Want To Start Home Cookie Business...such Large Cost (Long)

Business By Elise87 Updated 19 Oct 2009 , 2:30pm by -K8memphis

Elise87 Posted 5 Oct 2009 , 7:27am
post #1 of 22

Oh I just donât know what to do!!

So I really love baking and decorating cookies (even though I have only done 7 small batches lol) anyway, lately I have been thinking about actually starting to sell them. I think I can do them decent enough quality to sell them to other people outside my family and once I speed up the amount of time it takes me to make them, it should be good.

Now I rang up my local council and all up it is going to cost me $1000AU to legalise my home kitchen and then an annual fee of $400AU a year to keep that going.

Now for me $1000 is a lot of money since I only want a small little home business with a few orders here and there and am concerned that with not many orders it is going to take me a long time to pay off that amount or even loose money! And thatâs really sad cose I would love to make cookies for other people but want to do it legally but it just seems like too much.

I had thought of asking the owner of a previous bakery I worked at, to whether I could use her premises to bake and sell the cookies and she could take some of the profits but firstly I wonât be making much if she is taking half the profit plus I will be paying to use the space and secondly when I was working at the bakery people often complained about the prices of things and I just know that there are a lot of people that would have a fit about the prices of the cookies I would sell at $3 AU

Would I just be wasting my time and money? I think I would be, I just donât see how I would be able to make the money up and make a profitâ¦â¦.maybe I should just give up on the whole idea.

Who knows if anyone will buy them anyway, there are no places that i know of in my area that sell decorted cookies (which is good) but maybe people won't be use to them and not interested or won't want to pay for them.

I have had people telling me that i should be selling them and people would buy them but i don't know if i can rely on their opinion to what everyone else would think if you know what i mean.

Any tips and advice appreciated

21 replies
sugarandslice Posted 5 Oct 2009 , 7:47am
post #2 of 22

Do you have a local farmers' market or craft market in your area? Perhaps you could get a stall one week and take along a load of your cookies to see if they will sell. It's not the same kind of outlay as using a commercial kitchen so it could be a good way to test the waters.
I guess you really need to know if there's a market before you stump up the cash!
Good luck with whatever you decide
Emma

kathyx1 Posted 5 Oct 2009 , 8:34am
post #3 of 22

I had a look at your cookies, they are really good! You should try having a stall at a market. Good way to test the waters. Good luck.

Elise87 Posted 5 Oct 2009 , 9:17am
post #4 of 22

Thanks u guys, i completely forgot about the idea of having a stall!! that would be great to get a stall at a market cose yeh, that way i could suss out if there's a market for my cookies.

......I just looked up my local council website and found you can get a temporary food license for $205 a year, but i will have to check if that includes/allows me to cook from my kitchen in the cost etc because it doesn't say anythign about that.

Are sugar cookies considered a low risk food?

Oh and thank you very much kathy icon_smile.gif

CandyCU Posted 5 Oct 2009 , 12:42pm
post #5 of 22

I'm pretty sure sugar cookies are a low risk food (already baked, stored at room temp, no highly perishable items on them), I think anything with fresh cream is a no no.

Good luck to you! I hope it goes well! Where are you, in Australia, can I ask?

indydebi Posted 5 Oct 2009 , 1:32pm
post #6 of 22
Quote:
Originally Posted by Elise87

Now for me $1000 is a lot of money since I only want a small little home business with a few orders here and there



Ah, and there lies the fallacy!

Unfortunately, we can't buy a "small little" oven to make just a few orders .... the commercial oven required costs the same no matter how many batches of cookies we plan to bake.

we can't buy "a small little" 3-compartment sink. Nope, gotta spend the same money on the same size sink as someone who runs a "real, BIG" cookie business.

We can't get a discount on our licensing fees just because we're planning on running a "small little" business. It costs us the same as anyone who is running a "full blown" cookie business.

We can't buy a million dollar liability insurance policy that's valid just on the weekends that we have cookie orders. Nope, we have to pay the same annual premium as everyone else, regardless of the amount of business.

