What You Need to Know to Start a Food Business

Are you dreaming of starting a food truck? Do your friends tell you that your salsa is delicious enough to sell? Do you want to open a restaurant? A bakery? A popcorn shop? A coffee shop? A catering business? We talked to Kendra Wills, a counselor at the MSU Product Center Innovation, which provides support for new or expanding food business owners. Wills gave us insight on what questions to ask yourself when you are getting started, and how to reach your food entrepreneur goals.

GROW: What are the first steps people need to take if they are thinking of starting a food business?

Kendra Wills: It’s really important to outline what your goals are and how much time you have to spend on the project. A lot of the small business owners that I work with already have a job and want to start a side hustle, and then they find out how much time is involved with producing the product and selling it. Often times when you are starting out, you have to do everything: you source all of the ingredients, you do all of the marketing, you do sales, even web development.

 A lot of times people really underestimate how much time and capital it takes to start a food business. Decide how much time and money you have to put into this project. Make goals but do it in phases: the first year, maybe test the market out to see if it is a viable product; year two, grow to farmers markets and maybe retail, years three, four and five, maybe go for a brick and mortar. 

You have to consider the shelf-life of your products, too. The Michigan Cottage Food Law is a great tool — it helps people start food businesses from their home kitchen. But you can’t make anything you want, you have to follow the law.

Baked goods are popular products, but you can’t bake them weeks in advance and they don’t last very long. So, it’s a time-crunch situation where you have to make and then sell. So your marketing and production have to go hand and hand. There are labeling requirements and production requirements, and you must secure a food license through the state department of agriculture or the local health department.

GROW: What can people expect from the licensing process and how can they make it easier for themselves?

KW: Read what the licensing requirements are. There really isn’t anything easier than that. The health department is for ready-to-eat foods, like a catering business, food truck or restaurant. Packaged foods or retail stores are mostly licensed through the Michigan Department of Agriculture. Now, let’s say you are a caterer and make most of your money catering but want to sell salsa on the side; you can do that under your license from the health department. If you are doing both, running a restaurant and selling packaged foods, it matters where you make most of your money. If you make more than half in packaged foods, then you go to the department of agriculture. If you make more than half in the restaurant, then go to the health department. And then it is just reading guides that are on the respective websites. 

Another really helpful resource that is good for learning the basics is the Serve Safe class. It will teach you what to look out for and how to prevent food born illness.

What do you see that tends to set people apart?

I really think it is the focus and the amount of time they are committing to their project. The most successful people really dedicate their focused time. It might be every day or every week, especially when you have another job that doesn’t relate to what your food business is. It can be really hard to find that time, especially when you are tired from your other job and you other home responsibilities, it can be really hard. But the time and focus make a difference.

Click here for more information on the MSU Product Center.