In the past couple of years, there have been lots of talks, discussions, articles, blogs websites and books dealing with Cottage Food Laws and how to start a Cottage Food Business. With that said, I’m assuming that most everyone is familiar with Cottage Food Laws, what they represent and how they work. But, just in case you haven’t been keeping up, here’s a brief description:
Cottage Food Laws (sometimes referred to as Home-Food Processing Rules, Cottage Food Rules or Baker’s Bills) govern baking/food preparation businesses that are operated from the home kitchen. Cottage Food Laws allow a person to legally bake and prepare non-potentially hazardous foods from their personal kitchens and sell them on a small scale, generally directly to consumers and farmer’s markets. In a few states sales are allowed to businesses like restaurants, grocery stores, coffee shops, etc.
Cottage food kitchens have not been approved in all states. Currently there are 26 states with Cottage Food Laws, 9 states with very restricted Home-Food Processing Rules, 3 states with Pending Legislation, 7 states with Petitions for laws and 5 states that have no Cottage Food Laws or initiatives. In the states where laws have been approved, the rules and regulations vary. They can be restrictive and limiting.
So, before you start to gather baking ingredients, utensils, supplies and put the word out that you’re starting a home-baking business, here are a few very important things worth noting, considering and checking in to:
- a) Most cottage food states have an approval process which includes business license and/or permits. If you’re not approved, you’re not legally in business.
- b)Not all types of foods are allowed to be processed in your cottage food business. It’s important to check the list for your state. The item(s) that you plan to make and sell might not meet approval.
- c)Typically, you are not allowed to sell products online (via the internet) or sell outside of your state.
- d)In most states, sales are limited to consumers/individuals. Meaning…No sales to restaurants, coffee shops, stores or any other establishment that will resell the products.
- e)In most states there is a limit/cap on the dollar amount you can make per year.
- f)Last but not least…It is very important that you create a plan that outlines your vision/goals for the business and how you plan to operate the business. Your plan does not have to be lengthy or formal. Only if you’re planning to approach a lender for start-up funds does it need to be formal.
To make sure you’re on the right track: don’t work from assumptions, find out where your state is in the mix, do the necessary research and planning. Remember: Cottage Foods Laws and Regulations vary from state-to-state.
Interested in finding out the Cottage-Law-Status of your state?
Click here Cottage Food States
Oklahoma passed their baking law in April of this year and it goes into effect November 1, 2013. It is house bill 1094. No licensing, no health inspections. A person sets up their business gets a FEIN #, pays their taxes monthly. You can sell from your home to friends, neighbors, family members, businesses, churches, schools, farm markets, bake sales. There are two things that cannot be sold and that is meat and fresh fruit. Frozen fruit can be sold, things that are health inspected. There are misconceptions on what is allowed, contact Dustin Roberts office in Oklahoma City, contact your small business development. A person can make $20,000.00 a year. If there are any questions, please e-mail me at email@example.com
Thanks Mary Jane!
That is good to know.