How Your Home-Based Food Business Can Thrive During the Covid-19 Pandemic

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Small businesses are suffering major Covid-19 pandemic-related disruptions, but now is the perfect time to grow your home-based or micro business.

food based business
© publicdomainstockphotos
| Dreamstime.com

Was 2020 was the year you were finally going to start a specialty jam business? Or a small catering business? Or the flavored popcorn business you dream about?

Or did your 2020 plans include growing your tiny food-based business? Were you going to attend more shows, build a new ecommerce website, or employ the help of an enthusiastic sales representative?

No matter; 2020 apparently had other ideas; pandemic-related ideas. Instead of finding new markets, businesses of all sizes quickly closed their doors. No more restaurant business. No mall shoppers. No gyms, bars, or even wedding centers. Large businesses have mostly survived (although retail has been hit especially hard), but many small and regional enterprises have disbanded, victims of a lack of customers and a lack of workers – who chose to stay home rather than be exposed to the virus.

Obviously, we home-based and micro businesses have been affected too. Suddenly, some of our most productive sales outlets are no longer an option. Craft shows and local food events have been cancelled. Farmer’s markets no longer welcome specialty items, reserving their now limited space for fresh, farm-grown produce. And local hotel and other gift shops have unceremoniously shut down.

But despite the dire situation, economic turmoil presents a few opportunities for us too:

Home-based and micro businesses are agile

Your famous strawberry jam not selling, but you still have acres of strawberries? Quickly pivot and start selling fresh strawberries instead. Suddenly your bakery can’t sell large cakes because of group size restrictions? Switch to cupcakes or mini-desserts. You don’t have to get your new approach approved by a Board of Directors or a slate of executives. No one has to write new employee procedures or train workers to make new products. Your business, your decisions. Home-based and micro businesses can make decisions quickly, and implement them just as quickly. So, when the market changes, your business responds too. Flex your business model now to meet today’s needs.

Local sourcing helps stabilize costs

Have you noticed? Food prices have been all over the place during the pandemic. Prices are up; then down; then up again. These fluctuations are due to a variety of things; supply, demand, and infrastructure interruptions. For months I couldn’t find dried beans. They were flying off the grocery store shelves faster than toilet paper! Dried beans are easy to store, last a long time, are nutritious and inexpensive, so people were stocking up. Supply couldn’t keep up with demand. At the same time, the grocery shelves were overflowing with fresh vegetables because distributors rerouted produce from now closed restaurants to grocery stores. Factory shut downs and fewer workers mean fewer products are being made, and it’s difficult to get products to the stores. We ship things long distances in this country, so when trucks aren’t full or can’t get from point A to point B prices go up. But we home-based and micro businesses tend to source many of our supplies locally, which helps us stabilize our prices. Customers bolt when prices are unstable. Stable prices help us keep our customers happy.

There is less competition

Food manufacturers and restaurants are responding to supply chain disruptions by limiting product offerings. No more all-day breakfast at McDonald’s. Fewer varieties of Progresso chicken noodle soups and Oreos line grocery store shelves. Companies are reducing their product lines, but customers still seek variety. This is an opportunity that we home-based and micro businesses can fill! Our reason for being is to provide high-quality, unique, items. Now is the time to approach local retail outlets about carrying your products; even establishments you may not have considered before like farm supply stores or hair dressers. Theses stores, which are often open at reduced capacity, are seeking ways to delight their customers. Carrying your products is one way to do so.

Everyone is home

When you run a home-based or micro food business this fact may seem like a major disruption. But put those family members to work! While younger children cannot help in the kitchen, they may be able to pack boxes or attach labels. Older children can help prepare your food items or assist with record keeping.

The pandemic is changing how we conduct business. But for those of us who operate a home-based or micro food business there are still opportunities. Now is the time to use our abundant creativity, embrace possibilities, and introduce our products to new markets.  

Should You Start a Food Based Side-Gig?

