Professional Documents
Culture Documents
If possible, contact a Small Business Adminis- If potential customers do not appear interested,
tration representative for assistance. Help also stop and take a critical look at your plans.
may be available through the small business Maybe you need to change or modify your plans,
centers that are part of the university extension or consider something new.
system in many states.
N. D.
MINN.
S. D.
WIS.
MICH.
North Central Regional Extension Publication No. 259
IOWA
NEB.
KANSAS MO
Ill. IND.
OHIO
Revised January 2000
Study the Competition Facilities and Appliances
If similar businesses exist in your area, In most states, separate kitchen facilities
study them carefully. Who are their custom- are required for a licensed food business. A
ers? How and where do they sell their prod- person just starting out may prefer to rent
ucts? What marketing methods and promotion kitchen space from a church or other facility
pieces do they use? Learn from their successes rather than go to the expense of a second
and their mistakes. kitchen in the home. In general, it is wise to
avoid major remodeling expenses initially,
How will your business differ from the competi- although adequate space is needed for prepara-
tion? Why will customers prefer your product? tion and storage. Even for an unlicensed busi-
The answers to these questions determine the ness, it may be necessary to improve facilities to
unique “marketing position” to stress in sales meet state or local guidelines.
talks to potential outlets and customers.
Home-style appliances may not be a problem
Licensing while the business is small, but commercial
The state government agency that regulates food appliances may be needed eventually. Home
and agriculture probably has requirements you refrigerators lack the capacity to cool large
must meet to sell your foods. Check the require- amounts of food rapidly, and shelving may not
ments before you go too far. You may find that a accommodate sheet trays and other large pans.
separate kitchen is required, or there is some More freezer space may be needed if it is neces-
other rule that you are not willing or able to sary to prepare food in advance. In addition,
meet. In some states, a home food business may larger cooking surfaces and more oven space
be exempt from state licensing if it meets certain may be necessary.
guidelines, often related to income limitations.
Kitchen Equipment
State regulations also may prohibit the sale of If possible, avoid expensive equipment pur-
some types of home-prepared foods. For ex- chases at the beginning. Certain utensils are
ample, some states prohibit the sale of home- essential, however; for example, portioning
canned foods and/or the use of home-canned equipment (scoops, ladles, scales, quart and
ingredients in foods for sale commercially. gallon measures), serving trays, serving utensils,
dishes, and tongs.
Zoning
Always check local zoning restrictions before As the business succeeds, reinvest profits in
planning goes too far—and definitely before equipment to save hand labor or increase pro-
money is spent. Local ordinances may restrict duction capacity. It may become necessary to
the kind of home businesses allowed or prohibit purchase equipment for the location where food
a home business entirely. is sold or served. Display racks or a special
refrigerator may be needed, for example.
Expenses
A business will have both fixed and variable Food Costs
expenses. Fixed expenses are those that do not Estimate the cost of ingredients on a per unit
change, such as rent. Also in this category are basis (or per dozen, if small items such as
the “one time” or annual expenses such as cookies are involved). List the ingredients
equipment, remodeling, license fees, etc. Vari- needed, then compare prices in both retail
able expenses change from month to month. groceries and wholesale outlets. Try to find the
Examples are utility bills, ingredient costs, most inexpensive ingredients, but do not sacri-
transportation, supplies, promotion and adver- fice quality to cut costs.
tising salaries.
3
In general, larger quantities of ingredients have from your food), personal liability, auto (if your
lower unit cost. But wholesale buying of large car is used for business purposes), fire, business
quantities may not save money for a beginning interruption, and workers’ compensation (if you
business, particularly if food is perishable. The hire employees).
major advantage of wholesale buying is to main-
tain consistent product quality. It also may If you do hire employees, you also will need to
enable the purchase of ingredients that are allow for employer payments to Social Security
difficult to obtain in small quantities. and unemployment funds.
Labor cost is more than preparation time. A • Excess production (leftovers), pilferage, returns,
certain amount of time will be required for and “mistakes”
developing the business, transportation, pur-
chasing, and recordkeeping. If others will be • Food wrap, napkins, condiments
working as well (family members for delivery, for
example), include their labor costs also. Will they • Advertising and promotion, postage, telephone
work as quickly or efficiently as you do?
• Kitchen modifications
Transportation
Will you deliver your products? If so, include • Interest
gasoline and other automobile costs as an
expense. Is a special vehicle necessary? Will you • Rent
need equipment to keep foods at recommended
temperatures while in transit? Can you recover a If you have made major initial expenses such as
prorated cost of the delivery vehicle, including kitchen remodeling or appliance purchases, ask
fuel and maintenance? an accountant to establish a monthly figure to
include in expenses.
