How to start a meal prep business

The TCS rule. The FDA Food Code (opens in new tab) defines a "time/temperature control for safety" (TCS) food as one that needs temperature control to limit the growth of pathogens or the formation of toxins. Cooked meats, poultry, cooked rice and pasta, dairy, cut leafy greens, and most assembled meals are TCS — they have to stay out of the temperature danger zone (roughly 41 to 135 °F) through prep, storage, and delivery. A weekly meal-prep plate is essentially all TCS food.

Why that rules out cottage food. Cottage food laws — the state programs that let people sell home-made food without a commercial kitchen — cover only non-TCS, shelf-stable foods: baked goods without cream filling, jams and jellies, candy, dry mixes, honey, and high-acid canned goods. Prepared meals, refrigerated foods, and anything requiring temperature control are excluded almost everywhere. So unlike a jam business or a home bakery, a meal prep business generally cannot legally operate from a home kitchen under cottage food law. The path the law expects is a licensed commercial or commissary kitchen plus a health-department permit (steps 2 and 3).

The one narrow exception — a permitted home kitchen. A handful of states have created a permitted home-kitchen tier that can include some TCS food. The most established is California's MEHKO (Microenterprise Home Kitchen Operation, created by AB 626), which lets an individual run a small meal operation from a private residence — but only in the counties whose Board of Supervisors has affirmatively opted in, and under strict caps (a limited number of meals per day and week and an annual sales cap). See the California Department of Public Health MEHKO page (opens in new tab) for the official rules. Treat MEHKO as the exception that proves the rule: it's California-only, not available in every county even there, and tightly capped. Outside a participating MEHKO county, plan on a commercial kitchen.

Do this before anything else: contact your local (county or city) health department and ask two questions — (1) does my state or county permit any home-kitchen operation for prepared meals, and (2) what permit do I need to sell prepared food. Their answer determines your entire setup. Any third-party reference (including ours) is a starting point, not the authority — the health department is.

What a commissary kitchen is. A commissary (or shared, or incubator) kitchen is a licensed commercial facility you rent — by the hour, by the shift, or monthly — alongside other food businesses. It already holds the health-department license for the space, and your commissary agreement often serves as your business's permitted "kitchen of record" when you apply for your own permit (step 3). For a new meal prep business this is almost always the right starting point: you get a fully equipped, inspected kitchen without the capital cost of building one.

The options, cheapest to most expensive:

The food-specific requirements (these are what set meal prep apart from a cottage-food craft):

• Retail food establishment permit / food business license. Issued by your local (county or city) health department, this is the permit that lets you legally prepare and sell food. It typically requires your commissary agreement, a plan review of your menu and processes, and an inspection. Names, fees, and lead times vary by jurisdiction — this is the step most likely to take weeks. The FDA Retail Food Protection (opens in new tab) hub explains the framework, but your local health department is the authority and the place to apply.
• Food-protection manager certification. Most jurisdictions require the person in charge to hold a manager-level food-safety certification from an ANSI-accredited program — ServSafe Manager (opens in new tab) is the most widely recognized. (A food-handler card is the lower, employee-level credential; the manager certification is the one usually required of the operator.) Budget exam time into your launch timeline.
• Product and general liability insurance. Effectively mandatory: commissaries require general liability, and prepared food carries real foodborne-illness exposure, so product liability matters too. Food-focused programs like the Food Liability Insurance Program (FLIP) (opens in new tab) are built for this; confirm any policy actually covers prepared-food product liability, not just booth/general liability, before relying on it.

