Most people think that to have a successful food business, you need to have a business located in a prime location, but this is not always necessary. In times like this, where everything has become expensive and unaffordable, it is perhaps a good idea to open a home-based business where you can save fuel, rental and other overhead costs. In this blog we outline 10 steps one could follow when they want to start a food business at their home kitchens.
Can you sell food from home in South Africa?
The short answer is a very big YES! You can start a home-based business either as a full-time or part-time venture depending on what suits you best. However, it is important that you comply with relevant regulations and ensure that your idea is practical and can earn you some good income. You must understand that a food business could have direct public health risk if you supply unsafe food. It is advisable, like in any other business to start small and properly scale your business. This helps to ensure you control your inventory because you may have limited space to work in your house kitchen and to minimise risk.
Besides food safety, quality is another important aspect that consumers consider when choosing to buy your product. You must remember that there are many other options from which consumers could choose from. You need to be unique and have a competitive edge. These days consumers are fussy, know exactly what they want and want a fresh product at all times.
What should you consider before running a home-based food business?
There are a few things that you will need to take into account when you decide to run a home-based food business:
- Is the available space enough, and is it suitable for the nature of the product you want to make?
- Would it cause some form of disruption to your family?
- Does the nature of your business require you to apply for a rezoning certificate at your municipality?
- What regulations would you need to comply with?
- Would you allow for proper scaling before looking for commercial premises?
- Do you mind having additional staff working in your home and possibly invading your family’s privacy?
- Have you considered the additional resources your business may require, such as water and electricity? You may also want to consider the amount of waste you may generate.
- Do you have adequate resources such as cooking equipment, refrigeration units, etc.?
Once you have gone through this list and are satisfied that you have considered all of them, you may follow the steps below to ensure your business takes off.
Step 1: Decide on the Product You Want To Sell
Consumers have so many choices, and the food business is very competitive, so you must choose a product you are certain has a market. You can always sell a product already in the market, but you must differentiate yourself. For example, you could distinguish yourself by doing the following:
- formulating a new recipe for the same product (adding special ingredients),
- method of packaging (e.g. vacuumed packed instead of fresh),
- presentation, processing method (baking instead or frying maybe because of health benefits),
- serving a niche market (gluten-free and lactose-free comes to mind),
- healthy snacks
- using natural ingredients without any preservatives or using pesticide-free products
- using less of an ingredient consumers do not want, etc.
Step 2: Conduct a Preliminary Market Research
It is imperative that before you start a business, you do some research. This could be in the form of asking your family members, visiting other establishments selling a similar product, buying products similar to yours and tasting them, etc. I would strongly recommend asking as many people as possible, preferably outside your close circle. Perhaps draw up your ideal customers and target them in your market research.
You can just formulate a short questionnaire and distribute it to them. The purpose of your market research would be to:
- determine what is already out there,
- determine if there is a demand for your product, and if yes, what are potential customers looking for in your product,
- how you can make your product better,
- and who is the ideal customer, how do you reach them, etc.
Step 3: Make your product in small batches and ask for opinions
This is arguably one of the most important steps. You do not want to go ahead and make too many products that no one actually wants. So, please make a product in small batches, let people you trust will give you an honest opinion, taste it and give feedback. Here good and honest feedback is vital.
It is not always recommended to only ask your immediate family. We have seen how family members mislead their loved ones and tell them they are the best meanwhile they are not. You need only watch talent competitions!
If the person you have asked for feedback gives negative feedback, please ask as much as possible and see if other people feel the same. If you see a trend, please do not ignore that feedback! Please be open to constructive criticism. You want to make a great product, so do not despair and be discouraged when feedback is negative.
Step 4: Product Formulation for your Food Business
In this step, you must decide on your product’s recipe or formulation. Costs must inform this of your ingredients, the input from your market research, the shelf life of your product, the packaging material you will use and the production methods.
You must be aware of each ingredient’s food safety risks, the product’s function and their relevant regulations. For example, Sulphites under most food regulations and codes of practice must be declared when present in foods in concentrations of 10 mg/kg or more. This will, of course, be based on where you want to sell your product.
Step 5: Packaging Design and Labelling
The main aim is for starting your food business is to make money. Therefore it is imperative that your packaging attracts your potential customers! You, however, will need to make sure your primary packaging – packaging that comes in direct contact with food – is food grade.
To ensure you label your product according to the prescripts of the law, please go through the R146 labelling guidelines for additional guidance. Remember, you should not mislead the consumer! If you write about the nutritional profile of your product, make sure you have credible and verifiable data to support your claim. This includes the best before date or expiry date. If your product contains allergens, you must declare them to the consumer.
Remember to make sure your product is traceable in case the consumer has a complaint. You will need to know when the product was produced, which ingredients went to the product, from which batch and who was at work that day. This will allow you to do thorough traceability.
