I had a shop in a rented space in a deli type business. I hated all the hours I spent away from my family. We recently moved to a new town and purchased a house with a big space in the basement to become my cake shop. I have been working for months to gather estimates, find out legalities, and purchase equipment. I just barely broke ground for the plumbing a few days before we had a rummage sale. A neighbor (that i hadnt met yet) stopped over and bought a few wilton square pans i had out (i have recently upgraded to magic line and LOVE them). She tells me she does cake and we are soon to be competion! It's graduation weekend and I've seen countless sheet cakes leave her house. Now i know she doesnt have an approved kitchen and is operating totally illegally! I hate that I have spent what seems to be thousands of dollars already to be legal and here she is! What are the odds that i buy a house 1 door down from an illegal caker? Ugh~~so frustrated!
FYI - I live in south dakota. We currently have a cottage food law for farmers markets only, but is soon (july 1) to change to allow baking from home for public sale up to $5000 per year. This woman, however, had no idea of the law we just lobbied state legislature for.
When you're up and running, make "licensed kitchen" part of your marketing. Every where your name is, included that phrasing. Some will never leave their caker, as they've had her cakes for years. However, others will begin to wonder and maybe even ask some questions.
I'm new(ish) to Cake Central, but I'm amused (in an oddly annoyed way) at how many threads there are like this. Being licensed affords certain advertising, and event options, that are off limits to those who are not licensed. I can't imagine that you're truly concerned about the safety of the people receiving this woman's cakes....why not just get over it? Yes, you've worked hard - but surely no one's actually told you life is fair(?). I can't help but feel that anyone who has any interest in cake is a friend of mine.
Many venues will only allow cakes made by vendors who are licensed (and have liability insurance). If the venues in your area don't have this restriction, it might be time to talk to them about it.
I'm new(ish) to Cake Central, but I'm amused (in an oddly annoyed way) at how many threads there are like this. Being licensed affords certain advertising, and event options, that are off limits to those who are not licensed. I can't imagine that you're truly concerned about the safety of the people receiving this woman's cakes....why not just get over it? Yes, you've worked hard - but surely no one's actually told you life is fair(?). I can't help but feel that anyone who has any interest in cake is a friend of mine.
I didnt mentioned I was concerned for anyones safety. i am frustrated by the fact that I am spending tons of money and time to operate a fully legal and licensed business while she is operating without any restrictions and completely under the radar.
i realize that there the are tons of threads and postings on this topic but i cannot help but be irritated and frustrated by the irony and inconvenience of this woman being my neighbor
She may not even know she's operating illegally...most people tend to ignore the situation and look the other way instead of stepping up and starting a conversation about the legalities of the business (and the importance of liability insurance), so it's certainly possible no one has made her aware of the rules.
Living next door does complicate the issue somewhat though, if you do have this conversation you'll need to be very careful about it.
And while there are numerous posts, we all decide whether to "turn 'em in" (health dept, IRS, ag dept, etc.) OR "live and let live". Our "good reasons" to either act, or not act... are our own.
If you are of the "turn 'em in" squad, you should know that karma will get you OR meannie illegal baker will find you "told" OR you "wouldn't want that done to you".... but you will attempt to level the playing field and reduce the competition.
If you are of the "live and let live" squad... then you let the situation go on, maybe lose business, may be undercut, maybe put your own livelihood at risk.
BUT the real reason to post is to vent, and remind each baker to "know their risks" and make their choices. If you are "illegal", you now know you are illegal and can choose to become legal, or better conceal yourself to "fly low".... and know that "meannies" are out there.
I admit- I am a meannie and would happily "turn 'em in". And I am just a hobby baker!
Johnson, I have been self employed for 20 years with three different startup companies. Not once have I heard in business conversation, the word, "meanie". She is posting on the business forum and is obviously looking for business advice. Protecting your license is a vital part of business.
I, as the OP has done, always state my position in the market as a licensed baker. When many people comment on this subject, they NEVER state their position. Are you legal ,illegal, cottage industry, etc? How much was your investment to become legal? It would be interesting to see the credentials. We all know that for every license on file in area health departments, there are a multitude of people without a license that charge for cakes. I, know for a fact, bakers on this site that advocate minding your own business, who are in fact illegal bakers themselves.
