Start & Run a Home-Based Food Business Book

Notice xiii
Acknowledgments xv
Introduction xvii
1 Location and Space 3
1. Start Your Business in Your Kitchen 3
1.1 Storage and work space in your home 3
2. Finding a Kitchen Outside Your Home 4
2.1 Kitchen incubators and shared kitchens 5
2.2 Places that accommodate large gatherings 5
2.3 Renting a commercial space 5
3. Get the Rental Agreement in Writing 6
2 Finding Your Product Niche 11
1. Foods Made without Heat 11
2. Stovetop, Hot Plate, and Microwave Foods 12
3. Baked Foods 12
4. Specialized Niches 12
4.1 Convenience foods and meal parts 13
4.2 Ethnic foods 13
4.3 Health-oriented, allergy specifi c, and other special diets 13
iv Start & run a home-based food business
4.4 The seasons 13
4.5 Fashionable foods 14
4.6 Gift packages 14
5. The “New” Catering 14
6. Things to Consider before You Decide on a Product Niche 16
6.1 Foods that are labor intensive 16
6.2 Consider the shelf life 16
6.3 Copyright issues on character cake pans 16
6.4 Limit your products in the beginning 17
7. Create a Signature Product 17
7.1 Develop a few specialties 17
8. Researching the Market 18
3 Preparing a Business Plan 21
1. Executive Summary 22
2. Statement of Purpose 22
3. History and Background 22
4. Description of the Business and Products 22
5. Company Values 22
6. Operations and Employees 23
7. Market Research 23
8. Promotional Strategies 23
9. Financing and Start-up Expenses 23
10. Projections and Forecasts 24
11. Personal Business Plan 24
12. Business Planning Help 24
4 Making Your Business Legal 29
1. Your Business Structure 29
1.1 Sole proprietorship 30
1.2 Partnership 30
2. Choose a Business Name 31
2.1 Register your business name 31
3. Employer Identifi cation Number or Business Number 31
4. Business License and Seller’s Permit 32
Contents v
5. Food Production License 32
5.1 Food production license and legal issues 32
6. Insurance 33
7. Zoning Laws 34
5 Financial Management 37
1. Start-up Capital 37
1.1 Minimalist approach 37
1.2 Moderate approach 38
1.3 Flush-with-capital approach 39
2. Bookkeeping: Keep Track of Your Business 40
2.1 Business expenses and deductions 40
2.2 Business income 43
2.3 Separating business fi nances from personal fi nances 46
3. Hiring a Professional to Help with the Bookkeeping 46
4. Paying Yourself 46
4.1 Retirement savings 47
5. Setting up Your Home Offi ce 47
6 Purchasing Cooking Equipment, Utensils, and Supplies 51
1. Cooking Equipment 51
1.1 Worktable and counter space 52
1.2 Refrigerator 52
1.3 Freezers 52
1.4 Ovens 53
1.5 Stovetop cooking or frying equipment 53
1.6 Sinks 53
1.7 Cooling rack 54
1.8 Proof box 54
1.9 Microwave 54
1.10 Mixers 54
1.11 Food processor 54
1.12 Bread machine 54
2. Cooking Utensils and Other Kitchen Necessities 55
2.1 Saucepans and stockpots 55
vi Start & run a home-based food business
2.2 Baking sheets, trays, and pans 55
2.3 Rolling pins 55
2.4 Measuring utensils 56
2.5 Timers 56
2.6 Miscellaneous small hand tools 56
2.7 Aprons and towels 56
2.8 Pan holders and pot holders 56
2.9 Ingredient scale 57
2.10 Certifi ed scale 57
2.11 Ingredient bins and tubs 57
2.12 Shelving and racks 57
2.13 Cleaning tools and supplies 57
3. Purchasing Supplies 57
3.1 Food supplies 58
3.2 Holiday supplies 58
3.3 Packaging supplies 59
7 How to Name, Package, and Label Your Products 63
1. Product Names 63
2. Packaging 63
2.1 The basics of packaging 64
2.2 Trays and platters 65
2.3 Gift packaging, bags, and baskets 65
2.4 Outer packaging and transporting 65
2.5 Shipping 65
2.6 Eco-friendly 66
3. Labeling Your Products 66
3.1 Ingredient list 67
3.2 Nutrition facts label 68
3.3 Health claims 68
3.4 Universal Product Code (UPC) 69
8 Pricing Products 73
1. Calculating the Costs 73
2. Adjusting for Change in Cost of Goods 76
Contents vii
3. Wholesale, Retail, and Courtesy Discount Prices 76
4. Wedding Cakes and Other Exceptions to the Rule 77
4.1 Contracts for wedding cakes and other special orders 78
9 Where to Find Your Customers 83
1. Wholesale: Finding Businesses that Will Sell Your Products 83
