dmo4ab Posted 30 Aug 2010 , 9:21pm
post #1 of

Hey CC'ers. I just confirmed that the state of Alabama will not license a home based baked good business. I just bake on the side. I have a full time job and not enough cake business, time, or capital to quit and open a business at a seperate location.

However, I want to expand my business a little. I wanted to do a website and maybe a facebook page - mainly I wanted a place to showcase what I have done and publish my prices and what types of items I do. I came up to use the name "Sweet Dessert".

So....all that said, my concern is.... If I put a website out that looks like I have a business, but I really can't (literally), then am I sticking my neck out and asking for trouble? Or, am I being a worry wart unneccesarily?

Appreciate any advise....please!

37 replies
Monirr04 Posted 30 Aug 2010 , 9:34pm
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I've looked into it a few times as well. Putting up pricing and all is illegal. You are not allowed to sell any home baked goods out of your home at all. So yes, you would be sticking your neck out there. Even if you are not advertising as a business it is not legal to sell items you bake at home.

Sorry!! We are hoping that the Cottage Food law passes here next year so it is legal.

ShellBell69 Posted 30 Aug 2010 , 9:42pm
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Yep. I would say it would be sticking your neck out. It is illegal to sell here in AL. I wish it were not so but...it is. I have however made one cake and only took money to buy ingredients. I know...shouldn't do it but it was for my boss who really really wanted my cake and I couldn't afford to make it for her.

leah_s Posted 31 Aug 2010 , 1:27am
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You already know the answer to your questions. You can't sell cakes baked from your home, period. You can rent a commercial kitchen and bake there and sell those cakes. Or you can open a storefront. And you can join with others to lobby your legislature for a Cottage Foods Law. But you can't have a business out of your home and you seem to have validated that information with your state.

dmo4ab Posted 31 Aug 2010 , 11:42am
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Thanks guys. It really is a bummer!

julzs71 Posted 31 Aug 2010 , 11:58am
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I thought Alabama was a cottage law state

dmo4ab Posted 31 Aug 2010 , 12:10pm
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The state department of health will not allow selling baked goods from your home. It has to be a seperate structure. icon_sad.gif

jason_kraft Posted 31 Aug 2010 , 6:09pm
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It's pretty easy to get started in a rented commercial kitchen or incubator kitchen, most will let you pay by the hour...the trick is finding one in your area. Church kitchens could be another potential solution.

KMKakes Posted 1 Sep 2010 , 9:11pm
post #9 of

So I checked into the same thing. You will have to find somewhere commerically setup to bake. (Bummer, meaning you will have to learn there oven, etc.) In my small area there are a few cake decorators that do sell custom cakes out of there kitchen with fb pages and business cards floating out there. I was told to check into calling yourself a cake consultant instead of technically "putting yourself out there as an actual business." It is all fuzzy to me, a question I must find out soon. I was asked by a friend to bake a cake for over 60 people in the upcoming weeks........

mactrio Posted 6 Sep 2010 , 5:28am

It's not always ethical; but I have a friend who 'sells' the cardboard box that the cake is in. That way she isn't selling baked goods, she's 'giving' them with the box.

jason_kraft Posted 6 Sep 2010 , 5:01pm
Quote:
Originally Posted by mactrio

It's not always ethical; but I have a friend who 'sells' the cardboard box that the cake is in. That way she isn't selling baked goods, she's 'giving' them with the box.



That sounds clever, but the authorities would see right through it.

In fact, your friend could get in even more trouble by doing this, since she is obviously aware that it's illegal to sell baked goods from home and she's deliberately trying to circumvent the system.

Although unlikely, she could face charges of fraud due to her intentional deception. She also faces serious penalties from the IRS if she's not paying taxes on the sale of her "boxes".

peaseofcake Posted 6 Sep 2010 , 6:01pm

Alabama is a cottage law state. I too wanted to start my own cake business so I contacted Public Health in Montgomery and spoke to Ron who said I could sell from the Farmer's Market however would not be able to be licensed from my home unless I converted my garage into a commercial set up. So I contacted the Alabama Farmer's Market Authority who gave me the contact information to my county.

I contacted my county's farmer market and was told I needed to get a grower's permit to be able to sell at the market. I now sell my cakes at the market by taking order there and delivering the cakes to a different location. I have different flavor free cupcakes, my portfolio, and business cards.

