bdrider Posted 5 Apr 2013 , 1:11pm
post #1 of

So I'd love some feedback as to what is a fair percentage to give to a shop owner if you are operating under their food license, occasionaly working out of their facility.  Orders would come from shops clientelle as well as exisiting/new customers for me...

 

Materials paid for by me...

 

So basically I would be operating under the shops umbrella ( anyone in NJ knows what a giant situation this is)... And since I've not done this before I'm unsure what percentage would be fair to give to owner.

 

Appreciate the input..

28 replies
jason_kraft Posted 5 Apr 2013 , 2:00pm
post #2 of

ACan you clarify your situation? Do you have your own business or are you an employee or contractor of the shop? Where do you work on orders when not at the shop owner's facility?

bdrider Posted 5 Apr 2013 , 2:03pm
post #3 of

I have my own business that I've been operating out of my home ( illegally in NJ) that I have an LLC established for...   Not an employee of the shop..  Would work on orders still out of my home setup but would be operating out of her facility for legal purposes...

 

Thanks!

NJsugarmama Posted 5 Apr 2013 , 2:46pm
post #4 of

AWhen I sold cakes in my legal shop in NJ, the last person I'd give advice to is someone doing it illegally.

Good luck.

NJsugarmama Posted 5 Apr 2013 , 2:47pm
post #5 of

AThough, I do give you credit for being honest.

bdrider Posted 5 Apr 2013 , 3:11pm
post #6 of

Please dont misunderstand...  My intentions are to be operating ( not just on paper) completely legally within a month.. Sorry if that wasnt clear.  :)

jason_kraft Posted 5 Apr 2013 , 4:34pm
post #7 of

AIf I was the shop owner and your home kitchen was not inspected I would not agree to this setup, since that would be a health violation that I would be responsible for if you were under my shop's umbrella.

Instead I would probably rent you my kitchen space at an hourly rate so you could have your own license, inspection, insurance, etc. Under this situation no commission would be necessary since I would be receiving income from the kitchen rental.

-K8memphis Posted 5 Apr 2013 , 4:46pm
post #8 of

10% of the gross i think

Annabakescakes Posted 5 Apr 2013 , 4:58pm
post #9 of

WOW, I wonder how many people have taken screen shots and contacted the IRS and Health Department?

jason_kraft Posted 5 Apr 2013 , 5:12pm

A

Original message sent by Annabakescakes

WOW, I wonder how many people have taken screen shots and contacted the IRS and Health Department?

I can't imagine why anyone would do that, or what purpose it would serve.

A. OP hasn't even started his business yet, he is just asking a question B. There is no reason to believe that OP is evading taxes so it doesn't make sense to contact the IRS C. There is not enough information in the CC post to narrow down which county health dept has jurisdiction

MeghanKelly Posted 5 Apr 2013 , 5:27pm
Quote:
Originally Posted by bdrider 

I have my own business that I've been operating out of my home ( illegally in NJ) that I have an LLC established for...   Not an employee of the shop..  Would work on orders still out of my home setup but would be operating out of her facility for legal purposes...

 

Thanks!

Jason_kraft, she says she has been operating out of her home...

jason_kraft Posted 5 Apr 2013 , 5:30pm

A

Original message sent by MeghanKelly

Jason_kraft, she says she has been operating out of her home...

Ah, I see. Points B and C still apply.

Crimsicle Posted 5 Apr 2013 , 5:39pm

My goodness!  I'm stunned at the ugliness simmering under the surface here.  But, perhaps I'm naive....

enga Posted 5 Apr 2013 , 5:47pm

Welcome to the real CC
 

Annabakescakes Posted 5 Apr 2013 , 6:27pm
Quote:
Originally Posted by bdrider 

So I'd love some feedback as to what is a fair percentage to give to a shop owner if you are operating under their food license, occasionaly working out of their facility.  Orders would come from shops clientelle as well as exisiting/new customers for me...

 

Materials paid for by me...

 

So basically I would be operating under the shops umbrella ( anyone in NJ knows what a giant situation this is)... And since I've not done this before I'm unsure what percentage would be fair to give to owner.

