I want to start a cake business out of my home in NY, but I don't even know who to ask if this is possible and what are the proper steps in doing it. If you have any ideas or suggestions it would be appreciated.

There is an article on CC that you should read. Regulations and license requirements vary by state and sometimes even by county! Here is the link:
http://www.cakecentral.com/article57-Wanting-to-start-a-Cake-Decorating-Business-but-where-do-I-begin.html
Good Luck!!! and Welcome to Cake Central!!!!