cottage food law, packaging and farmers markets
I have a few questions regarding selling breads at a Farmers Market. I live in Texas and have researched our Cottage Food laws. I'd like to hear from those who have taken this step.
Did you incorporate/create a business?
If so, what type?
Did you need to carry insurance and how expensive is that?
Texas requires packaging. Are micro-perforated bags better than regular plastic?
How many different items of bread did you take with you to sell?
Texas says baking must be done in a home kitchen using non-commercial equipment. What mixer and oven do you use?
Some folks at work are encouraging me to try this but I have a very small budget and want to think it through to increase my chance of success, if I decide to try it. While I do work on Saturday's till about noon or so, I could take a few off to try this if I decide to. The only farmers market in the county does not have a dedicated bread baker selling wares there.
I'm at the ground floor in thinking about this so comments are appreciated.
Mike
Mike,
You're further along on this than I am, so I'm interested in any answers you receive.
I do not practice In texas, but generally speaking you want to be a corporation or limited liability entity so that if you are sued, you are not personally liable and place all of your assets at risk.
You may be sued for anything from a chipped tooth to death due to an allergen. Not suggesting it is likely, but it can happen. And it can happen whether you did anything wrong or not.
In addition to creating a separate legal entity, purchasing a business liability insurance would be advisable.
Interesting about the equipment.
One wonders if "baking" applies only to the oven or includes the mixer as well. What differentiates a home mixer from a "commercial" mixer? If a KitchenAid "Professional" is marketed as such, does that mean it is not a home mixer? Do any commercial bakeries actually use KA "Professional" mixers (I doubt it)? and why would that make a difference in the bread you sell at a farmers' market as opposed to using a Hobart N-50? How about a brick oven -- is that home or commercial? If it's in your back yard it's no longer in a home kitchen.
From what I read at the Texas Cottage Food Law website they mean the law for home bakers. KA may call their mixers Professional but they are not considered commercial. I believe the Haussler Alpha mixer is also considered a home mixer. The same website seems to indicate the equipment must be in my regular kitchen and not a garage or outside the house.
I have seen some equipment that says for commercial use and some that says for large families or small business. I would assume the latter qualifies if it will fit in the kitchen. In ovens this makes me think of the Cadco, Rofco and Haussler ovens.
On the other hand, one farmers market is only open for three hours on Saturday so I don't suppose I'd need to bake a ton of stuff for that.
Creating a business and having insurance do scare me.
"Creating a business and having insurance do scare me."
Don't be scared, at least not of the incorporation part. Creating an LLC is incredibly easy in this country. It can be done in a few minutes, online, instantly, and for a very small fee. The internet tells me that the filing fee in Texas is a mere $40/year. If you do it online through a company like legal zoom they will add a service charge, but again I think it's quite reasonable - like $100 or something.
I can't, however, speak to insurance costs. Of course, the LLC gives you basic personal asset protection already, so you may not find extra insurance necessary.
...I'm not sure how much you can make selling bread. When my sister and I went into catering, we made everything from scratch, including the bread for sandwiches, but we barely broke even. If you do go ahead, I wish you all the best of luck.
I've decided this is not the right time. The market is limited, my time is limited and the potential income probably will not exceed costs. I will continue to bake for myself and co-workers. With that in mind I need to keep things small scale since I do not use preservatives. I've made too much before and had to toss out a half loaf that went moldy. I really don't like to do that.
I appreciate the comments.