Pros And Cons Of Starting A Licensed Cake Business

Business By lovetofrost Updated 4 Apr 2008 , 7:37pm by yummymummy

lovetofrost Posted 23 Mar 2008 , 1:23am
post #1 of 47

So I have been wanting to start a cake decorating business for a while now. I took some more classes to get some more knowledge. I have one family member that says I should start out by word of mouth and not worry with the licensing yet until I build up my business and have the money to do all the paperwork. I have another family member that thinks since I am planning on doing this for a profession I should go ahead and get the health dept out and get my licensing first. I contacted the hd to ask questions about what to expect to see if it was worth my time to get everything now or wait until I get a little more built up. But for the second time I have not gotten a returned call. My question is what do most people do who when they start out. I'm torn between the two choices and would like to know a little of what to expect. Thanks. Your much needed advice is appreciated.

46 replies
kelleym Posted 23 Mar 2008 , 2:22am
post #2 of 47

For me it would depend on the regulations in the state in which you live. Some states make it extremely easy/inexpensive to obtain a license for your home, and some are impossible and require you to build a second kitchen to restaurant specifications. If you let us know what state you were in, someone would be able to give you further information (or look in the pinned post at the top of this forum, 'States that License Home Bakeries').

If the regulations are not too rigorous and expensive, then why not go for it? icon_biggrin.gif

CoutureCake Posted 23 Mar 2008 , 5:56am
post #3 of 47

I agree with Kelley.. Some states are very accomodating of getting your license (basically show that your kitchen is clean and no pets anywhere on the property), others like here in MN it's insanity especially depending on where your local gov't is on this (we just moved out of a bedsheet community that said "NO" to pretty much ANY home based business).. You could also contact your county to find out who does this there and they can get you in contact with the right people. For most states it's the State that does the licensing because just like a caterer you aren't in-house so you've got to be ready to transport so it's easier to have the state do the licensing.

Keep calling and just say you're wanting to speak to a compliance officer about the regulations. Also, check with your Department of Agriculture as they also license kitchens in many states instead of the health department (Many states it's "Dairy, Meat, and Food Inspector" so they do the whole supply line for food)..

I think it's worth going for the legal kitchen right away because that way you don't have to hide under the cover of darkness and can move about your business freely. There's nothing worse than having to hide what you do even when you see someone and go "they could SO use a cake from me".. The other thing is, how expensive will it be to get caught if you arent' licensed. Even if the fine is $300, that's an aluminum rack and sheet pans for your licensed space.

Also, don't go new except for your oven and fridge when it comes to the big things. The market is heavily saturated right now because of businesses going out. You can pick up used equipment from either an auction or restaurant equipment dealership for pennies on the dollar compared to buying new. It's something to think about.

Good luck!!!!!

indydebi Posted 23 Mar 2008 , 1:29pm
post #4 of 47

It is my ever so never humble opinion that all mechanics start in their garage, all contractors start in their backyard and all cake/caterers start in their home kitchen. Exceptions exist, of course, but in general, that's what I think.

That said, I dont' believe anyone on here will suggest or advise that you do anything illegal. However you start your biz will be your call and your decision based on your circumstances.

When I worked out of my home, it WAS a little stressful as I tried to stay under the radar yet trying, at the same time, to build a business to the point that I could justify and afford rental kitchen space and eventually getting my own space. My hands were tied in a number of ways that prevented me from moving forward in ways that I aspired to. I had too many events in which God was my partner as I prayed ... please, God, let this one go unnoticed so the bride doesn't pay for me doing things "wrong".

I was very blessed and things worked out ok for me. HOWEVER ... a friend of mine put up a website and inside of 4 weeks, the HD was knocking at her door. They found her because of her website ... said their boss had told them to scan the internet to find the at-home caterers.

I strongly urge anyone to try to "do it right" from the start. It's unfortunate that our industry is very expensive to get into but you can get creative. My caterer friend ended up with a great deal with a local church ... she cleans for them at no salary and they let her use their kitchen for no rent.