I don't know if this is legal however I have tried to contact my local business license place to get clarification with no luck. They will not call me back.
As far as finding a commercial kitchen for rent, I have only been able to find one which is located near Mobile.

My question for the state would be, if I am allowed to see from my house to the farmer's market, why not make me legal so I would have to pay business and state taxes on the products sold?

scp1127 Posted 6 Sep 2010 , 10:13pm

peaseofcake... why do you think that you are not supposed to be paying taxes on your farmers market sales? If you have an income from ANYTHING you MUST PAY TAXES! No one is exempt from taxes. You claim it on your state and federal tax returns and you pay the tax rate based on your total income. By the way, if you get caught, the IRS will look at your bank account, see the amount of checks you deposited, and arbitrarily decide how much cash you may have taken in.

peaseofcake Posted 7 Sep 2010 , 2:39am

scp1127 - I apologize if my post did not come out the way I meant it. I understand if I make more than $400 during a calendar year (fiscal year) I have to claim it on my tax return as income. I do have Bachelors in Business with a concentration in Accounting and do understand that federal and state income taxes do have to be paid. icon_wink.gif

I was talking more along the lines of the local (city/county) taxes that are associated with the business to include local sales and use taxes and license and permit fees which go help fune my local community.

I do not get the same privileges of being able to file as a business since my state does not recognize me as a business. I hope this cleared up what I meant.

wespam Posted 7 Sep 2010 , 12:05pm

I'm very leery of the advice you were given. I'm not familiar with farmers market growers permits here in AL but I can tell you from my own personal experience that because you use fresh eggs, a protein source, in your product that you are classified as a class 3 and need to be inspected in a licensed kitchen by your county health dept and have your ServSafe certifcation.

Business licenses and taxes are separate from your food permit. You will need your food permit to get your business license and if you deliver your cakes they may even require a transient license along with it. There's a lot of hoops to jump thru in the process but it's not impossible to find a kichen to rent and have the peace of mind that you are legal. Pam from Bama

leepat Posted 7 Sep 2010 , 12:25pm

I agree with Pam, I am pretty sure you are setting yourself up for disaster if you try to sell out of a farmers market and your cakes are not baked in a licensed kitchen. The hoops I had to jump through to make myself legal was far more worth it than to try ducking the authorities every time you turn around. Truly if I were you I would look into renting (the way I started out) and then expanding by building on to your house or using your attached garage. The worry free baking is sooo worth it.

peaseofcake Posted 7 Sep 2010 , 5:48pm

I appreciate your comments regarding selling at the farmer's market here in Alabama. I am attaching a link to the Alabama Farmer's Market Authority so you can read that they do allow the sale of baked goods at the market as long as you have the appropiate labeling that the food is prepared in a kitchen that is not inspected by a regulatory agency.
http://fma.alabama.gov/HomeProc.aspx

This is a temporary solutions, for me, until I can get the capital to open a store front. This is also the reason I question the ability to sale at the market instead of the state allowing home bakers to become licensed so they can collect sales and use taxes along with other business taxes in order to better the community.

To the opening post:
If you want to contact Public Health in Montgomery the phone number for license is 334-206-5375. The number to the Alabama farmer's market authority is 334-361-7273. I hope this helps you out.

sari66 Posted 7 Sep 2010 , 6:13pm

I'm not in AL but it seems that peaseofcake is right the link clearly states that you can sell to farmers markets with the appropriate labels on your cakes icon_smile.gif
Good luck to both of you

dmo4ab Posted 7 Sep 2010 , 9:24pm

peaseofcake, Thanks for the links and numbers. I will check them out. I might consider the farmers market.

wespam Posted 8 Sep 2010 , 11:48am

I'm not the 'moral' police by any means and don't want to make an arguement out of interpreting the code however I read,

" Chapter 420-3-22-.01 now excludes a kitchen in a private home from the definition of food establishment if only food that is not potentially hazardous (time or temperature control required for safety) is prepared for sale or service at a function such as a charitable, religious, civic, or not-for-profit organization's food sale, or at a state sanctioned farmers markets, and if the consumer is informed by a clearly visible label, tag, or placard at the sales or service location that the food is prepared in a kitchen that is not inspected by a regulatory agency. Certain home processed foods, for example baked breads, rolls, cookies, cakes, brownies, fudge, and double-crust fruit pies; traditional fruit jams, jellies, marmalades and relishes; candy; spices or herbs; snack items such as popcorn, caramel corn and peanut brittle, may be sold at farmers markets with appropriate labeling.

