I had another post which brought up the fact that I would potentially be accepting money from a bride (if hired) for a cake. It started a whole discussion on the fact that I live in Florida, and am not a licensed home bakery, because currently, Florida does not allow it.

I do actually have a corporation for another business, that I was going to run my contracts through as to protect my family, should I ever become sued, and run the money through. By first trade, I am a bookkeeper, and have that part covered. Now this certainly would not protect me against any health inspector, or anything to do with the food aspect of this, that's a risk I understand I have to take.

My question is, let's be honest, if someone doesn't have the money to rent any type of kitchen, etc. They are going to do this out of their home for a while until enough money is earned. I had thrown out the idea, half in jest, that I could accept donations, rather than calling it a "form of payment", someone suggeted that if you accept anything with monetary value or even barter, that is still considered monetary value. Really? So if I watch a friends kid so her and her hubby can go to dinner and she gets me a gift card to say thank you, I'm in trouble because I'm not a licesed daycare?
I think it's very unrealistic to keep making cakes for friends or friends of friends, for free. It's actually costs money. I'm not even reffering to my time at the moment, but the actual supply cost.

So there has to be a way. I'd love to hear what other's have done in the same situation as me, to start this up and accept some type of compensation. This is NOT meant to start an arguement, I simply would like to hear of some solutions instead of "what can happen to me".

Try renting a kitchen for the times you need it. Keeps yourself out of trouble and reassures your client that you aren't doing anything illegal. Lobby for cottage law, get involved in getting it changed.
And if you decide to go the illegal route...keep your pricing in mind. Don't try to underprice licensed businesses. As we work hard at becoming legal, pay the extra expenses and deserve to have competition that is doing the same. Sorry if it isn't what you wanted to hear...I offered a couple of ways to help but, I'm definitely in the mindset that the laws are for everyone. And truthfully the time you are spending trying to get around them would be better spent in trying to get yourself licensed. JMHO. Good luck to you...

The rules for day cares are much different than caking. You are only considered a day care if you keep 6 or more kids for more than 3 hours (might vary by state) on a routine weekly basis for compensation. Keeping your friends kids so they can have a date night is not even close to the same thing.

Yes many on this site are selling their cakes "under the radar". I don't condone this behavior, but I certainly would not whistle blow on anyone, not even my direct competition who severely undersells me. Even as a home baker you have overhead costs. Because you are small you have to pay retail for your ingredients instead of wholesale thus driving your price point up, not down. But since you are a bookkeeper and seem to have a good biz head on your shoulders you would understand that concept easily. There are other things to consider as well, deed restrictions of your neighborhood, zoning if you live in an area that practices zoning, and insurance. Even if you fly under the radar, if there is a mishap, your homeowners insurance will not cover any damages brought on by a suit. The suit could stem from a bevvy of things, not just the dreaded food poisoning possibility - which is actually pretty rare for cakers. But, can stem from an angry bridezilla claiming you ruined her wedding because the pink on her cake was not the shade she wanted (yes it does happen). Eventhough a judge would probably throw that one out, you will still be out time and money over the issue. And if the judge was drinking that day and you lose, then your insurance won't help you in that cause. If there were any medical issues due to a food poisoning event (like I said extremely rare) then that would be a class action and bam you are no longer in biz, and homeowners Insurance won't cover it at all. So I guess what I am trying to say is get insurance, but to do that you have to get a dba, and in some states a tax ID. Both things of which can alert your local HD of your existance. So you can by all means do your cakes illegally, or you can give them away, or you can bite the bullet and rent a commercial kitchen to start, then grow into a storefront of your own.

Niki, if you look around on this board for a while, you will find this topic has been discussed over and over and over....well, you get the idea. The specific issue you discussed about taking care of someone's child, that has been discussed too.

Taking care of someone's child occasionally does not mean a business, however, if you take in kids every day, well, you're running an illegal business.

EVERYONE has faced this issue and it's an extremely HOT topic. What most people get upset about is people that open an illegal business from home, undercut prices, and advertise. I would say that a huge majority of people, first making cakes, made cakes for someone and took money for it, usually it's friends and family. Like I said, the hot point is advertising, whether it's business cards, craigslist, website, whatever, and running a business illegally.

Best of luck to you!

Thank you for the replies so far. There is nothing that I want to hear, or don't want to hear. Simply wanting opinions. I absolutely saw that recent post on the cottage law in Florida and sending a letter to the proper authority, which I will do. As for spending time getting legal, it's my very simple understanding that you CAN'T here. I could be wrong, but that's everything I've read so far. My intention is not to fly under the radar or go illegal because I'm "lazy", like many other's our state doesn't give us a whole lot of choices.

You can't be a licensed home bakery.
If you go to "rent" church space, the church can lose it's non-profit status because YOU are selling your items for a profit.
PLUS you need liability insurance, which you can't really afford because you're only doing this every once in a while.
To rent commercial space as in a restaurant, might also cost and arm & leg since this is a once in a while type thing, but I haven't checked that out yet. Just now kind of getting all my ducks in a row and seeing the best way to go about everything.

