Many a food entrepreneur, including Martha Stewart, Debbie Fields – the famous Mrs. Fields – and Paul Newman began their food empires in their home kitchens. For people skilled in cooking and baking, starting businesses in their home kitchens might sound easy enough, since they already have the equipment and ingredients needed to launch. However, owning a home-based food business has its challenges, including legal requirements and costs, which make some entrepreneurs wonder whether selling food from home is worth it.

    Key Takeaways

    • Those looking to start a home-based food business must look to their state's cottage food laws.
    • Cottage laws dictate what foods the sellers can offer, where they can sell those foods, and what the earnings threshold is that they must remain under to avoid triggering commercial food manufacturing laws.
    • Sellers of food made at home must have food-handlers permits, which are typically granted following a brief training course.
    • Sellers can't offer anything that requires refrigeration, due to the risk of food-borne illness.
    • Sellers must label products clearly, stating that they were made at home and have not been inspected. 
    • Sellers can't surpass a certain income limit without needing to comply with commercial food manufacturing laws.

    Cottage Food Laws

    Many states have enacted cottage food laws to create more income-earning opportunities for their residents. Cottage food laws, which are enacted by state legislatures and enforced by local health departments or state departments of agriculture, are designed to eliminate some of the red tape involved in commercial food production and make it easier for home-based businesses to sell food.

    However, these laws limit the types of food that home-based entrepreneurs can sell. They also prohibit the amount of money that people can make; entrepreneurs who achieve financial success from their efforts may be required to submit to the same requirements as commercial food businesses. Cottage food laws vary among the states, and those interested in selling food from home should consult their local laws before launching their businesses.

    States also require home-based food business owners to have food-handlers permits, which typically requires a brief training course. Most states charge a nominal fee that covers the course and the permit.

    State cottage laws determine where you can sell your homemade food — typically, at farmers' markets, roadside stands, and to individuals.

    Prohibited Foods and Labeling

    In a nutshell, people who sell food that they make at home are prohibited from selling any food that promotes food-borne illness, which typically boils down to foods that require refrigeration. This limits entrepreneurs from selling home favorites such as cheesecakes, ice cream, certain types of pies, and meat, poultry and dairy products. People who manufacture food at home can only sell low-risk foods such as coffee and tea blends, dry foods such as granola, chips and popcorn, baked goods such as breads, cookies and some cakes, and jams and preserves. Many food items fall within acceptable parameters.

    Home-food business owners also must label their products. The labeling requirements are simple and involve including language along the lines of “This product is made at home and has not been inspected.” Some states limit the places that home-based food manufacturers can sell their goods, which often includes farmers' markets, roadside stands, and individual consumers. For their own safety, home-based food entrepreneurs should carry business insurance.

    Coffee, tea, chips and popcorn, muffins and cookies, and jams and honey are among the items, all non-refrigerated, that home-based food entrepreneurs are allowed to sell.

    Kitchen Inspections

    In most cases, the local health department only inspects a home-based food manufacturer’s kitchen if a consumer makes a complaint. States also require business owners to have their kitchens inspected if they’re planning to sell food to third parties, such as grocery stores. People who sell food only at farmers' markets, roadside stands and directly to consumers should take the normal precautions to keep their kitchens clean. To pass inspection, people who want to sell food to third parties may need to invest in additional kitchen equipment, such as refrigerators, sinks and storage areas, at their own expense.

    Is It Worth It?

    Figures are scant when it comes to determining how much money home-based food business owners make. Some earn a few hundred dollars a month from regular participation in farmers' markets and from stands that sell popular niche products, while others may earn more money by focusing on festivals and larger events. Still, others earn enough to call their home-based businesses a career, with the Bureau of Labor Statistics reporting that people who raise bees and sell honey can earn as much as $71,000 annually.  

    It's important to note that states set limits as to how much home-based food businesses can earn before needing to comply with commercial food manufacturing laws. Texas and California both set the bar as high as $50,000.     To determine whether it makes financial sense to start manufacturing and selling food from home , a person must start with a solid business plan, itemize the costs of getting into business and conduct market research.

    Can I make food at home and sell it on DoorDash?
    Jerry Brown just signed Assembly Bill No. 626, which allows residents to sell home-cooked dishes to the public, without needing a restaurant or food truck. This bill will go into effect Jan. 1, 2019, reports the SF Chronicle, and selling home-cooked meals might be the new norm in California. more
    Can you sell food from your home in Louisiana?
    The state allows direct sales, including online sales, for all Louisiana cottage foods at private residences, roadside stands, special events and farmers' markets. The state also allows retail sales in businesses like restaurants, grocery stores and coffee shops for all products except breads, cakes, cookies and pies. more
    What food can I sell from home?
    There are different types of food-based online businesses that you can start from your home.Some of them include:
    • Selling a variety of dishes.
    • Homemade lunch and dinner.
    • Freshly baked, bakery products and confectionaries.
    • Home-processed dairy items.
    • Culinary items, such as spices, pickles, grocery items, etc.
    more
    Can I sell my food through DoorDash?
    Food must be sold to consumers directly and can not be through delivery services or the mail. You can have a delivery driver employed who sends out food the same day, but you can't use Grubhub or Doordash to sell your food. more
    Can you sell food from home for charity?
    In Brief: You do not need a specific food hygiene certificate to produce and sell food at charitable events such as fete's, coffee mornings or fundraisers. You must however ensure it is safe to eat and produces by a competent person. more
    Can I sell food from home in NJ?
    New rules creating a cottage food operator (home baker) permit became effective as of October 4, 2021. New Jersey historically prohibited the sale of home baked goods but has now joined other states in allowing cottage food operations. more
    Can I sell food from home in Arizona?
    Arizona's Cottage Food Program allows individuals to make homemade products that are neither potentially hazardous nor Time or Temperature Control for Safety (TCS) Foods, and offer them for commercial sale. more
    Can I sell food from home Iowa?
    Unlike most states, Iowa allows home cooks to sell most types of foods, including perishable products. more
    What food can you make and sell from home?
    Coffee, tea, chips and popcorn, muffins and cookies, and jams and honey are among the items, all non-refrigerated, that home-based food entrepreneurs are allowed to sell. more
    Can I sell food from my home in Colorado?
    Colorado has allowed cottage food sales since the passage of the Colorado Cottage Food Act in 2012. The law was amended in 2013, 2015 and 2016 to allow even greater freedom. more
    Can I sell on Doordash from home?
    Food must be sold to consumers directly and can not be through delivery services or the mail. You can have a delivery driver employed who sends out food the same day, but you can't use Grubhub or Doordash to sell your food. more

    Source: www.investopedia.com

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