I Started It, Let's Talk About It...

Business By NikiH Updated 7 Apr 2013 , 1:30am by AnnieCahill

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Mama_Mias_Cakes Posted 10 Dec 2010 , 2:28pm
post #91 of 183

Many times illegal bakers do not file any taxes, and the excuse of "Every one else is doing it" and "I didn't know" is not going to fly with the IRS.

Also, this I'm only doing it for friends and family may seem safe to you, but you never know what can happen. Indeby has a story she has written on here about a family member of a person falling at their home and suing them, she can tell it to you much better. The point of the story is that your family and friends can "turn" on you.

It just takes one incident or the IRS finding out to ruin your family's financial future.

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-K8memphis Posted 10 Dec 2010 , 2:31pm
post #92 of 183

the sky is falling the sky is falling

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Lcubed82 Posted 10 Dec 2010 , 3:23pm
post #93 of 183

Not stating an opinion either way....

I am amazed at the number of people who get on a public forum and admit illegal activities. I have spent years teaching my children that anything put on a computer is there for good. Facebook, Myspace, yahoo groups, cake forums...

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jason_kraft Posted 10 Dec 2010 , 4:20pm
post #94 of 183
Quote:
Originally Posted by BethLS

I know here in Michigan, it is illegal to drive my car without wearing a seatbelt. Why? If I am hurting absolutely NO ONE with my choice, why should the government tell me I have to do it?



People in accidents who do not wear seat belts generally require more expensive medical care, using up resources that could have gone to help someone else. They also cause more traffic, as accidents with serious injuries require longer to clear and often involve an ambulance (which again could have been used to transport someone else).

And FYI, you are only required to wear a seat belt if you drive on public roads (i.e. maintained by the government). You are free to create your own private road system if you'd like to avoid the government's draconian safety requirements.

Quote:
Quote:

Whatabout the people who die in cars because they cant get their seatbelts off?



This is an urban legend, read the link below.

http://www.snopes.com/autos/techno/seatbelt.asp

Back to the topic at hand...

Quote:
Quote:

Without HANDS ON training, (classes maybe, or perhaps working as a decorator prior to in a "real" bakery or heck, I dunno, doing it, gasp, illegally) the fact is most people can't.



There is nothing illegal about making cakes at home to practice. The only thing you can't legally do (unless your state allows it) is accept compensation for said cakes. If you can't afford to spend a few months practicing on free cakes or dummies, work for someone else to get the practice.

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-K8memphis Posted 10 Dec 2010 , 4:53pm
post #95 of 183

My boss's son (think he was 15) died in the back seat of a car and he was the only one wearing a seat belt--the others walked away. Christmas time many years ago when only lap belts were required.

Six of one half dozen of another. Clearly people do die in accidents where wearing seatbelts exacerbate the injuries even to this day.

However--get this--several months ago, my son's (now) father-in-law had his cruise on at 60 and within a few seconds of making visual contact with this out of control vehicle he was hit head on--other dude was speeding.

Fil got out of his car and someone got him sitting down --let him lean against her back 'cause there was no place to rest on the side of the road.

He was taken to The Med one of the finest trauma facilities in the world. They did not even admit him overnight. He went home that evening. Walked africkenway from a head on something like 130mph into a brick wall accident.

Walked away.

Sure he was bruised through & through--in fact we found out later he had been hit two more times. He had just bought a Lexus (think it was) with this incredible puff bag thing that only inflates to 1/8 inch of your face--saved his 70 year old life.

The other guy had broken every bone in his body-don't know if he ever even made it--was in a coma for weeks and weeks is all I know.

There's seat belts and there's seat belts.

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aswartzw Posted 10 Dec 2010 , 4:53pm
post #96 of 183

[quote="jasonkraft"]

Quote:
Originally Posted by BethLS

Quote:
Quote:

Whatabout the people who die in cars because they cant get their seatbelts off?


This is an urban legend, read the link below.

http://www.snopes.com/autos/techno/seatbelt.asp

Back to the topic at hand...




Completely off topic but nowhere does that snopes article offer any proof to their false claim. I usually trust snopes but that is the lamest proof I've ever seen.

