Anyone Get Into Trouble Selling Cakes From Home?

Business By Mug-a-Bug Updated 29 Sep 2009 , 3:03am by Carolynlovescake

Mug-a-Bug Posted 24 Sep 2009 , 12:40am
post #1 of 67

My state does not allow home bakers, but my husband seems to think nobody will know or care if I sell 'a few' cakes here and there. Thoughts?? icon_confused.gif

66 replies
Musings9 Posted 24 Sep 2009 , 12:56am
post #2 of 67

I used to think that until I found this site and my eyes were opened to all of the possible problems and liabilities that could come about. So, I'm in the process of becoming legal, only making cakes for family and friends and accepting donations for supplies only. It's really building my portfolio and I'm not worried about getting sued by someone or being turned in to the Agricultural Dept or worse. For me, it's just not worth it. HTH.

kelleym Posted 24 Sep 2009 , 12:57am
post #3 of 67

Yes, people have gotten "in trouble".

Whether or not it happens to you depends on a variety of factors including the vigilance of your local health department.

This can be a hot subject around here. I encourage you to call your local health department and find out exactly what you can do to stay within the law. thumbs_up.gif

Here are some other threads with similar topics:

So how much trouble will we be in?

Now I'm Too Scared...

If it's illegal to sell cakes from home, can I do this?

indydebi Posted 24 Sep 2009 , 1:01am
post #4 of 67

hope leahs pops in here .... she was one who was caught which is why she is adament on education folks on how to do it the right way.

Ruth0209 Posted 24 Sep 2009 , 1:01am
post #5 of 67

I wouldn't bet on it. No one here will be able to help you with information unless you say in what state you live.

patticakesnc Posted 24 Sep 2009 , 1:15am
post #6 of 67
Quote:
Originally Posted by Ruth0209

I wouldn't bet on it. No one here will be able to help you with information unless you say in what state you live.




Well from the ID name Sin City...I was thinking Nevada.

Mug-a-Bug Posted 24 Sep 2009 , 1:32am
post #7 of 67

What about making cakes for donations?

I actually live in CO

MichelleM77 Posted 24 Sep 2009 , 1:34am
post #8 of 67

I believe that taking money of any kind is considered a business deal.

LaBellaFlor Posted 24 Sep 2009 , 2:01am
post #9 of 67

ANY exchange of money for services is a BUSINESS transaction...unless your a legal charitable organization thats set up to accept donations. Here's my thing, if you can do it legal, do it legal. See about renting kitchen space, check all avenues. Now, with that said, it's on you. You are going to do what you ultimatley want to do. Do I find it to be a big deal, no. Would I tell on you, no. I just wouldn't care enough about any of that. And with THAT said, you will be taking a chance and there may be people where you live who will care...and they may turn you in.

kelleym Posted 24 Sep 2009 , 2:05am
post #10 of 67
Quote:
Originally Posted by SinCityCakes

What about making cakes for donations?

I actually live in CO




Best place to ask this question is to your local health department. They will tell you what you can do within the law.

I'm personally not of the opinion that a friend paying you for a cake constitutes a cake business. But my opinion doesn't matter, what matters is what your local health department says. Whoever you talk to, make a note of their name and phone # just in case you need it in the future.

leah_s Posted 24 Sep 2009 , 3:08am
post #11 of 67

::raises hand::

Yes. I got caught without the proper license. Without going into a lot of detail I had what amounts to a mini-license, and I was certainly, absolutely not licensed to produce and sell cakes. I got caught within the first two weeks.

Since I already had some relationship with the local HD inspectors, they were kind enough to give me six weeks to get my kitchen brought up to code and get reinspected and pay a higher fee.

So basically, I threw a bunch of $ at the problem, had to have a 3 compartment sink custom fabricated (to fit into the space in my kitchen where it needed to go) ($$$) have a plumbing service draw up plans (10 sets,) get it all approved, have the plumber install everything (that even took 3 days $$$), add a hand sink to the kitchen (required cutting into the countertop and running new plumbing plus installation $$$) and some other fairly minor things $.

Like I said as long as you're prepared to throw a bunch of money at the problem you can get things fixed once you get caught. Well, assuming your state licenses home kitchens in the first place.

Some things to keep in mind:

I got caught with an innocent question, "MMM who made these cakes?"

You never know who is going to be at a party, event, whatever, where the HD inspector is a guest.

You never know if one of your competitors will be a guest where one of your cakes is served. All they'd have to do is call and ask, "Is so and so licensed?"

The bottom line is this. We live in a very litigious society. A lot of people are looking to make easy, quick money. All they'd have to do is order a cake from you, claim to be ill from it, and turn you in. Without a license you HAVE NO DEFENSE. You are betting your bank account, house, car and kids' future over selling without a license.

And in very blunt language, if you take that bet you're a fool.

xstitcher Posted 24 Sep 2009 , 3:13am
post #12 of 67
Quote:
Originally Posted by leah_s

The bottom line is this. We live in a very litigious society. A lot of people are looking to make easy, quick money. All they'd have to do is order a cake from you, claim to be ill from it, and turn you in. Without a license you HAVE NO DEFENSE. You are betting your bank account, house, car and kids' future over selling without a license.