Insurance
Do not assume a home business is covered by Pricing Products and Services
your homeowners policy. Check with your agent The price can make the difference between
to see what coverage you have and what is success and failure. Good prices make custom-
needed. Types of coverage to consider are prod- ers think they are getting their money’s worth
uct liability (in case people become ill or injured and make you think you are getting a fair return
on your investment of time and money.
How much can you charge? Consider Step 5: Add
comparable commercial products, prices Fixed expenses $2
charged by others in your community for Ingredients $2.50
similar products, and “what the traffic will Labor $2
bear.” Consult business people in the
community. $6.50 total per hour cost
Prices should reflect all fixed and variable ex- Step 6: Divide the total per hour cost by the
penses in the business and provide what you number of loaves you can make per hour—
consider a reasonable profit. Keep prices com- $6.50 ÷ 5 = $1.30—the minimum price that will
petitive and in a range that the target customers cover your costs.
are willing to pay.
Will customers pay $1.30 for a loaf of your
The following pricing methods are guides that bread? Compare the price with that of similar
you can adjust to your situation. Through products. If it seems low, consider increasing it a
experience, you will learn to set up your own little. (After all, $2 per hour is a pretty low labor
pricing formula. Don’t worry if the prices you set cost.) However, if the price is considerably higher
are a little higher than your competition—if you than the competition, consider the options
are sure your product is better in some way. below.
Step 1: Figure the productive working hours Percent Food Cost Pricing
(total hours spent in actually making the This quick method is used by many restaurants.
product)—Seven hours of the 32 are spent in It is based on the theory that food cost makes up
bookkeeping, shopping, and delivery, so are not about 40 percent of the price. To set a price,
productive hours. Therefore, your total produc- multiply the food cost by 21⁄2 (40% by 21⁄2 =
tive hours per month are 25 (32 – 7 = 25). 100%).
Step 2: Figure expenses per hour—Divide the In the example of the breadmaker, the food cost
monthly fixed expenses by the productive work- of $.50 is 38 percent (rounded to 40 percent) of
ing hours in one month ($50 ÷ 25 = $2 fixed the total selling price of $1.30.
expenses per hour).
The 40 percent figure is just a guideline; it may
Step 3: Figure ingredient cost per hour— not be a suitable standard if ingredients cost
Multiply the ingredient cost of one loaf ($.50) by very little but the product requires a great deal
the number of loaves you can make in an hour of labor or if ingredients are so expensive that no
($.50 × 5 = $2.50). one would pay 21⁄2 times the cost.
Step 4: Set labor cost—In this example, you Some experts say that a reasonable price for
decide you are willing to work for $2 per hour. catering is ingredient cost × 3. To get a price per
person, divide that total by the number of people
the food will serve.
5
Pricing for Services Only favorite recipe, remember that simply multiply-
If the client purchases the ingredients or reim- ing all quantities may cause reactions that will
burses you, prices may cover labor or service affect the final product. Brands of ingredients
only. Again, charge a reasonable but competitive can make a difference too, so don’t change
price that takes into consideration any unique brands without testing the result.
skills and special equipment.
Experiment with cost-cutting measures that
Policies and Price Sheet don’t affect the final product. For example,
List policies on a price sheet that is duplicated discover the minimum amount of each ingredi-
and made available to customers. In addition, ent without affecting quality. Arrange equipment
post both prices and policies in your kitchen. for most efficient production, and streamline
Some basic policies are listed below. work methods as well.
• Meet agreed-upon deadlines. The bacteria that can cause illness live and
multiply best at room temperature, but they also
• If you use the family telephone for your grow and multiply in the range between 40°F
business, insist that family members answer (refrigerator temperature) and 140°F (minimum
correctly and know how to take orders and oven temperature). Foods should not be held at
messages. room temperature for more than two hours (see
Figure 1 and Table 1). Bacteria are not killed • Never lick fingers or use the cooking spoon to
unless food is heated above 165°F. taste the food. Use the “two spoon” technique:
dip in with the cooking spoon and transfer to the
Potentially hazardous foods are those that tasting spoon.
contain meat, fish, poultry, eggs, and milk
products. Treat with special care foods that are • Whenever possible, use clean kitchen tools
warm or room temperature, handled, and not instead of hands. For example, use tongs instead
heated to the 165°F temperature that destroys of fingers for breads, butter squares, lettuce
bacteria. Good examples are salads with poultry, leaves, cold meat slices, and cheese cubes.
fish, macaroni, and egg, as well as cream puffs
and custard-filled desserts. Carry these foods • Keep kitchen and work area clear of pets and
and others like them to the serving place in an pests.
insulated ice chest or similar container. Keep ice
clean and do not let it touch the food. • Do not buy or use cracked or dirty eggs.
If time between cooking and serving is more than • Refrigerate ground meats and cooked foods in
two hours, refrigerate the food and reheat it just shallow pans (no more than four inches deep) to
in time for serving. Reheat to serve above 165°F, promote quick cooling. Use a thermometer to see
then hold above 140°F. Do not use a warming that the center reaches 40°F within two hours.
unit to reheat food.
