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How to Build a Home-Based Food Business That Succeeds

Do you need a license to sell baked foods from home? This is the question posed by home bakers across the country whenever the subject of cottage foods comes up. The state of Maryland defines a cottage food business as one that sells non-potentially hazardous baked or prepared foods from a residential kitchen that nets less than $25,000 annually. A non-potentially hazardous food is one unlikely to grow harmful bacteria or micro-organisms at room temperature. In Maryland, cottage food producers do not need a license.

Currently, every state permits cottage foods, which helps explain the popularity of this $20 billion industry. Last to join the wave was New Jersey, which made the home-based food business legal near the end of 2021. This gave amateur chocolatiers, bakers, and other at-home food producers throughout the nation the green light to earn money doing what they love best -- creating luscious treats to sell to friends, neighbors, and online clientele.

More About Selling Home-Cooked Food to the Public

Before you begin selling food online or in-person, it's good to know which types of foods fall under the cottage food umbrella:

This means you can't whip up dishes that include ingredients such as fish, cooked vegetables, egg-based custards, or raw cocoa in your home kitchen and sell them for profit. And in some states, you can't sell items such as homemade fudge or sugar-free jellies and jams, either. It's important to know that guidelines for selling homemade food online or in-person varies according to the state in which you live. So, before you set up your home kitchen for profit, check with your state's Department of Health or Department of Agriculture and read the rules on selling food from home.

Do You Need a License or Permit to Sell Food From Home?

Is there a penalty for selling food without a permit? Many states do not require a special permit or license to operate a cottage food industry. Other states have stricter requirements. In Alabama, for instance, operators must complete an ANSI-accredited (American National Standards Institute) food safety training course and then apply to their county health department for a certificate to become the legal owner/operator of a cottage food business. This certificate has an expiration date, and operators are required to renew their certification regularly.

Aside from certification or licensing, you may be required to label every item that's produced in your home kitchen. A label should include the name and contact information of your business and a complete list of the ingredients used. It should include allergy information as well as net weight/volume. Your label should also clearly state that your kitchen has not been inspected by a regulatory agency.

Other factors to consider include where and how you plan to sell your items. Some states have separate regulations pertaining to farmer's markets, mobile food vans, or home-based store fronts. You may be prohibited from selling to restaurants, as well. The only way to ensure that you're doing everything necessary to sell cottage foods legally in your state is to familiarize yourself with all the rules and regulations available at your local health department or Department of Public Safety.

What About Selling Cottage Foods Online?

Are you interested in selling homemade food online? In many states, the requirements for selling online are the same as selling in person. But to be certain, you'll need to check your local food laws. Next, you may want to find an app for selling home-cooked food. Apps such as Castiron, Square, and Shopify can help. You might also consider selling your cottage foods through social media channels such as Facebook or Instagram.

Obviously, the first rule of running a cottage food business is to ensure the treats you produce are safe, fresh, and palatable. This means no pets in the kitchen at any time. It means using the freshest ingredients possible and delivering your baked goods in a timely way. It means ensuring your kitchen is spotlessly clean and sanitary at all times. It also means adhering to the legal requirements in your state.

Know what you can and can't sell. Put safeguards in place where delivery or pickup are involved. Make sure items are well-packaged and that they arrive at their destinations promptly. If you do these things, there's every reason to expect your home-based cottage food business to flourish.

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