How to start a food business from home

How to start a food business from home

Business Opportunities

Vakilsearch Staff

Vakilsearch Staff

26 Nov 2020, 10:40 — 8 min read

If you are someone who loves baking and cooking, then maybe you should consider starting a food business at home. By starting an online food business from home, you can combine your hobby and career, making good money on the side. However, like with all other business ventures, starting a home-based food business requires a lot of planning and research. Furthermore, you also need to ensure you meet all the legal requirements of a home-based food business. Do you want to start a food business from home? If so, read out to know more about the licenses you will need, steps to follow and documents required for the same.

 

Is starting a food business at home a good idea?

 Most Indians prefer homemade food to those bought from hotels and restaurants. Therefore, there is a lot of potentials for a home-based food business to be successful. Since India has a high migratory population that live far away from home, such people will be happy customers to places like these. Also, since the business operates from your home, you have a chance to curtail costs and keep them to a minimum. Most office goers and students who live away from home will prefer home-cooked meals. If you set up an efficient delivery system, you will be able to create a profitable business model out of a home-based food business. You also have the option of partnering with dabbawalas and tiffin-delivery agencies to get the meals delivered. A third option is to open a small mess in your home and serve the food you cook, without offering any delivery options.

 

Also read: How to start a catering business

 

Licenses required to start a food business from home

Since you will be dealing with food, you will require a few licenses and certifications from the FSSAI before you start. Also, catering services are compared to hotels and restaurants that sell food and will be expected to follow strict food safety and standard procedures. Here’s a quick look at a few licenses and registrations you will require before you start a food business from home.

 

  1. Shop and Establishment Act License: Required in certain states, such as Maharashtra if you want to open a mess at home.
  2. FSSAI: A license from the Food Safety and Standards Authority of India is mandatory for all food-related businesses in India. Depending on the nature and size of your business, you will have to decide on which license to get. In most cases, small start-ups will require only a basic registration with the FSSAI.
  3. GST: If your establishment generates revenue that exceeds the annual registration threshold, you will need to complete the GST registration. Once you receive a GSTIN, you will also need to file all your returns on time to maintain compliance.
  4. Trade License: Businesses might also require a trade license, especially if you plan to operate as a cloud kitchen. You can apply for and obtain this through the local municipal office.
  5. Fire and Safety License: Since you will be working with fire, you should get the required clearances from the Fire Department.
  6. NOC from the Food and Health Department/Society in which you live.
  7. Trademark Registration: In case you want to maintain brand exclusivity, you can also opt to trademark your name or logo. However, this comes later on, when your brand starts growing, and you have the cash to spare.
  8. Signage License: You will need this license, from your local municipal corporation if you wish to advertise your products.
  9. Eating House license: If you wish to run a mess at home, you might require an eating house license. To obtain this license, you will need approval from the State Police Commissioner.
  10. Environment Clearance: In some instances, you will also need an EC Certificate from the State Pollution Control Board.

 

Also, to know more about state-specific licenses and registrations, you will need to contact your local municipality. If you wish to avoid all these registrations, you can opt to partner with an online food delivery marketplaces. This will allow you to scale up and reach out to more people quickly, with fewer licenses.

 

Also read: Trademark your business

 

Things to do before you start a food business at home

  1. You need to create the right ambience if you are planning to start a mess at home. In such cases, you will have to devote an entire room for your guests and also provide the space to clean up after eating.
  2. Another vital thing to do before you start such a business is to evaluate your kitchen to understand whether you need any upgrades. If you are planning to feed large amounts of people, you might need to buy bigger utensils or upgrade the equipment you have at home.
  3. You will also need to think about your packaging strategy. Since this will be the first thing people see when they buy your food, make sure you put some thought into it. Try to showcase your FSSAI license and registration on the packaging to boost your credibility.
  4. Next, evaluate your skill and determine if you will need help in the kitchen. If so, recruit some staff to help you with the food preparation.
  5. Marketing is an integral part of such food businesses. Plan a social media strategy using which you can spread the name of your business. Promote yourself on social media, start a blog and maintain an excellent website to attract customers from nearby.

 

Also read: Legal requirements for starting an organic food business

 

Documents required to start a food business at home

  1. ID Proof of the applicant
  2. Address proof of the applicant
  3. Proof of address of the business location
  4. NOC from the owner, in case it is rented
  5. NOC from the Fire/Safety/Society
  6. Bank account statements
  7. TAN
  8. PAN card and Aadhar card
  9. GST certificate
  10. Passport size photos
  11. Site plan and layout of the premises
  12. Water quality report
  13. Food category list

 

Steps to start a food business from home

  1. Conduct thorough market research to identify your target market, understand their needs and locate critical areas for delivery.
  2. Depending on the location, decide on a menu. For instance, if you live in a university town, you might want to add more fast-food items on the list. In case you live in an area with a lot of offices, focus more on healthy and filling lunch items to attract customers.
  3. Next, select a memorable and catchy name for the business to establish some branding for your business.
  4. You will also need to decide on what payment methods you will accept. If you wish to deal only in cash, you won’t have to set-up anything, but this might lead to fewer customers. To reach out to more people, enable payment through BHIM and UPI options.
  5. Stock up on all the items you will require and ensure you have all the utensils necessary to cook large batches of food.
  6. Next, you will need to go about obtaining all the required licenses as listed above.
  7. Try to give away a few free meals to your neighbours and friends to get feedback from them. This will also help you gain some publicity through word-of-mouth, which leads to more customers.

 

Also read: FSSAI – Food licensing

 

To explore business opportunities, link with us by clicking on the 'Connect' button on our eBiz Card.

Image source: shutterstock.com

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.

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