How to Start Selling Your Own Food Product?

1. Research the food business.

   If you’re going to sell any type of food, you have to be able to read the room. What that means is that you have to research the food market and determine what will be profitable.
   
   A good way to determine the popularity of a food item [in a certain region] is to use Google Trends. This platform is great for comparing how popular a certain search term is during any period of time.
   
   Keep in mind, Google Trends does not describe absolute numbers.
   
   Rather, Google Trends uses relative numbers. So, a region with fewer people could have higher numbers than a region with a higher population if the lower region searches for a search term more often.
    
   If you also want some information, data, or statistics on food trends and/or the restaurant industry, then there are websites that provide this information, e.g., Statista, National Restaurant Association, etc.
    

2. Research your state’s laws, licenses, and permits.
   

   Business License
    
   A business license may be required to start your food business even if you operate or sell food out of your home. So, you would need to check the laws of your city and/or county to verify if you need a business license.
    
   Seller’s Permit
    
   A seller’s permit is different from a business license.
    
   If you’re selling a physical product such as food you’ll most likely need a seller’s permit. Most states won’t charge you for a seller’s permit. However, you should check the laws of your state to verify that you do need a seller’s permit.
    
   Sale’s Tax
    
   When selling food items you also have to worry about collecting sales tax. Sales tax is a fee you have to pay the state either on a monthly or quarterly basis. Check the laws of your state to verify that you have to pay sales tax for the type of food you’re selling.
    
   Food Tax
    
   Taxes, taxes, and more taxes. Yet, this is another type of tax that can be collected if you sell food items.
   
   Some states won’t charge you a special or different tax for selling food items. However, you should double-check with your state to make sure that you aren’t required to pay a separate tax for selling food items.
    
   Health Permit (aka Food Service Permit)
   
   Your food business will most likely need a health permit (or food service permit) since it sells food or beverages to the public. This requirement applies to food trucks, restaurants, catering businesses, etc.
    
   Usually, this permit is for businesses selling food that customers eat on the business’s premises.
    
   Food sales License
    
   Depending on your state, you’ll also need a food sales license if you operate a food sales establishment. This can apply to warehouses, processing plants, grocery stores, drug stores, convenience stores, etc.
    
   Usually, this license is for businesses that sell food that customers wouldn’t eat at the business’s premises.
   
   Cottage Food License
    
   A popular homemade food business involves selling cottage foods.
   
   Check your state’s laws. But cottage food products can include the following products: cakes, pastries, cookies, jams and jellies, popcorn, bread and biscuits, nuts, candy, cereal, trail mix, etc.
   
   Depending on the state, you can sell cottage foods without having the extra paperwork or hassle. For example, Florida allows individuals to sell cottage foods from their unlicensed kitchen and they don’t need a food permit.
    
   However, some states may still require a food permit to sell cottage foods. Regardless, cottage foods can usually be prepared in your home kitchen.
   
   But you may not be able to ship your food products across state lines or sell to restaurants, wholesalers, or retail stores unless you get a food sales license.
    
   Keep in mind, certain states may require that you get your home inspected before you can get a cottage food license.
   
   For example, Georgia requires that an individual get their home kitchen inspected and complete a food safety training class before they can receive a cottage food license.
    
   Food Safety Certification
    
   Depending on your type of food business, some states may require that you get a food safety certification and some may not. For example, you may not have to take food safety training if you sell pre-packaged food.
    
   However, if your state requires food safety training, then you should choose a program that’s nationally accredited or approved by your state.

3. Determine how much it costs to prepare and sell your food.

   Determining how much everything will cost is going to be a deal-breaker. Before you get started, you want to figure out exactly how much everything will cost.
   
   You don’t want to get started only to have to stop because you didn’t realize how much money or time this would involve.
    
   So, I would make a list of expenses that you believe are necessary for your food business. This can include food and equipment, business registration, permits and licenses, food packaging, website, marketing, etc.

4. Determine your distribution strategy.

   The next thing you want to do is determine how you’re going to distribute your food.
   
   Are you going to be a wholesaler or a retailer? So, are you going to sell directly to a business who resells your food items to the customer? Or are you going to sell directly to the customers?
   
   Once you figure out how you’re going to distribute your food products, this will help you determine who you should be selling your food products to, where to find these customers (or businesses), and how to market your business.

5. Make (or outsource) the food products.

   You can rent a space in a local licensed commercial kitchen. So, you can choose between a private commercial kitchen or shared commercial kitchen.
   
   Your business will be the only business allowed to access to a private kitchen. But other food businesses will have access to a shared kitchen.
   
