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10 Considerations When Starting A Food Business

Posted by Deepshikha Shukla

January 15, 2021    |     6-minute read (1071 words)

Entrepreneurs who want to start a food business, whether it’s prepared food sold in grocery stores or a restaurant, must follow stringent requirements. In addition to the Food and Drug Administration (FDA) regulations, your food business must meet other federal, state, and local requirements depending on your product and the type of facility you operate. Check out some of the considerations that entrepreneurs should have in place to successfully launch a food business.

Create a Business Plan

Having a solid business plan can help you calculate your profit or improve your chances of success. A food business is typically part of a highly-competitive market, so it becomes vital to think of an idea that serves a niche market.

An effective business plan includes the company description, market analysis, organization and management strategies, required investments, and marketing and sales methods. Set a budget in your business plan, and try to maintain the food quality within the budget. You can also use some guidelines from the U.S. Small Business Administration (SBA) to create a detailed business plan.

Manage Equipment

To start a food business, you’ll need to purchase different kinds of food equipment depending on the type of food you want to sell. It may include kitchen appliances, cold storage products, kitchenware, utensils, or work surfaces like countertops, cutting boards, etc. If you’re planning to create a sit-down eatery, you may also require dining tables, chairs, and more. Ensure that your equipment is of good quality to avoid downtime.

Market Your Business

Use an Instagram, Nextdoor or Facebook page to publish photos of your dishes where people can follow along for updates. Share special deals, offers and discounts to entice people to stay up-to-date with what you’re making. Create a website to set up online orders and use search engine optimization (SEO) to help people find you and visit your store. You can also start a YouTube channel and ask your family and friends to promote your business.

Track Invoices

Use high-quality invoicing software to keep track of your expenses and sales. Keeping your invoices in one place will also help you while filing tax and returns. If you’re selling food online, you can use an online payment processor for accepting different cards and payment types.

Maintain Strong Records

You need to keep records of food manufacturers, processors, packers, distributors and importers and make them available to the FDA upon request. These records will allow the organization to identify all food products handled by the facility. Your records must include the names and addresses of the facilities from where you get ingredients and where your food is processed and packed.

Depending on the type of food business you operate, required documents may vary. To determine what records you need for a specific type of facility and operation, you may refer to the following guidelines:

Ensure Proper Labeling

Food manufacturers are responsible for developing labels, including nutrition and food allergen information that meet legal food labeling requirements. Manufacturers can use the FDA's Nutrition Labeling Manual to find appropriate nutrient information for food products. You can use this information in conjunction with food product recipes to calculate the nutrition information required for food labels. In addition, you can refer to the other following requirements governing the labeling of foods:

Food Facility Registration

According to federal regulations, a private residence is not a “facility,” so you can’t register it with the FDA. Check your local laws to ensure that you’re allowed to start a food business from home or sell food in the area that you want to.

Facilities that manufacture, process or pack food for human or animal consumption must be registered with the FDA unless they are exempt under 21 CFR 1.226. For example, farms, retail food establishments and restaurants are typically exempt from food facility registration requirements. Also, make sure that your facilities pass all of your state’s food cleanliness requirements, including:

Be Careful When Importing Foods

Food that’s imported must be safe and contain no prohibited ingredients, and all labeling and packaging must be informative and truthful, with the labeling information in English. As a food business owner, you need to register your business with the local authorities to purchase and resell goods from wholesale providers.

You must notify the FDA in advance of any food shipments for humans and other animals you import unless the food is exempt. Prior notice of imported food shipments provides the FDA with an opportunity to review and evaluate information before a food product arrives.

Use Preventive Measures

Current Good Manufacturing Practice regulations require that food offered for sale should be produced under safe and sanitary conditions. Unless specifically exempted by the Food Safety Modernization Act (FSMA), the owner, operator or agent in charge of a facility will be required to:

  • Inspect and intercept contaminated food products.
  • Identify and implement preventive measures to minimize food safety problems.
  • Provide assurances that food is not adulterated or misbranded.
  • Monitor the performance of preventive controls.
  • Routinely maintain records of the monitoring.

Specific Food Product Requirements

Some food businesses, such as grocery stores, restaurants, cafeterias, farms and food trucks, are typically regulated by state and local governments as well as federal agencies. Certain foods, such as low-acid canned foods, milk, eggs, juices, seafood, and infant formula, have additional product-specific regulatory requirements to ensure that they are healthy and free of contamination.

The FDA regulates both finished dietary supplement products and dietary supplement ingredients under the Dietary Supplement Health and Education Act of 1994. Before you market a dietary supplement, you must ensure that the products manufactured or distributed are safe. Any claims made about the products should not be false or misleading, and the products must comply with the FDA regulations in all other respects.

Launching a food business can be very lucrative and rewarding, but it’s important to follow all of the necessary steps to ensure your business stays in line with all regulations.

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