Make Extra Dough Selling Food You Make at Home
Maybe you’ve never fancied yourself a professional chef, but your friends go wild for your artichoke dip. Or each time you’re invited to a dinner party, they beg you to bring your carrot cake. “It’s the absolute best,” they say. “I would buy this.”
And while you don’t envision yourself spending hours making personal carrot cakes for everyone in your neighborhood, perhaps you wouldn’t mind an extra lump of cash on the side. If you cook for fun and always get complimented for it, then maybe there’s a small way to spin money out of that side hustle. If you’re really eager and have some time on your hands, you might even go so far as to start your own small business selling homemade specialties.
The good news is you won’t be the first one to try. There’s an already-tested path and business strategy to follow: you could start by selling to friends and friends of friends then expand to a stall at the local farmer’s market and eventually sell your wares at local restaurants, grocery stores, gift shops, festivals and even coffee shops. Yes, much of the business is word-of-mouth, but remember: it all starts with the product. If you have a good product, almost anything is possible.
Before you embark on your business, though, it’s important to do some research: find out the cottage food laws, or regulations on the production and selling of food at home, in your state. Within the United States, they tend to vary state-by-state. The National Agricultural Law Center maintains a report on each state’s laws here. In Texas, for example, what constitutes cottage foods are listed out by item, including, but not limited to, candy, fruit butters, popcorn, cereal and roasted coffee. Often, the food has to be adequately labeled with the producer’s information when sold.
But if you prefer to work from the safety of a commercial kitchen, that is also doable—and even relatively budget-friendly. Peerspace, an online marketplace for hourly venue rentals, estimates that its commercial kitchens go for an average of $95 per hour, but they can range from $75 to more than $200. But other kitchens that might require a monthly lease and security deposit can be as cheap as $15 to $30 an hour, so you’ll have to determine which option works best for you. If you plan to use the kitchen on a regular basis, perhaps a monthly guarantee at a lower hourly rate is the way to go.
Search the internet for “commercial kitchen rentals” to find options in your area. HUBB Kitchens in Raleigh provides an example of rates, per March 2023. Users commit to one of four monthly packages ranging from $27.50 an hour for a required 10 hours to $20 an hour for a required 40 hours. Clients also must pay a monthly membership fee of $125 to cover the cost of towels, aprons, laundry, cleaning products and building maintenance as well as a non-refundable $350 deposit. At the outset, members will also have to pay a $150 orientation fee to cover required safety and sanitation training. You’re paying not just for a space but for regulatory security.
Taking a Hobby to a Side Hustle
When Nancy Thompson Heathcote started taking her homemade pimento cheese into the school where she worked in Raleigh, North Carolina, everyone suggested she sell it.
“I went over to this women’s clothing store and took them a couple pints and some Triscuits and said: ‘Put this in your breakroom and let me know if you want to order some,’” she recounted. “In a couple days, the orders started coming in and it just picked up from there.”
She now sells 10 or more containers most weeks using Venmo and cash for payments. Pints cost $12 and half pints are $6. She also sells three types of muffins for $15 a dozen.
“I’ll put a photo on my Facebook and say: ‘Who needs pimento cheese for July 4 weekend?’ And people just text me or message with what they want,” Thompson said. Some customers order as many as 25 pints for holiday gifts.
Sometimes she delivers, while other times, she will leavethe food chilling in a cooler on her back porch for neighbors and friends who live close to pick up themselves.
“I started it out as just a hobby and more and more people kept saying: ‘You need to sell this,’” said Natalia Lima, owner of Curious Cat Bakery in St. Petersburg, Florida.
(Are we starting to see a pattern here?)
She makes vegan croissants and desserts for about 13 different coffee shops, restaurants and grocers in the Tampa Bay area. She started out selling to friends and friends of friends, but soon saw there was a big demand for vegan treats throughout the area. She made a few visits with samples to retailers and most of them wanted to order.
