Start a pasta business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your pasta business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a pasta business?
The startup costs for a pasta business run between $10,000 and $50,000. These funds go toward ingredients, packaging supplies, and pasta-making equipment. At a minimum, the following equipment is required:
- Work table
- Pasta dryer (multi-shelf)
- Sink and stove
It’s possible to start with just this equipment, although only limited types of pasta can be made with this list. Business owners who have additional funds available may alsowant to get the following:
- Automatic ravioli maker
- Gnocchi maker
- Molding pasta machine (for agnolotti and cappelletti)
- Cutter attachment (for short pasta)
Business owners can reduce their startup costs by purchasing used equipment and renting kitchen space.
What are the ongoing expenses for a pasta business?
The ongoing expenses for a pasta business include rent and utilities, as well as ingredient and shipping/delivery costs. Businesses with employees must also pay those employees’ salaries.
Who is the target market?
The target market for a pasta business tends to be foodies who have some discretionary income. Because fresh pasta commands a higher price than dry pasta, the people who buy it usually appreciate good food and are at least somewhat affluent.
How does a pasta business make money?
Pasta businesses make money by selling pasta. Noodles are typically sold by weight, and they may be sold to retail or wholesale customers.
How much can you charge customers?
How much profit can a pasta business make?
RP’s Pasta Company produces between 2,000 and 2,500 pounds of pasta a day. Even if all of this were plain fresh pasta, it could bring in between $7,500 and $9,375 in retail sales each day.
How can you make your business more profitable?
After a pasta business offers a variety of pastas, the next natural area to branch into is sauces. Pasta sauces can be sold separately from pastas, or they can be packaged together for easy dinner kits and gift baskets.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Pasta Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your pasta business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a pasta business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A pasta business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a pasta business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your pasta business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a pasta business
When marketing a pasta business, business owners should shy away from grocery stores and supermarkets. The dry pasta sold at these locations is too cheap to compete with, especially when people are worried about their grocery budget and just looking for a quick dinner.
Instead, business owners can sell their pastas at niche food stores, farmers markets, craft fairs and foodie events. People who shop at these locations are frequently willing to pay more for a premium product.
How to keep customers coming back
Pasta businesses can set themselves apart from the competition by making organic, gluten-free, stuffed or other unique pastas. These types of products can be offered when a business launches, or they can be added as a business grows.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Pasta Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Anyone who likes cooking and is able to connect with people may enjoy running a pasta business. A passion for cooking will help business owners get through the many days that they spend at the stove making pasta, and having people skills will make it easy for business owners to share their enthusiasm for pasta with others.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a pasta business?
A typical day at a pasta business may be spent in the kitchen or out selling.
When in the kitchen, business owners spend a lot of time prepping ingredients, actually making the pasta, and packaging it. They must, of course, clean up once finished.
When out selling, business owners spend a lot of time talking with other people about pasta. Fresh pasta typically sells for more than commercial pasta does, so it’s necessary to educate customers on why this type of pasta is worth the added cost.
What are some skills and experiences that will help you build a successful pasta business?
In order to successfully grow a pasta business, business owners must know how to make delicious pasta. Those who don’t already have a famed family recipe can learn how to make pasta by working at another pasta business, taking a pasta making class, and/or reading books on the subject.
There are pasta making courses throughout the world, including in New York City, San Francisco and (of course) Italy. Because pasta making is a hands-on process, online courses aren’t a very effective way to learn the techniques involved.
A few popular books on making pasta include Mastering Pasta, Making Artisan Pasta, and Flour + Water. These can be especially helpful when read after taking a course or if business owners have a mentor who can answer questions that arise while reading.
What is the growth potential for a pasta business?
A fresh pasta business may remain a small operation run by just the business owner, or it can grow to become a large company. For example, Fresh Pasta Delights is a business in Dallas-Fort Worth that has been operating for more than 30 years and continues to primarily serve the metroplex area. In contrast, RP’s Pasta Company has been in business about a decade less but sells throughout North America.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a pasta business?
Business owners can sometimes both reduce their upfront expenses and jump-start their business by forming a joint venture with an Italian restaurant owner who doesn’t already have their own line of pasta. Such an arrangement has benefits for both parties.
Restaurant owners benefit from having high-quality pasta that they can purchase at cost to use in their eatery’s dishes. They can also sell the pasta on-site for additional revenue, and they may receive some compensation from sales completed elsewhere.
Pasta business owners can split the startup costs with someone else and can use the restaurant's kitchen during non-peak hours to make pasta. Marketing the pasta under the restaurant’s name also instantly boosts the brand.
How and when to build a team
Most pasta business owners start out working by themselves, bringing on employees as the workload requires and profits allow. Peter Robinson of RP’s Pasta Company hired a president to help grow the company about 15 years after starting out.