And the fact that you are trying to use some really badly written article to tell someone that their father's personal experience is lame, is just silly. Until you can show true scientific data, I wouldn't dare use this article to ever try and prove that seatbelts don't get stuck.

Seatbelts are made of materials that wear down and can break, thereby indicating that there is the probability of a seatbelt not releasing when in an accident. Everything else in your car wears down and needs replaced, but not your seatbelt? Now that's just common sense.

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geri4292adams Posted 10 Dec 2010 , 5:23pm
post #97 of 183

What if you open a party planning service. All the sevices that you offer have a cake included. So technically, you're not selling your cakes, you're selling your party planning services. It just so happens to havea cake included in that package that the bride/customer wants. It's one way around it....right!

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BethLS Posted 10 Dec 2010 , 5:40pm
post #98 of 183

Jason,

Definately NOT a hoak/spoof/whatever. My father has seen it, as have I. Rare, yes of course. (Considering the amount of calls we've both attended) But nonetheless it DOES happen. Anyone who tells you otherwise are morons without any facts that still lives in a fantasy world.

One story haunts me to this day...
Back when I was little, my dad was a police officer for our small (population 600) village. (Called a village, because not enough to technially be a "town") My mom was out with a girlfriend (also rare!) and my dad was off duty. He was also a volunteer fire fighter. We were going up to "town" that day and witnessed an accident. My dad happened to be there at the right time to save one little girl in the back seat, but not her daddy that was trapped in the car from his seat belt. My dad, not being on duty and not prepared that day, (and before the common cellphone) didn't have his knife on him. (My father, who is now 71, to this day never NOT carries his knife) We literally (me, my dad, and the girl about my age) stood by and watched this man die in front of us, all because his vehicle was burning, and my dad couldn't get him out. You want to talk problems, and nightmares? Boy, that was it.

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-K8memphis Posted 10 Dec 2010 , 6:28pm
post #99 of 183

Omg, Beth.

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jason_kraft Posted 10 Dec 2010 , 6:44pm
post #100 of 183
Quote:
Originally Posted by geri4292adams

What if you open a party planning service. All the sevices that you offer have a cake included. So technically, you're not selling your cakes, you're selling your party planning services. It just so happens to havea cake included in that package that the bride/customer wants. It's one way around it....right!



Correct, as long as the cake was made in a licensed and inspected facility (for example, if you bought the cake from a real bakery pre-decorated and brought it to the venue).

If you are still making/decorating the cake at home, and your state does not allow this, it's still illegal. In fact, it's worse if you try to get around it with clever tricks, because that shows that you knew what you were doing was wrong and you were trying to circumvent the law (could be interpreted as fraud).

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jason_kraft Posted 10 Dec 2010 , 6:48pm
post #101 of 183
Quote:
Originally Posted by BethLS

Definately NOT a hoak/spoof/whatever. My father has seen it, as have I. Rare, yes of course. (Considering the amount of calls we've both attended) But nonetheless it DOES happen.



To clarify, I'm not saying that there are never cases where people are harmed by seat belts. The hoax is that seat belts should not be required because of these rare cases. Looking at aggregate numbers, seat belts save many more lives than they take, the net result (from an economic perspective at least) being fewer medical costs and lower taxes per capita. The sources in my link above will back that up.

I'm sure there are tons of horror stories on both sides, but the plural of "anecdote" is not "data".

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-K8memphis Posted 10 Dec 2010 , 7:44pm
post #102 of 183
Quote:
Originally Posted by jasonkraft


... the plural of "anecdote" is not "data".




'Got where you're coming from now--and I've been searching for a sound bite like this--thanks, Cake-Buddy.

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Kitagrl Posted 10 Dec 2010 , 8:02pm
post #103 of 183

There's law...but frankly...its no business of a CC member in Louisiana (just pulled that out of a hat, no reference to anyone here) to tell a CC member in, say, Idaho, that they should not ask questions on CC about selling cake until they are licensed.

Let the person mind their own business. Let them decide if they are going to follow the law or not. Let them face the results of whatever they choose.

Just answer their stupid cake question and go back to your legal caking...ya know? Really....

