How to sell food from home Legally

Posted by Damian Roberti on

How to sell food from home legally 


How? How to sell food from home, how to sell food from home legally, and what can be sold from your home. So in this video, we're going to cover the 10 myths behind selling food from home. Many of you might be believing a lot of the stuff that you're hearing from your friends, but most of that information might be incorrect. So I'm going to run down 10 things that are a huge myth when you start to sell food from home as a business under cottage food laws. were to start doing that right now. All right, so welcome back to marketing food online. So, as I mentioned in the introduction, we're going to cover some crazy myths about selling food from home. Many of you may or may not have heard some of these things that I'm going to cover in this video, but I want to kind of dispel some of the misinformation that's out there and to help you get in the right direction to start your food business. But before we do, as always, definitely hit that subscribe button and give us a big thumbs up if you find this video informative and educational, because that lets YouTube know that you enjoy our videos. So they'll definitely show you additional videos from our library. And of course, remember to check out the video below. There is a "Join" button.

How to sell food from home


It's a blue button there that says "Join Us." Our brand new membership program is actually three different tiers. There's a short video that explains how it actually works. But if you definitely love our video, we would definitely want you to join our membership because you get access to additional perks. There is also additional information and resources only available to members only. So now that is said and done, Let's dive right into it. We're going to go from number 10 down to number one. So, number 10. I can sell anything that is listed or not listed on my state's cottage food website. Well, yes and no. You need to make sure that you follow each state specifically as a list dedicated to what can be or what cannot be sold because you definitely don't want to get into trouble.

How to sell food from home


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If you attend the farmers' market or a local event and there happens to be someone from the health department walking around and checking on everybody, and you're selling a product that is not technically allowed for legally through the list that is on your state's cottage food laws, Now if you're not sure what your state has, definitely check out here on our channel marketing food online, and we just created a brand new channel, cottage foods laws, which is dedicated solely to the entire industry of cottage food businesses. So it is all about college degree resources to help you get your business up and running in every single state we're going to have on that channel. You definitely want to subscribe to that channel as well, because we're going to have a ton of other resources to help you scale and grow your own business.

How to sell food from home


But yes, that is a myth. You can't actually just make what you want. Even if you only see your friends selling it or doing it. That doesn't necessarily mean that it's legal, and you could potentially get into some serious trouble. So, you want to stick within the realm of the list. of what you're able to sell, what you're able to sell So the idea that you can sell anything that's either listed or even not listed, is not a good idea. Normally, what states have is what's known as potentially hazardous food products. These are particularly items that are cooked that have to be kept at a certain temperature or even at a certain time and they have to be consumed or sold at that point. What's a great example is like food trucks, restaurants, or cafes. They create meals based on those tacos, hamburgers, or whatever that might be. But those are items that have to be consumed immediately or they have to be kept at a certain temperature. So cottage food laws would be things like baked goods, snacks, popcorn, things that are not considered potentially hazardous. So don't steer off of the list of what they allow you to do because you could get into some trouble. Number nine, I can sell as much as I want. Well, yes and no. Some states actually have a sales limit. Every state actually has a sales preset for you based upon your state as well as the amount of money that you can actually sell annually every 12 years and probably every 12 months is actually already set up for you. Some states do have a note sales limit. That is something that yes, you can sell as much as you want if your state allows it.

How to sell food from home legally 

I've actually seen some states that are as low as five and $10,000, which is kind of a little weird because it's literally next to nothing in a month, but five to $10,000 in sales of a certain product or whatever you make. Can I sell pretty much anything as much as I want now? Not necessarily The other thing that you want to keep in mind is that you want to make sure you log everything you want to handle this as a business. You want to keep track of your sales and keep track of your expenses, because at the end of the year, if you do create a profit, it is taxable income. It is literally a business income, so you want to make sure that you tell your accountant about that every single year when you do taxes. So no, you can't necessarily just sell as much as you want. You've got to stay within the guidelines. Now if you exceed that, you have an opportunity to grow your business into a commercial kitchen or something bigger, then you're not going to fall under cottage food laws. You're going to be using an actual commercial food processor, from distributor to cooling factor. And that's going to be a different type of license. Number eight, I don't need an LLC. I'm just going to run this business as a sole proprietorship.

How to sell food from home legally 


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Yeah, that's not a good idea. Here's the reason why. If you don't understand the legal structure of a sole proprietorship, I'm going to break it down for you in a very simplistic way. of explaining this. Number one, you, as a sole proprietorship, are going to take every bit of responsibility on your shoulders. So if they didn't happen to, let's say, start a business from home selling food, and I'm not going to get a legal status like an LLC or an S corp or C Corp or any type of incorporation to separate my business from my own personal life, I give someone a food item and they actually get sick. They get to the hospital, they have a ton of money for a bunch of bills, and they turn around and sue me. Well, guess what? I personally am liable. They can take my house, they can take my car, they can take the shirt off my back. You are literally the sole proprietor. You are responsible for everything that takes place, whether it's positive or negative in your business, so do yourself a favor. Even though cottage food laws aren't required in almost every state, we're not. We don't require you to actually create an LLC. Do it. Because a legal LLC, a limited liability corporation, will give you the legal protection that you need in order for you to kind of bypass having to absorb personally any legalities or legal ramifications that come from your business. When you're dealing with food Don't be the sole proprietor. If you're selling laptops or you're selling books, that's different. Nobody's eating books and they can get sick, and nobody eats a laptop, obviously. So you'll want to make sure you protect yourself. So create an LLC, which is a limited liability corporation, but it's a legal entity that will give you that protection. Number seven, this is one that is a huge myth. I don't need insurance for my cottage food business. I have a homeowner's insurance policy. Yeah, that doesn't work out because homeowners' insurance policies don't cover the majority of the time, even businesses in general. That has nothing to do with your food business and manufacturing, making, or producing a product that's going to be edible for people to eat. So yes, you should get yourself a food liability insurance policy. Now, I'm not an insurance agent. I'm not going to sell you a policy or explain it to you. But I can tell you a couple of things that I know only from my own experience. It doesn't cost very much to get it every year. The insurance policies are between a few hundred dollars to, at the most, maybe 1,000. That's kind of unusual. You'd be about 600, maybe $700 a year, but you need to have one now. My state doesn't require one, Damia, so why do I need to buy it? Well, you're right. Most states actually don't require any type of insurance policy for their cottage food laws. But that doesn't give you legal protection if something happens to stay stuck in the same way. Damian is just making some cookies at home.


