Will My State's New Cottage Laws Put Me Out Of Business?

Business By Amberwaves Updated 4 Jun 2012 , 1:10am by AmysCakesNCandies

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Amberwaves Posted 2 Jun 2012 , 7:45pm
post #1 of 2

I am seriously wondering! I have a lot of money and time invested in my legal business and just found out my state's cottage law goes into effect June 25th.

There are already people in town with FB pages up and running, taking orders for cakes, cupcakes, etc anticipating the 25th. Of course they are charging considerably less than me, across the board.

I am in a small town with a limited number of customers--how do I protect my customer base when these newcomers have such a different price point than I do since they are working from home, without rent/insurance/inspection costs?

This is so disheartening to me after all this work and expense to become legal and then almost 4 years of work building up my clientele, educating them and working my a** off making sure I have a quality product.

Any suggestions from someone that has a legal business with a cottage law in their state? Do you see it affecting your business or am I panicking for nothing?

1 reply
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AmysCakesNCandies Posted 4 Jun 2012 , 1:10am
post #2 of 2

I have a legal home business under cottage law. Not sure about your state but home baking businesses here still need to be licenced, pay taxes, be inpected just like a brick and mortar bakery. What I would suggest is find out what limits the cottage law places on home bakers (here we cannot sell cheesecakes & real dairy whipped cream cakes) and push those items that you can provide that the others cannot. So laws limit how & where cottage law bakers can sell. Don't assume that a business running under cottage law is not running legally. Granted we have less overhead in the form of rent but our ingredients & supply costs are often higher because we do not (at least in my case) have the storage space to buy everything in bulk. We still need to be pay for licensing, insurance, advertising etc so we are not opperating free of overhead. If there are already home businesses selling cakes "under the table" and undercutting you it doesnt neccesarily increase your competition if theese same businesses become legal. After adding the additinal overhead of a legal business may actually cause them to raise thier prices. Personally my prices are only marginally lower than the brick & mortar bakeries and i have people choose not to book with me sometimes just because I am a one woman home business. So there are benefits to both. I hope everything works out for you, but try not to think of cottage law as a bad thing, in the end it might actually help when theese illegitimate businesses become legal.

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