What to know before you start your home-based food business!

Updated: Jul 21, 2020

So you made a batch of absolutely delightful chocolate chip cookies and people around you are fanning your delicate flame of pride for the little accomplishment you did. Everyone is telling you just how you would succeed if you started baking and selling your creations. Then you hop online and see a few hundred other like-minded people doing similar cookies and hoping they will be the next Famous Amos cookie chain.

There are the hundreds, maybe even thousands of online videos and resources that teach amazing recipes that were once chef or granny secrets. Now these recipes are available to just about anyone with an internet connection and because targeting algorithms fire the same content to following hobbyists, trends flow out from "idea to market" much faster than ever before.

There are a few important things to note before you embark on this journey of twists and turns as well as heartache and burns. Like any other business, home based food businesses follow some of the same basic rules that many may know but often forget to follow. For whatever reason, it is always wise to go back to the basics to move forward with confidence. Below are 6 topics to build strong foundations of your business.


I cannot emphasise more how important this is. Different customers require different ways of communication and they are also situated in different communities to target. It'll help to note down communities you are familiar with and decide how you would like to position your product so that it is communicated better. This is necessary when deciding the reasons your customers are buying your product for and how much they will be willing to pay. It will also affect your selection of packaging, the requirements of your copy-writing and quality of brand and collaterals you will use.

Photo by Ketut Subiyanto from Pexels


Resources are limited for many, especially if you are already starting from home, it is likely your available funds are also limited. Many people tend to work on plans too large to accomplish and a journey too far to complete. So instead of making 10 different "cookies", start with 1 or no more than 3 products with the variations not too different from the first. These will be your CORE PRODUCTS that will bring you the most revenue. FOCUS is the key to success here, one really delicious chocolate cake would win over hearts much more than many different cakes that you didn't manage to perfect. It allows you to react to issues quickly instead of being overwhelmed by problems.

You also have to consider your production and inventory requirements. A single product with many variations means lesser inventory and lesser production steps. Having too many products can also cause unpredictable retailing patterns which will have you selling lesser amounts of each product but holding a large variety of inventory. You will also find yourself spending too much time on preparation than actually using your time to sell your products. Working alone means you have to manage your time efficiently, so focus your time on perfecting ONE product and get yourself busy selling that ONE product before you begin venturing taking on more work.


It isn't difficult to run an online search on similar products to see the market price of the same or similar products before you price your products. Compare the different retailers and how they are packaging and pricing the product. Food cost in the industry is around 25-35% of retail price and because home based businesses do not require rent, saving that additional 20-30% rental cost allows you the option to price your products cheaper. This allows the customer to factor that discount when paying more for delivery costs. However, price is always relative to demand, scarcity and uniqueness. If I have a really unique product, I'd usually price it higher because you want to make more before other competitors catch up to the trend. You can always discount later.

Set your sales target, note your daily breakeven revenue and also give yourself a reasonable salary to factor in labor costs. Then create a financial plan that works towards profitability.


Two important issues to packaging. Look and product integrity. You can have the prettiest box, silver stamped, embossed, printed in 4C (meaning all colours) and designed by your very talented nephew, but if the product arrives to the customer all messed up, it will be a disaster.

I recently had an interview with a with a delivery rider and he told me horror stories of cupcakes jumping out of the holder inside the box, drinks spilling out of paper cup, and even soup seeping out sealed plastic containers because they were filled too full. So do a delivery test, if you have to personally use a lot of care to do the delivery, then you have to rethink your packaging design.


Record and measure everything. Type of ingredients, which supplier to use, amounts used per recipe, timing, temperature and methodology. Do not rely solely on a taste test. You are not cooking for your friends and family who are not paying and have no issues with slight variations. A small change and the customers who have sensitive taste buds will detect your inconsistencies. Your customers expect to taste exactly the same thing as they did the last time because they definitely did not sign up to be your guinea pig or pay to experience your random bouts of creativity. If changes are made, make very sure it is for the better, and that it will be the recipe for a long long time to come. It's probably wiser to just consume that experiment yourself.


Finally, everyone loves a good story, so plan a good one. Dumplings from your great grandma, a secret recipe from a retired baker, some special ingredient that is next to impossible to find or even an ex-convict serving you delicious prison style food. A good story grabs attention to your product, so be unafraid to tell your story so that people are more willing to give you a chance.

However, food is about taste, so good taste is the ultimate test to success. After getting someone to agree to buy your food, they will only buy again if its actually any good. People appreciate craft and all the more so if they have to come all the way to collect it from you. So make sure you are winning hearts with your cooking.


Hojiak Times is a column that provides advice to our readers looking to start up their little home based businesses. If you have a question that you want us explore? Let us know here.

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