OP, ask your health department where they stand and how they deal with illegal bakers, caterers, etc. They will tell you. Turn her in if you want. I turned them all in by asking my HD rep to google them. All you have to do is google "cake (city)", and eight used to come up in our town. Most shut down their sites after that. I do business in two states. One state has no illegal bakers online and the other had quite a few.
ON your "About Us" page, photograph your license, tax license, and your insurance policy. Tell them to make sure they get this information from each baker as they are gathering their quotes. Emphasize the importance of each document.
I personally do not care who bakes illegally. I get irritated when they put up web sites and sell on Facebook. Besides that, they can bake away.
Jenng1482 Just wondering how this neighbor has inconvenienced you by not being licensed, you decided to go legal she has decided not to and runs her business her way.
I believe in Karma what goes around comes around, don't let this get the best of you life is to short to feel irritated, frustrated or inconvenieced just because she also bakes, she may really be a nice neighbor so don't waste your energy letting this eat at you, if your good at your craft you'll have a great business with or with out your neighbor being licensed.
Karma works both ways, e.g. if you don't speak up when someone is unknowingly doing something wrong (and potentially dangerous) to help put them on the right path, you run the risk of no one stepping up for you if you unknowingly head down a bad path yourself.
But then I'm not Hindu, Sikh, or Buddhist, so I don't believe in karma. 
If I'm reading right you moved to her neighborhood. Her selling of cakes started before you got there. I'm not sure how right that would be to try to get her in trouble. I'm sure she has some loyal returning customers.
I would recommend you go about setting up your business do some advertising, state you are a license baker I'm sure in no time you will have more than enough business. Without looking over your shoulder for Karma.
I don't believe in telling on anyone period. The right thing will come around.
Personally before I started doing cakes I looked for the Home Baker. I always got fresh nicely done cakes and store prices. They also seem to take more time with the decorating to make sure it is exactly what I was looking for. I could care less if they were licence or not. I am my own judge when it comes to desiding where I want my food prepared not the State.
My guess you will be doing big orders like wedding cakes where she may only be doing the smaller BD cakes. You never know you may get so busy with order you may ask for her help.
jason_kraft Do you honestly think that someone doing any kind of business out of their home w/o a license be it baker to babysitter and in between doesn't know they can be caught and fined besides other legal issues no way, ignorance is not bliss but there are those who choose to be ignorant when it comes to being illegal in any business. It's done under the table so they are not having to pay taxes besides having to do whats needed to run a "legal" business. Reguardless my statement was don't waste your time and energy being ticked because your neighbor decides to run under the radar an you don't it's your choice not to. I have had a state licenses and business license long enough to know that those who play by their own rules will eventually get caught and burned.
And personally am not Hindu, Buddhist or Sikh but yes in life what goes around does come around may not be today or tomorrow but it does happen and I call it Karma.
I don't see anything wrong with the OP reporting the neighbor if she feels that the neighbor operating illegaly is going to negatively affect her livelyhood. The neighbor isn't in the right just because she lived there first. The OP is likely going to have higher prices due to the increased overhead of becoming legal and the neighbor's ability to have lower prices by not being legal could cause the OP to lose orders. I think it's the OP's personal decision as to whether or not to turn in the neighbor, although if the neighbor is following the laws that will go into effect in their state starting in July it may not do a whole lot of good. I would support the OP's decision either way. I think it really depends on the details of the situation.
Contractors will turn in an unlicensed handyman the moment they compete for the same job. Licenses are put in place to protect the public. This karma, what goes around, etc., has no place in a real business arena. You won't find it in a classroom in college and you won't find it in a business book. Protect your business. If you are in my area... I am your karma. You can either play at business or you can have a business. And don't forget that many opinions on these threads are coming from unlicensed bakers.
