Ok, in Hawaii, it is ILLEGAL to have a home-based food business. Your home kitchen can NEVER be used for your food business. I spent a lot of money getting into a commercial kitchen (gen liability insurance, rent, storage, etc) and none of my competitors are licensed and are operating out of their houses. I'm finding myself increasingly resentful of the $$$ I'm shelling out to be legal and them not bothering to follow the law. Maybe its just PMS but its really starting to tick me off.

Am I wrong? Someone talk me down please!

Turn them in to the health department. Or if it will make you feel guilty to do that, have your friends do it

Absolutely! I would anonymously turn them in. It's not fair to you. I would also make sure and add to any advertisements that you have that you're legal and legit in hopes that other people will notice and think twice about someone who isn't.

Heehee! I was considering it but the penalty is $1000 PER DAY so I might feel guilty. I was thinking about giving them a warning first.

No your not wrong at all.
My DH is self employed and I know how much we have to pay out to make sure he has all the correct insurances etc. If someone was doing the same work as him as a 'backhander' and it was against the law then I would not hesitate to turn them in.
Its a tough place out there at the moment and overheads have to be paid and food needs to be put on the table.

I would not feel any guilt at all in informing the correct people about this.

TURN THEM IN!!!! It is not an emotional decision, it's business.

I would call the health department too, and I agree with adding it to your advertisements that you are a licensed business-promo that you are board of health certified!!! then hire help, cause you will be busy!
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I can't say I blame you for being upset. Careful if you do turn them in so they don't know its you. Now a days anyone can pose as an upset customer and lambast you on the web so you don't want them to know its you if you turn them in. If theese folks are spiteful it could cause you more trouble than iyts worth. If you are licenced and most of your competition is not I would definately make soure that you specifically tell clients that you are licenced and inspected (as a licenced home baker I always make sure I point this out to clients just so there is no question or concern- because even in a state where it is relatiively easy and cheap to get licenced out of your home there are still people who are not.) I wouldn't necesarily point out the others that are not but by educating you customers in the importance of licensing and inspection in ensuring safe food handeling they might eventually start asking questions to other bakers they might call as well. I know if I was unlicenced and customers started asking if I was licenced I would start to get nervous.

Thanks everyone! I also just found the previous thread on this topic (kind of). I know the community seems split on whether it is right to turn them in or if its just petty. The problem I have is that I do cake pops (new here - no one has a retail space) and I'm the ONLY one who is licensed who does this so it isn't as if they are only "small time" competition. ANY competition in this market (especially one as small as here) is big.

We are in the process of building a building to become a legal bakery. It will cost at the least $20,000.00. When I google cakes in my area all these houses pop up. I will feel pain knowing that they are doing it without the proper conditions and papers. Yep, it will not be pretty.

It's not spiteful, it's business. And no, there isn't enough business to go around, there's a finite number of cakes purchased per year in any given location. And no, illegal businesses don't act in a vacuum. If they're underpricing then they drive average costs down, which makes it more difficult for people who have legal businesses to make a decent profit.

I have a legal home business and I do make it a point to tell people that I'm licensed and inspected, and that they need to check the licensure of other businesses. It's a good selling point because many customers don't know the difference.

Definitely turn them in. Not fair to you and not fair to customers who probably have no idea that they are buying from an illegal business.

No, no. The penalty is a fixed $1000 per day. I looked it up. Also talked to people in enforcement at the Health Dpt.

From what I read, it looks like they charge $1000 per day per violation if the business doesn't correct the violation after a certain amount of time, so if the illegal baker stops selling products ASAP they shouldn't be charged the fine.

Now if they keep selling for a month or two, that's another story. I certainly wouldn't feel guilty about turning people in.

http://www.khon2.com/news/local/story/Behind-kitchen-doors-A-day-in-the-life-of-a-food/GxJY31bW8EWZfC5pKgJQeQ.cspx

I would turn them in too. It's not your place to give them a warning, you have no authority over them. Just a concerned business owner. It's not personal its business..

Wow, no one is taking the other side here. If you are that concerned about it, send them an anonymous warning, and then if they don't take the warning you could turn them in. You don't know why these people are doing this illegally, could be financially strapped, need money to survive. I know it doesn't make it right, but to tack on a huge fine on top of that, I think its just sad. I would never do that, I would just make better cakes. I don't have a business, just bake as a hobby, so I know its not my livelyhood, I just know I couldn't turn someone in.

I haven't spent the money yet to start a business, and now that AR has passed the Cottage Food Law/Bill, I may not have (but I will - if I need to) But I would still do the warning first. Kinda like a warning shot. This way they know what's coming, and if they don't stop, then shame on them, and no guilt.

Well I have a lot of debt from my day job (lawyer) and don't have loads of money to spend on being legal. But I'm taking this seriously and want to do it the right way so I made the sacrifice. Just miffed that others are not.

BTW, totally cake "star"-struck at having indydebi and Jason replying to my post!

A quick story about being illegal. My sister-in-law asked me to do a 3d cake which I do not do. I offered a free $300.00 cake with coordinating chocolate lollipops, candy, and cake pops. She accepted. Then she went on facebook after I started gathering "bulldog" molds to ask if anyone knew of someone to make this 3d cake. Friends volunteered their bakers, a list of illegal bakers I did not know existed, complete with addresses and phone numbers. A nice little list for the health department. So don't think because you stay low profile, you will be invisible. Our area is the most expensive I have ever heard of, and I am the only licensed home kitchen.

In my opinion, dont bully people, JUST make better cakes, people know who is good and who is not, beat them at caking, there own game, not by being mean.

You would say that. Why don't you explain further?

"you would say that" why dont you explain further"?
Maybe you should explain what you mean rather?

I was merely stating as anyone can read, I dont have the heart to turn people in, people dont know everyones circustances in life or what they are trying to achieve, so if you sleep at night by turning people in, do it, personally i wouldnt and neither would some people I know that have there own large commercial business.

In any business, if you have certifications you use that in your marketing. Period. More and more venues require that food brought in be from licensed vendors, so of course you would need to be licensed. I'm sorry that you lost a friend over something so cut and dry...maybe she wasn't such a good friend afterall.

I am a hobby baker and I don't sell any of my cakes, so I probably don't feel as strongly about turning in unlicensed bakers. I work in the medical field and at our office we try to do everything by the book...by the book always = more $$. Good luck with making your decision!

I can see your point about not getting licensed... The $50,000 is still in your pocket, no pest control contract, no insurance, and no pesky IRS... they are allways getting in your business!!

Licensed bakers, consider this scenario. You are in the most expensive area to have a home bakery. So you jump through all the hoops for six months and finally get there. Down the street is a baker who contacts you and picks your brain about your business. You are nice and share information, even offering up the possibility of renting the kitchen. Later you find that this person has had an illegal business all along, complete with web site and business cards. How would you feel?

Very true, cakesherry. This current environment is making running a small business even harder. And we are certainly not a necessity. So many cake artists struggle because they are great at their craft, but don't have the experience, knowledge, or personality it takes to run any type business. That doesn't stop the dream or desire. Please don't take this as a put-down. We are all experts at something. I can't make the masterpieces most of you make. I would suggest to any person... even a home baker, to read up on business and marketing until your eyes hurt. Take the adult Ed classes on running home businesses. Take a tax class. Be as serious about running your business as you are about your cakes.

There is an empty storefront or a struggling mom and pop restaurant that closes at 6pm in every town. Sometimes it looks like the decision to be illegal is to stay at home, not to have a cake business.

Edit: cakesherry must have deleted her post.