Cakery Posted 24 Mar 2008 , 12:18am
post #5 of 47

Indy has my shared feelings on this as well. Back 30 years ago when I first started out...the rules were different....the HD didn't check things out or here where I lived...didn't really care....then all that changed about 15 years ago....and if I wanted to keep doing my cakes from home....I had to have a separate kitchen....so took out a small loan and built one. My shop has done so well....and I know though it was from having the customer base built from the 15 years I did it from my home kitchen. Still....now days when someone asks what my thoughts are about doing this as a business...I tell them to do it the legal way. Now days there are too many people out there just waiting to sue someone over anything.....and to have a home cake business and not have the insurance, and coverage....you could be fined heavy and or loose your home if you are not set up legal. It's sad that those who would like to get it going....have to do it on the sly to begin with....but the health dept. do and will check business cards being passed out or ads run....or a web site too.
Be very careful!!!

indydebi Posted 24 Mar 2008 , 12:27am
post #6 of 47

Another thing I remembered ..... my health inspector made the comment one day about ".... when I got the list for the last bridal show..."

Seems when there is a bridal show, the organizers have to submit a listing of the participants to the HD, who checks it THOROUGHLY. If there is a name/company on the list that the HD doens't recognize, they contact the show organizer to find out where they are based from (could be out of county or out of state). She told me she found two illegal cake decorators this year at the big show downtown this past year and she had to go to their home to shut them down.

So not being able to participate in bridal shows is a BIG "con" re: being legal or not. The organizers may not ask if you are legal ... they may not require you show a copy of your license .... but they MIGHT be required to turn in a list to the HD that has your name on it.

step0nmi Posted 24 Mar 2008 , 12:35am
post #7 of 47

I would really like to know how beneficially it would be to start as well? Does anyone know of what the LEAST expensive way to start?
and...HOW do you people get into these church/rental kitchens?? am I just not looking hard enough? Do you still have to get a license/certificate if you do something like this???
Thanks!

lovetofrost Posted 24 Mar 2008 , 11:19pm
post #8 of 47

I live in Georgia. I am blessed to have a separate kitchen detached from my home that I can use for my business. I just heard that all the costs of starting a business and the harshness of the health dept coming out is overwhelming when you are starting out. That it is better to wait until your book of business starts up when you have the money to do it then. Does anyone know what all is involved with the health dept once you do get licensed? I am probably going to go ahead and start out right, but just don't know what to expect and thought someone on here might have already been through it and could give me some advice. Thank you for all the replies.

indydebi Posted 24 Mar 2008 , 11:30pm
post #9 of 47

I can't, of course, speak for Georgia, but my dealings with my HD have been nothing but helpful and pleasant! It's like they are bending over backwards to help someone get started and do it right.

I think the harsh stories we hear are about those who aren't doing it right and are problems for the HD.

And you cite the catch-22 that many find themselves in, when starting up in this industry: It's better to have a book of business (i.e. existing clients) when you open a shop, but technically, you can't have a book of business UNTIL you open a shop, because that would mean you've been operating illegally.

Amy729 Posted 24 Mar 2008 , 11:40pm
post #10 of 47

In Georgia you go through the Dept. of Agriculture for cakes. I am in the process of building a seperate kitchen. I am almost finished but just have a couple more things to do before I can be inspected.

Good luck!

cookieman Posted 25 Mar 2008 , 12:18am
post #11 of 47

I had a business and it was legit. LLC, health inspection, license, etc. I did start out at home, but once I had to start baking for people I did not know, I became very uncomfortable. I started to think about how I would feel eating something that someone I did not know baked in their home. That was enough for me to go the legit route! Add to that the fact that a customer could legally sue you for all you are worth if you are a home baker...that about says it all. At least if you have an LLC, all they can take is what the LLC has in the bank, etc. (And when you start out...it ain't much!!!) Good luck with your decision!

cookieman Posted 25 Mar 2008 , 12:19am
post #12 of 47

I had a business and it was legit. LLC, health inspection, license, etc. I did start out at home, but once I had to start baking for people I did not know, I became very uncomfortable. I started to think about how I would feel eating something that someone I did not know baked in their home. That was enough for me to go the legit route! Add to that the fact that a customer could legally sue you for all you are worth if you are a home baker...that about says it all. At least if you have an LLC, all they can take is what the LLC has in the bank, etc. (And when you start out...it ain't much!!!) Good luck with your decision!

onceuponacake Posted 25 Mar 2008 , 12:24am
post #13 of 47

In Georgia it varies from county to county. In the county I live in u cannot have a licensed home bakery not even in your garage or basement. In another county you can but it depends on which side of the county you live in.

