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How to (Legally) Start a Homemade Food Business

By Edward Tan, JD | Last updated on

When it comes to food, many people usually have one specialty they believe they make better than anyone else. But making the jump to selling it isn't as easy as just having a good product. Whether it's a sandwich or Beef Wellington, figuring out how to start a homemade food business is not without its legal risks.

So before you start investing in your own homemade food start-up, consider looking into the following issues first.

1) Check the Federal Food and Drug Administration's Regulations

Regardless of the type of food you're planning to sell, the first step is making sure you're in compliance with federal laws. The FDA has set a number of regulations regarding the production, packaging, labeling, and distribution of food. A good place to start is by looking through the various FDA compliance manuals.

It's a good chunk of reading, but understanding it will keep you from being shut down. It's especially important if you're planning to make your food at home and not in a factory. Regulations in this area can be particularly specific.

2) Check Your State and Local Laws

The next step is ensuring you do everything by the book under your state-specific local laws. Finding out which rules apply to your homemade food business can be cumbersome. But it's important to get it right if you want to stay in business. Areas to watch out for are licensing and health and safety requirements.

3) Incorporate Your Business

Incorporating your company is important because it'll help protect you from becoming personally liable for any lawsuits that might be filed. When it comes to selling food, legal action is always a looming threat. Becoming a LLC or privately held corporation is likely best for most small businesses, but read up on your options to figure what's right for you.

4) Get Insurance

Starting a homemade food business without insurance is just as crazy as not checking your applicable laws first. Much like with incorporation, insurance will provide you with a financial safety net should the worst happen. From your home or factory being burned down to getting sued, being insured will help keep you running and out of the poor house.

Many insurance companies offer specialized policies for food businesses, so shop around for the best deal.

5) Consult an Attorney

The legal pitfalls in figuring out how to start a homemade food business are countless. While some people can easily wade through the rules, others might need a little help. Don't be scared to consult a lawyer if you fall into the latter category.

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