Jump to content


Welcome to the eG Forums!

These forums are a service of the Society for Culinary Arts & Letters, a 501c3 nonprofit organization dedicated to advancement of the culinary arts. Anyone can read the forums, however if you would like to participate in active discussions please join the Society.

Photo

what are the rules about selling baked goods?


  • Please log in to reply
23 replies to this topic

#1 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 23 February 2006 - 09:51 AM

quite a few people have said to me that they think i should sell my bird cookies and/or would want to buy them.

but i'm not a business, i'm an individual.

i thought i could put together some groupings and offer them through some local shops here in town, as easter baskets (with the bird cookies inside), but what rules govern this? they would be baked in my home oven and decorated in my home.


thanks and cheers for all thoughts --

#2 chezcherie

chezcherie
  • participating member
  • 1,288 posts

Posted 23 February 2006 - 09:53 AM

health department rules vary widely, but most jurisdictions won't allow home-baked goods to be sold. check with your local health dept.
(your bird cookies are gorgeous!)
"Laughter is brightest where food is best."
www.chezcherie.com
Author of The I Love Trader Joe's Cookbook ,The I Love Trader Joe's Party Cookbook and The I Love Trader Joe's Around the World Cookbook

#3 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 23 February 2006 - 09:54 AM

thanks for the swift reply, chezcherie (and thank you very much for the compliment :) ).

cheers --

#4 stscam

stscam
  • participating member
  • 188 posts

Posted 23 February 2006 - 11:20 AM

Here in Montana home bakers can sell to the public if they a) have a license and b) make their goods in a licensed commercial kitchen. It's not so hard to find such kitchens for rent by the hour, and once you have that access, getting a food license is pretty straight forward. Before we bought our bakery we rented a local kitchen for $7-8 per hour and it worked out pretty well.

The State of Montana does not require food vendors who sell at farmers' markets to be licensed, But many individual markets do have that requirement. Still, a farmers' market is a good, low-cost way to introduce your product to the public.

Good luck.

Cheers,
Steve Smith
Glacier Country

#5 devlin

devlin
  • participating member
  • 648 posts
  • Location:Indiana/Kentucky border, Kentucky Derby country

Posted 23 February 2006 - 11:41 AM

As others have noted, it varies state to state. The trend, however, seems to be more regulation in this regard rather than less. Indiana just changed its regulations to include farmer's markets, requiring all baked goods to come from certified kitchens. Unfortunately for all the women who've been baking out of their home kitchens for umpteen years and selling at local eateries and farmer's markets, that doesn't mean they can simply get their home kitchens certified. In fact they can't. A home kitchen can't legally be certified.

A space attached to the house can be certified if it conforms to codes, however, like a garage, for instance, but it has to be outfitted with all the required equipment and so forth. Which is what we're in the process of doing with our own garage.

Call your local health department and talk to the health inspector.

#6 kaneel

kaneel
  • participating member
  • 177 posts
  • Location:Houston

Posted 23 February 2006 - 01:14 PM

It's not so hard to find such kitchens for rent by the hour, and once you have that access, getting a food license is pretty straight forward. Before we bought our bakery we rented a local kitchen for $7-8 per hour and it worked out pretty well.

View Post


Did you call restaurants asking if they rent their kitchen.
I called all the churches i could find in the yellow pages for kitchen rental without any luck.

Thanks

#7 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 23 February 2006 - 01:46 PM

i just got off the phone with my state's health department regulation person.

aside from churches, you might try firehouses.

and many thanks to stscam and devlin re the commercial space and farmers' markets ideas. :)



cheers --

#8 Beanie

Beanie
  • participating member
  • 414 posts
  • Location:Mohawk Valley, upstate NY

Posted 23 February 2006 - 02:13 PM

i just got off the phone with my state's health department regulation person.

aside from churches, you might try firehouses.

and many thanks to stscam and devlin re the commercial space and farmers' markets ideas.  :)



cheers --

View Post


What did the health department say? New York State is surprisingly liberal with respect to farmer's markets and farm stands, clickety here, but strict when it comes to retail stores and wholesalers (which you would be if you sold to local shops.) Where are you located?
Ilene

#9 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 23 February 2006 - 03:13 PM

nj. the health department made a big distinction between wholesale (selling directly to restaurants and bakeries) vs. retail (selling directly to the public).

either way, one needs to rent space in a commercial (licensed) kitchen.

if one is going to be selling wholesale to restaurants, then one also needs some sort of license. one doesn't need that for retail.

a gray area was baking for a church or school or some low-key fundraising event. home kitchen was fine and nothing more was needed.

farmers' markets fell under retail (selling directly to the public) and the gentleman said that they didn't even really monitor the farmers' markets for various reasons (they assemble intermittently, on weekends, might be closed due to inclement weather, etc.).

i asked about the internet, and he said that that was an area they didn't really monitor, it was so big. one could even sell to restaurants and bakeries -- unknowingly -- so it would be hard to monitor.

he said i asked good questions. :)

cheers --

Edited by halloweencat, 23 February 2006 - 03:14 PM.


