10 Steps to Starting a Food Business in New Jersey
The fun part: getting creative in the kitchen; experimenting with recipes; and sharing your culinary delights with friends and family. The not-so-fun part: the paperwork; the drafting of the business plan--and the re-drafting, and the re-drafting; overcoming the financing challenges; and meeting all of the required regulations. You’ve mastered the science and the artistry behind your food, written your brand story, and identified your niche market. Now don’t shortchange your business success by skimping on the rules. Be sure that you follow all of the relevant steps to ensure you are fully in compliance with state and local authorities and regulators.
1. Check Food Business Name Availability. New Jersey law states that a new business entity cannot have the same or similar name as an active entity, so it’s important to ensure that the business name that you select is not in use by another company. Use the state’s Name Availability Lookup Service to confirm that the business name that you would like to use is actually available. Do an online search for your proposed name and evaluate the results to ensure your name isn’t already used for something less desirable that could later damage your brand’s reputation. Also, be sure to secure your domain name and social media handles.
2. Register Your Food Business. Be sure you understand where you need to register your business. It depends on the type of entity that you select. Sole Proprietorships or General Partnerships can be registered on the county level, while Limited Liability Companies (LLC) or Corporations must be registered on the state level.
Sole Proprietorship Or General Partnership
Trade name registration is advisable but not required if you intend to do business under your own name. If you intend to use a business name for your Sole Proprietorship or General Partnership, you must register your trade name with the County Clerk’s office in the county where your business is located. County-level registration is required and protects your business name from use by other companies. You must register the name in each of New Jersey’s 21 counties, if you would like to protect the name from use statewide.
Limited Liability Company Or Corporation
You must register your business as a New Business Entity with the Division of Commercial Recording, New Jersey Department of the Treasury if your business is a LLC or Corporation. To register, visit the State of New Jersey Business Portal, go to the “Starting a Business” tab, click on “Registration and Formation of a New Business,” and see Step 1. You also can contact the division directly at Division of Commercial Recording, PO Box 308, 33 West State St., Trenton, NJ, 08625-0308 or call 866-534-7789.
3. Use Your Social Security Number or Apply for a Federal Identification Number. A Sole Proprietorship or a single member LLC with no employees can use the owner’s social security number for federal tax purposes. However, other business entities and all businesses with employees are required to obtain a Federal Employee Identification Number (FEIN) from the IRS. You can obtain an FEIN by visiting the Internal Revenue Service’s website and clicking on “Apply for an Employer Identification Number (EIN) Online” or filing a form SS4 with the IRS by fax, mail, or telephone.
4. Register Your Food Business For Tax Purposes. Regardless of whether you plan to collect sales tax or have paid employees, all businesses must “Register for Tax and Employer Purposes” with the New Jersey Division of Revenue. To register, visit the State of New Jersey Business Portal, go to the “Starting a Business” tab, click on “Registration and Formation of a New Business,” and see Step 2. You also may contact the Division of Revenue, Client Registration Bureau by calling 866-534-7789.
5. Obtain A Food Safety Certification. The State of New Jersey requires that the person in charge, owner, or manager of a food establishment obtains a food manager certification by successfully passing a food safety certification exam that is accredited by the American National Standards Institute and the Conference for Food Protection (ANSI-CFP). Some local health departments also may require that food establishment employees receive a Food Handlers Certification.There are many organizations, like ServSafe that offer food safety training. Check with your local health department to ensure that the course and certification that you are considering is recognized by your city or municipality.
6. Get Properly Insured. The type of insurance that you need will depend on the type of products that you sell and where you plan to sell your products. And, as your business grows, your insurance needs may change. At a minimum, general liability insurance protects businesses against claims of bodily injury or accidents on their property and property damage to someone else’s premises. Be sure to consult an insurance broker or online insurance programs like FLIP about your specific food business insurance needs.
7. Find A Licensed Commercial Kitchen. The State of New Jersey does not have Cottage Food Laws, so all food created for sale to the public must be made in a commercial kitchen. Check out the Rutgers Food Innovation Center’s list of community kitchens. In addition, reach out to churches and synagogues as well as independent restaurants in your area. They may be open to renting their space to entrepreneurs to make additional revenue during their off days. Also, sign up to learn more about Hudson Kitchen’s membership options for caterers, food trucks, meal delivery services, specialty products producers, and bakers. Hudson Kitchen commercial kitchen services will be available in Fall 2018.
8. Obtain a Health Department License. When you are ready to sell your food or provide food services within the State of New Jersey, you will need to obtain a license. The specific license that you will need depends on how and where you are selling your products. Contact your local health department for information on their specific requirements. To find the health department in your city, use the Directory of Health Departments in New Jersey.
9. Find Places to Sell Your Products. There are many ways to get your name and product on the minds and lips of your customers and money out of their wallets. But you don’t want to run before you can walk. Start slow and steady, methodical, and thoughtful. When you are just starting out, farmers markets and festivals are cost-effective ways to sell your food products and services, while getting immediate feedback from customers on your product.
10. Get the Word Out About Your Food Business. Now that you have taken the steps to get your food business up and running, it's time to start spreading the word. Get tips on promoting your new venture in the Five Essential Marketing Tools for Food Businesses.
Interested in learning more about how to start a food business, including concept development, marketing and pricing for profitability? Register for our Food Business Bootcamp.
This information is not a substitute for professional advice. Please consult your legal, financial, insurance and tax advisors when making decisions about starting your food business.