Saturday, September 29, 2012

Starting a Food Buisness and the Cottage Food Law

In a previous post, I wrote about cottage food laws. Michigan and many other states have enacted sets of specific rules and regulations that allow a framework for food entrepreneurs to get started on a small scale. These laws allow individuals to do some test marketing before plunging headfirst into a full scale, licensed, food processing business.

The cottage food laws do have limitations. There are labeling requirements, limitations on the types of foods that can be produced for sale from a home kitchen, and guidelines for maximum annual revenues that can be earned.

Outside of the cottage food law allowances, many states and county governments offer other resources to help guide a prospective small business owner through the process of operating a food business legally. In Michigan, the state government provides significant resources online. The 64-page Guide to Starting and Operating a Small Business in Michigan provides a checklist that can be used to plan for a start-up. The guide covers taxes, business plans, licenses and regulations, hiring, financing, managment, and insurance considerations and many, many more.

All of this may seem like a lot of red tape and hassle for folks that just want to grow a hobby or personal passion into a source of income. I've seen and known many bbq enthusiasts who do bbq and other types of catering "under the radar" and out of compliance with legal requirements. This may seem like a harmless undertaking, but upon closer examination this is a pretty risky proposition. The personal liability is significant and should not be taken lightly.

There is a lot of information available to help you do it right, if you take the time to look for it. And the best part is that most of it won't cost you any money while you progress through the initial planning stages.

If you are aware of other resources that would be helpful along these lines, feel free to post them in the comments section or send me a separate e-mail so I can share the information with others who may find it useful.

Here's an example from the Small Buisness Administration (SBA):

Small Business Assessment Tool

Good luck.


Mary Jane Newlon said...

Dear Sir: I live in Oklahoma and we have no Cottage Food Law. I have been earnestly working to get one started. I want to work at home, no store front, no online, but I want to sell to my friends and neighbors, as well as companies but not for resale. I saw the SBA information. I do not even know what to say as I am not looking to be another Cheryl's Cookies. I wanted to ask what I could do just to be able to bake for friends and family. Would you be able to give me some advice.

Thank you.

Mary Jane Newlon
3009 Haworth Road
Durant, OK 74701

The BBQ Guy said...

Hi Mary Jane,

Thanks for visiting my bbq blog. I really appreciate that you have taken time to read my article and submit a comment.

I think there are many people who would like do what you propose - earn money with a food business that they start from their home.

Several years ago I did a lot of research with the health department (when I lived in Florida). They were very helpful. They were eager to answer questions and point me in the right direction for do's and don'ts.

If you haven't talked with your health department locally, I'd urge you to do that.

You may already be familar with They provide a lot of valuable information about home based food businesses.

Here's a link to their information regarding commercial/incubator kitchen rental:

I hope it helps. I know it can seem discouraging at times, but researching the process may help spur a new idea that sends you in an entirely different direction with a food business.