#10 CanadianBakin'

CanadianBakin'
  • participating member
  • 1,449 posts
  • Location:Mission, BC

Posted 23 February 2006 - 06:01 PM

Another thing you'll need to think about is commercial liability insurance. And if you rent space the landlord can require you to have a considerable amount of insurance. I have found that they really bite you in the bum all the way around when you're trying to do something the right way.
I've been looking into setting up a kitchen in one of my basement bedrooms. Talked to the heath, building and fire inspectors and everyone said it was fine except... I need to have a door that enters directly into the kitchen from the outside so that the health inspector can come once (maybe twice) per year. This door is going to cost $3000!!! It's partly underground so concrete has to be cut and that costs a lot. I haven't decided yet. In the meantime, my largest customer is a private school and they have offered me the use of their Home Ec room for their orders.
Don't wait for extraordinary opportunities. Seize common occasions and make them great. Orison Swett Marden

#11 McAuliflower

McAuliflower
  • participating member
  • 245 posts
  • Location:Portland, OR

Posted 23 February 2006 - 07:59 PM

this is a great thread.

I have a memory of cooking in a high school kitchen so that we could safely serve items in class. Perhaps school kitchens are available for rent to (ahh, but that's assuming schools actually cook these days!).

Sorry if this is already in here... what's a "bake sale" legally.
If I don't want to make a habit of retail selling, its a bake sale?
"A gourmet who thinks of calories is like a tart who looks at her watch." --JB
Brownie Points- Culinary Notebook

#12 alacarte

alacarte
  • participating member
  • 2,234 posts
  • Location:New York

Posted 24 February 2006 - 10:03 AM

i asked about the internet, and he said that that was an area they didn't really monitor, it was so big.  one could even sell to restaurants and bakeries -- unknowingly -- so it would be hard to monitor.

View Post


I always wondered about all the people selling home baked goods via eBay. Does anyone buy that stuff? I cringe and think the FDA and health dept must have nightmares about this stuff.

#13 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 24 February 2006 - 10:40 AM

while i think it's +very+ important for health inspectors to inspect facilities that involve food, i can also think of home kitchens that are very well-kept and from which i would have no qualms regarding the food. but knowing the home kitchen goes along way to trusting its output. i also know of some home kitchens that aren't very well-kept.

cheers --

#14 Truffle Guy

Truffle Guy
  • participating member
  • 196 posts
  • Location:Tampa, Florida

Posted 24 February 2006 - 11:07 AM

quite a few people have said to me that they think i should sell my bird cookies and/or would want to buy them.

but i'm not a business, i'm an individual.

i thought i could put together some groupings and offer them through some local shops here in town, as easter baskets (with the bird cookies inside), but what rules govern this?  they would be baked in my home oven and decorated in my home.


thanks and cheers for all thoughts --

View Post



I'm in a similar situation and would suggest you be careful. It's one thing to do charity events and bake sales where you donate items and yet another when you become a business. I've been taking some chances to help good causes but the liability scares me. I've done about 1000 boxes of artisan chocolates for local fund raisers all for no charge and I typically donate the chocolate. These are alwasy for non-profits and organizations with wealthy patrons so I feel the liability is less. But, I worry about nut allergies which are real concerns but another issue you absolutely have to consider when you sell is the opportunity you allow for unscrupulous individuals to sue you. Everything you own is then on the table to be taken. Get a business license and get insurance before starting to sell anything. If you think doing it right costs too much.....then you probably don't have the business opportunity you think.

Don't rush to "make money". First, test your product and the demand and then try to develop a business plan that others believe will be profitable. It "costs money to make money" and you should really understand if you are in a niche that will make sense financially. You need to "know" you will make money before you "hope" you will make it.