 

Appreciate the input..

 

Quote:
Originally Posted by bdrider 

I have my own business that I've been operating out of my home ( illegally in NJ) that I have an LLC established for...   Not an employee of the shop..  Would work on orders still out of my home setup but would be operating out of her facility for legal purposes...

 

Thanks!

 

Quote:
Originally Posted by Annabakescakes 

WOW, I wonder how many people have taken screen shots and contacted the IRS and Health Department?

 

Quote:
Originally Posted by jason_kraft 


Ah, I see. Points B and C still apply.

Um, how many illegal home bakers pay taxes? Seriously? (eye roll)

Her website says Bloomington, NJ.

 

And when people work their a$$es off, spent tons of money, and play by the rules, it pisses people off when others don't, then throw it in their faces.

mariets Posted 5 Apr 2013 , 6:37pm

I'm from the UK so I'm not really into the reasons why US states have different laws. Is the OP only in the wrong because she's in NJ, or does the US not allow food to be sold from a home in any state?

-K8memphis Posted 5 Apr 2013 , 6:41pm
Quote:
Originally Posted by mariets 

I'm from the UK so I'm not really into the reasons why US states have different laws. Is the OP only in the wrong because she's in NJ, or does the US not allow food to be sold from a home in any state?

 

 

it's as diverse as from city to city sometimes--there's lots of variables

 

for example--ohio is awesome for home cakers

 

most of my state is awesome--except not the city i live in ;)

 

i think new jersy is real strict

MimiFix Posted 5 Apr 2013 , 6:42pm

When I read this thread it didn't seem ugly. I thought Annabakescakes was being her usual funny/sarcastic self. And Jason was giving his usual business advice which is an awesome personality trait. We're here to help each other, so the OP might benefit from hearing business issues, not just a simple percentage.  

Annabakescakes Posted 5 Apr 2013 , 6:53pm

A

Original message sent by MimiFix

[SIZE=13px][COLOR=181818]When I read this thread it didn't seem ugly. I thought Annabakescakes was being her usual funny/sarcastic self. And Jason was giving his usual business advice which is an awesome personality trait. We're here to help each other, so the OP might benefit from hearing business issues, not just a simple percentage. [/COLOR][/SIZE][SIZE=0] [/SIZE]

Yes, thank you Mimi. I'm not saying that people would, or should turn her in, just that some could, and may feel justified.

I am in Ky. , where we have no cottage food industry laws, and I JUST had the sanitation district ring my bell (literally and figuratively!) to inspect my grease trap. I was putting my 4 year old down for a nap, and my husband and I were going to "do some laundry". I have several consultations this weekend, but no cakes, and I felt like I had been inturupted at home. Not to mention that I paid $400 for the grease trap, and $300 a year for the privilege for him to come out here and snoop. If I hear or someone illegally getting around that, selling cakes for $8-65 a serving, in my area, I do think I would narc them out. So, I was wondering how many NJ natives have called on her, and collected evidence.

kazita Posted 5 Apr 2013 , 9:01pm

AFirst of all I will say that I'm only a hobby baker and will never ever sell my cakes not after what I've read off this website . I use to be on the side of the people who thought it was no big deal to sell cakes illegally but I was uninformed about how much money and work goes into getting a caking business up and running and maintained , so that being said I'm now on the side of people who have gone through all the proper legal channels. This is why I'm one of the people who ask someone if there kitchen is legal when they come on here and post a cake and ask how much to sell it for and just the other day there was a gal on here wanting to charge for the overhead of her unlicensed kitchen sorry but I just don't think that's right. Coming on here and saying that you are illegal and that you are selling product is bound to cause some controversy. Just my 2 cents.

AZCouture Posted 5 Apr 2013 , 9:14pm
Quote:
Originally Posted by kazita 

First of all I will say that I'm only a hobby baker and will never ever sell my cakes not after what I've read off this website . I use to be on the side of the people who thought it was no big deal to sell cakes illegally but I was uninformed about how much money and work goes into getting a caking business up and running and maintained , so that being said I'm now on the side of people who have gone through all the proper legal channels. This is why I'm one of the people who ask someone if there kitchen is legal when they come on here and post a cake and ask how much to sell it for and just the other day there was a gal on here wanting to charge for the overhead of her unlicensed kitchen sorry but I just don't think that's right. Coming on here and saying that you are illegal and that you are selling product is bound to cause some controversy. Just my 2 cents.

