How to Start a Home-Based Food Business

If you love to cook, it’s possible that you could monetize your hobby and make some good money off of your culinary love affair. However, before you launch a home-based food business, it would be smart to do a little research.

How to Start a Home-Based Food Business
Healthy food at home. Happy woman is preparing the proper meal in the kitchen.

Workspace Requirements

Start by thinking about the workspace requirements for running your own home-based food business. Because while you might have enough kitchen space to bake cookies for the fam, is your space properly optimized for cooking larger amounts of food as your business scales up?

For starters, you need adequate counter space. A large island is ideal for food preparation, while additional counters can be used for storing goods and keeping cooking equipment out of the way when not in use.

It’s also helpful to have a home office adjacent to the kitchen. This gives you a separate space to work on the business side of things, such as marketing, sales, advertising, and customer service. For a productive home office, you’ll need the right combination of a chair, desk, and devices. Check out’s Facebook page to see some examples of versatile office furniture that works well for smaller home offices.

Cost and Pricing

Pricing is one of the most challenging (yet important) elements of running a food business. It requires meticulous attention to detail and is something that must be revisited over and over again.

Pricing is highly dependent on food costs and market-side demand. As the cost of ingredients increases, so must your price. But you also have to think about how much people are willing to pay, what the competition is charging, and how your food products fit into that unique puzzle.

At the end of the day, there’s no magical pricing formula that can be applied to every business in order to spit out a perfect number. It’s all about knowing your costs and your customer base, which allows you to optimize accordingly.

If you’re just starting, you might opt to forgo fat profit margins in order to get your food in front of as many people as possible. Then, once you get your name out there, you can gradually increase prices and generate a beefier ROI.

For perspective, restaurant margins are usually 10 percent or less. Meal-kit services often rake in margins of 30 percent to 40 percent. With baked goods, you may be able to capture margins above 50 percent. It all depends on your approach.

The best piece of advice is to track everything. Figure out how much it costs to bake a dozen cookies (or whatever it may be) down to the penny. Then find out how much you can sell your cookies for. Over time, you’ll be able to bring down the cost of goods and increase the price to get your profits to where you want them to be.

Marketing and Branding

When you’re super small, you can rely on word of mouth to create customers. But as your business grows and you become more professional, you’ll need to choose a business name, invest in branding, and launch marketing campaigns to scale efficiently.

When it comes to branding, choose a name that’s short and unique. Meet with a business attorney (or use one of the DIY websites) and create your own LLC. This will provide you with some basic tax and legal advantages.

In terms of marketing and branding, you’ll need a logo, a basic website, and a social media presence. Don’t worry about posting content to every platform on a daily basis. Instead, focus on one – such as Instagram or TikTok. Quality of marketing and engagement is more important than quantity.

Start Lean and Grow

If the only thing you know about running a business is what you’ve seen on reality TV shows, then you probably assume that things happen pretty quickly. But in the real world, it’s a much slower and more intentional process.

When it comes to creating your own home-based food business, resist the urge for perfection. Instead, start lean and focus on incremental growth. As your business grows, you can work on fleshing out some of the other elements. Moving too fast will do nothing but stymie your potential by overloading you with things you don’t need.