Cottage food laws across the U.S. allow people to operate a food business from their home kitchen. This is always the easiest and cheapest way to start a business. But for those folks who cannot use their own kitchen, or want to make products that are not permissible under their cottage food law, consider renting (or bartering) to use a commercial kitchen.
Culinary incubators (shared use kitchens) were originally created to help small food businesses become viable operations. Because these shared use kitchens were subsidized by non-profit organizations or state-funded programs, their fees were very low. This made for affordable entry into new business ownership.
However, now there are private businesses that operate for-profit shared use kitchens. These rental kitchens can be cost-prohibitive for a small business. For a new food entrepreneur with limited capital and little business experience, it gives their business a rocky start.
Think about this aspect when writing your business plan. If you need to find a commercial kitchen space, do the math. Think realistically about how much time is needed to start and finish your product, then multiply the number of production hours by the hourly rate, and add in the surcharges. How much product must be sold to cover the cost of ingredients, packaging, insurance, and rent. Is there any left to pay for your time?
If you need to rent a commercial kitchen, take a look around your community. There are many commercial kitchens in every community: churches, social service organizations such as VFW or Knights of Columbus, fire stations, schools, pizza shops, restaurant and bakeries in their off hours. Renting these kitchens can be as little as $8 per hour and many of these organizations or businesses will consider a trade – you leave them cakes or brownies, and you get to use their kitchen. Sounds like a fair trade to me.
Home-Based Baking at its Best!