22 Tips to Turn Your Homemade Treats Into Extra Cash
1. Many States Allow the Sale of Food Made in a Home Kitchen
It varies from state to state, but many have “cottage food” guidelines for selling food made in a home kitchen that does not have to comply with stricter food and safety regulations. Florida, for example, allows residents to sell food made in a home kitchen—without a license or permit from the Florida Department of Agriculture and Consumer Services or inspection by any state government entity—directly to consumers if sales don’t exceed $250,000 annually. The food also has to meet certain requirements, such as not being “time/temperature controlled for safety,” like an animal food that is raw or heat-treated or a plant food that consists of raw seed sprouts.
California allows two types of cottage food operations. Class A operators can sell directly to the public if sales don’t exceed $75,000. Class B operators can sell to the public and through third parties such as restaurants and food markets if sales don’t exceed $150,000. It’s important again to note that whatever food you are producing, at least in California, must be on the approved cottage foods list.
Search the term “cottage food” to learn your state’s guidelines or find information posted by your state’s department of public health or agriculture.
2. Farmer’s Markets May Have Their Own Guidelines
Farmer’s markets are a great place to sell homemade goods, but each one has different guidelines. Check with your market’s website to find requirements. Before you apply, you might consider reading this guide to selling at farmer’s markets. You’ll want to choose the right market and think about how you’ll transport your products and build up a customer base.
3. How to Set Your Prices
Thompson looked at her fixed costs, then calculated from there.
“I bought all the ingredients and figured out how many half pints I could get out of one recipe and what that cost,” Thompson said. “Then I doubled what it cost to make one pint for my selling price.”
4. Always Attach a Business Card or Sticker
Whether state rules require labeling or not, you should always brand your products. Still, many states do require that cottage foods are labeled appropriately, which can include the name and address of the operation, the name and ingredients of the product, its net weight or volume, allergen information and a clear marking that it is a cottage food product.
“I don’t let anything leave my house without my card or a sticker on it with my number and email,” Thompson said. “That’s how they order more.”
5. Office Opportunities
Give samples to your co-workers and your family members’ co-workers. This will be a great way to get responses to your product and get feedback regarding price and taste.
6. Hit the Hood
Hang a goodie bag on neighbors’ door knobs in your building or up and down your street. Consider also posting on Nextdoor about your newfound business venture—if anyone is having a party or just a little hungry, you may soon have some visitors.
7. Party Favorites
Offer a plate of your treats or small individually wrapped samples for friends’ birthday parties, bridal showers or any type of celebration.
8. Breakroom Tasting
Drop samples at nearby businesses, schools or retail shops where staff can enjoy a treat in the breakroom. Try making a business card to go with your goods, so the businesses can easily contact you if they’re interested in buying more or starting a partnership.
9. Use Social Media
When you need a boost in sales, post photos to social media of a fresh batch of signature muffins coming out of the oven or your delicious salsa in a bowl between two glasses of wine. Remind people to order around times they take a vacation or around a holiday, when they’ll likely be hosting people at home.
10. Promote Your Products as Gifts
Turn to social media as well to tell folks that your signature creation makes a perfect gift for the holidays or for teachers at the end of school. Remind them three weeks ahead to place orders so you can plan for your busy rush.
11. Sales Beget Sales
When current customers give your products to friends, you are reaching new potential customers.
“One person ordered 25 pints to give as Christmas presents and then a lot of those people started ordering from me,” Thompson said.
12. Individually Wrap Items You Are Shipping
If you are shipping food that isn’t perishable, items stay fresher if each one is wrapped and sealed individually. And be sure you charge extra for the shipping cost.
13. Keep Your Product Line Narrow
It can be exciting to dream up new ideas or maybe you think offering only a few items isn’t enough. Not true.
“When I started, I had a really long menu,” Lima said. “The more things you make, the more time it takes and it’s not cost effective to buy a whole bunch of different ingredients.”
She went from offering more than 10 different products to four. It can be better to specialize and find your niche than to offer everything possible.
14. Don’t Sell Items with a Small Margin of Error
It may still taste delicious, but you can’t sell something that’s lopsided or browned in the wrong places.
