First check to see if you live in a state that has a Cottage Food Law that will allow you to bake from home for profit. If you do not consider using an incubator kitchen or shared use kitchen. Then...
Determine what type of product
your community not only wants but needs. Pay attention to what is missing in
the marketplace. Have you heard of anyone complaining about a lack of this or
that? Is there a new product idea that could fill this need?
Do a bit of product
research to find out if your new product idea has been tried already? Check
around at local bakeries, farmers markets and other locations where homemade
baked goods are sold.
When you have a solid new product
idea, locate or create a recipe that produces a superior product.
Now it's time to create a sample product and
offer samples to the public. You may also want to design packaging and a label
and take a photograph of your product.
your new product and have the public, family and friends share their opinion of
the product in its entirety e.g. flavor, texture, color, taste, package appeal etc.
you've properly designed your new product, it's time start the marketing
process and decide how you will take your product from kitchen to market.
Choose a legal
structure for your business
You may or may not need
legal assistance to create the legal structure of your business; however you
must decide if your will be one of the following:
- Sole Proprietorships - Doing Business As (DBA)
- Partnership - Doing Business As (DBA)
- LLC (Limited Liability Corporation)
- INC (Incorporated)
You may contact your
city/state/county legal aid society to obtain assistance in setting up your
business structure or contact your local Small Business Administration office.
Additional assistance may
be obtained from:
- Local legal clinics
- State Bar Associations
- State or Local Business Service Organizations
- Legal Help.org http://www.lawhelp.org/
The IRS (Federal Taxes)
provides a detailed website address your small business tax questions. http://www.irs.gov/businesses/small/article/0,,id=99336,00.html
Telephone Assistance for
Hours of Operation: Monday
– Friday, 7:00 a.m. – 10:00 p.m. your local time (Alaska & Hawaii follow
Contact your state and local
tax authorities to learn about small business tax responsibilities.
Liability insurance for
your business and product is essential. You need to be honest with your
insurance agent and disclose exactly what type of food products you will
- General Liability Insurance
- Personal Injury Insurance
- Worker's Compensation and Disability
- Products Insurance and any other coverage that
addresses the production of your products and services, including any
coverage needed to operate in a kitchen incubator facility or sell at a
Annual Premiums for food-product
liability insurance coverage may range from $300-up and the following may
impact your insurance premium:
- Level of gross sales
- Level of coverage
- Type of market
(Specialty, Retail, Wholesale)
- Type of product
- Recall plan (if applicable)
D. Denay Davis