A S-corporation prevents anything happening to you and your family and your home . Yes your business can be sued and would cost a ton in lawyers fees, but they can not come after your personal assets. That's why I have a corporation. Also, to have a corporation, you have to have a tax ID (in FL), which does give you the ability to purchase items wholesale. I haven't done so yet, because again, I'm at the very begining of this.

I do appreciate everyone's input and keep em' coming!

The problem with operating this way is you have no leverage. You have to operate at the whim and mercy of each client. That's how you have to do it. You can't push back and you know in many threads there's tons of push back necessary to be fully functional.

So as far as how to do it, it only makes sense to do it for real and legit otherwise it's just not good for you. It's not right to do wrong in order to have a business.

I understand the kids and the time and everything, btdt.

Go get a job, part time if necessary. If you have muchkins still at home then you have to cut expenses and be poor some more and wait it out. When a friend or family member needs a cake --go for it. Otherwise no. But if you're not even pricing right why freaking bother.

Every Tom Dick and Harry can bake and decorate a cake. Ever hear of Wilton or Cricut? Huge market. Huge. Matha's in on it now? Oh yeah cake making is so exclusive--NOT!!

Then everybody who eats it says, <in sing song voice> "You need to open a bus-i-ness".

It's too hard to make money doing this unless you open it up right or move to Virginia or Kentucky or Ohio or someplace where it's ok from the home. Just say no. Not worth it. Go get a real job.

Hi Niki, I am in a similar situation and can understand where you are coming from. I have a business (not food related) and I cannot use it as protection for selling home baked goods. It's important to hold on to your dreams, though, and when one door closes, look for one that's open.

It does seem to be the "easy" way; but you don't need to do cakes illegally to obtain the funds to operate one legally. Now I know what everyone will say about the state of the economy, but... There are other ways to secure funding for a business, such as having a part time job and setting aside most or all of that income, or setting aside a part of your main income for your confectionary dream, having a money jar for bills and spare change (it adds up quick, you'd be surprised!). I'm sure you can probably come up with other (legal) ways to secure funding, such as loans, investors, etc. Of course, it may take longer, but you'll be able to sleep at night without the risk of getting caught. (For some the penalty is steep.) For the cake end of it, bake whenever you have the opportunity. Do it for family and friends. Give to bake sales, gas station attendants, post office employees, neighbors... (Yeah... I mean for free. ) This way you can still practice your skills and try out new recipes and techniques.

I sincerely wish you the best of luck and hope that things work out for you.

You can do bookkeeping from your home legitimately for other businesses with your computer and some Quickbooks action.

I mean I wanna be a rock star but I hate to sing in front of people. Do you think I could make it in the rock music world if I couldn't meet the requirements? Maybe I could just hold the mike backstage and they could just watch my band and listen to me from behind the curtain.

Think of it from this angle then.

What if you are caught. Have you looked at what the laws are in FL for illegally selling baked goods and food? In some states it is a very hefty fine and jail time.

Personally, I wouldn't risk it if that was the case. And don't assume that for something like this a judge wouldn't throw the book at you. Sometimes they like to set examples to send a message to the rest of the people doing the same thing.

It is more than just satisfying the government. And kudos for taking an illegal profession and reporting it. Most people probably don't.

And I will also bet you that running your contracts through your other company would do nothing to rescue you and your family from losing everything should, heaven forbid, someone get sick within days of eating your cake. There are opportunists and good lawyers every where. The loophole of it being an illegal business is so large a Mack truck could drive through it. The only way to protect against something like that is liability insurance. And I don't know if an insurance company is going to insure an illegal business.

You are looking for justification, and you will not find it here. And even if one person agreed and you felt vindicated in doing that. In the long run if you are caught, justification here will not help you legally. Like the OP said, do a search. This comes up all the time. Bottom line is - it is illegal. And no matter how you think you are doing a work around with having another legit business, you aren't. It is kind akin to having a dry cleaning business, but selling cakes. After all it is a business where I can report the income, so I must be able to sell anything else I want, right? Wrong!

I was actually going to use selling drugs as an example. Both are illegal after all. And in the eyes of the law they are not going to be any less lenient because it was cake and not drugs. They do not work that way.

BTW, I too have an S corp for another business. We make apps for iphone and droid. It has nothing to do with cakes. I live in NY and can have a home processing permit, which I went through the process and obtained. I did not assume that because I went to a lawyer and the government to set up an S corp that it meant I had cart blanche to sell whatever I wanted, even illegally. I have yet to take advantage of my permit. But when I do I will put earnings through the S corp. But I was not going to fool myself into thinking just because I did all the paperwork right to protect myself, that it meant it would protect me from every other business endeavor either. The Health Department is there for a reason. I have seen my share of restaurant and bakery kitchens. I happen to think they are a little bit more lenient in their inspections, but it does work to prevent widespread problems. I guess my level of what should be cleanliness is higher than what I thought it would be for inspections.

