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10 things to consider before starting a food business

Posted by Shivali Anand

January 6, 2022    |     6-minute read (1032 words)

Entrepreneurs seeking to launch a food company must adhere to strict guidelines, whether selling prepared foods in supermarkets or running a restaurant or food truck. Depending on your product and the type of facility you operate, your food business must comply with numerous federal, state and municipal rules in addition to Food and Drug Administration standards. 

Below is a recap of 10 essential things to know before starting a food business. Regardless of which type of food business you start, these guidelines are likely applicable, and it’s worth your while to get familiar with them.

Write a business plan

A great business strategy will help you estimate profit and increase your chances of success. Because a food business operates in a highly competitive industry, developing a concept that caters to a specific niche is critical.

The firm description, market analysis, organization and management techniques, needed investments, and marketing and sales tactics should all be included in a business plan. In your strategy, set a budget and aim to stay under it while maintaining food quality. The U.S. Small Business Administration provides a helpful resource on how to create a thorough business plan.

Plan your equipment

Depending on the sort of food you intend to offer, you'll need different types of culinary equipment. Kitchen appliances, cold storage items, cookware, tools and work surfaces such as worktops, chopping boards and so on may be needed. If you want to open a sit-down restaurant, you'll need dining tables, seats and other items. To avoid potential downtime, make sure your equipment is of excellent quality.

Promote your business

Post images of your dishes to Instagram, Nextdoor and Facebook so that folks can follow along for updates. To persuade people to keep up to date with what you're creating, provide unique offers and discounts. Create a website to take online orders, and leverage SEO to help customers find you and spur them to check out your business. You could also create a YouTube account and ask relatives and friends to help advertise your company.

Keep track of invoices

With high-quality invoicing software, you can keep track of expenditures and income. Keeping all of your invoices in one location helps make submitting taxes much more efficient. You may want to identify an online payment processor to accept various cards and payment types if you plan to sell food online.

Maintain a good track record

Food-makers, processors, packers, distributors and importers must preserve records and make them available to the FDA upon request. Thanks to such data, the company will be able to identify all food goods it handles. You should include the names and addresses of the facilities from which you obtain ingredients and prepare and pack your meals in your records.

Required documentation may differ depending on the sort of food company you run. You can use the following recommendations to figure out what records you'll need for a particular kind of facility and operation:

Ensure correct labeling

Food producers are responsible for producing labels that comply with food labeling regulations, including nutrition and food allergy information. The FDA's Nutrition Labeling Manual can help manufacturers locate the correct nutritional information for their goods. You can use this information along with food product recipes to calculate the nutrition information required for food labels.

Additionally, you can consult the following rules governing food labeling:

Registration of food establishments

Because a private house is not considered a "facility" under federal laws, it cannot be registered with the FDA. Check your local rules to see whether you may establish a food company from home or serve food in your desired location. Facilities that make, prepare or pack food for human or animal consumption must register with the FDA unless exempted under 21 CFR 1.226. For example, food facility registration is often waived for farms, retail food enterprises, and restaurants. Also, ensure sure your facilities meet all of your state's food sanitation regulations, which may include:

Import foods with caution

Imported food must be safe and include no prohibited substances. All labeling and packaging must be accurate and informative, written in English. To acquire and resell items from wholesale sources, you must register your firm with the local authorities as a food business owner.

Unless the food is exempt, you must inform the FDA before any food shipments for people and other animals. Prior notification of imported food shipments allows the FDA to assess and evaluate information before the arrival of a food product.

Take preventative measures

According to current Good Manufacturing Practice laws, food provided for sale must be made under safe and hygienic conditions. The business owner, operator or agent in control of a facility, unless explicitly exempted under the Food Safety Modernization Act, will be expected to:

  • Examine and intercept tainted food items.
  • Identify and execute preventative actions to reduce the risk of foodborne illness.
  • Assure that the food is not tampered with or misbranded.
  • Keep track of how well preventative controls are working.
  • Keep track of the monitoring regularly.

Requirements for specific food products

State and municipal governments and federal authorities control some food companies, such as grocery shops, restaurants, cafeterias, farms, and food trucks. Low-acid canned goods, milk, eggs, juices, shellfish and newborn formula, for example, have additional product-specific regulatory requirements to guarantee that they are safe and free of contamination.

The Dietary Supplement Health and Education Act of 1994 governs finished dietary supplement products and components. You must guarantee that the items created or delivered are safe before marketing a dietary supplement. Any statements made about the items must not be untrue or misleading. The products must otherwise comply with FDA standards.

Starting a food business may be highly profitable and satisfying. Still, you must take all of the required procedures to ensure that your company complies with all requirements.

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