But taking orders, delivering to outside addresses other than the farmers market and passing out business cards to me stretches the wording and intent of the code. Maybe on a par with charging for the box not the cake that's in it. Pam

leepat Posted 8 Sep 2010 , 12:11pm

I agree with you Pam. Buying baked goods at a farmers market and not knowing what kind of kitchen they come from (hygiene and such) ranks right up there with buying baked goods from the local bake sale stand outside of Walmart. You absolutely don't know how they were prepared and how clean the house is. I had a friend that saw absolutely nothing wrong with her cat walking on her kitchen cabinets. Needless to say I did not eat at her house or any of her food. I am not a germaholic but I do think you need to be wise.

Paige_Pittman86 Posted 8 Sep 2010 , 12:22pm

So I'm theory you could rent an apartment as long as you do not live there and only use it for baking cakes and then you could sell them.. But that's my theory.. Cause the law says you can't sell cakes made in your home right?? Well if you aren't living in the apartment well it's not your home.

scp1127 Posted 8 Sep 2010 , 12:26pm

As someone who has spent the last year saving, sacrificing, planning, and doing all the hard things to open my business legally, it is hard to hear of people who want to shortcut the process. Of course the law doesn't mean to use the farmers market as a gateway to do whatever you want. It seems that AL has one of the more strict requirements for home baking, so they are serious about protecting the public from unlicensed kitchens. I am now only three weeks away from opening and I believe in the process. It protects my business by setting the standards for public safety and it protects the public from possible unsanitary or hazardous food.

leepat Posted 8 Sep 2010 , 12:35pm

I worked very hard scrimping and saving then finally refinancing my home to open my licensed bakery and because I did it legally I have been truly blessed by a successful business. You guys can search and look for ways to get around the law if you want I just did not feel it was worth my morals to do it. I don't have a problem with home bakers at all, if you want to sell cakes to your family and friends that is fine. But it is when you are trying to run a business and do it so the law does not catch you it really gripes me. But you do what you want, but remember what goes around comes around. And no I am not the morality police either. You just need to think about it.

Paige_Pittman86 Posted 8 Sep 2010 , 1:02pm

It's not getting around the law if what you are doing Is in fact legal. If the health department gives you the green light then weather you open your own business or use an apartment or rent a kitchen if it's legal it's legal. Not everybody can open up
A store And since you can't save up buy selling cakes then you gotta start with what you can get. You gotta crawl before you can walk and I think jumping into opening a business when you have never sold a cake that skipping the crawling and the walking and going straight to running..

Paige_Pittman86 Posted 8 Sep 2010 , 1:06pm

And that's not aimed at anybody who is opening a store I'm
Just saying sometimes it's okay to start small.

scp1127 Posted 8 Sep 2010 , 2:27pm

I am not referring to anyone legally starting small.... I am that person who is legally starting small. If you want a cake business, you must raise money in an alternate vocation. My reference was to short-cutting the law. If you don't have the money to start, then you cannot do it legally. It is expensive, time consuming, and requires dedication to get it done.

jason_kraft Posted 8 Sep 2010 , 3:14pm
Quote:
Originally Posted by Paige_Pittman86

So I'm theory you could rent an apartment as long as you do not live there and only use it for baking cakes and then you could sell them.. But that's my theory.. Cause the law says you can't sell cakes made in your home right?? Well if you aren't living in the apartment well it's not your home.



You could probably rent time at a commercial kitchen for less than the cost of renting an apartment.

Paige_Pittman86 Posted 8 Sep 2010 , 5:10pm

I live in MS I haven't even found out what our laws are yet cause I'm still not ready by any means but does anybody know anything about ms laws

dmo4ab Posted 8 Sep 2010 , 5:10pm

Thanks to all for your thoughts and replies.

I didn't intend for the post to generate comments on how to circumvent the laws and regulations or to stir up hard feeling for those who do.

I do have a full-time job and I was planning to try and launch a small baking business from home and then (on the day I posted) found out it wasn't legal to do it from home in AL. I've scrapped the current business plans. I'm not out to break any laws.

My hubby and I have come up with a long-range plan to renovate an old house we own with a commercial kitchen and turn it into a legal business one day. However, right now we can't afford to do that. I appreciate that some of you have made tremendous sacrficies of time and finances to operate your own business legally as I'm sure it will be no less for me when I come to cross that bridge.

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