I see it all the time. The concept of "a small little business" is just such a "cute" idea, but the cost is the same as a regular or full blown business.

-Tubbs Posted 5 Oct 2009 , 1:43pm
post #7 of 22

Of course Debi's right. If you want a proper, legal home business, at some point you have to make an investment. To be honest, it seems a little early for you to be making that decision. I would say keep working, make cookies for friends and family, sell at the market, and see how you feel in 3, 6 or 9 months. If you're still passionate, not sick of the shopping, baking, mixing and cleaning, ready for the paperwork (!) then THAT would be the time to invest the money and really go for it, and by then you will have a really awesome portfolio, too.

By the way, your work is lovely - no doubt you have the required skillz.

KHalstead Posted 5 Oct 2009 , 1:52pm
post #8 of 22
Quote:
Originally Posted by Elise87



Are sugar cookies considered a low risk food?




I live in Ohio and I realize that all laws are different, but I operate under cottage food laws and it states only low risk foods as well. What I was told about that from the Ohio guys (dept. of agric.) is that I can't make anything that has to be temperature controlled like cheesecake or things like that which require constant refrigeration. I can fill a cake with bavarian cream sleeve filling because the manufacturer says it can sit out for up to 24 hrs.

Hope that helps you out some. cookies will be fine!

Elise87 Posted 5 Oct 2009 , 11:33pm
post #9 of 22

Well that's the thing, i don't think i am ready for a proper full business, all i wanted to do is have my kitchen legal so i could sell cookies here and there without possibly getting in trouble but in order to do that i have to pay all this money and set it up like a proper business that i wouldn't take full advantage of.

I mean i have only been doing this for not very long and i don't want to throw myself into the deep end so couldn't justify forking out that sort of money but i still wanted to sell cookies at some point and i got all frustrated lol

So to me i would be happy enough selling them at a market every now and then. Also if the biscuits turn out to be low risk my price goes down to $125!

and yes i am in Australia icon_smile.gif

Thanks for the advice everyone, i just need help with my options icon_smile.gif

Elise87 Posted 6 Oct 2009 , 6:36am
post #10 of 22

CandyCU: Oops sorry, i thought u asked me WAS I from Australia not where in oz lol

I am in melbourne icon_smile.gif

sugarandslice Posted 6 Oct 2009 , 6:47am
post #11 of 22

Elise, when I used to live in Melbourne I used to go to the St Kilda farmers' market every Saturday. I reckon that would be a great place to sell your cookies (lots of families!) if it's close enough to you. And I'm sure there are lots of others too.
Good luck and let us know how you go!
Emma

Elise87 Posted 6 Oct 2009 , 7:05am
post #12 of 22

thanks for the suggestion Emma. It's a bit further out for me but i'll still look into it. The other option i am looking at is a local farmers market in my council area which i might go have a look at one day

Elise87 Posted 6 Oct 2009 , 7:24am
post #13 of 22

Can i ask you guys another question? You will probably just read it and think of my gosh what is this girl doing when she doesn't know anything! but it's all new to me icon_redface.gif

Anyway i was just wondering if i sell my cookies at a farmer's market even thought it might be only a couple of times, is that still considered a business? Do I need to register a business?

sara91 Posted 6 Oct 2009 , 7:54am
post #14 of 22

You should have a look at some sites from the Australian Government for home based business and setting up a business. If you are only going to sell at markets a few times this would be a hobby not neccessarily a business.

http://www.homebasedbusiness.sbdc.com.au/02_01_starting.asp
http://www.business.vic.gov.au/BUSVIC/STANDARD/PC_50062.html
http://www.ato.gov.au/corporate/content.asp?doc=/content/00199712.htm

I would suggest talking to a person who works in this department to get the correct information as councils regulations vary. You need to get the correct information to start off with before outlaying cash for uncessary items.

