How To Start A Home Baking Business

by Annie S.
(Ronks, PA)

I love to bake. My chocolate macadamia nut cookies are always a hit at family functions. I would like to turn this hobby into a cash earning business but I don't know where to begin.

I wouldn't be doing this alone. My sister makes the best pies anyone around here has ever tasted. We have always been very close and I think we would make good business partners. We've already discussed it, and she's on board if I can come up with a plan.

My sister lives in a small apartment, so the business would have to be run out of my house. I live in a 3,000 square foot suburban home with a sizeable kitchen. There is plenty of counter space and I've got two ovens. We do have a homeowners association here.

How big of a problem will that be?

We would like to keep start up costs as low as possible, but we could come up with some money if we have to. Hundreds would be more doable than thousands, if you know what I mean.

Is our idea of a home baking business feasible?

Faith's Answer

Just off the top of my head, from what I know of homeowners associations, they will likely be your biggest hurdle and headache. Get a copy of the bylaws and go over it with a fine toothed comb to see if there is any passage that prohibits the operation of a home business.

If you find a prohibition, you will have to get an exemption from the board before you can move forward. If you are on friendly terms with the board members and you can convince them that the operation of your home baking business will not be in any way disruptive to the community, they may allow it.

Get the exemption in writing in case there is any question down the road.

If you do not find a prohibition against home based businesses in the bylaws, have an attorney look for one to be absolutely sure. If the attorney finds no prohibition, do not consult the board or say a word to your neighbors about what you are about to do.

Just quietly set up your business. Why give someone a chance to complain before you even get started?
Most communities governed by homeowners associations have rules against operating a business that involve selling something directly from your home. This is because of the traffic to and from the residence that this business model creates. It's disruptive.

But they don't always have a problem with other types of businesses.

I used to do contracting work for a woman who ran a clothing business out of her home. She lived where there was a HOA as well. She seldom allowed clients to come to the residence, she usually went to them. All her neighbors knew about the business because she had half the housewives on the block sewing for her. The HOA never bothered her.

Your second obstacle will be the laws of your local municipality. Each state has different laws concerning how food that is to be sold to the public must be handled. Some states will allow you to do this but have an annual certification process you must go through. Some states (or cities) disallow it entirely.

Each state has a Department of State Health Services website. Go to yours to find out what your state regulations are. Look for links with the word "food" in them to locate the information you need.

In Florida, where I live, you cannot legally operate a food operation form your home. In Texas, you can as long as your kitchen does not open directly into a living or sleeping area. The state of Texas also requires home food businesses to be permitted and certified. I tell you this only to show you how differently various states handle home based food businesses.

If both your state health department and your homeowners association will allow you to operate a home baking business, the next thing you will need is a marketing plan.

Come back to homemade-money-guide.com and ask a marketing question if you need help with this.

Good luck.