How to sell food from home legally 

You're sick. Don't worry about it. You know he gives you a reason to sue him. There's no reason to have any insurance. Wrong. That is a myth. And you need to definitely protect yourself legally. And then you need to protect yourself with insurance. Number six, I'm not comfortable with putting my home address on my label. So I know my state requires it, but I'm not going to do that. Well, that's going to be a problem. as well. Because if there's no contact information and somebody gets sick with a product that you produce, there is no traceability, as it's known in the food industry, and the fact that they have the address on there, someone can trace it back and double check because maybe potentially, you got somebody sick with salmonella, or maybe you prepared a product in your kitchen and you had some chicken on the counter or something that cross-contaminated. You need to follow the guidelines and if your state, which most of them almost 99% of the time, requires your home address, because that's your base of operation where you're making your product. You need to make sure you follow that so in case someone has an issue with it, they can come back and say hey Damien, somebody got sick and I just want to make sure when it comes to doing a double expense inspection, I know what's going on. Make sure you follow the guidelines if it's required in your state. Number five, my state allows online sales, so I can ship my product over state lines. Wrong again, because I know this is a little odd after being an e-commerce guy for 12 years. I know how e-commerce works. If you've got a website and you're in Texas and somebody in California says your website and buys a product, guess what? You can't technically ship it over state lines.

How to sell food from home legally 


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Now, There are very few states that will allow you to do this, but they'll also tell you that you'll need to follow federal guidelines with regard to production and shipping. This becomes very technical and a little bit involved. And it's kind of tricky. with the idea that you produce a product online in your state. Let's say if it's Florida, it says "Hey, you do definitely sell a product online." You can have an e-commerce business and sell it, but you have to deliver it in person, not ship it over state lines. You can't ship it over a stapler. You can do what you want if you choose to do that, but I don't recommend you breaking the law, of course, and doing something you shouldn't be doing. I highly recommend you follow that law as well. You can't necessarily send it just because you have an online presence. You have a website.

How to sell food from home legally 


So number four is the classic. Well, Damian. I see everyone else selling products and they're making money and nobody's saying anything about it. And well, if they're selling food and items that are productive, conducting the business within a residency that they can't legally do, eventually that may come to light, and if it does, there are a lot of legal ramifications and potential lawsuits and even criminal prosecution for doing that. Yes, believe it or not, in some situations. If you're breaking the law and you're operating a restaurant without inspections and somebody or a few people or a handful of people gets sick, you could be in some serious trouble with the state. So just because everyone else is doing it doesn't necessarily mean or allow you the authority to go ahead and start selling tacos out of your house. Because you can't sell tacos out of your house. Don't do it. I highly recommend you just again, follow your state's guidelines, but just because everyone's doing it doesn't mean it's actually legal, number three, so I have to have my labels for my college food products professionally printed, and that's expensive.

How to sell food from home legally 



Why would I need to do that? Well, technically you don't actually. You do need to, in almost every state, have your product labeled, but you can actually make these labels yourself and you can do them for pennies on the dollar. As a matter of fact, down below in this video description, I'll give you a couple of links to some videos where I show you how to actually make your own labels and even where to buy them cheaper than you could buy them at the store. So you can do them for literal pennies. I can tell you in our commercial kitchen when we print our labels that they are about eight to 10 cents at the most. If you have a professional company make them for you, you're going to be looking at about 30 to 40 cents each, and that's very expensive. text. Number two. I don't need a license or permit to operate my business from home. That's what I heard from a friend. Well, yes and no. Now the majority of states will require some form of permit or even a license in order for you to do this having a business, but there are many states actually over cottage food laws that they'll require even an inspection for the business license. So keep that in mind. You want to make sure that if your state requires it, you have the right number. I don't need an inspection. I have my cottage food, my friend told me, so I'm good to go and I'm going to make what I want. And that's wrong as well.

How to sell food from home legally 


That is a myth. Because in many states where you apply for a permit or license, you will have to have your kitchen inspected. There's even a handful of states, about four or five of them specifically, if you need to even map out and draw out how the kitchen is going to be configured, how everything's going to be made, and the ingredient list, it's pretty detailed. But as far as an inspection is concerned, that's a myth. The majority of states actually do require some form of inspection on your property, and you definitely can't start your business without having one. So these are 10 myths about operating a home-based food business that you really need to make sure that you follow and have even more resources. Of course, check our channel out because we have over 1000 videos. We have several hundred extra just for homes and businesses, and we know how much you need it.





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How to sell food from home legally 

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