Thank you! 

kazita Posted 5 Apr 2013 , 9:28pm

A

Original message sent by AZCouture

Thank you! 

Welcome ;)

bdrider Posted 6 Apr 2013 , 12:23am

Wow.

 

I have paid taxes on my cake for several years  now.  I have also been in very close contact with the local health dept recently.

 

one of the reasons I havent been on here to reply to anything in 8 hours is bc i was busy moving ALL my supplies to the shop as I decided that was the best choice.

 

Since I was no longer going to be doing any baking out of my home for $ ( which I havent done in well over a year BTW due to some extremely serious personal problems) the only thing I was really going to be doing at my home was the non edible things ( sugar shoes etc).  But I decided it was a much better idea to do it all there for several reasons.

 

SOOOOOO thanks very much for the extremely helpful input.

 

Have a great day...

enga Posted 6 Apr 2013 , 12:37am
Quote:
Originally Posted by bdrider 

Wow.

 

I have paid taxes on my cake for several years  now.  I have also been in very close contact with the local health dept recently.

 

one of the reasons I havent been on here to reply to anything in 8 hours is bc i was busy moving ALL my supplies to the shop as I decided that was the best choice.

 

Since I was no longer going to be doing any baking out of my home for $ ( which I havent done in well over a year BTW due to some extremely serious personal problems) the only thing I was really going to be doing at my home was the non edible things ( sugar shoes etc).  But I decided it was a much better idea to do it all there for several reasons.

 

SOOOOOO thanks very much for the extremely helpful input.

 

Have a great day...


Good Luck with your business ventures bdrider, I'll be rooting for you icon_wink.gif

-K8memphis Posted 6 Apr 2013 , 1:31am

how awesome for you to get this great opportunity

 

what do you think your percentage will be to the owner?

 

do you think 10% is close? 8%?

 

ps. fwiw-- i pay sales & use tax as well as personal income tax on my hobby cakes

enga Posted 6 Apr 2013 , 1:04pm

icon_wink.gif

jason_kraft Posted 6 Apr 2013 , 1:44pm

A

Original message sent by bdrider

Since I was no longer going to be doing any baking out of my home for $ ( which I havent done in well over a year BTW due to some extremely serious personal problems) the only thing I was really going to be doing at my home was the non edible things ( sugar shoes etc).  But I decided it was a much better idea to do it all there for several reasons.

Good for you!

If you do decide going the commission route, you'll need to know how much of a markup you have for profit, and how much of that you will be willing to give up. Compare that with building in the cost of hourly kitchen rental and see how the numbers work in both scenarios.

jason_kraft Posted 6 Apr 2013 , 1:47pm

A

Original message sent by Annabakescakes

Um, how many illegal home bakers pay taxes? Seriously?

Be careful with this, repeatedly making false reports to the IRS based on guilt by association instead of proof can get you in trouble.

BakingIrene Posted 6 Apr 2013 , 8:03pm
Quote:
Originally Posted by bdrider 

So I'd love some feedback as to what is a fair percentage to give to a shop owner if you are operating under their food license, occasionaly working out of their facility.  Orders would come from shops clientelle as well as exisiting/new customers for me...

 

Materials paid for by me...

 

So basically I would be operating under the shops umbrella ( anyone in NJ knows what a giant situation this is)... And since I've not done this before I'm unsure what percentage would be fair to give to owner.

Are you paying an hourly or daily rent?  That would cover everything that the shop owner considers to be their overhead plus a small profit if they know what they are doing.  In which case, no other payment.

 

Are you paying by the job?  Then you should  agree IN WRITING on a commission before you start working out of this kitchen. 

 

But I would ask for a rate by the hour or day--because a percentage/commission means that you are paying the shop owner "rent" for the ingredients that YOU are buying.

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