If you like to cook and are adept at finding grocery deals (and stocking up on them), starting a meals-to-go business may be the ideal way for you to repurpose excess food and make money.
Families are busy these days and rarely have time to cook healthy and nutritious meals. As a result, meals-to-go businesses have popped up and offer all kinds of meal offerings complete with home delivery. Many meals-to-go businesses even offer dairy-free, gluten-free, Paleo and other dietary options.
You can cash in on this trend by opening your own meals-to-go business right in your neighborhood, town or city. By doing so, you will access a wide client base without having to spend too much time and effort on shipping and/or delivery. Starting out locally will also keep you abreast of any customer or other issues, which can be dealt with quickly when your customer happens to be your neighbor.
So, how do you begin?
1. Visit your state/county health department.
Before you begin dreaming of recipes and dishes to prepare, find out where your state or county health department will permit you to prepare your meals at home. Many municipalities will not allow for food made in a home kitchen to be sold to consumers.
In such a case, you’ll need to find a suitable test kitchen, which may be located in a church, a restaurant (when it’s closed to the public), or even a community center. You can negotiate a given rate per hour for the use of the commercial kitchen and add this charge to your food cost.
Many commercial kitchens can be gotten fairly cheaply if they are used during non-operational or off-peak hours. What this means is that you will find yourself cooking and baking in the late hours of the night or on Mondays (when many dining establishments take their day off).
Some states and cities have so-called Cottage Food laws. If you live in such a municipality, you’re in luck. Cottage Food laws allow food vendors to prepare food in their own home kitchen for purchase by the public. For example, here is the website that lists California’s Cottage Food laws.
There are limitations on which foods are considered non-hazardous when prepared in a home kitchen, most often, “safe” foods are baked goods like cakes and breads and not meat or vegetables. This could limit your menu severely, and is one more reason why you should at least look up commercials kitchens and their costs.
2. Obtain your licenses.
You will need a business license to get your meals-to-go business started, as well as a sales tax license and probably a food handler’s license.
You should also incorporate your business as an LLC at the very least. Having the LLC designation protects you from personal financial ruin in the event that someone sues you for negligence or harm. The likelihood of a lawsuit is likely if you’re delivering food to customers who may have unknown allergies and/or food sensitivities, or may simply come down with a case of food poisoning and blame it on you.
3. Create a business plan.
When it comes to the food business, you need to generate a business plan. Why? Having a business plan gives you a defined idea of how much you’ll need to spend to get your business off the ground and operational. You’ll know how many clients are needed to make a profit. You’ll better understand your grocery purchases and what price points are feasible for stocking up.
Your planned investments, revenues, expenses and profits should all be outlined in your business plan. At the end of the day, your business plan should provide you with a monthly estimate of investment costs, recurring expenses, and expected sales.
A business plan also helps you secure current and/or future funding. If your business becomes a huge success, you’ll want a business plan for your investors, partners and employees.
4. Analyze your competitors and pick your niche.
To differentiate yourself from the crowd of other meals-to-go businesses, you should first size up your competition. Who is already selling ready-made meals to your area neighbors, coworkers and friends? What do these competing businesses offer and at what price? How do these companies handle complaints, returns and refunds?
Obtaining some counterintelligence will benefit your own business greatly when you start accumulating customers and dealing with various pricing, product and other issues. You’ll be better equipped to understand which refund requests are reasonable and which aren’t, for example.
Having some counterintelligence will also enable you to pick your niche, whether that be gluten-free, Paleo, low sodium, or some other meal niche. By picking a niche, you’ll be able to attract a smaller but more motivated customer base. Such customers have the potential to become very loyal to your business, which means bigger (and recurring)sales in the long run.
5. Start marketing your business.
Admittedly, this step will take a good amount of time to master and benefit from. However, there are many ways in which you can market your meals-to-go business- and many of these methods are absolutely free. Some free or almost free methods include the following:
- Creating a website.
- Generating social media pages and announcements.
- Posting flyers and leaving business cards.
- Presenting cooking demonstrations at community/senior centers.
More expensive methods for promoting your business include these:
- Catering small community events/meetings.
- Obtaining a Google AdWords account and using it to post ads.
- Listing your business in the local newspaper.
- Generating sponsored ads on the radio or TV.
6. Track costs versus profits.
Don’t get so wrapped up in business investments and inventory purchases that you overlook how much you’re spending. It’s imperative that you carefully measure your debts and capital investments so you know how much to charge your customers.
While high-end meals-to-go can easily cost $30 for two persons, this money can end up easily spent on groceries, kitchen tabs, marketing collateral, and the like. Thus, you must keep a tight lid on any and all expenditures.
The Bottom Line
It’s exciting to start a meals-to-go home business; many individuals who start such a business end up retiring from their day jobs to pursue it full-time. Whether or not you choose to retire is up to you. However, if you plan your investments and expenditures just right, you will be able to choose many options for your future. Good luck!