You have a number of great jelly and jam recipes and expertise in consistently cooking and canning them. You can turn your home canning into a food product business, but you will need to develop a complete understanding of your state's health and liability laws, as well as a feel for marketing techniques and accounting practices. Approach your new venture from the perspective of a businessperson, not a hobbyist.
- Skill level:
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Things you need
- Range of unique products
- Commercial kitchen and equipment
- Specific information on health laws for your state
- Documents for registering your business and paying state and federal taxes
- Business insurance
- Accounting program or accountant
- Commercial contacts
Take a small business course specific to your state. State health regulations can be quite extensive for food products. Take advantage of small business organisations in your locality that offer counselling and mentoring services. Talk to county and city officials about zoning regulations that might affect what work you can do out of your home. Complete any health department coursework required of food preparation workers in your county.
Find or designate a commercial kitchen. States normally require anyone selling food processed in any way, including food that is washed or packaged before sale, to be prepared in a kitchen that is used only for commercial food preparation. Most home canning businesses will find this requirement burdensome, so many communities have built kitchens within business incubators. Rent space and time in one of those kitchens to prepare your product. If a community kitchen is not available, consider talking to existing businesses with conforming kitchens. A restaurant open only for breakfast might be willing to sell you use of their kitchen in the afternoon.
Register your business. Small businesses often register as a limited liability corporation (LLC) for liability purposes, but you may also continue your work as a sole proprietor or partnership. Research your trademark name to make sure you don't infringe on a previous trademark or confuse customers about your brand. Contact your state department of revenue to get a license to collect your state sales tax, if applicable, and paperwork for doing so. States often allow food products to be sold without tax; verify if your product qualifies for this exemption.
Purchase business insurance. Check first with your own insurance company to see if it has a commercial branch. Your agent can advise you on the types of insurance you will need, and the degree of liability you need to protect yourself against.
Decide what accounting procedures you want to follow. If your business is limited, business accounting software may be sufficient for good record-keeping. Beyond that, consider taking accounting classes or hiring a book-keeper. Remember that you will have to pay state and federal income tax on any revenue you personally draw from your business. Make sure your books are detailed and accurate enough that you can provide numbers to the IRS. Your accounts will also tell you if you are making sufficient funds to withhold some income during the course of the business year.
Complete a business plan and compose a marketing strategy for selling your jellies. Know your goals and the steps you will take to achieve them. Have a good grasp of how you are going to distribute your product. Make contacts with local farmer's market managers, small food retail stores and any local businesses that can benefit from carrying your products. Read books such as Jay Conrad Levinson's "Guerilla Marketing" and Seth Godin's "Tribes". Consider the use of Internet social networking in promoting sales.
Tips and warnings
- If your business has two employees who spend significant time at work and draw hourly income, you may qualify for purchasing a group health insurance plan. Talk to your insurance company about possibilities while signing up for liability insurance.
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