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Could you use a little extra cash? Do you love to eat? Now is the perfect time to combine them and start a side-gig based on your favorite foods.

jam and jelly food based side-gig

As I write this, unemployment is nearly 14% and thousands – maybe hundreds of thousands – of businesses have shuttered their doors. Many will not reopen, and others plan to reopen with fewer employees or reduced salaries. Thus, many of us need extra cash, but since it seems people aren’t buying anything, where are we going to get that cash? In times like these – which have come and gone before – consider providing affordable options meeting people’s needs or desires; food, shelter, self-improvement, toys, and children’s learning materials. You can create a side-gig, providing any one of these.

Side-Gig, Side-Hustle, Part-time Business, or Side Job?

What exactly is a side-gig?

A side-gig is the same thing as a side hustle or a part-time business. Unlike traditional moonlighting or taking on a second job, a side-gig is a business that you create. People have had side-gigs for eons, but many of us don’t think of it as a “regular” business. Have you ever sold Avon or Mary Kay? That’s a side gig. Ever rented out your extra room, made candy and sold it at the holiday fair, or fixed computers on the weekend? All side-gigs. Even if you consider it just helping out, any activity that you do on a regular basis and that brings in a bit of cash, is a business. The trick is to think of it as a business, and watch those occasional dollars flow in.

Advantages of Starting a Side-Gig

Time Saving: Starting a side-gig doesn’t mean you quit your day job. By its very nature, a side-gig is a part-time endeavor, something that can be carried out in the evening, on weekends, or seasonally.

Money Saving: The old adage, “it takes money to make money” is true; but a side-gig doesn’t have to be expensive. Yes, you will still need the appropriate licenses, but a side-gig doesn’t require a large inventory of ingredients and equipment, extra space, or employees. Starting a cracker business to rival Nabisco would require millions of dollars for inventory, packaging, factory equipment, employee training, sales representatives, distribution, etc. Starting a specialty cracker business in your kitchen requires maybe a thousand dollars for local licenses plus a few ingredients.

Quickly Meeting Customer and Personal Needs: What to start a tutoring business? Great! Start a side-gig and see if there is enough demand in your area. If there isn’t, is there another way to offer your expertise? If so, pivot and start tutoring online. Or maybe you will decide you don’t really like tutoring after all. Since you don’t have much money tied up in the side-gig, move on to something else. Maybe it’s time to get that new lawnmower and start a lawn care side-gig. When winter comes, tuck the mower away and bring out the snow shovel! A side-gig lets us quickly adapt to what the market needs and what we enjoy.

Quick Start: You may be able to start a side-gig as soon as this week! Depending on your business idea, and your local licensing requirements, you can develop a quick plan and start making money by the weekend. Unlike starting a large business, your side-gig probably won’t have to search for appropriate real estate, have an environmental impact study performed, or sponsor a hiring event. Faster mobilization means quicker cash in hand.

Why Start a Food-Based Side-Gig?

Customers: Some people need their lawn tended. Others are seeking new toys for their toddlers. Still others need help building a website or need a new knit hat. But everyone needs food! When you start a food-based side-gig your potential customer base is automatically larger than for any other business. That doesn’t mean everyone wants your special crab cakes – lots of people are either allergic to or don’t like seafood. But there are more potential crab cake munchers out there than people seeking stone figurines or quilted tote bags.

Expertise: As a human, you are already a food expert of some sort. After all, think of how many meals you have prepared and/or eaten thus far in your life! You may take a bit of time learning how to run a business, but you probably already know how to make your family’s famous peanut brittle.

Why Now is the Perfect Time to Start a Food Side-Gig

Self Determination: The country is in an upheaval right now. We have limited control over COVID-19, social media misinformation, the economy, and politicians who profess to have our best interests at heart when their actions show otherwise. It’s enough to make one sink into despair. A side-gig can help you take back your life! Along with a mask and turning off the TV, starting a side-gig that feeds you – both literally and metaphorically – restores our sense of self-sufficiency.

Longing for the Good Old Days: Do you fondly remember Grandma’s strawberry pie? Mom’s peach preserves? Uncle Jim’s homemade beef jerky? You aren’t alone. Many people yearn for homemade foods that have intense flavor and lack additives and preservatives. But most people don’t have a family favorite pie recipe or know how to turn fresh fruit into jam and jelly. You can fill the void. Your customers are looking for the homemade products that only you can provide.

