My best friend and I have taken the leap of faith into ourselves and decided to pursue our dreams of being bakers - i'll pause while you all clap and cheer! Well this is where we need help. While we are aware that we're nowhere near ready to sell, we really need help determining what steps we'll need to take into making our in home bakery a legal in home bakery. We do not want any IRS trouble at all, but we want to be legitimate business owners.

How do we go about doing this when we're ready to do so? Any and all help is really just a helping hand for us as we're staring at the internet searching "how to start bakery business" with wide eyes and confused brains. Seriously I think my brains turned into eggs and got scrambled. I can't google it anymore without being confused on where to take the first steps.

Go to the health department if you are confused. They will be able to help you out the most.

If you are in Pa, you need to visit http://www.agriculture.state.pa.us/portal/server.pt/gateway/PTARGS_0_2_24476_10297_0_43/http%3B/10.41.0.77/AgWebsite/ProgramDetail.aspx?name=Home-Food-Processing&navid=12&parentnavid=0&palid=134&. Or if that doesn't show it is the PA Dept of Agriculture. All the info you need is right there.

Unless your state has a cottage food law the biggest hurdle will probably be finding licensed and inspected kitchen space. The other main points to hit are a business license and zoning compliance with your city, liability insurance, how to organize your business (sole prop vs. partnership vs. corporation vs. LLC), sales tax compliance, filing for a fictitious business name (usually with your county), setting up your accounting, and most importantly your business plan so you know what to make, how much to charge, who to sell it to, and how to market it.

I'm in PA as well, we do have CFL so you don't have to worry about the commercial kitchen. I just finished setting up my home business this summer.

First, you need to create a business plan (which should include all of your market research, menu, pricing, etc that Jason mentioned). Next, you'll need to contact your local township and get zoning approval (in writing). Then go to the state website that another poster linked to and complete your Home Food Processor's Application (need to attach local zoning approval and business plan). A state inspector will contact you to review your plan and schedule an inspection. They can take up to 60 days, so while waiting you can get your insurance and tax information lined up. You'll want liability insurance and will need to register your business for tax purposes. I was lazy and let Legal Zoom set up my LLC and handle all of the paperwork.

Be prepared to spend a lot of time waiting (use it to try out new recipes!). My local township was the longest delay - they approved it right away, but took forever to get me the letter the state required.

Also, my experience with the inspection was they were very concerned about packaging, labeling, and ingredient lists. Not sure if you'll have the same inspector or not but make sure you have detailed ingredient lists for all of your recipes.

A few night classes or adult ed classes in the business area would help. Some accounting is the most helpful.

If you are self-motivated, a lot of the business end can be learned from books and the web. And ask questions of everyone you know who is in business.

Here is another issue with CFL... sometimes people forget to count everything in expenses and it causes the low prices that are unrealistic in home businesses.

Don't forget water, paper towels, dish soap, the time spent shopping, gas, packaging, website, cards, commercial car insurance, change in homeowners policy, change in your home tax base as part of your home will now be zoned commercial, etc. When you do it correctly, and that includes making sure that your home investment is added because it is not free... it is there to put money in your pocket... not to undercut the price. In the end, you should be about the same price as retail, but with a slightly larger profit margin.

You can also go to your state's small business administration. They likely have info that will be helpful to you!

Oh my, there's so much to do!! O_O

We rent our house so I guess we'll have to talk to our Realtor first of all. It's so much haha.

I'll look into the small business administration in my area though. This is crazy!! I knew it would be a lot, but its still overwhelming.

Also does anyone else have the problem where the ads come into the forum posts?

Congratulations. Here is a website by Penn State:

Starting a Food Business
http://extension.psu.edu/food-safety/entrepreneurs/starting-a-business

You are very welcome!

Happy Halloween!