With so many of us relying on what we have in our homes to make a little income, it's no wonder that there are questions surrounding selling homemade goods. I got a few questions in my email regarding my recent DIY posts, and asking that I write about setting up a food business. I have to preface this article by saying that I am NOT qualified to give legal advice, and if you're truly interested in starting such a business, you should consult with a legal professional to make certain you are within your state's requirements. The real truth is, you can absolutely set up a home business selling food you make at home, but it depends on which state you live in, as every single one has its own special set of laws and regulations surrounding this type of business.
The type of small business that sells food produced at home is subject to what are colloquially known as "cottage food laws." As I said, every state has its own set of laws in this vein, so it's important to review them thoroughly before attempting to sell any food you made. I'll review some common restrictions, and suggest where you might find more specific information pertaining to your state.
1. What Can I Sell?
It would be impossible to list every allowed item, but typically you just need to avoid "potentially hazardous" foods. A good rule of thumb is to avoid any food that requires refrigeration, or contains significant moisture. In general, you're probably safe to sell dry mixes and seasonings, breads, cookies, nuts, granola, and popcorn. Some states will allow preserved food such as pickles, jams, and jellies, or even food produced by a canning process, but usually have special requirements for this, such as a license, training program, or producing in a licensed and inspected kitchen. I really can't stress enough that you should check with your local health and agriculture departments for the specific guidelines of your state.
2. To Whom Can I Sell?
Typically, you'll only be allowed to sell to individual people, not businesses. That means that you can't usually sell to local stores or restaurants. Farmer's markets are a good place to sell your goods, but some states require that you sell only out of your own home, especially for specific items. Unfortunately, you can't usually sell online, either: this might violate rules about selling across state lines, and entering even murkier territory legally. As a rule, once you've determined what you want to sell that's within your state's guidelines, look up a local farmer's market and rent a booth, or advertise (not sell) online in local groups that buyers can purchase it at your home. When in doubt, consult your governing authority or professional legal advice.
3. Do I Need a License?
This one is hit or miss. About half of states require some sort of licensing even for cottage food businesses, and the other half have no registrations of license requirements. Many states require only basic training for food handling, while some require a full business license before you start selling. Be very clear on this point, because this is where you might face huge taxes and fees if you don't set up properly.
There are often other requirements for your homemade food business, such as specific labeling by weight and with proper disclaimers, or business income limits, which are generally between $5,000-$20,000 USD. If you want more information-- and I recommend it before starting up your food business-- start by searching for "your state" + "cottage food laws." Look for links with the extension ".gov", because these will contain the most up to date information. When in doubt, call your state's department of health services, and they should be able to direct you to relevant information for your state.
See you all next time!