The general business setup (the same as any small business):

• A business structure. Many food entrepreneurs form a single-member LLC rather than operate as a sole proprietorship, because food is a higher-liability business and the LLC separates personal assets from business liabilities. You can start as a sole prop and convert later. The SBA's guide to choosing a business structure (opens in new tab) compares the options.
• An EIN. Free from the IRS via the EIN application page (opens in new tab), in minutes online. Never pay a third party for one.
• A state sales-tax permit. Prepared food is frequently taxable even where grocery food is exempt — but the rules vary by state, so register for a seller's permit with your state department of revenue and confirm how your state treats prepared meals. (Only a few states levy no state sales tax at all.)
• 1099-K awareness. Payment platforms and marketplaces issue Form 1099-K above the federal threshold, but that threshold has changed more than once in just the past few tax years — so confirm the amount in effect for the current tax year on the IRS 1099-K overview (opens in new tab) rather than relying on a figure from memory. Income is reportable whether or not you receive the form.

Because the permit and inspection timeline is the gating item, apply early and use the wait productively — secure the kitchen, build your food-safety systems (step 4), and finalize your menu and pricing (step 5) while the application is in process.

Temperature control and the cold chain. TCS food must stay out of the danger zone (roughly 41 to 135 °F). In practice that means cooking to safe internal temperatures, holding hot or cold as required, and — critically for meal prep — moving cooked food into refrigeration promptly and keeping it cold through storage, packaging, and delivery. A calibrated probe thermometer is a core tool, not an optional one. Insulated bags and cold packs maintain the chain during pickup and local delivery.

Safe cooling is where meal prep most often goes wrong. Improper cooling of large batches of cooked food is a leading cause of foodborne illness. The Food Code two-stage cooling rule is the standard to follow: cool cooked food from 135 °F to 70 °F within 2 hours, and from 70 °F down to 41 °F within an additional 4 hours (a 6-hour total window) — using shallow pans, ice baths, or a blast chiller, not a deep pot left on the counter. Confirm the exact parameters in the current FDA Food Code (opens in new tab) and any stricter local rule.

Allergen labeling — the nine major allergens. Federal law requires the major food allergens to be declared. Under FALCPA there were eight (milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, and soybeans); the FASTER Act added sesame as the ninth, effective January 1, 2023. Declare allergens either within the ingredient list or in a separate "Contains" statement. The FDA's FASTER Act page (opens in new tab) covers the sesame requirement. Allergen accuracy is one of the highest-liability parts of selling prepared food — a missed declaration can cause a serious reaction.

Date marking and meal labels. Refrigerated, ready-to-eat TCS meals need date marking, and your meal labels should clearly carry the meal name, an ingredient list, the allergen declaration, a use-by/keep-refrigerated instruction, and your business name. Reheating instructions reduce both customer confusion and food-safety risk. Check your local rules for any additional required label elements.

Write your process down. Health departments increasingly expect a documented food-safety plan, and a written process (cook temps, cooling method and timing, storage, labeling, cleaning) is also how you stay consistent as volume grows and how you'd trace a problem batch if one ever had to be pulled. The batch-tracking and production tools below help formalize it.

Foodservice pricing starts from a food-cost percentage: the ingredient cost of a dish should be roughly 28–35% of its menu price (a widely used foodservice rule of thumb). The complement most operators watch even more closely is prime cost — food plus labor — which typically needs to land around 55–65% of revenue to leave room for everything else. For a direct-to-consumer meal brand carrying kitchen rent and packaging, those benchmarks imply a gross margin around 45–55%, which means a meal fully loaded at about $8–$9 should sell near $15.

What a single meal actually costs. The numbers below are illustrative mid-range estimates — your real figures vary by menu, ingredient tier, kitchen rate, and volume. The point is that food cost is only the first of five lines.

• Ingredients (food cost): ~$4.00
• Packaging (container, lid, label): ~$0.75
• Commissary kitchen rent, allocated per meal: ~$1.00
• Labor (prep, cook, portion, pack), allocated per meal: ~$2.75 (e.g., ~16 meals from a 2-hour prep session at ~$22/hr)
• Delivery / overhead, allocated per meal: ~$0.50
• Fully loaded cost ≈ $9.00 per meal

What that means for price. On the food-cost rule alone, $4.00 of ingredients at a 30% target implies a menu price around $13. But the fully loaded cost is ~$9, so at a $13 price you keep about $4 per meal (≈31% margin), and at $15 you keep about $6 (≈40% margin) — while food cost stays a healthy ~27% of the $15 price. Drop the price to $11 "to compete," and you're keeping $2 a meal before a single mistake, refund, or slow week. That's why meal prep rewards pricing discipline: the low-price end of the market is frequently unprofitable once the real overhead is counted.