Exclusivity: I dream of my own home in Hawaii. Do I own property there? No. Why? Because, (despite my side-gig) homes in Hawaii are out of my price range. But each time I visit I bring a little bit of the islands back home with me. There’s usually a box of chocolate covered macadamias, some pink Hawaiian salt, a bottle of coconut syrup, and some lilikoi curd. Specialty foods are an affordable treat. Even when the economy is difficult, many of us can afford a delicious food impulse purchase, even if we can’t afford a fancy vacation home. So, start stirring!

Less Competition: You may think that now is a terrible time to start a food side gig. In reality, it’s the perfect time! As more people abandon their old business plans, and others are hesitant to start a new business, the marketplace is seeking replacements. We may be buying fewer clothes or movie tickets these days, but we are still buying food. You can provide the delicious options your customers want and need.


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5 More Reasons to Start a Small-Scale Food Business

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Americans are starting new businesses at a rapid rate, but now is a particularly good time to start a small-scale artisan or specialty food business.

artisan food business

As the years go by, we get further and further from our
agrarian roots. No longer do we grow up learning how to preserve the backyard
harvest, or even how to grow a backyard garden! Most of us squeeze dinner in
sometime between work and soccer practice, leaving little time to prepare a
home cooked meal.

But…we all still want great, artisan-style food that tastes homemade.
Which makes now the perfect time to show off your bread making talents. Or to
share your special-recipe marinara sauce. Or to put up cases of your family’s
favorite apricot preserves. All ideas that you can easily turn into a small or
side business.

Maybe you have had a food business idea bouncing around in
your head for a while now. Perhaps you have dreamed about operating a food
truck or selling whoopie pies at outdoor markets. But the timing has never
seemed right. So why is now the time
to turn that dream into reality?

Join the Business Crowd

According to cloud-based accounting software firm Freshbooks, 24 million of us have the desire to start a business. Most of us never make the move, fearful of what might happen if we quit our “real” jobs. That fear may be justified, which is why starting a small-scale artisan food business on the side is the answer.

Growing Food Sales

According to the Specialty Foods Association, sales of specialty (or artisan) foods grew 12.9% between 2015 and 2017, while standard retail food sales grew.1.4%. They predict that the specialty foods market, a $140 billion market, will grow 19% by 2022. Therefore, start your business now and claim your share of this profitable market early.

Customers, Customers

The economy is chugging along at a fine pace. Unemployment is at its lowest level in years. That means people have extra disposable income to spend on your product. It also means that people are busier than ever, and are seeking time-saving ways to put a healthy and satisfying meal on the table. Your artisan food product can supply both!

Tell the World About Your Business

Social media may be the bane of civilization, or it may be what finally connects us all, but it has made it easier to tell the world about your business. Instead of placing an ad in the local newspaper and hoping your potential customers will see it, you can now set up a business Facebook page or Instagram account and share your products. Pinterest boards are especially appealing for food businesses. And you may be able to sell your products not just at the local Farmer’s market, but also on sites like Etsy and Amazon.

Abundant Small-Scale Business Opportunities

There are so many ways to enter the artisan food market. As mentioned above, you could start a small baking business specializing in pies, or breads, or cookies, or quiches… the list goes on. Or you could become a personal chef and only take on as many customers as you choose. Maybe you could turn your backyard into an herb Eden, growing and selling fresh basil or dill or lemongrass. Perhaps you could start a pop-up wine and cheese tasting business, or organize farm-to table-events in your area. The ideas are only limited by your imagination. At least one of them is perfect for you.

Intuit, predicts that the number of small businesses will grow from 30 million in 2016 to 42 million in 2026. One of these businesses can be yours. Want even more reasons? Check out this previous post, 5 Reasons to Start a Food Business Today.