For example, I have donated 200 boxes to a large non-profit fund raiser just to get feedback. These are people who are patrons and donate money, i.e. they "have" money. I just wanted to see how they responded. That was 2 weeks ago, now I have another order for 300 boxes from the same company in 2 weeks. The chocolates were the "hit" of the event in the words of the organizer. I also did the same thing for a local charity when my company asked if I would make the chocolates. In 2 weeks we have raised about $2000 for the charity from my chocolates. 2 nights ago I gave a local upscale wine shop 200 chocolates for a wine-tasting by one of the more prestigious wineries in the U.S. Again, I was told they were the hit of the event and people were hesitant to eat them as they were so "beautiful". Of course all these people wanted to buy them and the cheapest bottle of wine sold that night was $60. The executive chef of the restaurant next door came by to see/taste them and now there may be an opportunity to supply them. Next door on the other side is a high end specialty cook shop (similar to Williams Sonoma) and they also want to buy a case and sell my products. In addition, I have 3 candy stores and one of the most prestigious restaurants in town wanting to buy from me.

So what is the purpose of the last paragraph? I now know that I can be successful and not only that there is a demand but also where that demand is located. How much have I made off all this? ZERO. It "takes money to make money". My advice, don't look to make money yet but rather look to make demand and get feedback. Perfect your skills and know EXACTLY why you will be successful. Who is your customer? How much will they buy? How much will it cost?

While I don't doubt you can sell your products right now. Take a little time to put everything in order. Have a license, have insurance, have a business plan and revenue projections and revenue streams. Who knows you may be the next Mrs. Fields and for most of us that is the dream.....but the reason dreams don't come true is because they are magical and happen without planning or direction. If you have those things then dreams become goals and then accomplishments. Good luck but I'd encourage you to "go big" and be safe doing it with all the proper licensing/insurance.

#15 cocoa-lulu

cocoa-lulu
  • participating member
  • 36 posts

Posted 24 February 2006 - 11:32 AM

You might try photography studios in industrial zones. Some have full kitchens for food stylist. Whether they are health compliant is another issue but they don't have the living quarters problem because of the industrial zoning.

#16 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 24 February 2006 - 11:33 AM

truffle guy, +great+ post, thank you. :)

i would not proceed to sell +anything+ without being an LLC. no way! nothing without insurance and all that.

i have experience with another (non-food) business venture, so i have a good sense of the need to test out a product, aim it at the right customer, mark-up, marketing, etc.

having previous experience with a business is great, because a lot of those experiences and skills are transferrable. however, every product is different. every product has its own vagaries. there are things specific to food products, to cookies, even, that are unto them and them alone. it's great to know that every experience is an opportunity to expand one's knowledge.

i'm pretty phobic about being sued, which is why i haven't contemplated before now anything regarding a food enterprise. but i got such a great response to the bird cookies, i thought i'd explore the idea more.

i congratulate you so very much with the success of your chocolates. i have a really good idea how much work goes in to conceptualizing a product, making it, shopping it around, strategizing, etc. it's +so+ satisfying when it gets a good reception. i hope you make lots of money soon. :)


cheers ---

Edited by halloweencat, 24 February 2006 - 11:34 AM.


#17 devlin

devlin
  • participating member
  • 648 posts
  • Location:Indiana/Kentucky border, Kentucky Derby country

Posted 24 February 2006 - 12:04 PM

while i think it's +very+ important for health inspectors to inspect facilities that involve food, i can also think of home kitchens that are very well-kept and from which i would have no qualms regarding the food.  but knowing the home kitchen goes along way to trusting its output.  i also know of some home kitchens that aren't very well-kept.

cheers --

View Post


As I get older, I'm increasingly wary about buying food from bake sales and the like, and the woman from the local public health department who came by to do a preliminary inspection said although she couldn't say too much specifically, we'd be appalled if we'd seen a lot of the local, domestic kitchens she's inspected over the years. She noted we were doing everything right and she was so intrigued by our space she asked if I'd do a presentation for the local ag extensions once I'm up and running. We were surprised that the actual requirements weren't as demanding as we'd feared, although it surely made a huge difference that we were already building out a separate space with outside access for health inspectors. It's also one reason we bought our house, because it had the best set-up for renovating the space for a certified kitchen.

If you get that far, get somebody from the health department to come look at your place and give you feedback. Find out how you might cut some costs in equipment. I was surprised by how expensive even the used commercial sinks are and it occurred to me I might use washtubs instead. The requirement is a three-basin sink big enough to accommodate your biggest piece of washable equipment, and so I phoned to check, and yes, I can simply use washtubs. A huge savings. Things like that. Nobody said it has to be pretty.