And in very blunt language, if you take that bet you're a fool.




Well said Leahs!

leah_s Posted 24 Sep 2009 , 3:16am
post #13 of 67

I got the t-shirt on this topic. icon_smile.gif

xstitcher Posted 24 Sep 2009 , 3:24am
post #14 of 67
Quote:
Originally Posted by leah_s

I got the t-shirt on this topic. icon_smile.gif




That you do! icon_lol.gif

Mac Posted 24 Sep 2009 , 3:43am
post #15 of 67

Yep--I got caught! Got fined, too! Got off my lazy duff and found a place to rent, paid all my fees for licenses, feels a heck of a lot better than having to look over my shoulder.

Yes, the HD will also call and order a cake and you won't know until they come pick it up...and it won't be Avon calling! If you have business cards that you pass out, it could fall into their hands...BUSTED! If you take ANYTHING for your cakes...money, cake mixes or pans...it is considered renumeration. Ask the IRS!

May not get caught for years or you may get caught tomorrow...just how much will that cake end up costing YOU???

Don't mean to sound so blunt or hard-edged but everybody has their opinion of how to "get around" the HD issues...and the only real answer is 'you can't." Legal feels a whole lot better!

littlecake Posted 24 Sep 2009 , 1:22pm
post #16 of 67

was there a huge fine?

Mike1394 Posted 24 Sep 2009 , 1:33pm
post #17 of 67

In Mi the cops with the HD come to your house, and issue a cease, and desist order. It's a misdemeanor ticket max is 500, and 89 days. Hmmm a cake worth a couple hundred, or 89 days. Not a hard choice to make.

Mike

-K8memphis Posted 24 Sep 2009 , 1:37pm
post #18 of 67

We had four cakers turned in in recent history.
4

KHalstead Posted 24 Sep 2009 , 1:54pm
post #19 of 67

wow, I'm just glad it's legal where I live.

Another thing I wonder about (not meaning to hijack here) is how many people who are legal to operate from home in their state don't actually pay taxes?? And how many get caught??

I had a lady that sells from home like I do, look at me with shock when I told her about claiming the income on my taxes. She was like........Oh I don't bother.....I mean it's a couple dollars here and there. She's busier than I am selling cakes and she doesn't CLAIM any of it! The IRS scares me, I'm not messin with em' LOL Also, I wouldn't be able to live with myself deliberately doing something I know to be illegal! Besides, what kind of an example would I be to my kids?

Mac Posted 24 Sep 2009 , 2:01pm
post #20 of 67

The fine was enough that I did not want to have to pay double if caught again! This is in East Texas--I believe it is different state to state or even county to county.
1st offense--Fine $$
2nd offense--Fine x 2 $$$$
3rd offense--2nd fine x 2 $$$$$$ PLUS jail time

My income was reported to the IRS as I am self-employed in my full-time job.

As for the IRS--they can and will put a lien on everything if you are caught not reporting income. And if you don't keep records...guess what? They can come up with an amount for you! Do you really want the IRS to look at other bakeries in your area and decide what you made money-wise? I wouldn't! They tend to figure in their favor! People, it is not worth it!

Mug-a-Bug Posted 24 Sep 2009 , 2:23pm
post #21 of 67

Wow, this is a real bummer. I was thinking it was 'no big deal', but of course I don't want to get fined. Any advice on how to find out what the fines might be? Guess I have to weigh my options. Thanks for all the advice. icon_rolleyes.gif

Mike1394 Posted 24 Sep 2009 , 2:26pm
post #22 of 67
Quote:
Originally Posted by SinCityCakes

Wow, this is a real bummer. I was thinking it was 'no big deal', but of course I don't want to get fined. Any advice on how to find out what the fines might be? Guess I have to weigh my options. Thanks for all the advice. icon_rolleyes.gif




Simply call HD, and ask, Hey what will happen if I start selling cakes from my home? They will tell you.

Mike

-K8memphis Posted 24 Sep 2009 , 2:33pm
post #23 of 67

I think the advice was centering around getting your ducks in a row to avoid the fines & drama. Why establish a business on sand?

See the greater deal beyond anything the authorities can do to you is you have no clout with your customers. Somebody wants to give you a hard time, pay late or something, somebody puts the squeeze on you, girl, you gotta be content in that visegrip or risk exposure. No playing hard ball with idiot customers.

That is ten thousand times more a deterent than anything the authorities can do to you. Yah got zero control.

'Have a nice day' huh. (squeaky little voice from the vise)

icon_biggrin.gif

alvarezmom Posted 24 Sep 2009 , 2:46pm
post #24 of 67

I make cakes for family and friends. And I do charge them. I dont charge nearly as what some would--I underprice even if I dont mean to. Not that that matters.... But I know operating with out proper docs. is a no-no.

