How to Start a Home Bakery Business Under Cottage Food Laws

To start a home bakery business, you check your state's cottage food law, confirm your products are on its allowed foods list, complete any required registration or food safety training, and sell with a compliant label through the channels the law permits. Most cottage food laws cover shelf-stable baked goods but restrict foods that need refrigeration.

Home bakeries grow out of a hobby. Someone's sourdough or decorated cookies become popular, friends start asking to buy them, and suddenly there is a business question. The baking is the easy part. The part people get wrong is assuming that selling homemade food is either completely unregulated or completely banned. In most states it is neither. It is allowed within limits, and those limits are specific.

What is a cottage food law?

A cottage food law is a state law that lets individuals make certain foods in their home kitchen and sell them to the public without the commercial kitchen and full retail permit a restaurant or bakery storefront would need.

These laws exist because of how retail food rules normally work. The FDA Food Code, which most states adopt in some version as the basis for their retail food rules, requires food sold to the public to come from an approved source. A home kitchen is normally not an approved source. Cottage food laws carve out an exception for lower-risk foods, and each state writes its own version. The FDA Food Code hub explains how the Food Code and state law fit together.

Because every state writes its own rules, there is no single national cottage food law. Two neighboring states can differ on what you may bake, where you may sell, whether you must register and how much you may earn before you need a commercial license.

What baked goods can you sell from home?

The line most states draw is between foods that are safe at room temperature and foods that need time and temperature control for safety, known as TCS foods. Bacteria grow quickly in moist, low-acid foods held at the wrong temperature, which is why regulators treat them as higher risk. The TCS foods hub covers why.

This is a general pattern, not a rule you can rely on everywhere. Some states publish a short list of allowed foods. Others allow anything not on a banned list. A few now allow some TCS foods under extra conditions. Texas, for example, updated its law to allow cottage food operators to sell TCS foods only after registering with the state health department and keeping them at safe temperatures, according to the Texas Department of State Health Services.

If a product is not clearly on your state's allowed list, ask your state or local health department before you sell it.

Do you need a license or food safety training?

It depends on the state. Some states require nothing beyond following the law. Others require registration, a permit, a home kitchen inspection or food safety training.

Training is a common requirement. Texas, for example, requires anyone operating a cottage food production operation to complete an accredited food handler training program, and accepts an accredited food manager certification in its place, according to the Texas Department of State Health Services.

Even where training is not required, it is worth doing. A food handler course covers the practices that matter most in a home kitchen: handwashing and personal hygiene, keeping pets and household activity away from food prep, cleaning and sanitizing surfaces, and preventing allergen cross-contact. Our free Food Handler track covers the same topics as an accredited course, including a practice test. The ServSafe Food Handler exam passes at 75%, which is 30 of 40 questions.

Your city or county may also require a general business license or home occupation permit, separate from anything the health department requires. Check both.

What goes on a cottage food label?

Labels are where most home bakers first meet the law in detail. Requirements vary, but most states ask for some version of the following.

• The name and address of your business, or a registration number where the state allows it
• The product name
• A list of ingredients, often in descending order by weight
• Allergen information
• A disclosure statement saying the food was made in a home kitchen that is not inspected by the health department, using the exact wording your state requires
• Net weight or quantity, in some states

Allergen labeling deserves real care. Federal law identifies nine major food allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans and sesame, according to the FDA. Baked goods routinely contain several of them. If your kitchen also handles nuts, a customer with a nut allergy needs to know. The Big 9 allergens hub explains cross-contact and why it matters.

Where can you sell home-baked goods?

Cottage food laws usually limit sales channels as well as foods. Common rules include the following.

Direct to the consumer. Most states allow sales directly to the person who will eat the food, whether from your home, at a farmers market, at events or through personal orders.

Online orders. Many states allow you to take orders online, but often require delivery or pickup in person within the state.

Wholesale to stores and restaurants. Many states do not allow this, or allow it only under limits. Texas, for example, allows wholesale only to registered cottage food vendors, and not for TCS foods.

Across state lines. Generally not allowed. Cottage food laws are state laws, and they typically limit sales to customers inside that state.

Many states also cap annual gross sales for cottage food operations. The cap, if any, varies widely, so look up your own state's figure before you plan revenue.

When do you outgrow a home bakery?

You outgrow cottage food rules when your business needs something the law does not allow. The usual triggers are these.

• You want to sell a product that needs refrigeration, such as cheesecake or cream-filled pastries
• You want to sell wholesale to cafes or grocery stores
• You want to ship to customers in other states
• You reach your state's sales cap
• You want to hire staff, which some cottage food laws restrict

At that point the next step is usually a permitted commercial kitchen. Many small bakers rent time in a shared-use kitchen before committing to their own space. Our guide to what a commissary kitchen is covers how that works. If you plan to open a storefront, read our guide to commercial kitchen requirements.

Moving to a commercial kitchen also changes your training picture. A licensed bakery is a food establishment, and many jurisdictions expect a certified food protection manager on staff.

What this means for you

If you are just starting: find your state's cottage food law on your state health or agriculture department's website and read it in full. Make a list of your products and check each one against the allowed foods list.

Before your first sale: complete any required registration and training, design a label that meets your state's rules and follows allergen requirements, and decide which sales channels you will use.

As you grow: watch the limits. The sales cap, the TCS restrictions and the in-state rule are the three most common reasons home bakers move to a commercial kitchen. Planning for that move early is easier than scrambling when a wholesale order arrives.

Frequently asked questions

Can I run a bakery out of my house?

In most states, yes, within the limits of a cottage food law. These laws usually allow shelf-stable baked goods such as breads, cookies and many cakes, sold directly to consumers inside the state. Foods that need refrigeration are often restricted. Check your own state's law, since the allowed foods, training and registration rules vary.

How much does it cost to start a home bakery?

Costs depend on your state and your products. Some states charge a registration or permit fee, and many require food safety training. You will also need packaging, labels, ingredients and possibly a business license from your city or county. Check your state and local agencies for current fees before you budget.

Do I need a food handlers card to sell baked goods from home?

Some states require it. Texas, for example, requires cottage food operators to complete accredited food handler training and accepts a food manager certification instead. Other states have no training requirement. Even where it is optional, a food handler course covers hygiene, cleaning and allergen control that apply directly to home baking.

Are home bakeries profitable?

They can be, but there is no reliable national figure for home bakery profits. Your margins depend on ingredient costs, pricing, the time each order takes and your state's sales limits. Many states cap cottage food revenue, which sets a ceiling on growth until you move to a licensed commercial kitchen.

Can I sell home-baked goods online?

Many states allow online ordering, but usually require delivery or pickup in person within the state. Shipping to other states is generally not allowed under cottage food laws, because they are state laws. Some states also restrict shipping within the state. Read your state's rules on sales channels before you set up an online shop.

Do I need to put allergens on my cottage food label?

Most states require allergen information on cottage food labels. Federal law identifies nine major food allergens, including wheat, milk, eggs, tree nuts, peanuts and sesame, many of which appear in baked goods. Listing them clearly protects customers with allergies and protects your business. Follow your state's exact labeling rules.

Baking from home? Our free Food Handler practice test covers hygiene, cleaning and allergen basics in the exam format.

Sources

• FDA Food Code 2022, the model code most states adopt for retail food rules
• FDA: FDA Food Code overview, how states adopt the Food Code
• FDA: Food Allergies, the nine major food allergens
• FDA: Food Allergen Labeling and Consumer Protection Act of 2004
• Texas Department of State Health Services: Texas Cottage Food Production
• ServSafe Food Handler