Baking from Home – a New Way to Start a Home Based Business

Bake From HomePassing 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.

 

Cottage Law Food 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.

 

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  • Kathy Sullivan

    Hello, am looking to make whoopie pies to help fund a pony rescue. I can make the whoopie pies and have noticed others making cookies etc… And selling them at local markets. I myself have a farm and also plan on opening my own farm stand, so I could sell them on my own from my house and farm stand. Is there decent money to be made?

    • doughraisingmom

      Hi Kathy,
      Thanks for your question.I will give you my best effort to try and answer. One of the things that I would advise you to look at closely is the total cost of what it will take to make the whoopie pies including all the packaging and labeling. Too many people don’t really include the total costs to decide if
      it is profitable.

      That said can it be profitable, well, I have not made whoopie pies, but the cinnamon rolls were hugely popular when we did fund raising with them. There was a lot of money made, but the key was having a market ready to buy them. We sold at churches and schools because we were helping youth groups. It might be possible to consider that angle.

      One if the keys is market you can sell to. If you are selling at your farm stand it can compliment the money you make with the other items you are selling. You would not have expensive overhead, so as long as the laws let you sell your items from your stand, it sure can’t hurt to give it a try. You might use social media and whatever means you have to get the word out about your pies. I hope that helps a bit. Feel free to contact me if you have any more questions. Good luck with your business. Have a wonderful week.

      Blessings,
      Grace

  • Lyndy

    I am michigan a resident and a stay at home mom I want to bake cookies and cakes for the public I don’t fully understand all the laws because the internet is how everyone advertises everything nowadays it says no selling on the internet does that man I can’t advertise and create orders online if its a pick up the product only kind of deal and I just need all the information possible for starting one up. I love baking and decorating cakes and my husband is tired of eating them all I bake at least 4 a week and they do get wasted because its too much cakd for my family of 4 when my two children are only 16 months old and 2 months old lol. Also I have to store the food in a garage or basement? Can’t I put another fridge in my kitchen area? Or even in my laundry room if I have to? I know I have a lot of questions I just want to cover all my bases before starting this up and I could use all the help and encouragement possible. Thanks for your time.
    Lyndy

  • Ika

    You’re so inspiring to me. I can’t imagine how you’ve been loved by so many children and how they have encouraged you to start your home business so that you can always be with your them..

  • Sadly, Alaska isn’t one of the states that has this law, but you can rent the kitchen from the Cooperative Extension for $10/hour.  It would do to at least test the market.  

    • Davette,
      You are right, at least you have the opportunity to use the extension kitchen. Those are not available everywhere. I would encourage you to write your representatives and ask them to consider
      adding Cottage food laws to the books of your state. At this time the majority of the country is adding those laws. As a matter of fact, you have inspired a new post for my blog. I am going to write more about things you can do to get the laws changed.

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