1.1 Restaurants, diners, delis, and coffee shops 85
1.2 Stores and markets 85
1.3 Caterers and party planners 86
1.4 Online merchants and catalogs 86
1.5 Florists, gift shops, and specialty boutiques 86
2. Retail: Finding Your Customers 86
2.1 Street fairs and markets 86
2.2 Mobile carts 89
2.3 Offi ce delivery route 89
2.4 Wedding cakes and other specialty products 92
2.5 Residential neighborhood sales 92
2.6 Kitchen sales 93
2.7 Mail order 93
2.8 Holiday sales 93
2.9 Celebrating year-round 95
2.10 The custom gift business 95
10 Promoting Your Products 101
1. Create a Logo 101
2. Advertising 101
3. Marketing 102
4. Publicity 102
4.1 Press releases 102
5. Public Relations 103
5.1 Brochures 103
5.2 Flyers 103
5.3 Business cards 103
5.4 Websites 106
5.5 Portfolio 106
viii Start & run a home-based food business
5.6 Coupons 106
5.7 Write your own ads 106
5.8 Point-of-purchase promotional materials 106
5.9 Promotional products 107
5.10 Newsletters 107
11 Using and Measuring Ingredients 111
1. Availability and Substitutions 111
2. Use Natural Ingredients to Extend Shelf Life 112
3. Use Fresh Ingredients 112
4. Find a Multifunctional Recipe 112
5. Increasing the Ingredients 113
6. Formatting Recipes 113
7. Tweaking a Recipe 114
8. Testing Product Shelf Life 114
8.1 Freezing your products or ingredients 115
9. Measuring Ingredients 115
10. Utilizing the Leftovers and Excess Products 116
11. Ingredient Equivalencies 117
12 Recipe Advice and Tips 125
1. Ongoing Problem Recipes or Products 125
1.1 Occasionally good recipes go bad 126
2. General Tips for Recipes 126
3. Muffi ns and Quick Breads 128
4. Cookies 129
5. Bars and Brownies 130
6. Coffee, Bundt, and Pound Cakes 131
7. Other Cakes 131
8. Cake Frostings 132
9. Pies, Pastries, and Sweet Crusts 133
10. Breads, Buns, and Breakfast Pastries 133
11. Fruit Sweetened, No-Sugar Added Products 134
Contents ix
13 Production and Business Tips 139
1. Production Tips 139
1.1 Seasonal production 139
1.2 Scheduling production 140
1.3 Assembly line method 140
1.4 Being organized 141
2. Food Safety Tips 141
3. Kitchen Safety Tips 142
4. Business Tips 142
4.1 Look professional 143
4.2 Your food should look professional too 143
4.3 Organize your home offi ce 143
4.4 Be timely 143
4.5 Be consistent 143
4.6 Be a thinker 144
4.7 Problem solve 144
4.8 Know your competition 144
4.9 Donations 145
4.10 Don’t give away recipes 145
5. Customer Service Tips 145
5.1 Put on a happy face 145
5.2 Keep in contact 146
5.3 Dealing with pushy people 146
5.4 Observing your customers 146
5.5 Hire good employees 146
6. Taking Care of Yourself 147
6.1 Prioritize to reduce stress 147
6.2 Manage your time 147
6.3 Avoid isolation 148
6.4 Occupational hazards 148
14 Expanding Your Business 151
1. Keeping Your Business at Home 151
1.1 Increase production capability 152
x Start & run a home-based food business
1.2 Upgrade equipment 152
1.3 Renovation 152
1.4 Increase your outlets 152
1.5 Extend your product varieties 152
1.6 Profi t from emerging trends 152
1.7 Continue to advertise 152
2. Opening a Retail Shop 153
3. Wholesale Space 154
4. Co-Packers 155
5. Making Decisions 155
Recipes
1 Basic Buttermilk Muffi n Batter 1
2 Pumpkin Loaf 9
3 Apple Crumb Cake 19
4 Sour Cream Coffee Cake 27
5 Almond Chocolate Chip Cookies 35
6 Bakery Sugar Cookies 49
7 Gingerbread Cookies 61
8 Cappuccino Blondies 71
9 Chocolate Overdose Brownies 81
10 Chocolate Cake 99
11 Red Velvet Cake 109
12 Poppy Seed Cake 123
13 Harvest Cake Muffi ns 137
14 Grand Marnier Fruitcake 149
Table
1 Ingredient Equivalencies 117
Samples
1 Sublet Agreement 8
2 Simplifi ed Business Plan 26
Contents xi
3 Repayment Contract 38
4 Investor Coupon 39
5 Monthly Expense Ledger 42
6 Monthly Income Record 45
7 Product Label 67
8 Ingredient Label 68
9 Ingredient Cost Caculator 74
10 Recipe Cost Calculator 75
11 Wedding Cake Contract 79
12 Retail Market Venue Supply Checklist 90
13 Offi ce Delivery Route Flyer 91
14 Neighborhood Flyer 94
15 Holiday Flyer 96
16 Holiday Letter 97
17 Press Release 104
18 Retail Flyer 105
19 Recipe Format 115