As a pioneer in the cottage food industry, both covering the national movement for publications as well as championing for the passage of a “Cookie Bill” in Wisconsin, Lisa Kivirist is on the cusp of the latest trends. Lisa and her husband and co-author-and-photographer, John Ivanko, are food-loving entrepreneurs. They operate Inn Serendipity bed & breakfast and farm, from which they run their cottage food enterprise. Lisa Kivirist is also initiated and directs the Rural Women’s Project of the Midwest Organic Sustainable Education Service that provides resources and networking for women farmers and food-based entrepreneurs as well as a Senior Fellow, Endowed Chair in Agricultural Systems at the Minnesota Institute for Sustainable Agriculture at the University of Minnesota, focusing on identifying opportunities to champion leadership development among female farmers and rural women.
Lisa and John’s recent collaboration, the book “Homemade For Sale“, is the first authoritative guide that provides a clear road map to go from idea and recipe to final product for home-kitchen-based entrepreneurs. Read on for more information about this book and find out how to WIN ONE OF TWO COPIES from New Society Publishers!
When it comes to starting a home based food business, it is important to note that you have been through the paces yourself. How did you start out and where are you today?
As small business owners of the award-winning farmstay bed & breakfast and farm, Inn Serendipity, we’re always exploring ways to diversify our income, especially if we can use our organically-grown vegetables. We produce lots of cucumbers, cabbage, garlic, onions, tomatoes and pumpkin, so launching a cottage food operation based on high acid canned food products was a great fit. We just produced small batches of pickles, salsa, sauerkraut and pickled pumpkin for sale, made possible under the State of Wisconsin’s cottage food law. Our cottage food product inventory is in addition to what we put up for our own personal consumption, since we grow about 70 percent of what we eat on an annual basis. Our state’s law allows us to sell at farmers’ markets and community events. Given that we often attend community events related to our Homemade for Sale, Farmstead Chef, Soil Sisters and ECOpreneuring books, we found this a perfect place to also make our high acid canned products available for sale.
How does this book help gardeners conceive and launch their own home-based food start-up?
We wrote HOMEMADE FOR SALE with a truly first time food product entrepreneur in mind. First, we explain what cottage food laws are, how they operate and explore some of the food product ideas that might be created. Ultimately, the readers will need to consult with their state’s cottage food law for what’s possible to sell in their state. In Wisconsin, unlike most other states, we can’t sell any baked goods — at least not yet, so we stick to the high acid canned products. We also touch on how to get laws expanded within your state. Then we devote a large section of the book to cover the many facets of marketing, the least of which is developing a great tasting product that can be consistently made and sold at a price that returns some profit at the end of the day. Of course, we delve into the ins and outs of setting up your kitchen for your cottage food enterprise. There’s a checklist chapter, too, on the steps to go through to set up the business, from getting a Federal Employment Identification Number (FEIN) from the US IRS (it’s free) to structuring the business and getting insurance. In the final section of the book, we cover the next steps for food entrepreneurs who have so much demand that they need to scale up their production by renting an incubator kitchen or even build a commercial facility of their own.
What are the necessary “ingredients” one must possess in order to be successful in launching their own food enterprise? Is a lot of capital one of those ingredients?
What’s great about a cottage food operation is that it’s practically impossible to fail. By the very nature of working from a home kitchen, using the equipment you already own and selling what many food entrepreneurs already know are big product hits, there’s very little downside, or expense. Many cottage food operators started because friends or family members kept raving about their muffins, pickles or jams. In a state like Florida, for example, you can pick up some baked goods ingredients on the way home on Monday, review and make sure you follow the cottage food labeling guidelines, bake the products on Friday, then sell at a farmers’ market on Saturday that welcomes cottage food operators. So, the most important ingredient is a great tasting product that customers are willing to pay for at a price that leaves you with enough profit to make it all worth it at the end of the day. As we write about in Homemade for Sale, to be in business, the IRS requires that your business must make some profit three of every five years.
That said, slick marketing, a memorable product name, attractive website and Facebook page also help, as does the owners’ sense of commitment and determination. Most people starting food product businesses have already spent more than 20,000 hours cooking for family and friends. It’s just a matter of transforming that experience into an enterprise by selling that coveted jar of jelly or artisan loaf of French bread that you’ve been sharing (for free) with others for years.
What is some invaluable advice you have to offer those who wish to embark on the journey to starting their own food business?
Our advice, start off small, focus on the most promising recipes or product lines and be attuned to your customers needs. As you sell your products, revise your offerings and listen to the feedback from your customers. Like any other business, your customers will determine how profitable your business will be. Don’t try to offer everything to everyone. We’ve found most of the most successful cottage food operators focus on what they do best and create product lines around that. Some have found, for example, that it helps to bake something for sale for consumption at home plus a “single serving” to be consumed at the venue.
Your book aspires to provoke, inspire and inform people about starting their own food venture. Why do you feel it is important to encourage the passion and talents of home cooks everywhere to become entrepreneurs?
We believe in a return to a nation of butchers, bakers and candlestick makers. Localizing our economy where neighbors, once again, are selling hand-crafted items to neighbors will improve our economy, make our food system more secure and transparent, and most important of all, lead to a diversity of more great-tasting products often made with ingredients that can actually be both pronounced and understood. The growth of farmers’ markets are one manifestation of this new emerging local economy, where people are meeting the makers of the products they enjoy. Cottage food products are a natural evolution of the interest in direct connections between producers and consumers.
Starting anything new, let alone a new business, can be challenging, since there are new considerations and requirements to follow. With so many great products shared in home kitchens everywhere, we believe — and research from such places as the Specialty Food Association confirm — that specialty food products, particularly those made in small batches with unique recipes and high quality ingredients will continue to grow in market demand. The trick is to go from product to market and still have the business be as fun and satisfying as feeding the family for Thanksgiving. That’s where the inspiration and information comes in, often in the form of our cottage food story profiles we include in Homemade for Sale.
How deep a role do local resources and support play in championing start-up success and how do we tap into those resources?
By the very nature of each state’s cottage food law, sales of the food products will be local, usually at a farmers’ market, community event, or perhaps delivered directly to the customer (if the state allows this). The more cottage food operators can connect with others in their community, the greater their likelihood of success. Most new business owners already have some of these connections, either through school groups, their place of worship or perhaps a service group to which they belong. If not, becoming a member of your local chamber of commerce might be a great place to start, for no other reason than to network with potential new customers; if you’re a big baker, one new friendship might result in you supplying a local company the next time that company hosts a Friday “roll day” for their employees. In Homemade for Sale, we stress the importance of finding ways for potential customers to sample your products and share feedback. One way might be to host a free potluck and also have a display table with your products to sample; add a “people’s choice” feedback card for fun and see, for example, what wins as the favorite flavor of jelly or sweet bread.
To enter, simply leave a comment on this blog post by midnight on Sunday, June 5, 2016 (be sure to provide a valid e-mail address) in answer to the following question:
If you were to pursue a home based food business, what product would you make?
Be sure to include a valid e-mail address. The winner will be drawn at random from all qualified entrants, and notified via e-mail. (See rules for more information.)
UPDATE 7/16/16: Congratulations to Carole Coates & Dawn Woodward!