So you want to start a cottage food business? Here’s what you need to know
A home-based food business can be a great way to share your favorite foods and make money.
Do you have a great recipe that you dream of turning into a business? Take a walk through any local farmers market and you’ll see that a lot of people have transformed their herb focaccia, blueberry donuts and raspberry jam into profits. In Michigan, entrepreneurial foodies can sell goods made at home under the Cottage Food Law. Here’s how to get started.
Michigan Cottage Food Law
Foods that do not require refrigeration are exempt from licensing and inspection requirements. Generally, jams, jellies, baked goods, vinegars and other non-potentially hazardous foods can be made at home and sold directly to consumers.
Before your print labels, make sure you meet Michigan Department of Agriculture Rural Development (MDARD) rules for labeling.
(If you learn that your product can’t be made at home, find a commercial kitchen to rent.
The online directory Culinary Incubator lists several in our region.)
Start with a plan
When you start a cottage food business, you quickly discover that you need more than a great recipe to launch your venture and make a profit. You need a business plan.
Some planning questions to ask include:
- How much money do I need for start-up?
- Where will the start-up money come from?
- How should my product be packaged?
- What price should I charge?
- Who are my customers?
- What’s my brand identity?
- Where will I store my goods?
- Where will I sell my goods?
- What kind of online presence should I have?
You don’t have to answer these questions on your own. In West Michigan, we are fortunate to have several organizations that help aspiring entrepreneurs.
Do your homework
To successfully launch a cottage food business, doing your research up front can save you a lot of time and expense later. Here are resources explore:
- MDARD Cottage Foods webpage
- MDARD Cottage Food Law Q&A video
- MDARD Checklist for Starting a Cottage Food Business
- Food safety workshops and training from MSU Extension
- Can-Do Kitchen, food business start-up training and support
- West Michigan Farmers Markets
Keep your finances in order
Keeping your cottage food business finances separate from household funds is a smart money move. With a business account, you can see exactly how much money is flowing in and out. And, at tax time, documenting your expenses and income will be simpler.
When you’re ready to start a cottage food business, talk to a Consumers commercial loan officers about setting up your business checking account, business credit card and credit card processing. We’re here to help you grow your business!
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