My main issue is not that its okay to be illegal but that I get tired of the busybodies who like to start debates in threads about whether the OP is being a bad little girl or a good little girl.

I mean...that would be like...if I get on here and say "I have a problem...I was delivering a cake....and I got to the venue and I realized that I had left the gumpaste flowers at home...what should I do?" And someone to get on and say "I'm not sure, I have no experience with that, but were you speeding on your way to the venue or on the way home? Because if you were, you're a lawbreaker, and you're lucky the caterer doesn't turn your license number into the police."

I mean really...let the person speed, and let them get pulled over....let the baker be illegal, and let them get caught....but I think each of us have enough problems with family and illness and money and decorating to keep our own selves busy in our own lives without pointing fingers at somebody else's.

There are a TON of informative threads on this site about being legal...there is a huge thread on what states are legal....its very easy for a baker to find out what's right to do. Can we just let it rest at that?????

And if you are worried about local "illegals"....sheesh... just make your business so darn good nobody will WANT to buy from the "illegals". Spend that energy into your own business, not getting mad at someone else. Actually my biggest competition here are other licensed businesses...gives me something to work towards.

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torysgirl87 Posted 10 Dec 2010 , 8:03pm
post #104 of 183

I want to chime in.

I desparately wanted to be a licensed baker and was in fact told by my state and county that this was possible in my home in a seperate, commercial kitchen than my family kitchen. So I worked full time, overtime, and part time, and sold cakes as a hobby...If you read up on hobby income on the IRS website, you will find that federally you can sell cakes from home out of your family kitchen, but this cannot be your main source of income. Doing one to three cakes a week was certainly not going to allow me to quit my job. Anywho...

When I went to take my saved money and buy a license, hire a contractor and build the kitchen, I was informed that I had been misinformed and while my state does allow for this kitchen at home, my county does not. I could continue to do cakes as a hobby. I posted a desparate thread here about it b/c my dream was to raise a family and do cakes from home.

Instead, I'm trying hard to focus on my family, I only work part time and I do cakes for a hobby. I follow the IRS rules for hobby income AND I REPORT EVERY BIT OF IT ON MY 1040. At the end of this year, I will not renew my business license. I intended to use the license this year to pursue a cake rental business (I did that once for a young couple) but it doesn't truly help my feed my passion. So this is what I've resorted to.

And I'm happy with it.

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Kitagrl Posted 10 Dec 2010 , 8:06pm
post #105 of 183
Quote:
Originally Posted by torysgirl87

I want to chime in.

I desparately wanted to be a licensed baker and was in fact told by my state and county that this was possible in my home in a seperate, commercial kitchen than my family kitchen. So I worked full time, overtime, and part time, and sold cakes as a hobby...If you read up on hobby income on the IRS website, you will find that federally you can sell cakes from home out of your family kitchen, but this cannot be your main source of income. Doing one to three cakes a week was certainly not going to allow me to quit my job. Anywho...

When I went to take my saved money and buy a license, hire a contractor and build the kitchen, I was informed that I had been misinformed and while my state does allow for this kitchen at home, my county does not. I could continue to do cakes as a hobby. I posted a desparate thread here about it b/c my dream was to raise a family and do cakes from home.

Instead, I'm trying hard to focus on my family, I only work part time and I do cakes for a hobby. I follow the IRS rules for hobby income AND I REPORT EVERY BIT OF IT ON MY 1040. At the end of this year, I will not renew my business license. I intended to use the license this year to pursue a cake rental business (I did that once for a young couple) but it doesn't truly help my feed my passion. So this is what I've resorted to.

And I'm happy with it.




So basically if you do not have a business name or business advertising, you are allowed to receive compensation for your hobby?

That's awesome. thumbs_up.gif Great post.

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jason_kraft Posted 10 Dec 2010 , 8:18pm
post #106 of 183
Quote:
Originally Posted by Kitagrl

So basically if you do not have a business name or business advertising, you are allowed to receive compensation for your hobby?



According to the IRS, yes. According to the dept of health in most states, no. (The IRS is not really the roadblock here, if they had their way all home kitchens would be legal so they could increase revenues.)

