Many food entrepreneurs, including Martha Stewart, Debbie Fields—the famous Mrs. Fields—and Paul Newman, started their food empires in their family kitchens. For people who are good at cooking and baking, starting a home kitchen business sounds easy because they already have the tools and materials needed to get started. However, owning a home-based food business has its challenges, including legal requirements and costs, that have some entrepreneurs wondering whether selling food at home is worth it.
- Those wishing to start a family food business must comply with the family food laws in their state.
- The Farm Act dictates what food vendors can provide, where they can sell this food, and what income thresholds they must maintain to avoid triggering commercial food manufacturing laws.
- Food vendors who make meals at home must obtain a food business license, which is usually granted after a short training course.
- Due to the risk of foodborne illness, vendors cannot provide anything that requires refrigeration.
- The seller must clearly label the product, stating that the product is manufactured in-house and has not been inspected.
- Merchants cannot exceed certain income limits without complying with commercial food manufacturing laws.
Agricultural Food Law
Many states have enacted family food laws to create more income-generating opportunities for residents. The Family Food Act, passed by state legislatures and enforced by local health departments or state departments of agriculture, aims to remove some of the red tape in commercial food production and make it easier for family businesses to sell food.
However, this law limits the types of food that family entrepreneurs can sell. They also forbid how much money people can make; Entrepreneurs who strive to achieve financial success may need to meet the same requirements as commercial food companies. Home-cooked food laws vary by state, and anyone interested in selling food at home should consult local laws before starting a business.
The state also requires household food business owners to have a food business license, which usually requires a short training course. Most states charge a nominal fee that includes coursework and permits.
State farmhouse laws dictate where you can sell homemade food—usually at farmers markets, roadside stands, and individuals.
Prohibited foods and labels
In short, people selling food they make at home are prohibited from selling any food that can cause foodborne illness. These foods are usually boiled into foods that require refrigeration. This restricts entrepreneurs from selling family favorites such as cheesecakes, ice cream, certain types of pies, and meat, poultry, and dairy products. People who produce food at home can only sell low-risk foods such as coffee and tea blends, dry foods such as granola, potato chips and popcorn, baked goods such as breads, biscuits and some cakes, and jams and sweets. Many foods are within acceptable parameters.
Home food business owners should also label their products. The labeling requirements are simple and include the language “This product was manufactured in-house and has not been inspected”. Some states restrict the places where family food producers can sell their products, usually including farmers’ markets, roadside stalls, and individual consumers. For their own safety, family food entrepreneurs must purchase commercial insurance.
Coffee, tea, French fries and popcorn, muffins and biscuits, and jam and honey are all non-refrigerated items that family food entrepreneurs can sell.
In most cases, if a consumer makes a complaint, the local health department will only inspect the kitchen of the household food manufacturer. The state also requires business owners to inspect their kitchens if they plan to sell food to third parties such as grocery stores. People who only sell food at farmer’s markets, roadside stalls, and directly to consumers must routinely take precautions to keep the kitchen clean. To pass inspection, people looking to sell food to third parties may need to invest in additional kitchen equipment at their own expense, such as refrigerators, sinks, and storage areas.
Is it worth it?
To determine how much home food business owners make, the data is scant. Some people make hundreds of dollars a month regularly participating in farmer’s markets and stalls selling popular specialty products, while others may make more money focusing on festivals and large-scale events. Still, others earn enough to call their family business a job, and the Bureau of Labor Statistics reports that people who keep bees and sell honey can earn up to $71,000 a year.
It is important to note that prior to the need to comply with commercial food manufacturing laws, states set income limits for household food businesses. Thresholds for Texas and California are as high as $50,000. To determine whether it makes economic sense to start producing and selling food at home, one must start with a solid business plan, detailing the costs of running the business, and conducting market research.