Step-by-Step: How to Start a Homemade Food Business in the United States

Many immigrants in the United States opt to sell food from their home countries. This helps them maintain their cultural roots and provides a source of income and the opportunity to start a business. However, it’s crucial to know that selling homemade food in the United States is regulated, and the rules vary depending on what, when, and where you sell. Each state and city has its own set of regulations. That is why, in this article, we’ll provide a detailed step-by-step guide on how to start a homemade food business in the United States.

Next, we will address the following questions:

1. What steps are required to start a food business?
2. How do I choose the type of food for my business?
3. What permits or licenses are required to sell homemade food?
4. How do the regulations vary between states and cities?
5. What is the penalty for selling food without a permit?
6. What resources or organizations provide guidance and support?

What steps are required to start a food business?

If you’re considering starting a food business but unsure where to begin, here’s a simple guide to kickstart your journey:

Step 1: Start by understanding the regulations that govern home-based food businesses in your area. Visit your local government’s official website or contact your local chamber of commerce for information on regulations and requirements. 

Step 2: Figure out who you want to serve with your food. Understanding your audience helps shape your menu and marketing.

Step 3: Make your business official by choosing a suitable legal structure, such as an LLC or corporation, to protect your assets. Ensure you have insurance coverage for unexpected events, and keep your business and personal finances distinct. 

Step 4: Determine what type of food you will offer. Concentrating on a specific category allows you to draw in your intended customers more successfully. Whether you’re offering baked goods or meals from your cultural heritage, clarity about what foods you sell is vital.

Step 5: Depending on the nature of your products, you may need specific licenses or permits. More information on how to obtain necessary licenses and permits is below. 

Step 6: Research comparable products and calculate costs before deciding on prices. Balancing affordability with profitability is essential. Overpricing may discourage customers, while underpricing affects your income.

Step 7: Decide where you’ll sell your food. Online, local markets, catering—pick one that suits your business.

Step 8: Design strategies to attract customers and expand your business. Create a website or social media account to share your hours, specials, menu, and more.

How do I choose the type of food for my business?

To choose the right type of food for your business, think about what you love to cook and what’s popular in your area. Consider who will eat your food and what they prefer. Also, see what similar businesses are doing and find ways to be different. Ensure you can easily find the ingredients you need and have the skills and tools for that food. Lastly, test your dishes with friends or at events to see how people like them.

Additionally, the food chosen will determine the specific permit required. For example, a cottage food permit restricts you to baked goods, jams, and candies. However, selling meat or perishable foods comes with different regulations due to higher risks of bacterial growth. These foods, including meat, dairy, eggs, and dishes with these ingredients, require extra precautions due to their refrigeration needs. By understanding these factors, you can make informed decisions for your food business.

What permits or licenses are required to sell homemade food?

The licenses and permits you require from the state, county, or city will depend on your business activities and location. Fees for your business license will also vary. Here’s a breakdown of common permits and licenses:

• Cottage food permit or license: Many states have cottage food laws that allow individuals to sell certain low-risk homemade foods, like baked goods, jams, and candies, from their homes. However, allowed foods and sales limits vary by state. You can find state-specific cottage food law information HERE.
• You might need a health department permit to sell perishable or refrigerated foods. This permit ensures your kitchen meets health and safety standards. To find contact information for your state or local health department, click HERE.
• Business license: Depending on where you are, you might need a basic business license or a permit to run your food business legally from your home. Look on your city or county’s website for details on getting a business license.

Permit and license requirements can vary significantly across states and local regions. The information provided offers a general overview. Reach out to your local authorities to verify permit regulations in your area.

What is the penalty for selling food without a permit?

Selling food without a permit in a state that mandates it is against the law. This violation can lead to several consequences: 

• You may have to pay a fine for this violation, and the amount varies based on factors such as food type, sale location, and violation count.
• Cease and desist orders: Authorities might tell you to stop selling until you get the correct permits. Ignoring this could result in more legal actions.
• Legal action: In severe cases, you might face legal charges, court proceedings, and potentially higher fines.
• Confiscation of products: Officials may seize and discard your unsanctioned food to prevent unsafe distribution.

What resources or organizations can provide me with guidance and support?

Several resources and organizations can offer valuable guidance and support for starting a homemade food business. Here are some options to consider:

• Websites like Créditos en USA, Immigrants Rising, and Entrepreneurial Hispanics offer comprehensive information and resources tailored to immigrants, including those interested in pursuing entrepreneurial ventures.
• Small Business Development Centers (SBDCs) are valuable resources that offer free or low-cost business consulting and support services. They can help you navigate the complexities of starting a food business, including business planning, understanding regulations, and the overall process. To find an SBDC near you, visit the SBA’s SBDC Locator.
• SCORE is a nonprofit organization that provides mentoring, workshops, and expert advice to aid small businesses in succeeding. Their experienced mentors offer guidance on various aspects of establishing and running a homemade food business. You can find a local SCORE chapter or access online resources through their website: SCORE.
• La Cocina, located in the Bay Area, is a renowned nonprofit organization assisting low-income food entrepreneurs, primarily women from immigrant communities. They offer comprehensive support, including culinary training, business guidance, mentorship, and the valuable opportunity to access commercial kitchen space. For more information, visit their website: La Cocina.