Use roughly $20–$25/hr as a labor floor when you allocate labor per meal — deliberately above the national BLS median wage for restaurant cooks (opens in new tab) (a useful reference point; check the current figure at the link), because pricing your own skilled labor at the bottom of the market undervalues it and leaves no room to absorb a hired cook later. Counting your own labor at zero is the most common way meal-prep pricing hides a loss. The bigger your batch, the lower the per-meal labor and kitchen-rent allocation — which is why menu simplicity and batch size are themselves pricing levers.

The pricing and batch calculators below run this math; plug in your own ingredient cost, batch size, kitchen rate, and labor time to see the real per-meal margin before you publish a menu.

The common models:

• Weekly subscription meal plans. Customers order a recurring number of meals per week (e.g., 5, 10, or 15). This is the most predictable revenue model — it lets you forecast ingredient buys and batch sizes, which is exactly what keeps per-meal cost down. The trade-off is the work of managing a rotating menu and recurring billing.
• À la carte / weekly menu. Customers order individual meals from a menu that changes weekly. More flexible for buyers, harder to forecast — you carry more risk of over- or under-producing until you have demand history.
• Bulk / family meals. Larger portions sold by the tray or family pack. Higher order value, simpler production, fewer SKUs — often a good complement to individual meals.
• Niche meal plans. Targeting a specific need — high-protein/fitness, diabetic-friendly, postpartum, senior, or a specific cuisine — lets you charge more and market more precisely than a generic "healthy meals" service.

Pickup vs. delivery. Local pickup (from the commissary, a fixed location, or a farmers market) is the simplest and cheapest fulfillment. Short-radius local delivery widens your market but adds cost and cold-chain responsibility — insulated transport and a tight delivery window keep meals out of the danger zone. Shipping prepared meals nationally is a different, far more complex operation (insulated packaging, frozen logistics, and broader regulatory exposure); most new businesses stay local first.

Where customers find you:

For the first few weeks a spreadsheet is fine. As you scale a rotating menu across weekly batches, three things make the math brittle:

• Perishable turnover. Ingredients spoil on a weekly cycle, so over-buying is a direct loss and under-buying stalls a production run. Tracking inventory turnover — what you have, what it cost, and what each batch consumes — is how you buy to actual demand instead of guessing.
• True per-meal cost moves. Ingredient prices swing, and a menu that was profitable last month can quietly slip underwater when produce or protein costs jump. Recalculating per-meal cost from a live bill of materials — ingredients plus packaging plus allocated labor and kitchen rent — keeps your pricing honest as costs move.
• Batch traceability. If a batch ever has to be pulled, you need to know which ingredients and lots went into which meals on which day. A batch record is both a food-safety requirement and the data behind your costing.

Scale recipes cleanly. A weekly menu means cooking the same recipes at different batch sizes depending on orders. Scaling by hand is error-prone; a recipe that auto-scales ingredient quantities to the week's order count keeps both your shopping list and your per-meal cost accurate. The recipe-costing fundamentals post and the Recipe Scaling and Batch Calculator below cover the method.

Keep cost-of-goods separate from overhead for taxes. Meal prep income goes on Schedule C (sole prop) or the equivalent, and quarterly estimated taxes are generally required if you expect to owe $1,000+ for the year. Keep ingredient and packaging costs (cost of goods) separate from kitchen rent, insurance, and platform fees (operating expenses) so the breakdown takes minutes at tax time. Open a separate business checking account on day one. The production and costing tools below are built for exactly this kind of food-business tracking.