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Aurora_333 Posted 10 Dec 2010 , 8:18pm
post #107 of 183

Kinda off subject, but what irks me is this. I have people tell me often, You should sell cakes, but when I tell them that I CAN'T legally and even explain to them why I can't. They get pushy about. Like I haven't spent almost TWO years looking into doing it legally. What do you tell people when they start getting pushy. BTW I only do cakes for very close family. I think they get upset when I tell them No I can't do a cake for you go to our local bakery. I just cannot afford to be giving cakes away for free.

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-K8memphis Posted 10 Dec 2010 , 8:29pm
post #108 of 183
Quote:
Originally Posted by Aurora_333

Kinda off subject, but what irks me is this. I have people tell me often, You should sell cakes, but when I tell them that I CAN'T legally and even explain to them why I can't. They get pushy about. Like I haven't spent almost TWO years looking into doing it legally. What do you tell people when they start getting pushy. BTW I only do cakes for very close family. I think they get upset when I tell them No I can't do a cake for you go to our local bakery. I just cannot afford to be giving cakes away for free.




This is maddening. I've already gone a little insane with this whole thing (can't do it from home). TorysGirl said she is happy with her situation--I'm not happy.
icon_biggrin.gif I'm grinning through my teeth.
icon_lol.gif I'm laughing with that scary hysterical almost out of control edge to it.

But yes people are freaking -- demanding -- what the frick --yes good question, Aurora -- what do say to pushy people who decide for you that you are such an undiscovered talent you need to open a place for the good of humanity. Something demure like stfu. icon_biggrin.gif

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torysgirl87 Posted 10 Dec 2010 , 8:29pm
post #109 of 183
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by Kitagrl

So basically if you do not have a business name or business advertising, you are allowed to receive compensation for your hobby?


According to the IRS, yes. According to the dept of health in most states, no. (The IRS is not really the roadblock here, if they had their way all home kitchens would be legal so they could increase revenues.)




Trust, your state and county uses your 1040 for their tax purposes too.

According to my state (GA) and county (DeKalb) this is totally allowable. The Department of Health does not regulate bakeries here. It is the Department of Agriculture and I have had many a meeting with all necessary officials at every level.

Also, please understand that I cover my bases. It is clear that I am making a cake for you as a hobby only, not under a business guise, no ingredients listing, you are accepting responsibility for this cake, etc. Most people that I make cakes for are people I know. But it is sufficient to feed my passion. And the pocket change is cool.

I'm editing this post to say that if you read what I wrote carefully, I said federally hobby income is allowed, and also what my state and county allows regarding cakes from home allows me to do what I'm doing. I'm so sure the specifics are different everywhere.

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-K8memphis Posted 10 Dec 2010 , 8:34pm
post #110 of 183

TorysGirl, I am very happy for you. And I'm glad this is such a well behaved thread. I've said stuff like this and oh my gawd--the cake fundamentalists about made meatloaf out me.

More power to yah!

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jason_kraft Posted 10 Dec 2010 , 8:35pm
post #111 of 183
Quote:
Originally Posted by torysgirl87

Also, please understand that I cover my bases. It is clear that I am making a cake for you as a hobby only, not under a business guise, no ingredients listing, you are accepting responsibility for this cake, etc. Most people that I make cakes for are people I know. But it is sufficient to feed my passion. And the pocket change is cool.



I don't see a big problem with this, the issue is when unlicensed bakeries start expanding outside their circle of friends/family and advertising to the general public. The hobby/business distinction doesn't really matter though, the DoH/DoA in your state still won't approve. The only big difference is that you can't deduct net hobby losses against other income like you can with net business losses. If I were in your position, I would rather have an official business that gave product away for free (until a licensed kitchen could be secured) so I could deduct those losses and at least get something back.

Have you looked into renting a licensed commercial kitchen outside your home? I know of at least one option in the Decatur area.

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gatorcake Posted 10 Dec 2010 , 8:37pm
post #112 of 183

[quote="Kitagrl"]There's law...but frankly...its no business of a CC member in Louisiana (just pulled that out of a hat, no reference to anyone here) to tell a CC member in, say, Idaho, that they should not ask questions on CC about selling cake until they are licensed.