From what dept of agric. told me, you are required to have a grease trap and all the sinks required (mop sink, triple sink, hand sink). As far as other equipment, its whatever you want.

nautkl1 Posted 25 Mar 2008 , 1:56am
post #14 of 47

I have converted my 2 car garage into my kitchen - thankfully I obtained a brand new double oven and the rest came from family donations. It only cost us a few hundred dollars to remove the garage door and put up french doors, a coat of pink paint, cabinets found at a garage sale which I made into an island and a 3 compartment sink on ebay. All that's left is the plumbing which should be simple because of where the plumbing is located in the house.

I've owned a restaurant in town and due to the size of our town, it doesn't pay to rent. All of my cakes are word of mouth and I usually do at least 1 per week.

alicegop Posted 25 Mar 2008 , 1:58am
post #15 of 47

Don't forget all your equipment needs to be UL listed and you have to have your food in certain containers, off the floor.... conforming to all the rules can be a challenge... but piece of mind means a lot.

I was trying to find a place today and the realtor suggested that I try to find a caterer who works out of a warehouse. They are already set up and are looking to supplement their income oftentimes and might not mind sharing their kitchen with you. You might be able to get a good deal.

I'm in the process of trying to work something out with a church. Fingers crossed!

indydebi Posted 25 Mar 2008 , 2:05am
post #16 of 47
Quote:
Originally Posted by alicegop

.... the realtor suggested that I try to find a caterer ... They are already set up and are looking to supplement their income oftentimes and might not mind sharing their kitchen with you.




Yup! My biz is 66% buffet and only 4% cake-only; the balance being cake-and-buffet. I have dead time in my kitchen that I'm looking to rent out to a cake person. The thing to factor in is that a caterer will be operating out of that kitchen full force during peak weekend times, so you may have to work around that.

alicegop Posted 25 Mar 2008 , 2:07am
post #17 of 47

indydebi I sure wish I lived near you.......

step0nmi Posted 25 Mar 2008 , 2:11am
post #18 of 47

I SOOOooo wish I lived near Indydebi too!

Mac Posted 25 Mar 2008 , 3:03am
post #19 of 47

I, too, like Indydebi started out flying under the radar...the stress of worrying about getting caught was ALWAYS there.

And I did get caught and was fined. Now that I have found a kitchen, they have been extremely helpful. In fact, after the officer gave me my citation, she was telling me places that are kitchen-ready for me to look in to.

bethyboop Posted 25 Mar 2008 , 3:20am
post #20 of 47

mac,
I think your story brought it home...thank you for being candid and sharing your story. I am happy to hear that things are going to go well.

indydeb--was always, you are a rockstar with a wealth of knowledge.

I am glad that this post was started....i already knew the consensus (get legal), but it always good to be reminded of why...

Now a question to add...
I live in missouri. there is a restaurant down town in my small town that does well. In the dining area there sits an empty display case. If I offered to do cakes for them, custom or not, would I have to be liscensed, or would I be working under them? any thoughts? yes, I will check with the HD, just thought I would feel here first.

Penny7271 Posted 25 Mar 2008 , 3:37am
post #21 of 47

This was a great question - I am glad that you asked it. I've really been wondering the same thing.

I would LOVE to start a business, but I know that Delaware doesn't license home bakeries and with 2 little ones and another part-time job, I just don't have the time to go looking for other kitchen options right now.

Thanks to everyone for all of the information you shared!

And good luck to you, lovetofrost!

Mac Posted 25 Mar 2008 , 4:41am
post #22 of 47

You would have to do the baking in their kitchen to be covered under by them--as an employee.
If you sell it to them to re-sale, then you have to have a resale license.

Here in Texas--if you have a separate business in a kitchen that is already inspected in a restaurant's name, it has to be inspected in YOUR business name.

justme50 Posted 25 Mar 2008 , 7:41am
post #23 of 47
Quote:
Quote:

If I offered to do cakes for them, custom or not, would I have to be liscensed, or would I be working under them? any thoughts? yes, I will check with the HD, just thought I would feel here first.




It depends on the laws in your area. Here in Oklahoma, all they care about is that the kitchen you bake in being licensed by the health department. I can bake anywhere for anyone as long as I'm baking in an approved facility.

all4cake Posted 25 Mar 2008 , 10:01am
post #24 of 47

The HD is extremely helpful. If you don't pass the first time, they will give you a list of things that need to be taken care of in order to pass....how cool is that? I wish there was a written checklist that each state provides their interested residents...instead of the documents that need deciphering(?).