   You may also rent a restaurant kitchen and use it in their off-hours. Or you can use a co-packer to make the food for you. In exchange, you will pay the co-packer a fee.
   
   Finally, you can choose a kitchen incubator, which can provide kitchen rentals, business development training, labeling and packing services, distribution services, etc.
   
   Regardless of the setup you choose, some things remain the same. So, some states may have certain requirements, even if you decide to start selling food from home.
   
   For example, a kitchen should have a compartment sink that is used for cleaning, a handwash sink, hot water supply, and no pets allowed in that area.
   

6. Buy (or lease) all of the necessary cooking equipment.

   You can either buy or lease restaurant equipment to prepare your food.
   
   Some common equipment to prepare and store food includes an oven, refrigerator, freezer, baking rack, hand or stand mixer, mixing bowls, spoons and spatulas, and storage equipment.
   
   Keep in mind, you may not need to lease or buy restaurant equipment if you lease a commercial kitchen that has the equipment included.

7. Test your food product.

   It’s important that you test your food before you sell it.
   
   That means you need to create a process that will produce consistent, high-quality food. You want to make sure that each batch is consistent so that customers receive the same food product experience every time.
    
   You should also give samples to potential customers so that you can get honest feedback before you start selling. It’s possible to use friends and family as testers.
    
   However, you need brutal and honest feedback. So, you don’t need anyone to sugarcoat their opinions about your food products.
   
   Some other options for testing your food include focus groups, setting up a stand at a local farmer’s market, or using geofencing marketing technology at your local grocery store.
    
   Let’s say you convinced a local store to carry a limited stock of your food product. This option allows customers to have an ad pop up on their phone where they enter a certain store.
   
   The customer can choose to interact with the ad for a discount on the product. Also, the customer can provide feedback on the product, which allows for anonymous (and more truthful) feedback.

8. Use quality food packaging.

   Labels are important. Not just when it comes to fashion. All food product labels should comply with Federal Regulations 21 CFR 101.
    
   Your food labels may also need to be reviewed by a government agency in your state if you sell foods to retailers, wholesalers, etc.
   
   Remember, your food packaging will make the first impression of your product. So, it must be properly labeled.
   
   But the packaging must also look appealing, use quality materials, and adequately store and ship the food items.
    
   Cottage Foods Labels
    
   You have to check with the laws of your state to see what’s required for cottage food labels.
    
   For example, Georgia requires that cottage foods must be labeled with the business name and home address of the cottage food operator, the common name of the cottage food, the ingredients should be listed from the largest to smallest amount, list all FDA major food allergens, and it must include this statement: “MADE IN A COTTAGE FOOD OPERATION THAT IS NOT SUBJECT TO STATE FOOD SAFETY INSPECTIONS” in at least 10-point Times New Roman or Arial font.  
    
   Also, the label must follow the FDA requirements if it lists any nutritional claims.
   
   Finally, the individually packaged cottage food must have the net weight listed on the label.

9. Determine if you’ll register your business.

   Once you determine your business name, you can decide what type of business structure you want, eg., LLC. The business structure will determine if you need to register your business.
    
   Your food business doesn’t need to be registered with your state if you create a sole proprietorship. However, you’ll need to register your business if you create a limited liability company (LLC), corporation, etc.
    
   Trademark (Optional)
   You’re not required to trademark your business name and/or food product names. However, trademark registration can provide notice to others that you own that name. So, if someone uses your trademark(s) without your permission, you can sue them and get money damages.

10. Sign up for an Employer Identification Number (EIN).

    You’ll only need an EIN if your food business is created as a partnership or corporation or has employees.
     
    Get an EIN for free. You can apply for an EIN online.

11. Create a website.

    Building a website is cheap. You can use platforms such as WordPress to create a free website. However, you’ll still need to pay for website hosting, which isn’t too expensive.
     
    Keep in mind that a picture is worth a thousand words. So, the pictures of your food products on your website should be professional looking and showcase your products in the best light.
     
    Shipping policy and Refund Policy
     
    It’s important that your website post a shipping and refund policy.
     
    You also have to figure out what states or countries you will ship to, how much it costs to ship each item, whether you’ll accept returns (on unopened and nonfood items), and if you or the customer will have to pay for shipping on returned items.
     
    Set your prices
    Once you’ve figured out your profit margins, you can set your prices. You should factor in food item costs, shipping, food packaging costs, and marketing.

12. Market your food products.

    Use social media, online ads, and other types of marketing to get eyeballs on your food business.
     
    Another great way to promote your food products is to create videos. These videos can be short videos, e.g., Tik Tok videos that create a viral buzz around any unique characteristics of your food products.
    
    For example, the pink sauce created a food frenzy online.