It is your right to turn them in and it is your right to forget about it. Do what you feel is right for your business and your investment. Google her and see if she comes up. If she does, she is soliciting strangers. If she doesn't, she is probably selling through word of mouth and will be less of a problem. When the excavator came to dig my grease trap, he ased me why I was doing this when no one else did. I gave him the check for $2500.00 and he installed the grease trap. I wouldn't think to operate outside the law. But it is hard to swallow knowing that my kitchen was $25k more than the one down the road operating illegally. People sell cakes without a license because they want to work from home. It is convenient. There are plenty of jobs out there, they just aren't as convenient. No personal hardship justifies jeopardizing public safety when other jobs are available. And they are available.
It won't be long before the IRS and state tax depts use the web to track down tax evaders. Actually, they already use the web for evidence. People will demand more and more to pay with credit cards and that leaves a permanent trail. Bakers who allow their customers to pay by check have already started a paper trail that will be proof positive forever that the illegal baker has committed tax fraud as soon as they mail that year's tax return with their signature and there is unreported income. My point is that illegal bakers will have a harder and harder time doing business without web pages, credit cards, and checks. As time goes on, their market will diminish because the risk of tax issues that leads to being turned in to the health depts will be on the rise.
Example: My sister-in-law was looking for a 3D cake that I would not make. She asked all of her friends on fb if they knew anyone who made cakes. A nice long list of many illegal bakers with addresses and phone numbers popped up on her fb page. Because I am her "friend", it came up on mine too. My health dept said that they were investigating several of them who swore they weren't selling. Now they have the evidence. The health dept said that most of those people are already being investigated. They are just gathering proof of sales activity. Our HD give everyone a courtesy visit and tries to work with them to meet the requirements. They said that many of the unlicensed bakers and caterers are rude and think that they can't get caught with proof of sales.
Again, do what you feel is right for your business. My husband is a physician. If he lost his license and continued to practice, do you think karma should decide this issue? Or maybe "what goes around...". Both industries are licensed for public safety.
I don't believe in telling on anyone period. The right thing will come around.
I will say up fron this won't be a popular post with many so if you're thin skinned, you might just skip this one.
Why do peple think karma only applies to the person contemplating "telling" on an illegal baker? Why does karma not apply to the person performing the illegal act? Whenever we (hubby and I) see the idea about "karma will get them if they are doing someothing wrong" or anything about "their just rewards", hubby always points out "getting turned in IS their just reward! It IS karma biting them in the butt!"
I'm not sure how the logic works in that "if I do nothing, then it will eventually al work out." Huh? How do you figure anything will change if nothing is done? How does "the right thing come along" if no one ever does the right thing?
I just dont' get it. I also dont' get the logic of "she was there first." Double huh? 
Does that mean Walgreen's can't open a store across the street from CVS because Walgreen's wasn't there first? Because everywhere I drive, that doesnt' seem to be the case at all! Walgreen's on one corner ... CVS on the other.
I often wonder if the "live and let live people" teach their children that it's ok to cheat on their school tests or shoplift "as long as no one turns you in and you don't get caught"? Or that its ok NOT to report these things to the teacher or the store manager. If a teacher grades on a curve, then it affects my child's achievement records; shoplifting raises prices on all of us.
(and I hope I don't have to read the "cake baking is not shoplifting" defense. I'm tired of the lsit of things that are "not as illegal" as some illegal activities as if that 's some kind of justification on why it's ok to do THIS illegal thing and not THAT illegal thing.
Please don't use the tired exapmle of "do you turn in people who are speeding?" becauswe yes we have. Lived in a family neighborhood where some car was speeding up and down the street with little kids playing. We and about 5 other neighbors got the license number and called the police while we were all stnading right there in the street. Yes, people call 911 when they see a drunk driver on the freeway. Etc., Etc.)
You have rec'd good advice on using your legality as a marketing tool. More and more venues are requiring the proper paperwork, wihch becomes a great selling tool.
Yes, I've alerted my health dept to an illegal baker. not because she was competition to me but because she totally screwed over a bride and refused to make it right AND flat out told the bride she just didn't want to spend the money on a legal kitchen. I guess she wanted to make sure her cats could still roam all over the counters. (Yes, she had cats roaming on her counters.) I sent a link to her website to my HD inspector and asked "is this person licensed?" 3 days later, her website was down.
