How to start an online food business from home in 7 steps

Powered by passionate home run food business owners, online food sales in Australia are well and truly on the rise, and it’s not just restaurateurs who are getting in on the act. Many food entrepreneurs around Australia are now launching online food businesses from the comfort of their home kitchen.

If you fancy yourself as a home chef with divine homemade food recipes that will dazzle tastebuds far and wide, you may find your calling by starting an online food business from home. Why not turn your foodie passion into profit by starting a home-based food business?

Recommended reading: 11 Profitable Food Business Ideas to Start in 2024

If 2024 is the year that you commit to starting your food business from home, learn how to make it a raving success in six steps, and how you can reduce your exposure to risk by investing in food business insurance*.

1. Create a business plan

Consider creating a business plan as you first priority. Write your plan down in order to decide what your business will do, what direction you envision it taking, and what results you hope to achieve. The key questions to ask yourself are:

  • Who are my customers?
  • What types of food will my food business offer?
  • What makes my food business different from the competition?
  • How can I sell food online to customers?
  • How much initial capital is required to start the business?
  • How will I promote my
  • Online food business?

Consider all of your options prior to creating your business plan. It is easy to set up an online food business, but there can be stiff competition. Meal kits, for example, are now a very popular way to allow families to cook themselves without the need to go shopping for ingredients. Food boxes that offer meat or vegetables are also big business.

These services allow customers to purchase directly from farms or suppliers and use food they would have otherwise thrown away. Smaller, local businesses are now offering their services online as well – virtual newsstands selling household food staples such as milk, eggs and flour.

2. Find your niche

If you are new to the food industry, start with your passions to discover your product. Are you a home baker who makes cakes from home or a home jam maker in your spare time? Do you dabble in cottage baking, or are you a qualified chef seeking a new challenge?

Whichever direction your foodie passion takes you and your online food business, follow it to define the niche that your online home food business will take. In the same way, cooking for dietary restrictions that you are familiar with, or focusing on health food, can be a great way to differentiate your food business.

3. Plan your menu

Planning is a key part of creating your menu. This should include what you sell, how much you charge for each item, and where your ingredients come from. You are selling a product or service in exchange for money. As with any other business, you should charge enough to justify your time and efforts.

It is important to know the cost of each ingredient, and from where they are coming from. Consider the cost of other production components, such as energy bills, personnel costs (if you hire help), and any rental costs for equipment or extra storage space.

You may also benefit from researching your local area and other food businesses in the area to help you determine your price points. It can also be helpful when deciding what you’ll offer in the first instance.

4. Prepare your space

Once you’ve found your found your niche, decide where in your home you will set up your commercial kitchen for your online food business. You may also start with your own home kitchen if that’s easier at first. Just remember that you may be required to hold a separate business insurance policy to operate your business food business from your home. An ABN will also be required to register your food business with the Australian Business Register.

In preparing your space, consider how you will ensure that your kitchen, even if you are the only one working in it, is safe for you and others to use. Your kitchen needs to meet certain safety and health guidelines. You can get additional information from the Australian Institute of Health and Safety website, which requires a risk assessment of your workplace and having first aid equipment on hand.

The following requirements apply for home-based food businesses:

  • Standard 3.2.2: Food Safety Practices & General Requirements;
  • Standard of the Food Premises & Equipment; and
  • Part 12.2 – Labelling requirements and other information.

5. Register your business

By law you will need to register your business with your local council at least 28 days before you intend to open for trading. Otherwise, they might not approve the application. Your application cannot be refused, but it is required by law.

After you have been approved by your local council, arrange a government-mandated food safety inspection. Food safety inspections are designed to verify whether the culinary delights you intend to sell are safe and clean for customers. You may also be required to submit a request to your local council to have your food safety program accredited.

Recommended reading: What to Consider When Registering a New Business Name

It’s worth noting that food safety laws and food permits vary across each mainland state. So before you launch your new home food business, ensure that you meet any food business licence requirements that you need to meet before starting trading. These can be found at the below links:

It can also be a good idea to also consider training your staff (if you have them) as well as yourself. After all, you don’t know what you don’t know. A food hygiene course can be beneficial for you and any staff you may have.

Independent institutions such as the Australian Institute of Food Safety provide online training on various levels, such as food handling and hospitality training. Completing these courses will ensure that you are legally compliant and that your hygiene and food safety practices and premises are up to scratch.

6. All systems go for launching your online food business

With all the pieces now in place, your online food business is ready start trading.

You have two choices when it comes to getting your new food business online. You can either sign up with an existing food delivery platform and use their infrastructure, or you can do it yourself by building your own online presence and offer delivery service.

It will cost you to register with food delivery companies such as Uber Eats, Menulog and Deliveroo, but it may be the easiest and fastest way to get your food and your brand out there.

7. Get your home run food business started on the right foot with business insurance

Starting an online food business from home is certainly no Sunday picnic, and you will likely have to overcome challenges during the early days of your business.

When it comes to business insurance for your home food business, it can get a little confusing. While you make and sell food, you are not a restaurant, and you also are not a café or a takeaway food shop.

Instead, the main risks to your home run food business relate to food safety requirements and food hygiene standards. The risks may include food contamination, issues related to food allergies, and food poisoning.

However, business insurance offers a great way to reduce the impact of insured events on your business. As the owner of your own home food business, remember that business insurance can play a key role in reducing the impact of insured events on your business.

Business insurance products that you may consider for your online food business from home include Public Liability insurance, Business Insurance, and Cyber Liability insurance.

When you choose BizCover for your business insurance you will have the power to compare competitive business insurance quotes online from leading Australian insurers. Better yet, you will be able to get covered in 10 minutes while also saving on your business insurance. Give BizCover a go and enjoy business insurance made easy.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769.

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