Passing a Cottage Food Law in your state opens the door to a home baking business. So exactly what would that mean to you if you are someone who has always wanted to make some income selling your baked goods. Well, a lot of years ago, that was exactly what I wanted to do. When I inquired about doing that, I ran into a brick wall.
I was a stay at home mom who just wanted to be able to generate some income from home to supplement my families income. I was a pretty good baker, and I enjoyed making homemade food, especially baked products. I often had friends and family suggest that I take my culinary expertise and bake for others. That was exactly what I wanted to do. The problem I ran into was not having a commercial kitchen. Believe me, lots of people encouraged me to open a restaurant or bakery. The thing of it was, I wanted to be a stay at home mom. We also did not have the cash to make the huge investment of a commercial retail bakery.
Cottage Food Laws are Changing Restrictions on Home Baking Businesses
With the passage of the new laws in many states, it is now legal to start baking some foods to sell to the public. It is really important to understand what the regulations and restrictions are however. I have been doing a lot of research about those laws, and there similarities and differences in each state. In the coming blogs I will try and give you some specific information I found about the different states that have the laws in place. I listed the states that have Cottage Food Laws in a past blog. I am going to start with the state of Michigan and look at the law there.
A Home Baking Business is a Common Sense Start
Michigan has taken a look at the potential risk to the public posed by a cake that is baked in someone’s home kitchen. The level is very low.
Under the Cottage Food Law, non-potentially hazardous foods
that do not require time and/or temperature control for safety can be
produced in a home kitchen(the kitchen of the person’s primary domestic
residence) for direct sale to customers at farmers markets, farm markets,
roadside stands or other direct markets. The products can’t be sold to
retail stores; restaurants; over the Internet; by mail order; or to
wholesalers, brokers or other food distributors who resell foods.
Baking from Home Requirements.
To be sure, there are requirements to be able to operate your new small business under the Cottage laws. You will have to make a trip to the local licensing and regulatory affairs office to find out the require permits you may need. You should determine the business structure you want to operate under. You may have to find out if you are required to charge your customers sales tax and how to then pay those sales taxes to your state. You will have to label you foods. It doesn’t have to be fancy, it can even be hand written, but it has to contain certain information. Here is an example of what may be required on a label.
The Cottage Law is not the answer for everyone because some foods are not included in the exemptions the law covers. Earnings are also limited to $15,000 per year. The benefit of the law is that it provides a great opportunity for those who have thought about opening a baking business, but have not had the resources to do so.
Now small scale food producers can “test the waters” to see if a baking business is going to be a good fit for their needs. If it is a good fit, the money you can earn can be saved to make it possible for you to expand into a larger operation without putting your family home at risk if you have to borrow money to start your business. I never advise using OPM (industry speak for other peoples money). That just sends shivers up my spine. Take a word from the wise, start small, grow as you can afford it.
Do You Want to Bake From Home?
If you are starting to get excited about the prospects of making profits from you kitchen. I would love to invite you to join my free mini coaching calls. They are really informal, actually just brainstorming with each other for a half hour each week. I would love to help you get started. Who would benefit from these calls?
- Stay at Home Moms
- Baby Boomers
- People who Love to Bake
- People who Need Extra Cash
- Solopreneurs
- Entrepreneurs wanting a home based business
I would love to chat right here too, if you would leave a comment by clicking on the “comments” at the top right hand corner, I will be sure and respond.