I've more than demonstrated on here that I'm willing to bend over backwards to help someone who is working toward getting an inspected kitchen. I've no tolerance for those who know the laws and thumb their noses at it simply becuase they don't WANT to spend the money required to become a real business.
(Sorry for all of the typos ... its 5 a.m.with a bouncy screen.) 
I don't believe in telling on anyone period. The right thing will come around.
I will say up fron this won't be a popular post with many so if you're thin skinned, you might just skip this one.
Why do peple think karma only applies to the person contemplating "telling" on an illegal baker? Why does karma not apply to the person performing the illegal act? Whenever we (hubby and I) see the idea about "karma will get them if they are doing someothing wrong" or anything about "their just rewards", hubby always points out "getting turned in IS their just reward! It IS karma biting them in the butt!"
I'm not sure how the logic works in that "if I do nothing, then it will eventually al work out." Huh? How do you figure anything will change if nothing is done? How does "the right thing come along" if no one ever does the right thing?
I just dont' get it. I also dont' get the logic of "she was there first." Double huh?
Does that mean Walgreen's can't open a store across the street from CVS because Walgreen's wasn't there first? Because everywhere I drive, that doesnt' seem to be the case at all! Walgreen's on one corner ... CVS on the other.I often wonder if the "live and let live people" teach their children that it's ok to cheat on their school tests or shoplift "as long as no one turns you in and you don't get caught"? Or that its ok NOT to report these things to the teacher or the store manager. If a teacher grades on a curve, then it affects my child's achievement records; shoplifting raises prices on all of us.
(and I hope I don't have to read the "cake baking is not shoplifting" defense. I'm tired of the lsit of things that are "not as illegal" as some illegal activities as if that 's some kind of justification on why it's ok to do THIS illegal thing and not THAT illegal thing.
Please don't use the tired exapmle of "do you turn in people who are speeding?" becauswe yes we have. Lived in a family neighborhood where some car was speeding up and down the street with little kids playing. We and about 5 other neighbors got the license number and called the police while we were all stnading right there in the street. Yes, people call 911 when they see a drnk driver on the freeway. Etc., Etc.)
YOu have rec'd good advice on using your legality as a marketing tool. More and more venues are requiring the proper paperwork, wihch becomes a great selling tool.
Yes, I've alerted my health dept to an illegal baker. not because she was competition to me but because she totally screwed over a bride and refused to make it right AND flat out told the bride she just didn't want to spend the money on a legal kitchen. I guess she wanted to make sure her cats could still roam all over the counters. (Yes, she had cats roaming on her counters.) I sent a link to her website to my HD inspector and asked "is this person licensed?" 3 days later, her website was down.
I've more than demonstrated on here that I'm willing to bend over backwards to help someone who is working toward getting an inspected kitchen. I've no tolerance for those who know the laws and thumb their noses at it simply becuase they don't WANT to spend the money required to become a real business.
(Sorry for all of the typos ... its 5 a.m.with a bouncy screen.)
I totally agree 
I agree with Debi. However, this person lives next door -- I can see this turning into the Hatfields and McCoys. The OP needs to consider whether she is willing to risk a feud, potentially ruining a happy life in a new home where she's just made a large investment to build her kitchen. Tough situation to be in.
I often wonder if the "live and let live people" teach their children that it's ok to cheat on their school tests or shoplift "as long as no one turns you in and you don't get caught"? Or that its ok NOT to report these things to the teacher or the store manager. If a teacher grades on a curve, then it affects my child's achievement records; shoplifting raises prices on all of us.
Yes Debi, that indeed is what a lot of parents teach their kids...there is little to no remorse for cheating, only anger over getting caught and having a consequence to follow.
To the OP: I do however agree with others that as a neighbor (with your new home as your biggest output of cash and effort thus far) you need to tread gently. Living peacefully 24/7 for years to come is far and away the bigger concern. Find out what she specializes in and try to gear your business in a different direction. Advertise what sets you apart and makes you great. It's not about being afraid of karma sneaking up and biting...it's about creating positive karma in your own life. Focus on building your own great business and don't expend your creative energy fretting over your neighbor's caking.
