Cottage Food Law Limits Sales Amount. How Much In Sales Do You Make?

Business By cadaless31 Updated 19 May 2017 , 1:25pm by cadaless31

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cadaless31 Posted 20 Apr 2017 , 12:45am
post #1 of 5

Hi, I am currently located in Delaware. I just found out that last year the state allowed for at home based baking businesses to operate under Cottage Food Laws. However, they place a restriction on the amount of sales per year to $25,000 or less. I am worried that this would really limit my potential.  We are looking to move and I don't want to stay in DE if I don't have the potential to grow. I have two small children so it may take time for me to reach this amount but I am looking at the future. What do you all think? How much do you make a year? I know there will be folks making alot more than this, but is the average person surpassing this in one or two years?

Another question- what forms of payment do you accept? It seems if I want to invoice via Paypal or Square Up I would also be prohibited in DE as this is viewed as 'online sales' as the customer would need to use a web browser. Thank you!

4 replies
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johnson6ofus Posted 21 Apr 2017 , 4:38am
post #2 of 5

This sounded strange, so for fun...I researched it (I am in Texas, so only google as a source). The strange was about payment, to me.

I see that it is really geared for "face to face" or farmer's markets. So, you can't sell on Facebook, but you can accept a credit card (theoretically processed through the internet) at a farmer's market. I don't see that if I met you at a farmer's market, we agreed on a cake, and then you sent me an invoice that would be a violation as the sale was "made" face to face. Since you can only sell face to face, I don't see how receiving payment would be a problem. Cash, check, or charge. grinning

Can't help with growing a business to exceed $2K per month in sales, as this is not my main biz....sorry.

VERY restrictive cottage food law you got there.

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cadaless31 Posted 19 May 2017 , 2:26am
post #3 of 5

Thank you. Yes very restrictive. Frustrating because Delaware is so relaxed in sooo many other things. Thanks again for the help. 

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MimiFix Posted 19 May 2017 , 11:58am
post #4 of 5

I know $25k seems like a severe income limit, but for most home-based bakers, it takes several years to reach that amount. And many seasoned home-based bakers struggle, for any number of reasons, to earn half that in a year. 

I suggest you write a simple business plan to address your concerns. What types of products do you make and what's the competition in your area? Two other factors are quite important and impact your potential income: your own experience in both business and food production. Add to the plan, for comparative purposes, cottage food laws in states where you would consider moving. Once your plan is complete, the answers may help you decide. Good luck! 

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cadaless31 Posted 19 May 2017 , 1:25pm
post #5 of 5

@MimiFix ‍ thank you for the advice! Yes I have to start my business plan.

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