How To Start A Food Business From Home [Startup Academy Featuring Damian Roberti]
Welcome to Startup Academy by OnlineLabels.com. We're talking to industry professionals to get the inside scoop on starting home-based businesses.
In this episode, Damian Roberti of Marketing Food Online shares his tips for starting an online food business. Continue reading to hear directly from Damian.
My name is Damian Roberti and I am the founder of Marketing Food Online. Today I'm partnering with Startup Academy by OnlineLabels.com to bring you eight specific steps you can take to start a food business from home.
Step 1: Obtain Required Licenses
The most important action item is to check with your state, county, and city about the types of permits (licenses) that you may need. Every state is slightly different when it comes to this, so you need to do your research. You want to find out if there are any additional permits or licensing you may need, from your state down to the city and county you live in.
Step 2: Make Your Business Official
Many states don't require a company to incorporate, but I've been in this business for over 12 years and I highly recommend that you form some type of LLC or other business entity.
Incorporating is going to protect you personally from any business activity. When you're dealing with food, people can potentially get sick or have an allergic reaction. If that happens, you want to make sure you're covered – which is where your food business insurance policy comes in.
Incorporate yourself and get a food producers insurance policy. These are normally about $500-$600 a year but the great thing is that you can break up the payments. Many insurance companies will let you pay over a period of time, so rather than having to come up with the $600 upfront, you can pay anywhere from $40-$50 a month.
Find out what one lawyer has to say about incorporating your business.
Step 3: Perfect Your Recipe
You want to perfect your recipe. You're probably thinking "I know how to make my product" but that's not what I mean. If you begin to produce this product in large batches, you need to be able to scale the recipe. Not only that, you don't want your recipe to take a lot of time to produce or include expensive ingredients.
Why? That's going to cut into your profit margin.
Producing food for friends and family is one thing, but when you begin to create a business product, you need to be able to produce a lot of it very quickly and at a very low cost. That is how you make a profit.
Step 4: Make Great Food Labels
Make sure your packaging and labeling looks amazing – especially your labels. That's where OnlineLabels.com comes in. Check them out in regards to getting your labels they are the most important part of your food product.
You want to create a unique look with your labels (learn more about product label design). The first thing they see when they see a food product is always going to be the label and the front part of the packaging. You want to find a really great package and a label to go on the packaging. The two have to really work together. It's going to dictate how customers perceive you and the direction of your brand.
Step 5: Create A Website
If you're going to sell a product online, you've got to have some type of online presence. You don't have to be a web designer to create a website by yourself anymore, there are some fantastic sites out there like Shopify and Weebly that make it pretty simple. Nowadays it's very easy and doesn't take a lot of time to do. Learn more about website builders.
Keep in mind the costs associated with websites. I don't want you to be blindsided as far as your expenses are concerned. Your website has to be hosted online, which can range from $20-$30 every month.
Step 6: Choose A Selling Platform
The idea of having a website sounds great, but getting customers to show up and pay for your product is very challenging. I have multiple websites and it's a real challenge to get people there.
You should also open a store on eBay, Etsy, or Amazon.
Using an online marketplace is the best way to actually get traffic to your own website. Why is that? Selling platforms have a built-in customer base with millions of people. They're using these sites regularly and are already looking for your product. Once they've found you and they're interested in finding out more about your product, that's where your website comes in.
Bringing those two platforms together (having a store on an existing platform and having your own website) is definitely the way to go. I personally would recommend you be on all of these platforms, but one or two of them is good too. Compare marketplaces to determine which is right for you.
Step 7: Experiment With Shipping
Seasonal temperature changes can present a challenge. They can prevent your product from arriving beautifully – that is where you need to experiment.
Some food products like granolas and nuts aren't sensitive to heat or cold. But if you have a food product that could melt (such as chocolate-covered pretzels) or packaging that could break (i.e. Mason jars), ask yourself if you need to pack and ship it a certain way. You want to experiment to find the safest, best, and fastest way to get your product to the customer.
Review our list of ecommerce shipping tips.
Step 8: Promote Your Brand On Social Media
Build a presence on social media. Facebook, Twitter, Instagram, Pinterest, and even LinkedIn are fantastic. Being on these different social media platforms is free advertising.
Of course you can run paid ads on them, but I personally don't spend much of anything on any of these social platforms because I've learned how to master them. Use hashtags, thoughtfully craft posts, include images, and pay attention to your keywords. Complete those few tasks and social media will bring you a ton of customers.
Those are the top eight tips to get your food business up and running. Check out more entrepreneurship stories by following our Startup Academy video series or learn more from Damian Roberti on his YouTube channel: Marketing Food Online. He has more than 700 videos on food labeling and online food sales to help your business take off. Or visit our Customer Ideas gallery to see how other makers are labeling and packaging food products.