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How can I turn my food hobby into a legitimate company?

How can I turn my food hobby into a legitimate business? Source: Marishell Evangelista

Hobbyist-turned-food entrepreneur Marishell Evangelista gives practical advice.

'May PERAan' is SBS Filipino's podcast series which features financial experts seeking to answer the most common questions about money and finances.

 

With a pandemic that has pushed hobbies to quickly evolve into businesses, how does one go about turning a profitable side hustle into a legitimate company?

Former hobbyist and now-food business owner Marishell Evangelista of Weekend Ensaymada gives reasons why you should begin the transition and how to go about it.

 

Listen to the podcast here

Paano nga ba gawing lehitimong negosyo ang aking napagkakakitaang hobby?
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Highlights

  • The definition of a hobbyist has changed.
  • Evaluate if the product you are selling is high or low risk.
  • It's better to focus on perfecting one or a few products instead of rushing to sell a variety.

What is a hobbyist?

"I started as a hobbyist and then after some time, I turned my hobby into a food business," Marishell shares.

So what is exactly a hobbyist? Marishell says the official definition has changed.

"When I started four years ago, a hobbyist was someone who sold food at cost, meaning you only charged for the cost of your materials.

"Things have changed now. A hobbyist is now defined as someone who cooks without any financial or in-kind return. If you cook and sell - even if it's at cost - you are considered as having a food business."

Marishell shares that the definition of a hobbyist can no longer be found in current legislation.

"The question now is whether or not yor business is registered. Under the Food Act 1984, all businesses in Australia should be known by the council or registered."

Important things you need to run a food business

"If your products are not high-risk or potentialy hazardous, you might not need to register your endeavour; but if you're selling pandesal or kakanin, you have to register in my opinion because they're high-risk items."

Should you decide to register your food business, Marishell shares there are certain requirements you need to be aware of, such as:

1. Food handling certificate

"Everyone who handles food - bakes, cooks, sells, and others - need to have at least a Level 1 certificate.

"When I say everyone, that includes even people who give out food for free during an event as an advertising strategy."

Marishell shares that there are other certificates that may be required of you, depending on the type of food you handle.

"You might need a Level 2 or supervisor certificate if you don't have someone on your team who carries it."

2. Register your kitchen

"If you work from your kitchen at home, you will need to register it with your local council. If the kitchen is being used by the family, there needs to be an arrangement that during the time that you are cooking or baking for your business, no one else will be using the space."

Typically, councils don't permit working from the kitchen if you live in a share house.

"If you have pets, that is a concern as well. They should not be allowed in the production area."

"If you're just renting and are unable to get consent from your landlord, you can always just look for a commercial kitchen space to rent."

3. Have a specialty.

Instead of having a variety of items, Marishell shares that it's better to have one product that you have perfected.

"We focus on ensaymada. I could have chosen to do other breads, but I prefer concentrating on making sure that that one product I do, I do as close to perfect as I can.

4. Have a business plan

"Organisation is important. You'll have a more directed path if you know your organisational and operational objectives.

5. Branding is important.

"This gives people an insight into your brand's reputation and what you want other people to know about what you're selling.