it easier to keep your catering supplies safe from hungry family members if you’re cooking at home.
You may also need chafing dishes and Sternos to keep food hot when it reaches its destination, plus serving utensils and dishes.
When you have all these extra items, where will you keep them? If you have a large garage or storage shed, that can work. But you may need to rent a storage unit nearby to keep these things out of your home or rental kitchen space.
Start Building Relationships with Vendors
As a catering business owner, you have access to wholesale food suppliers that can supply you with bulk ingredients at better prices. They may also be able to help you source specific ingredients, which is valuable if you’re in a specialty market.
Start communicating with vendors early to get an idea for who has the best prices, quickest delivery times, and most responsive customer service. And if you’d like to source ingredients from local farmers and small food producers, start reaching out early to build relationships.
When it comes to sourcing, think beyond the food. If you can source linens, flatware, and plates as part of your service, you can both charge a higher rate and provide a useful service to your clients. So strive to develop relationships with rental vendors as well.
Start Marketing Your Home-Based Catering Business
How will you get the word out? If you plan to cater to an older crowd, you may want to go with traditional marketing methods, like taking an ad out in a local publication. If your ideal customers are younger and tech-savvy, social media is probably a better place to focus your efforts. Focus on high-end photography.
You’ll also need a website. A website makes you “findable” online, and it can be your home base to display menus, testimonials, photos, and pricing. It’s also where you can share your story and credentials, like your Food Entrepreneurship degree or diploma , and what is special about your cuisine.
“For me, having access to the school online means it is now possible to receive the culinary education I have desired, while still being able to grow my business and take care of my family, without even having to leave our valley. It is awesome that in my lifetime, we have developed the technology making this educational venture even an option. I am grateful for the opportunity, to say the least.”* Kirsten Douglas, Online Culinary Arts Graduate, Owner & Catering Chef at The Main Event
If you’re catering small events, you may be able to handle them on your own. But as events get larger, they often grow in complexity.
Even if you can handle all the cooking on your own, who is going to serve it? Two or three people may be enough to keep a buffet well-stocked, but if you plan to do seated meals, you’ll need more staff to prevent slow service and cold food.
If you’re an Escoffier graduate, you may be able to find some team members among your fellow alumni through the Escoffier Alumni Association !
One of your best sources for new clients will be old clients. Along with relying on word of mouth, encourage past customers to leave positive reviews and testimonials you can share.
Some bookkeeping software has this function built in. After you send the final invoice and the client pays it, the software can send out an automated email with a link to your review platform of choice.
Celebrate Major Moments Through Food
Starting a catering business at home can be flexible and rewarding! You have the opportunity to make rewarding connections with interesting people and help them to celebrate life’s big events through food. But it can also be challenging and demanding.
Education can be a great way to prepare you for starting a catering business. Escoffier’s Online Food Entrepreneurship programs include core culinary principles, marketing concepts, and business planning methods that may help demystify some of the important concepts of entrepreneurship and set you up for success. And with online culinary school , you may even be able to complete your program while you start your catering business. To take the next step in your entrepreneurial journey, contact us today to get started!
Interested in learning more about culinary entrepreneurship? Try these articles next:
How to Start a Bakery Business From Home
- How to Start a Restaurant with Little to No Money
- How to Start a Food Business From Home
This article was originally published on June 11, 2021, and has since been updated.
*Information may not reflect every student’s experience. Results and outcomes may be based on several factors, such as geographical region or previous experience.
Subscribe to Blog
Related articles, how to start a food business from home, how to start a restaurant: a step-by-step guide.
The Essential Culinary School Planner & Checklist
We’ve compiled a checklist of all of the essential questions into one handy workbook: Career options, academic plans, financing your education, and more.
- Location of Interest Online Austin, TX Boulder, CO
- Program of Interest
Clicking the "Get the Workbook Now" button constitutes your express written consent to be contacted via phone, text, and/or emails by Auguste Escoffier School of Culinary Arts at the number(s)/email you provided, regarding furthering your education. You understand that these calls may be generated using an automated technology. You can unsubscribe at any time or request removal of street address, phone number, email address via Escoffier website.
According to the American Diabetes Association, about 34 million people in the United States — both adults and children — are living with diabetes, and an additional 1.5 million people are diagnosed every year.
Preparing a financial plan for your business is important if you plan to pursue business finance options such as loans, according to Inc. Business finance companies look at the short-term viability as well as the long-term potential of a bu...
If you’re looking to start planning your weekly meals using a delivery service like HelloFresh, there are some easy steps to follow that can make your experience a more enjoyable one.
How to Start a Food Business From Home · Choose Your Niche · Conduct Market Research · Prepare a Business Plan · Licenses and Permits · Purchase Your Equipment.
Relatively inexpensive meal preparation: ~$15 for a four-person meal. · Fun, social, party atmosphere. · Convenient: eat your prepared meals in your home, when
Why Should You Start a Food Business From Home? · Low cost · The ability to be creative in your job · A simple business model to follow · The ability to create your
If you are resisting writing your food business plan, start with a one-page business plan to force you to answer important questions and
Owners of businesses with products that cannot be produced in the home
10 Things to Include in Your Food Business Plan · 1. Company Details & Structure · 2. Product Mix · 3. Food Product Pricing · 4. Sales &
How to Start a Food Business From Home. · 1. Learn your local laws. · 2. Know your market. · 3. Conduct your business as a legal entity. · 4. Hire
There are many ways to start a business in the food industry from supplying raw ingredients to manufacturers to opening your own restaurant, but
How to Write a Food Business Plan [ Step by Step Tutorial ] Website Design Services : https://bit.ly/35XnxK4Food Business Books:
Scaling Up Your Food business · First Step: Find the Perfect Kitchen Space · Choose Suppliers · Acquire your Kitchen Equipment · Invest in Technology · Create a
On-Site vs. Off-Site Catering · Know Home-Based Catering Laws · Start Looking at the Numbers · Create Your Business Entity · Craft Your Menu · Assess