majka_ze Posted 6 Oct 2009 , 8:26am
post #15 of 22

Well, to cheer you up - it could be worse. I cannot have legally home based business at all. And I cannot work in food industry on my own (other than for another licensed person) unless I go back to school, for a complete 4 years period - no courses, nothing else than a "real" school will cut it.
And I have to comply with all the state throws at me - meaning not only commercial standard, but up to height of the walls, material used for the construction and size of the kitchen area. No build out garage for me, thank you. As indydebi said, it is not viable to work as "small" business - I need good sized business with a storefront or sell the goods through a bakery, because no "small little business" will ever cover such costs.
The idea of renting a kitchen is not good for us as well - the education problem stays, you have to have a health license to even put a foot in such kitchen as employee and renew it each and every year. (I had it at one time and let it lapse.) No other bakery, restaurant etc. will let you in their kitchen, because they never know when they could loose their license because of you.
And even a restaurant with a food license can't sell baked goods which leave the premises. They can bake a wedding cake, set it up there but not go over the street and set it up there - they would need another food license than they have, one which is more difficult to get.
This is the reason quite a few bakers and decorators here fly under the radar (and if lucky, are quietly ignored) and the cookie decorators sell this as "for decoration only". Even if they wanted, they cannot make the money with handmade goods they need to cover the costs.

Elise87 Posted 6 Oct 2009 , 11:54pm
post #16 of 22

thanks for the links sara...... Yeh i would feel the markets are a hobby cose i am not doing it for a main source of income, won't get much money etc and i am not planning on going with a business name attached or anything. I just assumed selling any biscuits may be called a business and didn't know it can be classified as a hobby.

But i'll ring up my council soon about it.

majka_ze: i think that sucks that some of you guys can't have legalized home kitchens and things are made so difficult for you.

traceyjade Posted 7 Oct 2009 , 12:09am
post #17 of 22

Another idea is to sell cookie bouquets (in themes) you can advertise at party supply stores schools offices ect.

Elise87 Posted 7 Oct 2009 , 12:25am
post #18 of 22

yeh but that gets back to me having to fork out $1000 to just licence my current kitchen to sell legally....or do u mean advertise the fact i am at the market?...but then would that consider be a business cose it's advertised? lol

Elise87 Posted 9 Oct 2009 , 1:49am
post #19 of 22

rang up the council about the market stall. Any profit at all is considered a business and the temporary license does not cover baking at home, you must bake in a licensed premises icon_sad.gif

indydebi Posted 19 Oct 2009 , 2:27am
post #20 of 22
Quote:
Originally Posted by Elise87

.... and i make no profit that means i don't have to register a business right? And since i am making no profit i am not actually selling the cakes so i don't need to register my kitchen?




The govt could care less if you're a lousy business person who doesn't know how to set up a profitable pricing structure so that you make a profit. You're not considered a business "*IF* you make a profit". You're a business if you are functioning and acting and conducting yourself like a business.

It's common knowledge that a new business can expect to operate in the red for the first couple of years. Does that make them not a "real" business, just because they are not making a profit? Nope!

walks like a business, quacks like a business .... it's a business.

Elise87 Posted 19 Oct 2009 , 6:56am
post #21 of 22

Thanks for the reply. What i started thinking is I don't want a business, i don't want to run like business, i don't want to advertise, i don't want to sell to complete strangers that have no link to me at the moment, all i want is that if i might occasionally be asked by someone who knows someone would i do them a cake or cookies or something that they might just pay me for the ingredients and that's it without it being 'illegal' or the issue of it being a business icon_sad.gif

But like i have always been doing i think i'll be sticking to free cakes/cookies for all instead if that's still considered a business. Less complicated, still happy.

-K8memphis Posted 19 Oct 2009 , 2:30pm
post #22 of 22

You're saying $1,000 Australian dollars? and $400/yr to maintain? I understand that you've already changed your mind and I understand that a thousand dollars is a lot of money.

However--that is the bargain of a lifetime if you can get legal in your home. Clearly you may need to do more improvments to your home but dude, like $35 a month to be legal??????!!!!!!!

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