Starting a new home food business

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Joined Apr 21, 2020
Hi All,

I live in Ontario with my family. I'm doing my graduation and along with that, I have 2 part-time jobs. I have plans to resign from my part-time jobs and start a home food business. As its a major step, I asked some friends to join me. But none of them are interested. So I plan to start one on myself. What do you guys think about a sole proprietorship? Is it good to start a business with this structure?

I plan to consult an Ontario business registration service. I think they can help me with the process. As its COVID, I plan to start my venture after a few months. But, I'm not sure how long the COVID effect will last. Is there anyone who runs a sole proprietorship business. Share your feedback on this type of business.

Thanks!
 
1,085
645
Joined Mar 1, 2017
Hello and welcome to CT. :)

In terms of how your should set up your business, I would strongly encourage you to contact a lawyer and/or an accountant who can provide proper advice based upon the laws in Ontario.

However, aside from that, my first suggestion to you, if you've not done so already, is to thoroughly research any and all cottage industry laws in Ontario that deal with home food businesses. I don't know how they work there but, here in the US the restrictions involved vary from state to state, especially in terms of what you are allowed to produce in your home kitchen.

Next, you should research all local health code requirements. If you are going to produce food for public consumption, you want to make sure you know exactly how your local and provincial health codes apply to your home operation.

Next, you should contact your local municipality and find out if you are allowed to operate a business out of your home. Here in the US, we have zoning regulations that are divided into three categories: residential, commercial and agricultural. If we are zoned residential, we are often required to apply for a "variance" if we wish to operate a business from our homes. However, this is not always the case and the exceptions to the rule vary from place to place. I don't know if a similar structure exists in Ontario. But, you want to make sure you are standing on firm ground before you begin operations..

Next, do you have any sort of experience working in a commercial kitchen? If not, learning how to produce food in large quantities can be a daunting task, even for the most experienced home cook. One of the biggest problems is that home appliances are simply not designed to produce large quantities of food or store large quantities of food. That being said, some ingredients must be held at or below a certain temperature that residential appliances are not capable of sustaining with large quantities. This is especially true when it comes to dairy and animal proteins, especially eggs and chicken. Even if the product you produce uses these ingredients, such as the eggs that go into cookie dough, storing large quantities of this product can prove to be logistically troublesome, not to mention the possibility of rigorous regulatory oversight.

Another factor that comes to mind is insurance. If you own your own home, I would encourage you to check with your home owner's insurance, if you're required to carry it, and see if you are covered in the event of a business related incident such as a fire etc. Its common for home owner's insurance policies to exclude coverage for business related events. But, times are changing and with the increased popularity of home based businesses, insurance policies have changed as well. If business related incidents are not covered under your existing homeowner's plan (again, assuming you have one), you should make plans to secure proper insurance, including liability insurance. Without it, your personal assets could be at risk in the event of an accident or if a customer gets sick etc. If you rent, that presents a whole new basket of apples in addition to the those I have just outlined.

Lastly, before you begin, I would encourage you to exchange one of your part time jobs with a job in a bakery or at least a restaurant kitchen and work there for several months. That way, you can gather very important knowledge and experience in the production of food on a large scale. Also, you can learn some very useful food safety skills and habits that will be of great benefit in your home venture, not to mention cultivate good contacts within the industry.

Please understand that I am not trying to talk you out of your intentions to start a home food operation, Instead, I am simply trying to convey a sense that even though it may appear to be a simple process, in many respects, starting a home food business is very complicated and involved.

Good luck. :)
 
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