Checklist for Beginning Cottage Food Operations
Texas makes it easy. But there are a few things to think about before you start!
It's easy to start selling cottage foods!
Texas is one of the easiest states for starting a cottage food business. There are no permits, fees, inspections, or licenses required. You must complete a basic food safety education or training program for food handlers (commonly known as getting a “food handler’s card”), and label your food with the required information. That’s it. You can decide to start a cottage food business in the morning and be legally selling cottage foods by lunch time.
1. [HIGHLY RECOMMENDED] Read the basic rules of the cottage food law. Know the rules and your rights!
2. [HIGHLY RECOMMENDED] Pick your product(s). Verify that your product is allowable under the law.
3. [REQUIRED] Complete basic food safety education or training program for food handlers. Cost – around $15.
4. [REQUIRED] Create your legally required food labels.
5. [HIGHLY RECOMMENDED] Develop a business plan. How much does your product cost you to make, and how much will you sell it for? Where will you sell? How will you market yourself? Is there demand for your product in your area? How much competition will you have? How do the competition’s products compare to yours in price and quality? How long will it take to turn a profit?
6. [HIGHLY RECOMMENDED] Check with the Texas Comptroller to see if your product is subject to sales tax, and if you need to obtain a Sales & Use Permit. Cost – free.
7. [HIGHLY RECOMMENDED] Pick a business name and register it as a DBA with your county. This ensures that no one else in your county can use your business name. This usually costs less than $20. Optional – you may also wish to conduct a national search to verify that this name is not in use by others, or trademarked by someone else.
8. [HIGHLY RECOMMENDED] Speak with a tax or legal professional about how to structure your business, whether it be a Sole Proprietorship, LLC, or some other entity. Your cottage food income is subject to federal taxes the same way any other income is.
9. [HIGHLY RECOMMENDED] Open a business bank account.
10. [HIGHLY RECOMMENDED] Set up a web site and Facebook page for marketing. Order inexpensive startup business cards from a site like VistaPrint or Zazzle.
11. Start selling! Good luck with your new business!
