Are you a whizz in the oven? Do you make the most delicious cupcakes, breads, cookies or pies or other baked goods? If you are, you may want to consider starting a home-baked goods business from home.
Food is a product that will constantly have a huge demand. According to Fresh Baked Goods in the U.S. by market research publisher Packaged Facts, the fresh baked goods market is projected to exceed $20 billion by 2014. The growth is spurred by consumer interest in healthy eating, artisan foods and “localism”.
Thorough planning and research is important to succeed in the baked goods business. Determine what products you will sell, and where you will sell them. There are two options in starting a food business: sell wholesale to other businesses such as restaurants and groceries; or sell directly to consumers.
However, the biggest challenge in starting a baked goods business from home is passing the stringent requirements that government has imposed with regards to food businesses. Before you can start, you need to pass home processor inspection to determine whether your business complies with all food sanitation regulations.
While you need to check with your state authorities the specific rules and licensing requirements in your state, some of the regulations governing a home food processing business are as follows:
- Most states require commercial-grade kitchen to prepare food products that will be sold to the public. Many households, however, do not have commercial-grade kitchens in their home. You then have two alternatives: upgrade your kitchen, or prepare your food products elsewhere. Some food business owners rent kitchen space elsewhere — e.g. church, bakery, restaurant, etc.
- Having pets in your household may be a reason for your permit to be disapproved. In North Carolina, for example, pets in the home are considered a violation of good manufacturing practices.
- Some states require that you submit a written plan on your food production, food handling and distribution practices. Prepare to be asked to submit a written plan on ingredients used and the suppliers; plan for storage of supplies, equipment and processed products; general production flow, including procedures and equipment used; planned way to transport the products; and potential locations where you will sell the products (local businesses, farmers market, etc).
- Also check with your food safety agency if there are any rules for product labeling. Some states will require you to include in the product label the following information: listing of ingredients, your business name, place of manufacturing (now think if you are willing to put your home address, since you are manufacturing the product from your home). This is particularly important if you sell your products over the internet, farmer’s markets; curb or tailgate markets; trading posts and retail stores. Some states will except your business from product labeling if these are custom or on-demand service foods (e.g. wedding or specialty event cakes, cakes for restaurants to serve, or cookies in bulk package for restaurants to serve).
- Be prepared also to provide a description of your product, how often will you operate/produce your products, and the number of employees you anticipate.