In many states, the proliferation of cottage food laws over the last five years has made it very easy to run a home-based cake business.You can find out about your state's regulations by searching online or contacting the Department of Health and Agriculture in your area.Our sister site, TexasCottageFoodLaw.com, has an interactive map with links to each state's home food processing requirements.Cottage food laws allow food entrepreneurs to sell their products from home without having to invest tens or even hundreds of thousands of dollars into a commercial kitchen.Not all cottage food laws are created equal.It is important to know what the rules are in your state and the restrictions that apply before you start selling.Decide what you want to sell after you have verified that it is legal for you to work from home.Check and double-check to make sure that the state laws allow you to sell your product from home.The majority of cottage food laws prohibit the sale of potentially hazardous foods, i.e., food that needs refrigeration.It's a way to eliminate perennial favorites such as cheesecake, tres leches, tamales, and tiramisu.Start your business with a legal product.
Business Plan
Create a business strategy.This is a step that everyone wants to skip and go straight to baking. But it's really important.How much did it cost to produce your product, and how much are you going to sell it for?Where will you sell your product?How will you promote yourself?Does your product have a market in your region?What level of competition can you expect?What is the price and quality of your competitors' products compared to yours?How long will it be before you start making a profit?Your business plan can tell you if your business will be viable.Creating a business plan is better than banging your head against the wall for months and wondering why your company doesn't work.Set your prices correctly right from the start.Start at the right price. It's much easier to get your customers on board when you raise your prices than it is to lower your costs and then ask them to understand.Do you prefer to make ten cakes for $20 or one for $200?Do more with less.CakeBoss can help you know your costs and how to set prices.Check out our list of Cake Business Mistakes. It would be best if you read it now.You are in charge of your own business.You can still provide exceptional customer service and adhere to your business policy.Do not flutter around like a fly in the wind.You are the captain of your ship.Don't allow your business to run you.You may find that a home-based business is overwhelming because you are always working.Don't worry if your voicemail goes unanswered or if your email is not answered until tomorrow.If you work every minute of the day, you will quickly burn out.
Food Safety
You may be required to take a course in food handling or management by your state's cottage foods law.Your business could be destroyed if you cause someone to get sick.It's not difficult to ensure food safety, but you need to be diligent in the kitchen.Even if it's not required in your state, we recommend that you keep your children and pets out of the kitchen when you are preparing food.
Taxes, legal issues, and other legal concerns
Consult your state controller to determine if the product you are selling is subject to sales taxes and whether or not a permit is required to charge sales tax.It's not fun to pay back taxes by way of fines and fees.Start on the right foot.Choose a name for your business and register it with the county as a DBA.You can be sure that your business name will not be used by anyone else in your area and that it is yours alone.You may also want to search for a national level to ensure that the name you are using is not trademarked or in use elsewhere.It can be difficult to navigate the trademark world, so it is best to consult an attorney who specializes in this area.Talk to a tax or lawyer about the best way to structure your company, whether you choose a Sole Proprietorship, LLC, LLC, or another entity.Setting up a business helps you protect yourself from business liabilities.You can also get liability insurance for your home baking business, which costs around $500 per annum.You can also contact your home insurance agent and ask if they offer a policy.
Marketing and Networking
Create a website and a Facebook page to market your business.Facebook marketing can be done for free or at least inexpensively.It is impossible to overstate the importance of having a professionally designed website with the correct keywords.All of this is important, but it cannot replace good word-of-mouth.A successful cake at an occasion can launch your business.You can order inexpensive business cards for new businesses from sites like Vistaprint and Zazzle.Never go without a business card!Network, network, network.Join your local baking club to meet colleagues.You never know when an emergency might arise, and you'll need someone to help with your work for a while.Cake clubs can also be a great way to learn new techniques and improve your craft.
