Due to the pandemic, have you put your dreams of starting a food business on hold? Or maybe you are part of the Great Resignation/Reshuffling. Either way now may be the perfect time to become an entrepreneur and start your food business.
Restaurants have been hit very hard by Covid, but out of the metaphorical ashes comes opportunity.
You may not realize that you have options if you want to start a food business. Starting a restaurant or bakery is not the first step many take since it takes a large investment. You have options: Home Kitchens, Food Trucks, and Shared Kitchens.
A couple of interesting trends have gained popularity during the pandemic. One we've taken notice of is the pick-up and delivery option of items made in home kitchens, and this can work effectively in any of the options noted previously.
The Illinois Cottage Food law, which allows people to produce specific food products in their homes for sale, was recently amended. SB2007 came into effect on January 1st. It improved the law by replacing the restrictive home kitchen operation law and allowing food businesses operating out of home kitchens to increase sales opportunities.
Cottage food operations can now sell products at farmer's markets, events directly from your home or online. Sales must be direct to the customer. You cannot sell wholesale or let a retail store sell your product. Your online sales can be shipped within Illinois, picked up from your home or a third-party location, or you can offer delivery services.
At the point of sale (e.g., event booth, online website, etc.) and on your packaging, you must prominently display this notice: "This product was produced in a home kitchen not inspected by a health department that may also process common food allergens."
Unlike most laws, Illinois specifies which types of foods are NOT allowed. These are primarily perishable items or contain ingredients that must be refrigerated, such as raw eggs, butter, or milk.
The previous home kitchen operation law limited income from home sales of baked goods to $1000 per month. Now, you are limited to how much you can produce with your domestic appliances. This is excellent news for home bakeries.
The pandemic impacted people's ability to go out to eat in a restaurant, but that doesn't mean that people didn't want to eat out. The gig economy took off with food delivery and ghost kitchens. The delivery companies take a large percentage of the revenue, so prices tend to be higher when ordering from a delivery app. On the other hand, food trucks offer people a variety of options safely.
Food trucks fill the same need that street vendors have done in the past and still do in many cities worldwide. However, they are licensed and inspected by the health department in the same way as a brick-and-mortar restaurant.
For the owner/operator, a food truck has a much lower cost associated with starting up and operating a food business. The overhead is much lower without personnel costs because they operate with one or two people.
During the height of the pandemic, food trucks offered their diners a great alternative to delivery. Patrons could order ahead and simply drop by to pick up their food. If they had to wait for their food to be prepared, they were outside and could easily socially distance themselves.
Many cities have limited access to food truck permits because of pressure from established businesses threatened by this competition. However, there has been a small food truck boom in the past decade. Young, creative chefs with social media savvy have created successful gourmet food trucks. Their foodie followers are excited by the fusion cuisines they can't find in their local restaurants. Many cities are now re-thinking their view of food trucks and are beginning to see them as an economic cultural plus rather than a threat.
The popularity of micro-breweries that operate as bars but don't offer food has significantly helped increase the revenue for many food truck owners. Drinking on an empty stomach is a problem for everyone, so food trucks have come to the rescue. On weekend evenings, you can find a food truck parked outside most microbreweries. They are there until they sell out, which they do all the time.
Another popular use for a food truck is as a party caterer. Taco trucks or gourmet grilled cheese trucks might be the easiest way to feed your guests at a graduation party or family reunion. At the end of the party, the truck and the mess drive away. Your kitchen is spotless!
As the demand for innovative and inexpensive cuisine continues, you'll see more food trucks in every area. For example, the developer who owns the Charlestowne Mall in St. Charles is planning for the future of that space. Their vision includes a mixed-use urban district that would include a food truck plaza, among other things.
The city of Aurora is already food-truck friendly. Aurora hosts an annual Food Truck Festival in May that is very popular and has food trucks at its First Friday events in the warm weather. Some food trucks have semi-permanent homes in the parking lots of big-box stores. Yelp has ratings on food trucks so you can see what others have to say before you place your order.
Some chefs are happy owning and operating a food truck and may eventually own several. Others may use it to gain a following before opening a brick-and-mortar restaurant. Either way, food trucks are here to stay, so get in on the game instead of waiting for the perfect time.
A shared kitchen is designed to be an incubator for cooks and bakers who want to grow their businesses. Home kitchens, in addition to limits imposed by the Cottage Food law on ingredients, have physical limitations. There is only so much you can produce without commercial equipment and storage space. In the Chicago area, food trucks are limited by weather conditions. They may also need a freezer or workspace beyond what their food truck permits.
A shared kitchen (also known as a commissary) can solve these problems. For food entrepreneurs with aspirations to eventually sell their product wholesale, or with dreams of one day owning a restaurant or bakery, the shared kitchen offers you the opportunity to experiment and test your food products using commercial equipment.
By becoming a member of a commercial kitchen, you have access to commercial convection ovens, gas ranges, additional storage, refrigeration, and freezer space, as well as space to prep and package your food products. What you don't have is the price tag for the equipment or the electrical upgrade required for these appliances. The shared kitchen owner has the responsibility of complying with health department requirements, cleaning the common space, keeping the appliances in working order, and paying the bills. You come to prep, cook, or bake, package your food, clean your space, and leave.
In a shared kitchen you become part of a community of food entrepreneurs. You'll have the opportunity to work alongside numerous people, each with their own expertise. You can learn from others and share your expertise as well. You also become each other's customers and you never leave empty-handed.
Regardless of which avenue you choose, it's time to stop waiting and take action