Low Cost Marketing Ideas for Food Businesses

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You have started a business with no money, and figured out packaging and labeling. Now it’s time to find some low-cost marketing ideas for your food business. low cost marketing ideas

Marketing:

Marketing, especially advertising and promotion, can eat up your entire budget in minutes – without bringing a single customer through your door. New business owners often feel that they have to market the same way large food brands market. However, you cannot out advertise the big boys. Large food companies spend millions every year to paint the airwaves and magazines with pictures of their products. They pay grocers a slotting fee so that their products are on the shelves. It’s a scatter shot approach – by having their product everywhere it’s bound to find its market. Small food companies cannot play this game. We must carefully define our target market and promote directly to them. Luckily there are many ways to do this for little or no money. So, don’t start marketing your business by putting together even a  TV advertisement or a big ad in the local paper.

Low Cost Marketing Ideas:

  • Place a notice on Craigslist.
  • Create a web site, even if it is just a basic site that explains who you are, what you make, and how to contact you.
  • Write a blog that lets your potential customers learn about you and your product.
  • Use an old-fashioned sandwich board outside your store.
  • Send a monthly newsletter to your customers, either by mail or email.
  • Offer classes using your products at your location.
  • Teach a class using your products at your local community education center.
  • Host in-store demonstrations and free tastings.
  • Plan a special event around your product and invite the local newspapers and TV stations.
  • Get people talking about your products either through using social media or online forums.
  • Sponsor a local Little League or soccer team.
  • Donate products to further a special cause, but only if you know how it will be promoted (unless it’s a cause you would support anyway).

I was once asked to donate quite a bit of product to promote a worthy cause. That was fine and dandy, except that the product was put into individual gift baskets which were then auctioned. The basket winners didn’t know that those products had been donated, and there was no press release issued about the donations. So, while donating can be a wonderful way to both support a cause you support and to get your business name recognized, it can also be an expensive lesson in what-not-to-do. Now it’s time to set your food business started – and save money too! Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!

Starting a Food Business – What You Need to Know About Packaging and Labeling

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In a previous post I shared some easy, practical ways to get a food business started without spending a lot of money. Today I am sharing money saving tips concerning food startup packaging and labeling issues.

food startup packaging

Packaging:

Food packaging must be food grade, or food safe. There is no wiggle room here. You don’t want your packaging leaking toxins into your food product. Start with a packaging product that is made out of a FDA or USDA approved material. Luckily there are several options if you are creative.

Packaging can cost more than the food product that it contains. If you are targeting a high-end market, it might make sense to package your product in an uniquely shaped glass container. But even if this is your market, I urge you to start with a less expensive and more easily sourced jar. Consider using a plastic container while you are testing your market. This is a good place to practice your creativity too. Explore unexpected, but not necessarily pricey, packaging, like take-out boxes, clear tubes, and stand-up pouches. Search Ebay or Craigslist for other businesses selling excess inventory – so you won’t purchase 1000 coffee bags only to find out after using 10 that they don’t work for your product.

Labeling:

When selling food, by law you must have a label that includes your business name and address, ingredient list and an allergen statement. Most of us want our labels to be more than just the facts though, and to be a visual representation of the business itself.

You can hire a graphic designer to design your labels and have them printed in large quantities. This saves money over the long run. But once again I urge you to start small. If you have any design talent at all design your own label on the computer using copyright-free stock photography. If you are putting together initial food product samples, you can even print out your own labels on a laser printer.

Home printed labels won’t hold up to wear and tear though, so when you start selling a product in any amount over 10, have your local printer make up about 250 labels. When you start using 250 labels a quarter, you may want to re-consider and go the graphic artist route, which can cost up to $4000 for 1500 labels (includes set-up fees and designer fee).

If designing and printing your own label isn’t for you, get labels printed using an online business like StickerYou. StickerYou has no minimum order, so you can try several designs. They also have templates to help you easily develop a new label.

Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!

Starting a Food Business When You Have No Money

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If you have entrepreneurial dreams, but no money, a food related business may be the answer.

small business display Although food businesses come with more regulation than opening a gift shop or starting an errand service, there are plenty of ways to save money while getting a food business off the ground. Here are some of the money-saving tips I followed when I started my Specialty Food (dry mixes) Business, and some others that I learned along the journey.

Licenses and Permits:

This is not the place scrimp and save money. Make sure your business is legal by getting all the required licenses and permits. Spending a little money up front is worth it to avoid the legal headaches of getting caught without the correct paperwork. Besides, paying for all these licenses is still cheaper than a good lawyer’s retainer fee!