Step 6: Training Requirements For A Food Business
So now you are sure of your product, you know what you want to do, including the packaging you will be using, and you have received all the feedback to make it the best. Now, you need to do food safety training to know everything there is to know about basic food safety practices, including the necessary controls to ensure the safety and quality of your product. All food business owners or managers or any person recognised as a person in charge of the food premises must get food safety training.
What training should a food business owner or person in charge of food premises do?
As per Regulation R638 of 2018 (Regulations Governing General Hygiene Requirements for Food Premises, the Transport of Food and Related Matters) a person in charge is required to do accredited food safety training. A person in charge could be the owner, manager, supervisor or whoever is responsible for the business. The regulation specifies that a person is charge must do accredited food safety training. It is also a requirement that the food handlers are trained, and the evidence of training is available. While as a person in charge, you must get accredited training, you can always train the other food handlers yourself.
Step 7: Implement the R638 Course Lessons
Now that you are familiar with the basic food safety requirements and minimum good manufacturing practices, you will then need to implement these in your kitchen as much as possible. Generally, if your kitchen is clean, has no pest activity, has access to potable water and has waste control practices, this should not be a problem. However, please thoroughly review the regulatory requirements to ensure you are fully compliant.
There are certain things that you may not be able to implement in your small kitchen, which is perfectly fine; the Environmental Health Inspector may still give you an exemption provided that they do not pose a risk to the safety of your product.
Please take into account how your surroundings may affect the product. You may be located close to a waste dump where people are illegally dumping; maybe your neighbour has a lot of animals or pets, resulting in high pest activity, etc. If this is the case, you are responsible for implementing necessary controls to ensure the safety of your product is not compromised.
Step 8: Contact Your Local Authority
So now, the next step is ensuring your business is legally compliant. To do that, you will need to contact your local authority, normally the municipality where your business is located. The relevant department would be the department of economic development and public health. The department of economic growth is responsible for issuing a business licence. In contrast, the department of public health/ community health / environmental health is responsible for administering a food permit or certificate of acceptability.
Depending on the nature of your business and how big your operations will be, you may also need to apply for a business zoning certificate.
What does property zoning mean?
Zoning of a property considers the nature of your business, how it will affect your neighbourhood, traffic influence, and the suitability of the allocated land for your business type.
Zoning or rezoning of property is usually handled mostly by the department of human settlements or housing within your municipality with concurrence from relevant directorates such as public health, infrastructure and engineering, roads and transport, etc. The municipal Council grants permission to rezone properties. It must be noted that your neighbours have input as this may affect their property values.
Step 9: Implementation of a Basic Food Safety System
One of the things the municipal inspector will look for is your basic food safety system. This includes the following:
- Pest control may require a fumigation certificate or pest control certificate to prove that your facility has been treated for pests),
- Traceability documents to prove you can trace your product and raw materials in case something goes wrong, or you need to initiate a product recall
- Temperature records to verify that you consistently monitor your product if your product is temperature-sensitive, and a cleaning checklist.
- Hygiene inspections for your staff members to ensure their health does not compromise the safety of your product and consequently that of the consumer.
- Depending on the nature of your business, you may need to attain South African National Accreditation System (SANAS) accredited HACCP certification as per Regulation R908 of 2003 and subsequent amendments (R1060 of 2009 and R607 of 2018). The specific industries that MUST have an accredited HACCP certification or equivalent are:
- Peanut sorting and grading (R1060 of 2009 amendment to R908 of 2003)
- Peanut butter manufacturer (R1060 of 2009 amendment to R908 of 2003)
- All producers of ready-to-eat processed meat including poultry and red meat (R607 of 2018 amendment to R908 of 2003)
Step 10: Trading as a Successful Food Business
Now you can start trading and start earning so income. It is important to properly manage your budget because the profit margins of many food businesses rely on sales volume. You must sell a lot of products to make decent profits. It is also important to budget properly and know how many sales you need to make to break-even and make profit. You must scrutinise your pricing structure thoroughly. You may end up making a loss despite have a lot of sales if you have not priced your products correctly.
To ensure that your food business remains legally compliant, you must ensure you do not contravene any of the regulations. The municipality inspectorate has a right to close you down working with law enforcement. It does not mean that now that you have been granted permission, you may do as you please; it is crucial to follow all the laws and ensure that your business always complies.
Remember, while the Certificate of Acceptability does not necessarily expire, if there are new regulations, you may have to apply for a new certificate of acceptability. The onus is on you to keep up with the latest regulatory requirements in your sector.
Remember to market your business as much as possible and social media has proven to be very effective. Invest as much as possible in fine tuning your digital marketing skills.
Running a business has its challenges but a food business is further complicated by public health risks and additional regulatory requirements. As an entrepreneur you want to supply a product that consumers that meets and even exceeds consumer expectations while making enough profit to sustain your business. These 10 steps are meant to make it easier for any aspiring food business entrepreneur to run a successful and legally compliant business.