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It took many years of advocacy work to allow home kitchens to become a safe hub for home-cooked meals that are served in their communities, but in the summer of 2021, Alameda county was the second county in California allow Micro Enterprise Home Kitchen Operations (MEHKOs) since they were legalized at the state level in 2019.
The idea around this work was to level the playing field by creating a pathway to generating income for food passionate individuals who would not otherwise be able to afford to legally serve the food that they would like to bring forward.
My Oakland soup company, Purpose & Hope, was one of the first businesses that signed up to operate with this permit. The experience of operating Purpose & Hope as a MEHKO has come with a lot of highs and lows that are worth sharing for those interested in an inside look at this business model.
Many MEHKOs operated in the shadows
Oakland soup company Purpose & Hope wants to comfort and nourish the East Bay
The inspiration behind my service was when my mom was diagnosed with cancer in 2006. At the time, I was not consciously aware of how broken our food system is and had not seen first hand how this was amplified in the medical care my mother received. It was through this experience that I realized how the act of providing someone with thoughtful, nutritious food could be a source of empowerment and hope for the receiver. When my mom passed, I felt this was the most meaningful way to give back and make an impact for the kindness and deepened sense connection with the oncology community that imprinted itself through that experience.
Although I felt a genuine pull towards this work, the hard numbers and logistics were a terrifying reality that scared me away from this idea for many years. But it was always a thorn in my mind, and I was afraid to leave this world with the regret of never honoring my mother. I knew that this work was absolutely worthy of being born.
So I took the initiative to write a business plan with the help of Renaissance Entrepreneurship Center in San Francisco and took Holistic Nutrition classes at Bauman College. In 2018, I met my mentor, Ali Jelveh, who encouraged me to find a minimal way to start my business, and I met Susie Wyshak, who informed me about AB626, a possible new state law that might allow me to legally operate without the massive costs of a traditional food operation. But even when it passed, it was still up to individual counties to allow home cook permitting to move forward.
When I fist launched my business, it was during the dark pits of COVID in January 2021. The local status of a MEHKO law seemed promising, but was still unknown. I had the support of my community behind me and had my first client referred by a friend. So I thought, it’s now or never. Like most small food businesses, I didn’t have a large investment backing me, I just took a leap.
I was lucky enough to have a small group of medical professionals who referred my service to a handful of their patients, and that got me started. Although I was grateful for this support, there was still a sense of shame, and a need to be invisible, in order to avoid being discovered and shut down. The limitation made outreach and my own feelings about what I was doing uncomfortable and stressful, but the feedback from the people I was serving was beyond encouraging. So when Alameda county voted to allow permitting for businesses like mine that summer, I was eager to legalize my service and dedicate myself to being of service in this way.
MEHKO owners face challenges (if they follow the rules)
Suddenly, I was able to make sure that people in our community could discover our service, which I think is one of the greatest challenges for MEHKOs to gain traction. Since the idea of sourcing your dinner like you would an Airbnb was new, normalizing and encouraging demand for this kind of service takes the willingness and engagement of the community to make a micro business successful.
Another real world limitation of MEHKO is its $50,000 limit on a business’s gross earnings. If you are lucky enough to build a client base that will support you to reach that level of income, you have all of the costs, labor and taxes chipping away at that number.
That makes the overall, take home income a fraction of the amount of sweat equity you must invest to bring your grandma’s secret tikka masala recipe to the community you love, or to offer your food in a competitively priced way.
With the average food business profit margin at 5-10%, it’s no wonder that over half of the East Bay businesses that attempted to operate as a permitted MEHKO went another direction, as the SF Chronicle reported last month. The money the business is allowed to generate cannot possibly replace the income you would earn at a tech job, or even from working at an established restaurant.
Another lesser-known restriction is that the Alameda county health department is required to approve any menu changes. That makes staying fluid and creative in your offerings much more complicated than someone who can afford to operate out of a brick and mortar or commercial kitchen. Being able to express creativity and seasonality is what keeps your clients engaged and interested in what you are doing, but the rules as they stand now make that very difficult.
After you do all the shopping, prep and cooking, people can either come by to pick their order up from your home, you can host their dining experience at your place or you, yourself must deliver it to your customer’s residence. The rules as they stand now restrict us from other distribution methods, another requirement that could use careful reconsideration to help keep MEHKO businesses open for the long term.
Are MEHKOs even worth the effort?
Given all this, you might be wondering why any of us even attempt this kind of service. But like anyone who bootstraps a meaningful business, the personal connection and letters I have received from people in our community has fulfilled me and the intention of the work a thousand times over. When someone writes to me and shares that they are ordering for themselves or a friend because they are going through chemo, recovering from surgery, had a baby, are healing from COVID or are working on their health, it makes the exchange feel like I am doing my part to work against the machine that keeps a great portion of our population in dis-ease.
Being permitted with MEHKO has given me the permission to embrace the opportunity of entrepreneurship through building relations with vendors who I admire, and also share my journey as a way to encourage others. I’ve been able to invest my heart, creativity and intuition into starting a small business, and this pursuit has evolved me from who I previously was. I feel more capable now and can call myself a business owner without feeling like a fraud.
What I feel most proud of is being able to use my business as a vehicle to engage my desire to create equity through our Soup Sponsor program. With the support of our community members and donors, we have donated over 400 of our soups to the Charlotte Maxwell Clinic and the Women’s Cancer Resource Center, which has been the most gratifying part of the work.
This journey has not been easy. In order to keep Purpose ‡ Hope alive, I work two jobs to keep my bills paid and the business going. I know that the future of my business is uncertain, but I have dreams of implementing aspects of social justice in my operation by — someday — employing people who have barriers to employment, such as those who have been unhoused. That makes the current sacrifices feel like the vision is worth inching towards day by day.
I see food as a way for us to tell a story about who we are, where we come from and how we care about one another. MEHKOs are a way to give someone the keys to exploration in an industry that would otherwise make it impossible for the average person to tell their story, to share their gift and experience the risk and work it takes to serve someone they don’t know a delicious meal. Most importantly, it takes a community that is aware of their work and is willing to support them in a way that allows them to become successful in what they do.
Nancy Change is the owner of Purpose & Hope, an Oakland-based Micro Enterprise Home Kitchen Operation (MEHKO). This article is her opinion, and does not reflect the opinions of Cityside or East Bay Nosh.
Featured image: Ingredients for soup from Nancy Chang’s kitchen. Credit: Anna Mindess