THE MIND-BOGGLING & HAIR-PULLING PROCESS OF BECOMING A LEGAL CAKER!
So... I'm doing it! I'm going to become legal and sell my cakes. I've decided this a bunch of times over. I thought I'd take you all through the processes I went through; this process and my costs may not be the same as your own state/county. Disclaimer: these are the steps I took, in this order, and I am not a lawyer, tax person or advisor not do I play any of these on TV. This is only my experience.
THE RUNDOWN:
BUSINESS NAME
FILE DBA
SELLERS PERMIT
BUSINESS LICENSE
FOOD HANDLER'S CARD
FOOD PERMIT (COTTAGE FOOD CLASS A/B OR COMMERCIAL KITCHEN)
DECIDE ON YOUR NEW BUSINESS NAME: First and most simply (NOT!), I came up with a business name. Check!
FILE YOUR DBA: One major benefit of filing a dba ("doing business as") other than the obvious "the name is mine" is that this will allow you to open a checking account in your biz name. I filed my dba through a company who charged a bit extra to do the legwork for me. Search for your county's Recorder Office to see what to file. You'll publish your notice in an approved newspaper, which is typically listed on the Recorder's website; this usually costs around $25-30 and they will publish it twice. They'll mail your published notice to you that you'll then file with the County Clerk. You could also take the route I did and let them do it for you for an extra twenty-spot. It cost me around $51 for not having to set foot in my car. Check, check!
SELLERS PERMIT: In addition to filing state sales tax with a sellers permit account, you will also use this to avoid paying sales tax on purchases for items you use inyour products or resell. I already had a sales tax account for filing sales tax for my Etsy businesses so I thought I'd call the California BOE office to inquire how to sort out the home bakery business I had in mind. They went over the requirements for how sales tax relates to selling baked goods and as it turns out, I am not required to collect tax. They just simply added my new business name to my current account. Whew! Easy. I received my new sellers permit. Done. Check, check and check!
CHECK FOR NECCESSARY LICENSES & PERMITS IN YOUR AREA: This is where it gets mind-boggling and the reason I decided to write a blog post and help a sista out.
City - Business License $127 (then another $11 I was billed for to cover a "home business fee")
State - Food Handlers Permit or Card $6.95 (obtained online)
County - Cottage Food Operation Permit / Health Permit $54 app fee + $42 annual fee (look for your county's Environmental Health agency)
I mailed in my fee and application to my city for a home business license. I got a call stating they will be "holding" my application until I provide them with a food permit. After going deep depths of crazy and pulling some hair out, joining multiple Facebook groups on California cottage laws, business startups and just plain good old researching online for the various permits I needed, here's the rundown. Keep in mind, these are the permits I've found that I need for a home bakery business in my city and state. The fee for my city was around $121.
In the meantime I obtained my food handlers permit. This was 100% pain-free and online. Here you will find a list of accredited sources where you can obtain your California Food Handler Certificate (or "Food Handlers Card"). There are other courses and permits as well, including a managers course that I will take as well that should dive more into allergens. The prices for the card varies from company to company. I paid a whopping $6.95 and it took me a few hours in my pajamas.
The "Health Permit". Or, the Ughhhhhh Permit. The application is fairly easy until you realize that they require each and every recipe you intend on selling, and sample labels for those. This is what I'm currently putting together. I will update the blog as I go through the process. Facebook groups such as Creating Your California Cottage Food Business have been Godsends. This process is initially daunting but once you starting rolling those labels out it gets easier and you see the light at the end of the oven. It took exactly a month for me from submitting my application with labels to receiving that glorious email from the county that said I was approved!
Class A? Class B? You will have a choice of a Class A or Class B permit (or a commercial kitchen, but I was not). Class A is what I need to sell my cakes directly to the consumer. The simple difference I can see is that with this permit I cannot sell wholesale to shops or restaurants. I will need a Class B to do that. I am going to worry about that down the road and am sticking with Class A for now.
Sample labels-- whaaaa?? Yep. Every recipe you want to sell must be submitted in order to keep you safe from liabilities. The recipes must be on the allowed list of Cottage Foods. This is a big, dirty job but someone's gotta do it.
You wait for approval. And hope nothing gets rejected. And if you're a praying person don't let me stand in your way of praying. You might pray for me, too. Oh-- and turn off your social media.
Turn off social media/website. WHAAAA?? Turn off what? Yep. You must not be advertising to sell. If you post that you are not currently selling or taking orders, I believe that suffices. Don't quote me on it.
I hope this helps someone out there. Good luck with your amazing new venture! Please come back and share your approval with me so that I can shout out a hooray for you and follow you on social media! I mean, help a sista out.