Let the person mind their own business. Let them decide if they are going to follow the law or not. Let them face the results of whatever they choose.

Just answer their stupid cake question and go back to your legal caking...ya know? Really....

My main issue is not that its okay to be illegal but that I get tired of the busybodies who like to start debates in threads about whether the OP is being a bad little girl or a good little girl.

[quote]

Okay so why is your policing of the forum any different than their policing of illegal businesses? If you do not like the threads/posts do not read them. But to tell people it is not their business is no different than someone else tell another their business is illegal. Mind your own business works both ways.

The fact is that a number of businesses require liscensed legal operators to police their profession. There are not the resources or staff for the state do it alone. You may dislike it, but that is the way it is. If somone has an interest in protecting their profession that is their perrogative. There is no moral high ground for those that "mind their own business." You are not a better person because you mind your own business. To each their own, then to each their own. If you do not want to police fine, but you should not be policing those who are trying to protect their profession.

You say make it better so no one will buy from others. That is naive to say the least. Folks will buy from people who offer cheaper deals (sorry I agree with a prior post, illegal does not mean they are worse than what you can do).

I struggle with this right now. I know people will buy from me if I start selling out of my kitchen which could never pass inspection due to a four legged friend that lives in my house. Does not matter that he never goes into the kitchen--pet = no liscence. They will buy because they have tasted the cakes I make and love the flavors and textures even if my skills are not as good others.

So if we were in the same town as you and I went to my colleagues and said heck I will sell and undercut you (and buy the way these people have resources to afford specialty cakes) they would buy from me. Heck I already "took business away" from a place in another town because I was asked as a favor to make a cake for a birthday (I was not financially compensated for it).

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torysgirl87 Posted 10 Dec 2010 , 8:39pm
post #113 of 183
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by torysgirl87

Also, please understand that I cover my bases. It is clear that I am making a cake for you as a hobby only, not under a business guise, no ingredients listing, you are accepting responsibility for this cake, etc. Most people that I make cakes for are people I know. But it is sufficient to feed my passion. And the pocket change is cool.


I don't see a big problem with this, the issue is when unlicensed bakeries start expanding outside their circle of friends/family and advertising to the general public. The hobby/business distinction doesn't really matter though, the DoH/DoA in your state still won't approve. The only big difference is that you can't deduct net hobby losses against other income like you can with net business losses. If I were in your position, I would rather have an official business that gave product away for free (until a licensed kitchen could be secured) so I could deduct those losses and at least get something back.

Have you looked into renting a licensed commercial kitchen outside your home? I know of at least one option in the Decatur area.




It is so obnoxious for a person to tell me what they think they know, but really do not know. DoA has been in my home and yes, approves. I'm no longer interested in a business and yes you can deduct hobby expenses up to the amount of hobby income you make. The internet might possibly be one of the greatest tools of all time. www.irs.gov. Check the laws out.

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Kitagrl Posted 10 Dec 2010 , 8:41pm
post #114 of 183
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by torysgirl87

Also, please understand that I cover my bases. It is clear that I am making a cake for you as a hobby only, not under a business guise, no ingredients listing, you are accepting responsibility for this cake, etc. Most people that I make cakes for are people I know. But it is sufficient to feed my passion. And the pocket change is cool.


I don't see a big problem with this, the issue is when unlicensed bakeries start expanding outside their circle of friends/family and advertising to the general public. The hobby/business distinction doesn't really matter though, the DoH/DoA in your state still won't approve. The only big difference is that you can't deduct net hobby losses against other income like you can with net business losses. If I were in your position, I would rather have an official business that gave product away for free (until a licensed kitchen could be secured) so I could deduct those losses and at least get something back.

Have you looked into renting a licensed commercial kitchen outside your home? I know of at least one option in the Decatur area.




I don't understand what part of "I got permission from my local government" you don't understand in her story? She's not breaking any laws!!!! She got permission from her DoA!!!!

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jason_kraft Posted 10 Dec 2010 , 8:44pm
post #115 of 183

In her earlier post she said the county did not approve (sorry, I should have said county instead of state).