There is also the option to help her get her kitchen up to code. You could stop by her house, ask her if she's licensed and then say "oh, it's dangerous not to be cerified for x..y...z reason," and then show her the legalities. I know you view her as competition, but it sounds like she is selling a different caliber of cakes, so you would be viewed as THE baker and might actually put her out of business. If you want to report her, I'm sure you can do so anonymously. Heres' an example: you're the conflict-free, flawless diamond, (far more expensive) she's the cloudy diamond mined in an unknown location. Which one will a customer choose?
What about the neighbor respecting the OP's investment. This is a two way street.
I had a CC member that asked me all about how I built my legal kitchen and I shared it with her. She lives about three miles away. Later, she was involved in one of those heated "turn in/don't turn in" debates. I noticed that she had a website. She was very outspoken about, "mind your own business and just practice your skills to be the better decorator".
I called her on it and asked that she share her situation (legal/illegal) and please elaborate in the thread. Obviously, we took it to pm's. We were not going to agree but I gave her the opportunity to take down her site before I turned in my findings to the HD. She took it off CC, but left it up and claimed the cakes were for family only.
One week after I had an hour long discussion about illegal bakers with my HD rep and my debate with her, she comes on CC and thanks everyone for giving her the inspiration to become legal. In my area, the requirements are expensive and are just shy of FDA regulations. It took months to go through the planning commission, submit plans to the engineering department, and all of the other requirements. We were even streamlined because we could pull our own permits and were exempt from inspections (we both have contractors' licenses).
So in a few weeks she goes from wishful thinking and no money to a licensed kitchen that the HD has never heard of. All along, playing this game with CC members. Sometimes we just get duped. And for every licensed (or almost) baker we help, we are helping the next crop of people with no regard for the law, including taxes. And I know first hand that some of these people proclaiming to "mind your own business, let karma deal with it, blah blah blah" the loudest, are in fact operating illegally themselves.
So again, do what you feel is right for your your business. You can also talk to the HD and not mention names. It may be a case like mine where they had an open investigation on most of them anyway.
My opinion doesn't count for anything, but this is what I think....I'm not licensed yet. Currently working on it and trying to get the money together. I have to do some work on my well before I can get everything completed. This cake decorating thing happened by accident for me. I was selling food at the flea market after losing my job just to bring in some money and had someone ask for a bday cake. I'd never even iced a cake before, but I told her I would give it a try (my mom's family are all bakers and chefs, and she has decorated cakes for 30 years so I could always get her help). Now, one year later, here I am. And I'm trying to get legal, but that's a long story.
Anyway, I think those who are illegal get very defensive because they know what they're doing is wrong. The legal bakers don't need to defend the "you need to be licensed" view. Everyone on this site knows they need a license. The unlicensed are trying hard to make themselves believe it's okay, even when we know it's not. I know it's not okay, and it bothers me terribly. I got swept up in this, and now I have orders booked into October...so, I keep trying to get the license. But I deserve the anger of the licensed bakers and I'll admit that. And, I'll keep working to get everything set up right. Don't get angry with others because you are doing wrong.. Just my two cents....
My opinion doesn't count for anything, but this is what I think....I'm not licensed yet. Currently working on it and trying to get the money together. I have to do some work on my well before I can get everything completed. This cake decorating thing happened by accident for me. I was selling food at the flea market after losing my job just to bring in some money and had someone ask for a bday cake. I'd never even iced a cake before, but I told her I would give it a try (my mom's family are all bakers and chefs, and she has decorated cakes for 30 years so I could always get her help). Now, one year later, here I am. And I'm trying to get legal, but that's a long story.