“I decided I’m not making lemon tarts anymore. If anything leaks out the edge of the pastry it caramelizes and browns. They come apart when I take them out of the pan,” Thompson bemoaned. “I’d have to make two or three dozen just to come up with a perfect dozen. It was stressful. Not worth the money even though people loved to order them.”
15. Have a Set Time Frame for Completing Orders
Don’t fall into the habit of scrambling to fill orders within a few hours or within a day if you have other demands on your time, such as a day job or family. Make sure clients know you need 48 or 72 hours notice or longer.
16. Keep Improving Your Production Process
Keep a critical eye on your process. You may notice that a time-saver actually costs you in other ways.
“I was using a food processor but then at the end of a block of cheese it gets slimy and balled up and I was losing about two ounces of cheese I couldn’t use because it lost the texture,” Thompson said. “So I hand grate everything now. I can’t afford to lose that cheese.”
17. Keep Ingredients on Hand But Not Finished Products
Save yourself the hassle of rushing to the store each time someone asks for your specialty. Keep ingredients on hand so you can make it within your set time frame. But don’t make items in advance anticipating sales, unless you are going to alert your customer base that you just made a big batch. The nice thing about baking ingredients is that they are often non-perishable, so you can buy them far in advance.
18. Track Sales and Costs
Even if it’s a side hustle, you should still know how much you’re selling and how much it costs you to make those sales.
“Baking is a very small part of my business. You need to get comfortable with QuickBooks,” Lima said.
You don’t have to use specific software but find and use a tracking method — i.e. notebook, Excel spreadsheet — that works for you.
19. Stipulate a Minimum Order
It may make sense to sell single items or smaller quantities at a farmer’s market but set a minimum for orders. Baking a single cupcake isn’t very cost effective.
“I sell everything by the dozen and they have to buy a certain (dollar) amount to place an order,” Lima said.
20. Commercial Kitchens Are a Great Resource
If you need a fully stocked kitchen that’s licensed and inspected to sell at a market or in stores, you can rent space in a commercial kitchen from about $10 to $50 an hour, although it depends on where you live and how luxurious you want your commercial kitchen to be. Users usually sign a six-month contract at the minimum and commit to a certain number of hours to use the kitchen on a monthly basis. Look out as well for additional fees regarding food safety and the maintenance of the kitchen. Those will factor into your total cost.
Business incubators are another option. Some counties and cities have “business incubators” that offer small spaces for lease by the month or even hour with approved food preparation facilities. Check with your local government, chamber of commerce, Small Business Administration office or department of economic development.
21. Business Incubators Are Another Option
Some counties and cities have “business incubators” that offer small spaces for lease by the month or even hour with approved food preparation facilities. Check with your local government, chamber of commerce, Small Business Administration office or department of economic development.
22. Use Commercial Kitchens in Off Hours
You may have to — or want to — work some off hours when you rent a commercial kitchen but there is a bonus.
“I prefer it when it’s quiet and less crowded, so I usually schedule for weekends and overnights. I’m more productive then, I think,” Lima said.
Frequently Asked Questions (FAQs) about Making Money from Homemade Food
We’ve rounded up questions to the most commonly asked questions about how to make money from food made in your own kitchen.
In most states, it is legal to sell food prepared in your home kitchen. Cottage food guidelines allow residents to sell homemade foods directly to consumers up to a certain amount of sales from around $75,000 to $250,000 in various states. You will also have to consult the list of approved foods to make sure yours falls on that list.
Some states allow home cooks to sell to restaurants and other retailers and some states don’t. Look up the “cottage food” restrictions for your state or check with the department of agriculture or health.
Hand out free samples of your goods for workplace break rooms at offices, schools and stores. Give individually wrapped items for parties you attend. Use your social media to promote your item for holiday gifts for friends, family members, teachers and other people. Use forums like Facebook Marketplace and Nextdoor as a way to market your business.
Renting a commercial kitchen to prepare your goods will vary from around $10 to $50an hour.
Katherine Snow Smith is a freelance writer and editor in Chapel Hill, North Carolina, and author of Rules for the Southern Rulebreaker, Missteps & Lessons Learned. Freelancer Elizabeth Djinis contributed to this report.
