The Homemade Food Business Can Be Profitable — But Be Careful
Homemade food can make a great side hustle. Take care, though – officials in many cities are cracking down on the popular “cottage industry.”
By now you may have heard about Mariza Ruelas, the woman who made some amazing homemade ceviche and was arrested for selling it to people who requested a batch. Yes, it sounds crazy to be arrested for running a homemade food business. She even faced a potential year in jail for selling goods on Facebook. But she is just one of many people who got into selling food that they made at home.
The World of Homemade Food
Yes, this is a real thing. Everyone has that person in their life: a grandmother, sister, husband, or friend who bakes the best breads, cookies, or jars of jam. Those people (depending on where they live) can potentially tap into their love of cooking and make some money at the same time.
The homemade food business is called a “cottage industry,” and the most popular items are typically breads, jams, and dried goods. These are all considered fairly safe to make at home with a fairly low risk of poisoning yourself or other people.
But before you start baking bread in your home as a side hustle for your homemade food business, there are several things to consider. Many cottage industry participants need to ask themselves whether this will really make them money.
Is a Homemade Food Business Right for You?
I love side hustles. I prefer side hustles that make you as much money as possible in as little time as possible. Personally speaking, laboring over a stove and stirring your family’s perfect raspberry jam recipe for endless hours is not for me. So make sure that cooking is really what you like to do.
Also check to see if you’re breaking any of your state’s rules and regulations surrounding cottage industry food production. You don’t want to get arrested for making and selling food in your home. You will need to look for the following information:
- The maximum amount that you’re allowed to earn a year. In the state of Colorado where I live, it’s $10,000 for the year. Other states may have higher earnings thresholds.
- Any tax liabilities that you may incur as you earn more money. Don’t forget that you do have to pay taxes on earnings. Make sure that you’re reporting and paying any taxes that you may owe. You can use tax software to determine if you have a hobby income or a small business.
- Some states might require a license, while others might not. Again, do your research to make sure that you are complying with the laws.
- Research food handling regulations specific to the product you would like to make.
- Check for any city or town requirements concerning the kinds of items that you’re allowed produce at home, and where you’re allowed to sell those items.
How to Start a Homemade Food Business
Take time to check out PickYourOwn.org for some basic information and resources on how to get started with your homemade food business, what to avoid, and what to worry about.
And network among other cottage industry artisans! After all, these like-minded people may also provide you with ideas on where you can sell your goods. They can tell you what it costs to enter into different farmers’ markets, and how to manage your new clients as you grow your business. Products live and die by their brand in this industry!
You can find these individuals through business associations, Facebook groups, Meetup groups, and dedicated websites for cottage industry hustlers.
A cottage industry side hustle may be a great fit for you if you need to feel a sense of autonomy, prefer self-directed work, and dislike working for other people.
What Can We Learn From Mariza Ruelas?
Ruelas ended up doing 80 hours of community service instead of jail time. Her story illustrates the complexities of non-traditional methods of earning money.
Cities are especially sensitive to the potential for lawsuits or people getting seriously ill from eating homemade food, which is a huge obstacle for individuals looking to crack into the business. Don’t be the person who makes an innocent mistake that gets you arrested while trying to improve your financial situation. But once you’ve taken care of those issues, there’s nothing that tastes better than money made from fresh-baked bread!