I had to drag my husband kicking and screaming through the whole thing, and have been giving my bread away for about three years now to truly rave reviews. So I know I've got a market, and I've already got clients waiting. It sounds as if you're in a similar situation yourself.

My husband also wanted me to consider renting out existing space, but I knew nobody would have the equipment I wanted to make the sorts of breads I want to buy myself, and I needed a wood-fired, brick oven for that. And I wanted the freedom to be able to use the space whenever I wanted to use it and in the long run I don't want to pay that kind of overhead. Now that we're nearly finished, my husband absolutely loves the whole thing.

Nothing's a sure thing, I think we all know that, but it's gotta make all the difference to have the head start knowing you've got something of a clientele, it seems to me, before investing a lot of money in leasing or building a space. Two local coffee shops opened and closed in the past year. I talked to both of them and was stunned by their business plan which basically boiled down to, "I've always thought it would be fun to open a coffee shop. How hard could it be?"

Famous last words.

#18 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 24 February 2006 - 12:29 PM

i would +love+ to hear about people's experiences with their businesses, both the ones that were successful and the ones that weren't. sometimes the mistakes are more instructive than the right moves, as errors can sting more and longer.

great post, devlin -- and that stuff about the washtubs is astounding. i never thought that would have been a possibility (and might not be, for all areas, but still...). btw...your avatar...arab?

cheers --

#19 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 24 February 2006 - 12:35 PM

another thing about bake sales and the like...

it's not just the cleanliness of the kitchen, but the habits of the cook.

for example, when i'm cooking i tie my hair back when cooking. i also will wash my hands +every time+ if i happen to touch my face/skin. if i have to sneeze, i'll sneeze in another room.

i have seen food handlers wipe the oils off their noses, touch their hair -- a cashier at my local grocery took his finger and gave the inside of his ear a swipe, and licked his fingers as he herded my groceries down the conveyer belt. ugh! i threw out all the exterior packaging i could and washed everything i couldn't. with soap and hot water. +ugh+!

this and other things i've seen make me wary of consuming things made by others, whether in restaraunts or no. thank goodness food handlers now have to wear gloves ('tho the reasoning is ruined if they touch their faces or clothes).


cheers --

#20 andiesenji

andiesenji
  • society donor
  • 9,314 posts
  • Location:Southern California

Posted 24 February 2006 - 02:01 PM

I don't know about other states, but I am intimately familiar with California and in particular, Los Angeles County. Very, very strict.

In 1994 I added onto my house, converting my kitchen into a commercial facility. Because I have dogs, it had to be separated from the rest of the house by what is essentially an "airlock" entrance, that is, two sets of doors with a chamber in between. My contractor was experienced in commercial kitchens so he did whatever was necessary and it was expensive. The exhaust system for the commercial oven and the stovetop had to move a certain amount of air. The walls, ceilings and floors had to conform to the rules, as did the countertops, storage cabinets, water and light fixtures, and so on. It had to be inspected every step of the way, not only by building and safety but also by the healt dept., and since I had a well, the state also had to certify the water.
Jumping through hoops is an inadequate simile, wading through neck-deep mud sounds more accurate.
However it was finally finished and I did get the certification, followed by inspections every three months for the first two years, then every six months.
A year ago I decided not to apply for renewal of the certificate because I no longer do any baking or cooking for sale, because of health reasons (and age).
I also want my kitchen to again be part of the house so I have a little renovation going on at present.
I am also getting rid of the commercial oven - I have a buyer for it who has been after me to sell it to him for quite some time and I seldom use it.

I did enjoy working in my own kitchen but I could easily have continued to rent space in the kitchen at a private church school that had a certified kitchen. They could use the money and I worked in their kitchen in the evening and on some weekends.
I did carry product liability insurance and workers' comp insurance for my helpers and of course had to pay Social Security and Fed, State and local taxes.
I didn't do any retail sales. I did contract baking for a small bakery, a couple of local restaurants and for three caterers whom I have known for many years.
Our arrangements did not include delivery, they all picked up their orders because I would have had to charge quite a bit more for maintaining a delivery vehicle, insuring it and a driver and so on. I couldn't use my vehicle legally because I had dogs that occasionally were transported in it. The rules here are very strict, children may not be transported in any commercial vehicle that transports food products. I know people do it but they can lose their certification as it is clearly spelled out in the rules.

