Many people are passionate cooks and would love to share their creations with the general public. Opening a restaurant is daunting, expensive, and very time-consuming. For many, it’s simply not worth it.
There is still a way to get your home-cooked food into the hands of the public, however. That is to start a food business out of your home. With some patience to deal with bureaucratic matters and some footwork to get the word out, a home-based food business can make quite a bit of money.
In this article, we will go over what you need to know about starting a food business from home.
Know your expenses
Before you even think about getting the permits and licenses to be able to operate a food business out of your home kitchen, you have to crunch some numbers. A business needs to make a profit so calculations have to be made to understand if your idea is actually going to make money.
The first thing to do is figure out all of the expenses and go from there. There are two primary figures to focus on. The first is how much money upfront will be required to get the business started. The second will be how much the overhead costs are to operate on a monthly basis.
One of the biggest benefits of having a home-based food business is that the upfront costs are low. That doesn’t mean that you don’t need to have some to get going, though. Permits are going to likely be a few hundred so start with those. There may even be some required changes to your kitchen to be able to legally cook and sell food from there.
You’ll need to have money for specialty equipment and even things like bulk orders of disposable food containers.
Then calculate the operating costs such as utilities like gas and electricity. Food costs will need to be understood so figure out how much of the raw product you need to make your creation and then put a price on what it will sell for. Will you be paying somebody to deliver your food? This needs to be accounted for also. Add these numbers up and see if the profits are big enough for this activity to be worth it.
Find a niche
Having too many items for sale can lead to poor profits margins. When some things don’t sell you’re going to lose money on them. It’s much better to have one or two products that you specialize in so you can dial in on the costs and profits.
It’s also better for people to think of you as an expert with certain food. If you are a baker then be the person known to have the best blueberry muffins. If it’s a made-to-order sandwich then be the one known for the best bagel sandwiches.
Marketing is also much easier when you have a certain specialty.
Get good at marketing
Getting the word out there is as important as the food itself. If nobody knows that you exist then you can’t sell much.
Luckily, marketing is very effective these days thanks to the internet. Social media is the most obvious place to start since it is free and you can target the people in your area. Find out where most of the people in your town like to hang out online as there are a lot of platforms. For instance, if everybody is using Instagram, don’t spend too much time on Facebook or Pinterest.
Also, make sure to start an email list as it is a very effective marketing tool. Every time you make a sale, ask the person to give you their email address. Then you can send them promotions when you have a sale like a two for one, or to remind people to put their holiday orders in on time. You’ll get a lot of repeat business from your email list.
Understand the market
You are probably not the only one that is selling food out of your home. See what the others are doing and make sure that you are doing something different or better than them.
Before getting started, you can even use your social media following to ask people what they would want from a takeaway business. Understanding the market will allow you to not only cook the food that they want but to meet their needs in other ways. You may know the hours that most people will be able to come by and pick up their order, or to use the type of packaging that they want.