As far as I know there are no commercial rental kitchens in my area. In order to rent space from an existing business like on their off hours, the existing business has to be up to exisiting code.

For example, we have The 19th Century Club here. It is a really old really cool vintage venue with some ovens that barely work & stuff.

They can 'get away' with this set up and remain viable as is because they are 'grandfathered in'. If I rented their kitchen for a separate business it would have to be up to 2010 standards every bit.

It would impact a younger existing business less but still it makes it awkward and more difficult. Why would an existing business improve just to rent out a space that they have to improve once again if they get a new tenant. Why would a new baby business toss money into someone else's business just to rent--sure it's doable but it's rarely if ever done around here.

It's easier in some places. Harder in others.

I am also in Florida, Jacksonville, huge city NO commercial rental space available (the only one recently closed). And I know you Cannot bake from home and be legal. That means you cannot obtain a license from the city and therefore cannot get insurance (a required proof to get professional insurnace in Florida). I also know for tax purposes you can make upto $600 (might be more now, check) a year without having to file taxes (in Florida we have no income tax). I would suggest you continue to bake, do not advertise, and "charge" for your ingredients. You wont make money but you will gain experience and not be in the poor house.

PS- you can aslo use your other company to order ingredients wholesale. Just be sure to add the expense into your other business as "orders".

I wish you luck!

Niki, I feel your pain. It's not allowed in my state either, unless I build a separate building on my property etc etc. So, I continue to bake/decorate cakes for free for friends/family as gifts. Thankfully, my husband is very understanding and doesn't complain about how much $$$ I'm giving away lol.

It's a tough situation, especially for those of us who have NO DESIRE to own a biz. My husband has been a small-biz owner for many years, and there's no way I'm getting myself into that! The accounting, paperwork, legalities, etc...no thanks. All I wanna do is bake/decorate. I've even been in contact with every bakery in my area, just trying to see if I can work part-time becuase I love doing this...no one is hiring. So, I'll keep giving my stuff away. Yeah, it sucks bit it is what it is.

Living where we CAN have a licensed home kitchen, I can only partially feel for you.

Doing things under the radar is something that a lot of people do, I did it for about 3 weddings before licensing the kitchen, they were for family members, and yes, I felt so weird and scared doing them.

From a purely practical standpoint, I think another problem that you will run into (besides what's already been mentioned- ie arrest etc) is that I don't think very many venues would let you into their facility as an unlicensed baker. I know most of them up here don't. So you're going to have a hard time cracking into that business anyway, which is where the money is that you're seeking for startup.

"there HAS to be a way." There is a way- do your research and take a leap with a licensed kitchen or a storefront....or move.

From the IRS 1040 manual:
"Chart COther Situations When You Must File
You must file a return if any of the four conditions below apply for 2009.
3. You had net earnings from self-employment of at least $400.*

* my mistake you would be considered "self employeed" so the cap is $400 assuimg you are married filing jointly

I haven't read anything but the orignal posting, but I wanted to point out that illegal kitchens are going to have more and more problems running a "wedding business". In our area, most reputiable venues are now requiring proof of libility insurance before they will allow your cake. One Venue is even only allowing cakes from their preferred vendor list. No other cakes. I have had a couple of brides call me with a change for thier caterer because they weren't legal. I am glad to see this trend, as it helps save those of us who have taken the time, and money, and pride, to be legal, whatever is called legal in your state. (home, rented kitchen, etc) Many national hotels (like Marriot) are requiring proof of insurance, even for the DJ!! Weddings are getting so expensive, and so many brides/grooms/families/people in general are sue happy, that these venues need to protect themselves.

I hope this becomes a national trend.

Yes you can do it from your home in Kentucky.

I'm really not sure what's your problem. There's a coupla details a coupla hoops to jump through. It is possible. You can do it in some part of Ky anyhow maybe not in downtown Louisville. I'm not sure about that.

You CAN do it from a Kitchen In Your Home in the Blue Grass State.

In my county it is not possible to do this and I wish it was.

That is a huge opportunity--it's a wide open door.

You want somebody to come run the mixer for yah too.

In other words, Anna, some of us have to have separate property that is zoned commercial with all separate utilities and rent and/or mortgatge payment, separate buildings etc.

That is very different than in some parts of KENTUCKY and TENNESSEE where you can use your own residential property to have a cake business legal. Yes we all are very aware of the plumbing and electrical and ceiling tile and floor requirements etc.

So - in states where you can bake on your property only if you have a separate commercial kitchen, I have a question. How in the name of all that's holy can you justify spending the money it takes to build a commercial kitchen on your property? I'm guessing this would cost $20,000 - 30,000. How many $100 cakes would you have to sell (minus costs) to pay for that?

Some hobbies just aren't supposed to turn into businesses.

So if Aunt Bea is making the wedding cake for little Lucy, you mean to tell me the place of reception wont let it in the door?

well on this subject.....in a bad economy starting a new business is difficult.........I would not do it illegally, you are just asking for trouble. They love to go after easy targets you know..