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Are you thinking about starting a business selling baked goods from home? If so, it is important to understand that the process involves more than just whipping up a batch of cookies and taking orders from customers over the internet.
Selling homemade food online is possible, but you need to be aware of all the different legal restrictions for your state. Most areas have strict cottage food laws, making it super important to know which ones pertain to where you live.
In fact, some states specifically restrict selling baked goods online, but allow you to create products for farmer’s markets and events. The same goes for other items like jams, jellies, popcorn, snacks, breads, and more.
Those interested in starting this type of business should thoroughly research the cottage food sales process and how certain guidelines affect what you can and cannot sell online. For example, before you look into the best food products to sell online, you should find a list of permitted cottage foods for your region.
What if you don’t qualify for sales under a cottage food law? Then you might have to get a commercial license, which has many more requirements and upfront costs. For a lot of entrepreneurs starting this type of business, that can be very difficult to do.
But, the truth is that most people who are just starting out can still operate under basic cottage food laws in many states. Thus, it is important to see if you meet the guidelines as someone who can sell food prepared at home before taking all of those additional steps.
In this guide, we’ll cover the rules on selling food from home and what you need to know about cottage food laws in various states before starting your business.
If you’re looking for more information on how to make money selling food from home, you’ll be happy to know that this section is where we’re going to break it down. In fact, we’ll cover a answers to a few questions including:
Generally, the first place to check when researching how to make money selling food from home is your local health department website. Often, they’ll have a list of items necessary to start this type of business. In some cases, they might even have a downloadable brochure that helps you determine whether you need additional permits in your state.
Cottage food laws vary widely from one state to the next. While some require a specific permit for selling food from home, others do not as long as your income is under a specific benchmark each year.
Since individual state lawmakers are the ones that govern how to get a license to sell food, they often listen to those in their local area to make the laws. The good news is that a public push for better cottage food laws is creating change in a lot of regions that either had poor guidelines before or did not allow sales of homemade foods at all.
That said, most laws today are still pretty strict. In some regions, homemade chefs are allowed to sell only at farmer’s markets or select locations. Others allow for wholesaling, shipping within state lines, and the ability to deliver directly to customers.
Why are there cottage food laws in the first place? Keeping the health and safety of the general public in mind is a huge concern for a lot of local governments. When kitchens aren’t inspected or they do not require certain labeling guidelines, then it is possible for people to become ill or have a negative experience consuming these types of products.
In turn, the happy medium is generally some form of a cottage food sales permit. Whether you need a kitchen inspection, food handler’s license, or if there’s no need for anything really depends on what state you live in and any changes they’ve made over the last few years to these rules.
Most states have some sort of cottage food law on the books. The problem with understanding the process is that the industry is constantly changing and guidelines are created by those in the state legislature. Some are much more strict, while others are very lax.
When deciding to start an online food business, make sure you’re checking to see what the guidelines are where you live. Certain ones only allow you to cook from your own kitchen and do not allow for online sales. Others don’t mind online sales, but you have to deliver the items in person to the customer. Likewise, others simply have no restrictions whatsoever on cottage food sales.
Here are a few important guidelines to take note of in regards to cottage food law in certain states.
If you’re looking to sell food from home in California, you might have a few questions including:
As you might expect from the Golden State, there are quite a few regulations in place for cottage food businesses. In this area, there is a Class A and Class B system based on the type of food sold and how the individual plans on selling items.
Class A operations are less strict and do not require a home inspection, but have less sales opportunities than Class B.
In fact, the state’s new Cottage Food Amendment goes into effect on January 1, 2021. It allows individuals to ship foods throughout the state and raises the income cap, making California one of the more CFO-friendly states in the nation.
Are there food operations that do not need permits in California? Generally, no. You must have either a Class A or Class B permit to sell home cooked foods.
If you’re researching this type of business, you probably want to know do you need a license to sell baked goods from home in PA? The answer is no. In fact, Pennsylvania has no official cottage food laws on the books.
Instead, certain larger food producers can register as limited food establishments. The cost to do so is $35, a home inspection and business plan are required. While there are certain benefits to doing this, those looking to sell baked goods at community events or online might not need to go this far.
However, it is always a good idea to check with your local health department for final guidance.
Texas is one of the least restrictive states when it comes to cottage food laws. However, annual sales are capped at $50,000 and indirect sales are prohibited. No official license is required, but a food handler’s permit is necessary for anyone who handles ingredients or makes the recipes as part of a homemade food business. Interestingly, Texas is the only state that allows for the sale of frozen vegetables under their official cottage laws.
Sadly, Washington is one of the most difficult states to start a cottage food business. They have incredibly restrictive laws that make it tough for new sellers to start and the overall process can be expensive.
Likewise, they have an annual cap of a mere $25,000 per year. But they do allow for online sales and the ability to ship certain items, though out-of-state selling is still restricted.
So, do you need a license to sell baked goods from home in NY? The answer depends on whether you live in New York City or other parts of the state, as the local city jurisdiction and health department codes differ from the rest of the state.
You might still wonder, can I sell food from my home in NY? Yes, but under some guidelines. To start, chocolate and chocolate-dipped candies are prohibited—which is a rare guideline not present in most other states. Producers must also register with the agricultural department, but there is no annual income cap on sales.
In 2021, Illinois worked to update their food laws. What goes into effect on January 1, 2022 now allows for indirect sales including wholesale and online. Furthermore, the amendment adds a paid registration process and clear guidelines on how to sell homemade baked goods and other items at roadside stands, events, farmers markets, etc.
Are you wondering, do I need a license to sell food from my home in Florida? The truth is that Florida’s laws are actually quite lenient when it comes to selling homemade food. The annual cap before needing a permit is a generous $250,000 and there are no home inspections required. No license is required, but the producer must be the one to directly sell items to the end customer—which limits some online sales and/or restricts wholesale agreements.
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