So, what about licensing?

This is probably one of the most common questions we get…what licensing do I need and how do I get it?

First training that ALL of these licenses require is the Food Safety Manager’s Training. Always start with that. Several companies do it, we use the ServSafe curriculum. Do NOT mistake this for the Handler’s certification…Manager’s is more involved.

There are 3 agencies that regulate companies that make food for sale. The health department, the Department of Agriculture and the US Department of Agriculture. Which one you need depends on how you intend to sell your product and what you are making.

The health department—run by your state or local authorities—regulates direct to consumer food. This is any food that is made by you and sold directly to a customer. Food trucks, restaurants, farmer’s market vendors, etc usually fall under health department’s jurisdiction. As a general rule (but not ALWAYS true) a health department license is quicker to get.

The state-level Department of Agriculture regulates and inspects packaged goods intended to be resold (wholesale products) that do not contain meat. They do this on behalf of the FDA, which means once you get this license you may sell across state lines. In most cases, the process of getting this license usually takes 2-6 months from the time it is turned in. You need to have your labels created, your packaging ready, your HACCP plan (Hazardous Analysis Critical Control Point Plan) for each product and, if applicable, your product tested for bacterial growth and shelf life standards. Some products require specialized training (like acidified products or cold press juice, for example). While very small businesses ARE NOT required to have nutrition labels, they are a good idea and can either be tested by the lab or can be made by putting in your ingredients into a software program (we often use recipal.com).

The federal United States Department of Agriculture regulates all wholesale products containing meat. Those frozen meals in a grocery store? USDA. The USDA issues something called a Grant of Inspection for these types of products and it is involved. The certification requires you to be separated from all other products by time and space (shared spaces have to have allocated kitchens for this, for example) you to notify your inspector each time you are going to produce (they will usually be onsite for production). You will require HACCP plans, recall plans, manufacturing training and more, depending on your product. This is a significant investment for food producers.

For the new entrepreneur, this should be a step process as you put your business together. You can hold ALL of these licenses you want. Start with direct to consumer sales and, as your customer base grows, spend more and go through more processes.

Oh, and one last thing to remember. In all cases your products have to be approved AND your production kitchen has to be approved. You will need new licensing if you move kitchens.

How do I start a food business as a side hustle?

So you want to start a food business.

You know you have a good product or idea, but you still have bills to pay.  That’s great…we get it. But how do you do it?

Most new entrepreneurs start their companies while working another job, however there are some major questions to consider if that is what you are thinking about.

·         How much time do I have time for this?

o   The hardest part about a side gig is being honest about the amount of time you have to dedicate to it, because your success is a result of the time and effort you put in. If you have a job you are working 80 hours a week and raising a family, it could be very difficult for you to start a successful business, too. We go more in depth on this topic in our “Starting Your Food Business” course.

·         How can I sell my food part-time and can I make money?

o   Absolutely! Making money in food depends on the business model you decide on---wholesale vs retail, catering/made to order vs. premade, etc. Check out this free guide to lay out the options for you to decide on which type of business will be best for you. 
Once you make that decision, you want to think about how to best find your target customer. Most new entrepreneurs don’t know who their target customer is yet and need to figure that out. This is why we advise many of our new entrepreneurs to try out local farmer’s markets—it is an opportunity to understand and interact with the people who buy your food. This interaction is one of the most integral lessons you can learn in business and will determine if you are successful in your business. Check out the “Early Sales” course for methods and best practices to make money while learning.

·         Can I make enough money to cover my overhead if I’m not full time?

o   Sure you can! Much of this will depend on what your overhead is—and whether the type of food you are making, how you intend to sell it and whether it even requires substantial overhead.  Some items—especially bakery items—can be made from your home and sold directly to customers, other types of food, like catering, have to be made in commercial kitchens and other products rely on “it depends”.  We go in-depth with these topics in both our “Learning How to Make a Profit” course and our “Licensing Your New Food Company” Course.

One of the first goal posts for most new entrepreneurs is when their company can finally support their life and family and you can make this side hustle into a full-time gig. Whether or not this is your objective, having a food business as a profitable side hustle is very possible but depends entirely on how you get started.