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jason_kraft Posted 10 Dec 2010 , 8:46pm
post #116 of 183
Quote:
Originally Posted by torysgirl87

yes you can deduct hobby expenses up to the amount of hobby income you make.



Correct, but you cannot deduct net losses (when expenses are greater than income).

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Kitagrl Posted 10 Dec 2010 , 8:49pm
post #117 of 183

[quote="gatorcake"][quote="Kitagrl"]There's law...but frankly...its no business of a CC member in Louisiana (just pulled that out of a hat, no reference to anyone here) to tell a CC member in, say, Idaho, that they should not ask questions on CC about selling cake until they are licensed.

Let the person mind their own business. Let them decide if they are going to follow the law or not. Let them face the results of whatever they choose.

Just answer their stupid cake question and go back to your legal caking...ya know? Really....

My main issue is not that its okay to be illegal but that I get tired of the busybodies who like to start debates in threads about whether the OP is being a bad little girl or a good little girl.

Quote:
Quote:



Okay so why is your policing of the forum any different than their policing of illegal businesses? If you do not like the threads/posts do not read them. But to tell people it is not their business is no different than someone else tell another their business is illegal. Mind your own business works both ways.

The fact is that a number of businesses require liscensed legal operators to police their profession. There are not the resources or staff for the state do it alone. You may dislike it, but that is the way it is. If somone has an interest in protecting their profession that is their perrogative. There is no moral high ground for those that "mind their own business." You are not a better person because you mind your own business. To each their own, then to each their own. If you do not want to police fine, but you should not be policing those who are trying to protect their profession.

You say make it better so no one will buy from others. That is naive to say the least. Folks will buy from people who offer cheaper deals (sorry I agree with a prior post, illegal does not mean they are worse than what you can do).

I struggle with this right now. I know people will buy from me if I start selling out of my kitchen which could never pass inspection due to a four legged friend that lives in my house. Does not matter that he never goes into the kitchen--pet = no liscence. They will buy because they have tasted the cakes I make and love the flavors and textures even if my skills are not as good others.

So if we were in the same town as you and I went to my colleagues and said heck I will sell and undercut you (and buy the way these people have resources to afford specialty cakes) they would buy from me. Heck I already "took business away" from a place in another town because I was asked as a favor to make a cake for a birthday (I was not financially compensated for it).




I honestly do not fear competition but I guess its because I do not need, nor want, high volume business. I really do the same amount of work as the hobby baker above (LEGAL hobby baker) but I have licensing and insurance for it.

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-K8memphis Posted 10 Dec 2010 , 8:54pm
post #118 of 183

Her county does not approve her having a business the way she had first been told. They are ok with a few hobby cakes.

It's really hard for some people to understand that a few cakes for friends and family that you get paid for is not going to blow up the phones at the Pentagon or something. Swat teams are not surrounding the houses of those who bake thusly.

It is ok. It is ok with the officials. We can get paid for baking like this, a little baking. Not a business. One cake two cake three cakes is not a business.

Taking money for a cake does not institute a business in many locales.

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Annabakescakes Posted 10 Dec 2010 , 9:12pm
post #119 of 183
Quote:
Originally Posted by -K8memphis

Her county does not approve her having a business the way she had first been told. They are ok with a few hobby cakes.

It's really hard for some people to understand that a few cakes for friends and family that you get paid for is not going to blow up the phones at the Pentagon or something. Swat teams are not surrounding the houses of those who bake thusly.

It is ok. It is ok with the officials. We can get paid for baking like this, a little baking. Not a business. One cake two cake three cakes is not a business.

Taking money for a cake does not institute a business in many locales.




I totally "get" your frustration here! Thanks for wording it better than I could have! I just have to say "DITTO, for the love of all things HOLY, FREAKING DITTO!!"

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torysgirl87 Posted 10 Dec 2010 , 9:13pm
post #120 of 183
Quote:
Originally Posted by jasonkraft

In her earlier post she said the county did not approve (sorry, I should have said county instead of state).




Nope, the county doesn't, though the state does, of a commercial kitchen in the home that operates as a business. But a cakehobbery from your family kitchen is cool and you slight not even Uncle Sam if you report your hobby income and don't try to live off it. icon_wink.gif

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