Anyway, I think those who are illegal get very defensive because they know what they're doing is wrong. The legal bakers don't need to defend the "you need to be licensed" view. Everyone on this site knows they need a license. The unlicensed are trying hard to make themselves believe it's okay, even when we know it's not. I know it's not okay, and it bothers me terribly. I got swept up in this, and now I have orders booked into October...so, I keep trying to get the license. But I deserve the anger of the licensed bakers and I'll admit that. And, I'll keep working to get everything set up right. Don't get angry with others because you are doing wrong.. Just my two cents....
Your 2 cents is worth a million. Some on this board seem to forget this is how they started out. In some cases we don't know why that person is selling cakes from their home. Maybe to save enough to become legal or they may have lost their job and want to put food on the table till they can get on their feet. Before I reported her I would give her a chance to close shop. I wouldn't do it behind her back.
Be sure whatever you do it's something you can sleep with at night.
I think your opinion counts. And it was very honest. You are the type of person that my HD tries to help. Although I don't agree that the path to a license is working without a license, I can appreciate that for you it is a means to an end and if you were in my area, I would ignore it. Again, I have no problem with people selling to friends and relatives. It's too isolated and too small scale. But websites and business cards cross the line of soliciting to strangers.
Janette, losing a job does not validate working without a license. There are many jobs out there to be had that do not require a license. People can get jobs that pay what a small scale decorator would get. But that job may withhold taxes or may not be as desirable. Baking cakes illegally is a choice, not a necessity.
I can understand your frustration because the "only this would happen to me" phrase is a permenent part of my vocabulary lately! But, if this woman is purchasing your old pans and you have seen nothing but sheet cakes coming out of her house,my assumption is that when people start seeing far superior work coming out of your licensed kitchen she will loose business anyway. Turning in you neighbor is a tricky situation, hopefully you can work it out.
How do you know for certain she does not have a legal kitchen? I would probably find that out for sure before moving forward with turning her in...
Maybe you will get lucky and someone will order a cake from her and they will just happen to be picking up that cake at the same time the HD is coming out to your house to inspect! Wouldn't that be a hoot for the inspector to see someone going to the door and walking out with a boxed cake!
I just want to say too that almost 4 years ago I was approached to make a cake for a friend of a friend who had seen a cake I made for a party... At that time she told me she would buy my cakes if I sold them. Needless to say, I found CC and began reading post after post about the legalities of selling cakes from your home. Within 6 months I had a up and running separate commercial kitchen, granted I know the situation for others may not be that simple; however, I can make my cakes in my nice peaceful cake kitchen and never have to worry that someone will be at my doorstep turning me in for tax evasion! So basically all you CC'ers out there that have posted how illegal it is to sell cakes from your home, thank you!
For those of you who know that it is illegal and do it anyway... shame on you... I look at is more of a moral issue really.
You do not have to know if someone is legal before you make a health department inquiry. It is a public license. We have a right to verify any license. Doctors... state medical board, contractor... building inspector, babysitter... health dept, hairdresser... cosmetology licensing agency.
I cannot begin to tell you how many times our construction employees and fired employees have gotten jobs by flashing our license and insurance. Our vehicles have to carry both and anyone can copy them. We have even had permits pulled with them.
So anyone who hires a contractor to work on your house, check the license. Because the stolen insurance paper does not cover you when your house burns down or your pipes burst.
You do not have to know if someone is legal before you make a health department inquiry. It is a public license. We have a right to verify any license. Doctors... state medical board, contractor... building inspector, babysitter... health dept, hairdresser... cosmetology licensing agency. I cannot begin to tell you how many times our construction employees and fired employees have gotten jobs by flashing our license and insurance. Our vehicles have to carry both and anyone can copy them. We have even had permits pulled with them. So anyone who hires a contractor to work on your house, check the license. Because the stolen insurance paper does not cover you when your house burns down or your pipes burst.
My point in asking that is that this is her neighbor, she will need to live next to this person for however long... No sense in to making unjust claims before knowing the facts. Just for the record I in no way am saying to not turn her in, just asking if she knows for certain if she is not licensed all of her concerns would be moot at this point if her neighbor were in fact legal.
Yikes, I feel like I was getting my head chewed off for asking a simple question. I guess I know why I choose to not respond on these types of posts... Or maybe I'm just overly sensitive?
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