These are not necessarily in the order of which they should or could be done but this is what was necessary in the NC county in which I reside:

Inspection-free
notarized business name form-2.00
filed name with county courthouse-14.00
applied for privilege license at City Hall-35.00
registered business with state DOR
Applied for EIN(I chose to get one as a future step saver...not necessary in order to become legal)

To register as an LLC, the fee is higher. As cale,an stated, as an LLC, your business and its' possible legal situations are isolated to what you have tied up in your business....your personal property isn't affected...aaaaaaaaaaand...you file separate taxes.

shadow79 Posted 25 Mar 2008 , 12:03pm
post #25 of 47

Does anyone know where the best free place on the internet might be to check and see if your idea for a business name is already taken or licensed? Can two businesses exist with the same name if they are on opposite ends of the U.S. or is that illegal? Is there an easy place on the internet that I could maybe get some of these preliminary questions answered?

Thanks in advance!

ninas09 Posted 25 Mar 2008 , 12:11pm
post #26 of 47

Well, I was in the middle of converting my garage into a bakery, I talked to the city, HD, and state laws and was given the ok by all. We needed some electrical work done so we called an electrician in. We made the mistake of telling him that we were converting to a "bakery". Well, when they went to the city to pull a permit, guess what? Our city has a clause that says we "can't change the structure of our home to suit our occupation". We had our garage doors down and everything. My husband went down to talk to the city and they told him they would give him a permit to enclose the garage, but when we were done, he'd send an inspector in and if we had a kitchen there, he'd make us rip it all out. So basically, had we converted our garage to a kitchen for "personal" use, then decided to bake in it commercially, it would have been ok. Turns out the city employee we had previously talked to was fired 2 weeks ago and gave us the wrong information. Talk about being upset.

So, I called our county Health Department and got into a discussion with her about "some people" baking cakes out of their home. She said that it is illegal, but the HD is not allowed to go into people's homes, so basicallly their hands are tied. She said the HD has "bigger fish to fry" than home bakers.

This whole situation is so frustrating to me. I feel like the home cake business is an underground orginization.

Good luck to all of you!

Mac Posted 25 Mar 2008 , 12:48pm
post #27 of 47

THere has to be a certain amount of miles between you and another business with the same name.

I went to the courthouse and told the clerk the name of my business. She typed it in and none were found in the surrounding area, so I was good to go with that name.

kayakgirl73 Posted 25 Mar 2008 , 1:08pm
post #28 of 47

Has anyone started a business in WI? I am a pastry chef at a restaurant and can work out of the kitchen there. But I don't know what else I need to do or where to go. I'm assuming I need a business license and liability insurance. What else? Where do you get these things?

cookieman Posted 25 Mar 2008 , 1:27pm
post #29 of 47
Quote:
Originally Posted by shadow79

Does anyone know where the best free place on the internet might be to check and see if your idea for a business name is already taken or licensed? Can two businesses exist with the same name if they are on opposite ends of the U.S. or is that illegal? Is there an easy place on the internet that I could maybe get some of these preliminary questions answered?

Thanks in advance!




I had to pay my lawyer to do a search for company names when I started my business. I had to give him at least three choices, in case my first choice was taken. This was included in the lawyer's fee for starting my LLC. I'm not sure if it's as easy as going on line and doing a free search. I may be wrong though. I'm sure someone currently in business will have a better answer for you. icon_smile.gif

justme50 Posted 25 Mar 2008 , 1:59pm
post #30 of 47
Quote:
Quote:

She said the HD has "bigger fish to fry" than home bakers.




I'm in Oklahoma, but was told the exact same thing by my inspector.

The trick was though, that if someone complained to them, they were required by law to "investigate" and at that point they have "cause" and could come to my home.

The way it was explained to me (for my area only of course) is that they can't do a house to house search for illegal baking (good heavens, you'd think we were cooking meth, not cakes!!), but if given a valid reason, could go to a specific home and check it out.


Trying to build within city limits is a huge pia here. I would have preferred my home kitchen be at my daughter's house. She has a much better location than I do, but she's in the city limits and we're not. The headache of dealing with the city inspectors was more than I wanted to take on.

The county health department on the other hand, has always been more than helpful to me.

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