• Keep frozen foods frozen until ready to use.
More Tips for Handling Food Safely Cook vegetables while still frozen or icy. Serve
• If practical, rinse foods with cool, running immediately.
water before preparation to get rid of some
harmful bacteria. • Always use covers to prevent contamination of
cooked food.
• Wash hands before handling food, frequently
during preparation, and always after doing • Put newly purchased groceries away immedi-
unrelated activities such as answering the ately, making sure perishable foods go into
telephone, using the toilet, or blowing your nose. refrigerator or freezer immediately.
Dry hands with a paper towel or hot air.
• Keep frozen meats, including turkey and
• After handling raw meat, fish, poultry, or eggs, chicken at 40°F while thawing. If you must
wash hands and equipment with soap and water speed up the process, place under cold running
before working with other foods. water. Roasts or unstuffed turkey (with giblets
removed) may go into the oven while still frozen
• If possible, keep raw and cooked foods in (remember to increase roasting time).
separate coolers or refrigerators to avoid cross-
contamination. If raw and cooked foods are • Bacteria thrive in partially cooked meat, so
stored in the same refrigerator, store raw foods never partially cook a roast or turkey one day
below cooked foods and food that will not be and then finish it the next. Some bacteria may
cooked prior to consumption. produce toxins that are not destroyed by further
cooking.
• Avoid touching face, mouth, or hair when
hands are clean. Keep hair under a scarf, cap, • Raw poultry or meat should not come into
or hairnet. contact with other foods, especially those eaten
raw or only slightly cooked. This means cutting
• Do not handle food if you have cuts, scratches, surfaces and knives must be thoroughly washed
or sores on face, hands, or arms. A bandage if used for raw meat or poultry.
does not give necessary protection.
Freezing 40°
point Slow growth 32° Cold foods must be held in this range, or below.
at sea
level No growth Bacteria cease to grow but do not die.
0°
Botulism—Double vision, inability to swallow, Improperly home- Bacterial spores in foods are destroyed
speech difficulty, progressive respiratory canned low or me- by high temperatures obtained only in
paralysis. High fatality rate. Comes on 12 to dium-acid foods; the pressure canner. More than 6 hours
36 hours or longer after eating involved food. smoked fish. Rarely, is needed to kill the spores at boiling
commercially canned temperature (212°F). The toxin is de-
Duration—3-6 days foods. stroyed by boiling for 10 to 20 minutes;
time required depends on kind of food.
Campylobacter jejuni—Fever; mild to severe Raw or undercooked Heating and refrigeration practices to
and often bloody diarrhea; abdominal cramps meats, especially kill or control Salmonella also appear
that may be severe; possible headache, malaise, poultry; raw (unpas- to be effective against Campylobacter.
muscle or skeletal pain, or vomiting. Recognized teurized) milk; water
only within the last 10 years as problem to supply that has been
humans. Thought to be more common cause contaminated with
of acute gastroenteritis than Salmonella. animal or human
feces.
Duration—2-7 days
Escherichea coli - E. coli 0157:H7—One of Inadequately cooked Cook ground beef to 165°F interior
four highly infectious types that causes gastroin- ground beef, unpas- temperature. Use only pasteurized
testinal disease in people, especially infants, teurized apple cider apple cider and juice or bring to boil
elderly, and immune-compromised people. Type and juice, contami- before serving, rinse-wash fruits and
0157:H7 causes bloody diarrhea and severe nated lettuce, vegetables. Practice good personal
stomach cramps. Hemolytic Uremic Syndrome sprouts, and other hygiene to prevent person-to-person
(HUS) in children can result in acute kidney failure vegetables and foods. exposure.
and death and blood clots in the elderly. Other
E. coli types can cause infant diarrhea, “traveler’s
diarrhea,” and shigellosis-type dysentery.
Table 2. Foodborne illnesses (cont.)
Illness and symptoms Foods often involved Preventive measures
Listeriosis (Listeria monocytogenes)— Meat products like precooked Eat pasteurized milk and pasteurized
Nausea, vomiting, fever, and headache. frankfurters and cold cuts, milk cheeses. Reheat frozen and
Severe cases result in abortion, still- raw milk soft cheeses, raw refrigerated precooked meat and
birth, perinatal septicemia and meningi- milk, precooked poultry poultry products like frankfurters.
tis to surviving infants, and/or death. and seafood products, and Wash-rinse fruits and vegetables.
Susceptible include elderly, immune unwashed fruits and Store perishable foods below 40°F and
compromised, infants, and unborn. vegetables. This bacteria use up rapidly.
will grow slowly at refrig-
erator temperatures.