Get a printout of your local laws and rules for caterers, bakers, food processors, etc. Don't take anyone's word for anything, get it in black and white. Don't leave yourself unprotected legally. And just because other people get away with doing something similar, don't expect that you will. There is just too much to lose if something goes wrong.
I formed a corporation, leased the kitchen and the equipment which I personally owned to the corporation, and carried insurance in the name of the corporation. That cost too but it protected my personal assets from any legal action. I never had a problem but I didn't want to take the chance. I also kept meticulous financial records and had a CPA experienced in food service to handle my taxes and such.
I didn't make a fortune, but I did okay, however I had a customer base before I ever began and knew the business. There are a lot of "hidden" expenses that one doesn't think about until they pop up. You have to think about all of this before you get into it, it will save a lot of grief later on.
It is satisfying to produce a product that people rave about and it is possible to be extraordinarily successful, even starting on a shoestring. After all, Mrs. Fields and Martha Stewart began small......

Edited by andiesenji, 24 February 2006 - 02:02 PM.

"There are, it has been said, two types of people in the world. There are those who say: this glass is half full. And then there are those who say: this glass is half empty. The world belongs, however, to those who can look at the glass and say: What's up with this glass? Excuse me? Excuse me? This is my glass? I don't think so. My glass was full! And it was a bigger glass!" Terry Pratchett
My blog:Books,Cooks,Gadgets&Gardening

#21 halloweencat

halloweencat
  • participating member
  • 242 posts

Posted 24 February 2006 - 02:53 PM

i always love reading your posts, andiesenji. you have such a broad range of experiences and lead an interesting life.

thank you very much for contributing to this thread.


cheers --

#22 shaloop

shaloop
  • participating member
  • 237 posts
  • Location:Mississippi Gulf Coast

Posted 24 February 2006 - 04:02 PM

I've been wanting to start a small "Dessert" business for about a year now. I read alot on the subject and became familiar with local and state regulations. I found a small cafe that was going to lease space to me and I began looking for wholesale clients before signing any papers. I took samples and found two clients (coffee shops) who wanted me to begin right away. Several others were interested. The cafe I was to rent from closed due to the owner's personal situation and I have been unable to find another suitable/reasonable location. I produced products for those two clients from my home (until Hurricane Katrina shut them both down.) Since then I haven't pursued it any further as I do want to do things the right way. I have a spare bedroom with an outside door that I would like to turn into a commercial kitchen, but my husband is opposed to his home "being a business." I know I have a good product and response to my product has been very great. (A small sandwich shop just opened nearby that called and asked for my products.) Also, there are NO, I repeat, No dessert cafes, coffee houses, bakeries, wholesale dessert suppliers or any of the like in my area. I feel my research and response from the community indicate it is a viable business, but I don't know how to begin. I've been a stay-at-home mom for the past several years without an income or credit history. My goal is to continue adding to my knowledge and skills, honing my craft, working on my business plan and wait until my youngest is in school (another 1 1/2 years) and go from there. Any thoughts or ideas would be great.

#23 devlin

devlin
  • participating member
  • 648 posts
  • Location:Indiana/Kentucky border, Kentucky Derby country

Posted 25 February 2006 - 11:46 AM

The requirements for certification here seem nearly identical to those andiesenji outlines for California. We've put in water, we've bought the required countertops, have the appropriate storage and work space, are currently installing the required lighting, and have painted the walls according to code. It sounded like a lot on paper, but when you've got the empty space just sitting there waiting to be fleshed out, especially if it's for a product like mine which is pretty simple compared to the requirements for a full kitchen, then it's a whole nother ballgame.

Up until last year or so, the regulations also called for that intermediary sort of "airlock" space andiesenji notes, but they relaxed that in the new regs. Fortunately, should that change, we actually already have a space that would conform, simply requiring the addition of a door. We'd looked at a lot of houses before this, were planning to build our own, and then when we walked through I knew in an instant the space was perfect. In other houses, we'd have had a whole lot of hurdles to jump.

Halloween, about the avatar. Peruvian Paso. Click on my name and you'll also see my Arab/Paso Fino baby boy from my Paso Fino mare.... It's a long story. :biggrin:

Edited by devlin, 25 February 2006 - 11:47 AM.


#24 K8memphis

K8memphis
  • participating member
  • 2,464 posts
  • Location:memphis tn

Posted 25 February 2006 - 04:00 PM

In Tennessee, or rather here in Shelby County, you have to have commercially zoned property. You can spend several thousand dollars applying for a zoning variance but none has ever been granted. I mean the residential to commercial zoning change for the purpose of doing baked goods, ie wedding cakes, legally. A $3000 door would be a freaking bluelight special, bargain basement priced no problem-o.

Hence, the tea-room...