Some ppl will run the risk and other's wont. Like Mac said "May not get caught for years or you may get caught tomorrow...just how much will that cake end up costing YOU???"

So the question really is... does it matter all that much to you?

leah_s Posted 24 Sep 2009 , 2:54pm
post #25 of 67

[quote="KHalstead"] Also, I wouldn't be able to live with myself deliberately doing something I know to be illegal! Besides, what kind of an example would I be to my kids?[/quote]

See, I think K's got the right attitude. Why delibertly do something you know is illegal? What does that say about you?

I'm going to sound like a geezer, but that's one thing that's wrong with society today. Everyone thinks "I'm gonna do what I like, what makes me happy even if I it's not right. Maybe I won't get caught."

Maybe you will get caught. Maybe you'll teach your kids by your example that laws don't matter. Maybe you'll lower your own standards to think that other laws and standards don't matter either. It's just a spiral.

I was going to end with "getting off my soapbox now", but yaknow, I'm not. Food service is serious business.

Flame away.

alvarezmom Posted 24 Sep 2009 , 3:01pm
post #26 of 67
Quote:
Originally Posted by leah_s

I'm going to sound like a geezer, but that's one thing that's wrong with society today. Everyone thinks "I'm gonna do what I like, what makes me happy even if I it's not right. Maybe I won't get caught."




Majority of ppl dont take food laws seriously enough. It's my opinion that that is probably why you find more ppl who feel like it's just not that important to call the HD when some one is selling cakes out of there home.

I think this subject is like the scratch vs box cake! icon_cool.gif

Mug-a-Bug Posted 24 Sep 2009 , 3:01pm
post #27 of 67

I guess it depends on what the repercussions are. If it's a $200 fine and I don't get caught for 10 years, then I guess it was worth it. If it's $2000 and they prevent me from ever getting 'legal' than I'd say it's not worth the risk. I know that saying that will tapedshut.gif a lot of people off. Sorry. I'll have to do some homework. Thanks everyone.

indydebi Posted 24 Sep 2009 , 3:13pm
post #28 of 67

Mac and leahs both mentioned "You never know who is attending the party" and I'd like to add my story to that.

When I get new folks in my crew, I always give them this speech:

When I took the food safety course, the instructor, a former HD inspector, told us how he stopped in a fast food place for lunch one day. Not to do an inspection ... just to buy a burger and fries. He's standing in line watching the folks in the kitchen. He watched one young lady bag up the trash, carry it outside, lift the dumpster lid, put the bag in, come back in, put a new bag in the trash can, walk up to the counter, wipe her hands on her apron, looked at this guy and said, "can I help you?"

He said, "Yes. You can get me the manager. Now."

So the reason we always do everything the right way is because we never know if the bride is the health inspector's niece or not. And if we always do it right, then we never have to worry about doing it wrong.

Then I send them on their merry way to their work stations, with food safety gloves on their hands!

cakesweetiecake Posted 24 Sep 2009 , 3:14pm
post #29 of 67

I am in a similar situation. I live in an area where you are not allowed to bake and sell from home. I've baked for family and friends off and on over the years. I dont charge. Quite frankly, I am tired of that set up. I am thankful for the practice, but I am tired of giving cakes away. It costs. At the same time, I dont feel comfortable charging when I dont have my ducks in a row. Even if I were to charge a minimum price, I'd still be giving cakes away. I love my friends and family dearly, but I am tired of them bypassing the local bakery just to get a good deal. I've spent lots of money on tools and at the end of the day, I cant claim a thing on my income taxes. LOL!

So, I am taking the step to do it the right way. I am currently enrolled in a food safetly and santitation program. After lots of looking, I was able to find a caterer who will allow me to rent space. If for some reason, that doesnt work out, I am going to continue to pound the pavement until I find something that works. I will be registering the business and calling for quotes for insurance this week. Yes, it has been a pain in the butt. However, the peace of mind that I will have now when baking for others will be PRICELESS. I can deal with arguing about a design. However, I dont want the added headache of worrying about whether or not someone will report me for illegally selling from my home. (Although I only bake for family and friends, it is quite possible that their family and friends may also consume the product.) In addition, another great benefit is that I dont have to limit myself to just my family and friends. I will be able to sell to anyone I'd like without worry!

Good luck whatever you decide.

Ruth0209 Posted 24 Sep 2009 , 3:16pm
post #30 of 67

This topic is NOT like the 'scratch vs. box' argument. That's simply a matter of taste and opinion. This is a matter of legal vs. illegal/ethical vs. unethical, plain and simple.

The thing that I get really tired of is people who think they don't have to pay taxes on what they earn. I collect and pay sales tax, and I pay income and self-employment taxes quarterly. If you earn income in this country, you owe taxes. I pay to help support the needs of my state and country. That way, I can drive on nice roads when I deliver cakes, my children got to go to public school, and when I call the police or fire department, they come help me. How do you think these services get paid for? If you earn, you owe it to this country to pay your part just like the rest of us.

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