Perfringens poisoning—Nausea, Cooked meats, poultry, Cool foods rapidly; put foods in
abdominal pains, diarrhea (like mild 24- fish, gravies, and main shallow pans in refrigerators. Keep
hour flu); comes on 10 to 12 hours after dish casseroles that have cold foods at 40°F or below; keep hot
eating involved food. not been properly cooled foods at 140°F or above. Reheat leftover
and refrigerated and then foods to 165°F. Wash hands after
Duration—may persist for 24 hours. have not been reheated going to toilet, handling raw meat,
above 165°F. and doing activities other than food
preparation. Clean and disinfect
kitchen equipment. Restrict workers
with diarrhea from touching foods.
Salmonellosis—Sudden onset of vomit- Food animals may harbor Cook foods to internal temperatures of
ing, abdominal pain, diarrhea. Usually Salmonella. Raw poultry, 165°F. Use separate equipment for raw
fever, chills, severe headache. Can be meats, eggs, and dairy and cooked products. Cool foods in
dangerous for infants, elderly, and products are most frequently shallow pans in refrigerators. Keep cold
anyone with low resistance. Comes on involved. Also transmitted foods at 40°F or below; keep hot foods
12 to 72 hours after eating involved food. by infected people, pets, at 140°F or above. Reheat leftover foods
insects, and rodents. to 165°F. Clean and sanitize kitchen
Duration—2-7 days Salmonella are destroyed utensils and equipment. Wash hands
by heating food to 140°F after visiting toilet and handling raw
for 10 minutes or to higher foods of animal origin. Restrict workers
temperature for less time. with diarrhea or fever from touching
foods.
Staphylococcus poisoning (staph)— Custard or cream-filled Wash hands after coughing, sneezing,
Vomiting, abdominal cramps, diarrhea, baked goods, ham, meat, smoking, going to the toilet. Practice
sweating (often attributed to “the flu”). poultry and egg salad good personal hygiene. Cool foods
Comes on 1 to 6 hours after eating sandwiches, potato and rapidly; put foods in shallow pans in
involved food. macaroni salads, creamy refrigerators. Keep cold foods at 40°F
salad dressing. Transmitted or below; keep hot foods at 140°F or
Duration—1-2 days by people who carry the above. Cover infections with water-
bacteria. Bacteria thrive at proof dressing or bandaid. Restrict
temperatures between 40°F workers with diarrhea or colds from
and 140°F. touching foods.
Viral Infections—Small Round Structured Shellfish such as oysters Do not prepare foods for others if
Viruses (SRSVs) including Norwalk virus and mussels from sewage- suffering from vomiting or diarrhea
cause gastroenteritis and Hepatitis A virus contaminated waters. Fruit and after 1 week after jaundice onset.
causes hepatitis. These virus originate and vegetables if fertilized Food handlers exposed to Hepatitis A
from and reproduce in human intestine. with sewage sludge or given immunoglobulin injection.
They do not increase in numbers in food contaminated water. Follow stringent personal hygiene
but will survive in food. Poor personal Foods such as salads and with frequent hand washing. Heat
hygiene (unwashed hands) contaminates desserts contaminated by treat shellfish to 195°F for 1.5 min-
food during preparation. SRSVs usually infected food workers. utes. Avoid cross-contamination of
cause sudden onset uncontrollable raw shellfish with other foods.
projectile vomiting, diarrhea, and stom-
ach pain within 15 to 72 hours. Viral
Hepatitis A incubation is 3 to 6 weeks
with gradual development of symptoms:
loss of appetite, malaise, fever, and
vomiting followed by jaundice. Illness
lasts a few weeks to several months.
Usually more severe symptoms in adults.
11
This chart illustrates how a bacterium grows Under ideal conditions bacteria
when food is held in the temperature danger will multiply by dividing in two
zone. When food is initially held at ideal growth every 20 minutes. This means a
temperatures for bacteria, the growth rate is bacterium can grow to more than
slow. This is termed the lag phase; it takes 16,000,000 in 8 hours.
bacteria time to adjust to the environment and
the numbers reproduced are lower. Beyond this Time:
initial period, bacterial growth accelerates Number of bacteria:
rapidly.
1:00
1
15,000,000
1:20
2
Number of bacteria
tes
1:40
4
ra
2,000,000
ele
cc
ha
2:00
wt
300,000 8
ro
lg
ria
3:00
cte
64
Ba
40,000
se
Lag pha 4:00
512
5:00
0 1 2 3 4 5 6 7 8 4,096
Hours
6:00
32,768
7:00
262,144
8:00
2,097,152
9:00
16,077,216
Do not hold food in the temperature danger zone for more than two hours.
North Central Regional Extension publications are prepared as a part of
the Cooperative Extension activities of the 13 land-grant universities
from the 12 North Central States in cooperation with the Extension
Service, U.S. Department of Agriculture, Washington, D.C.
File: FN 4 3/00