  • Business licenses. Most states require a State, or Master business license. Many municipalities also require a license. These fees are usually quite reasonable and will probably be less than $150 total.
  • Legal entity. I highly recommend that you form either a LLC or a S-corp when starting a food business. Operating your business as an entity separate from you (unlike operating as a sole proprietor) will legally protect you and your personal assets in the event that your business is sued. This may be your biggest expense when starting a food business, but if you do the paperwork yourself it will still be less than $500 – much less in some states.
  • Insurance. Liability insurance is a must when preparing food products for sale. You should have at least $2,000,000 in coverage. Shop around for policy quotes. When I first started I received quotes from $500 a year to $5000 a year, and everything in between.
  • Permits. Depending on the laws in your state and the food products you are preparing, you may need permits from the local health department and/or your state Department of Agriculture. Even so, these permits are usually less than $200.

Equipment:

Although you may have visions of mixing pounds of dough in a 60-gallon commercial mixer or filling packages of dry goods with an automatic hopper system, almost any food business can be started without specialized equipment. Start small and save your dollars until sales volume warrants equipment purchases a necessity, not a nice-to-have.

Even if you aren’t looking for specialized equipment, purchasing new measuring cups/spoons, baking dishes, bulk storage containers and the like can add up to hundreds of dollars quickly. Look for inexpensive equipment at dollar stores, estate sales, your local Goodwill, and yard sales.

If you need something not usually found in a home kitchen, like a soup cooker or a heavy-duty blender, search ebay or Craigslist for restaurant liquidation sales.

Supplies:

You can save hundreds of dollars – in the long run – by purchasing your product supplies in bulk. For example, when I ran my Specialty Food Business, many of our products included instant minced onion as an ingredient. To purchase a pound of this product at the grocery store costs about $6.00, but when purchased in bulk cost about half that amount. Of course, I had to purchase 50 pounds at a time. While the per pound cost was much less, instead of having $6.00 tied up in supplies, I had almost $200 tied up in supplies. That was fine when we were selling a lot, but when we were just starting out it made more sense to spend the six dollars.

Purchase as many of your supplies locally as possible. Visit restaurant supply stores if there are any in your area, or purchase at the local Costco or Sam’s Club. Many grocery stores and health food stores will also order products in bulk for you at a lower price. Instead of purchasing 25 one-pound bags of rice, see if your local grocery store would order you a case of rice, or one 25-pound bag of rice. When your sales increase order 500 pounds or more directly from a wholesaler or distributor.

Need help with your new business web pages, product development, or employee step-by-step guide? Contact me!

5 Reasons to Start a Food Business Today

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This is a great time to start a business – and a food business in particular.

food business

© Monkey Business Images | Dreamstime.com

It’s All About the Economy

What? Isn’t the economy doing great? Yes, it is – overall. But salaries are still lagging, and hours at work are still increasing, and some of us want to control our own destiny! Starting your own business is the best way to take control of your life, whether you start a gig on the side, or you go all in and make your own full-time job.

Everyone Eats

Everyone eats, but only a few cook meals from scratch anymore. That leaves plenty of opportunity for those food entrepreneurs providing ready-made, convenience, heat-and-serve, pre-cut, and stir-and-mix type products.

Low Barrier to Entry

Because everyone eats, food is a familiar business to most of us, with an easily understood product. Contrast that to a medical research company, or a tech services business, or a financial planning entity – all of which require years of formal education or training. We start our training in the food business shortly after birth – leaving us with lots of experience under our belts (yes, poor pun intended).

The American Heartland

What a great country this is. We grow and manufacture almost any product ingredient needed right here at home; from peaches in Georgia to olive oil in California to wheat in North Dakota to beans and lentils in the inland Northwest. Growing our ingredients here at home allows us many food business options to choose from, all at a reasonable price.

Improved Health

Want to do something to reduce obesity and improve American’s overall health? Start a specialty food business that utilizes wholesome, high-quality, natural and/or organic ingredients and avoids excess salt and saturated fat. We may not cook much anymore, but we still know good food when we taste it and there is always room for more delicious but healthy products in the marketplace.