Cottage Oven
@cottageoven
active 5 days, 18 hours agoForum Replies Created
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Each state sets its limitations and usually posts that information somewhere. For example, in Florida, it is handled by the Florida Department of Agriculture and Consumer Services. Their website is http://freshfromflorida.com and if you type “cottage food” into their search bar, you’ll get a link to the basic information (https://www.fdacs.gov/Business-Services/Food-Establishments/Cottage-Foods) which includes a link to a PDF brochure on the subject (https://www.fdacs.gov/content/download/70108/file/Cottage-Food-Operations.pdf).
One of the things specifically listed as approved is “Popcorn and popcorn balls.” Otherwise, in addition to the lists of specific approvals and prohibitions, the general definitions are also include, such as that the products must be “non-potentially-hazardous” foods and cannot require refrigeration.
Again, each state is different and the information listed on the Forrager website comes from what they have obtained from such sources.
I tried asking this (as a sample chart of accounts) a couple of years ago, but never got any real responses. Since then, I have started using Wave Accounting and it has been VERY easy to use.
Here are my expense categories from Wave. Much of this is from the default categories initially provided by Wave, but some are categories I have added to suit my business. A few of these don’t apply to me (e.g. Computer Hardware, since I already had the computer and my business use of it is not more than 50%)., but I have left them in the list, anyway. Having these categories definitely makes things easier when it comes to tax time. In fact, I even discovered things I didn’t realized I could deduct (e.g. Bags and labels necessary to package products for sale are considered part of the Cost of Goods Sold – something I didn’t know to deduct in my first two years).
I hope this helps at least somewhat as you get everything organized.
Operating Expense
Advertising & Promotion Advertising or other costs to promote your business. Includes business cards, web or social media promotion.
Business Liability Insurance Business Liability Insurance
Business Licenses & Permits Fees for licenses and permits your business requires to operate.
Computer – Hardware Desktop or laptop computers, mobile phones, tablets, and accessories used for your business.
Computer – Hosting Fees for web storage and access, like hosting your business website or app.
Computer – Internet Internet services for your business. Does not include data access for mobile devices.
Computer – Software Apps, software, and web or cloud services you use for business on your mobile phone or computer. Includes one-time purchases and subscriptions.
Disposable goods Parchment, paper bags, trash bags, etc. not integral to product packaging.
Equipment for market Tents, tables, etc.
Kitchenware Pans, utensils, etc.
Market Fees Fees paid to rent market space
Office Supplies Office supplies and services for your business office or space.
Repairs & Maintenance Repair and upkeep of property or equipment, as long as the repair doesn’t add value to the property. Does not include replacements or upgrades.
Sales Tax Sales tax taken out of income from items that have the sales tax included in the price.
Telephone – Land Line Land line phone services for your business.
Telephone – Wireless Mobile phone services for your business.
Training and Education ServSafe certification, etc.Cost of Goods Sold
Product packaging Bags and labels necessary to package products for sale.
Purchases – Food & Beverage Ingredients, etc.Payment Processing Fee
Merchant Account Fees Fees your business pays in order to accept credit card payments. Includes transaction fees, monthly subscription fees, and one-time fees for processing software or equipment.Uncategorized Expense
Uncategorized Expense A business cost you haven’t categorized yet. Categorize it now to keep your records accurate.Bags would certainly be less expensive than bottles.
The thing to compare would be bulk prices on small zipper-closure bags versus some kind of bag where you would use a heat (“impulse”) sealer. For my baked goods, I use plastic food bags and a heat sealer ($30 – $50 on Amazon). Of course, you could use something like a Foodsaver or Seal-a-Meal, if you have one, but the added expense isn’t necessary unless you absolutely must have the capacity for vacuum sealing.
For labeling, you could just use address labels and a laser printer (an ink-jet printer would probably run through ink too quickly) and then stick the labels directly to the bags. To be a little more elegant, you could attach a piece of thin cardboard to the top of the bag (if you use staples, don’t puncture the bag below where it is sealed) and then slap a label onto that. Of course, the ultimate would be to have the cardboard tops preprinted, but that would probably raise the cost too much.
Remember: whatever method you choose, the cost of packaging, labeling and any associated equipment must be factored into the price you charge for the item. Otherwise, you could be spending more on preparing the product for sale than you make when you sell it. On the other hand, also remember that the costs of the packaging and labels that are an integral part of displaying your product for sale are deductible inventory (cost of goods sold) expenses.
Don’t know about California – I’m in Florida, but the following may be helpful as some general guidelines to help you find the answers that would be specific to California.
Here, in Florida, most items sold under cottage-food law would NOT be taxable, but CANDY is ALWAYS taxable. Thus, bread, cookies, cakes, muffins, etc. would not be taxed but caramels, fudge, chocolates, etc. would be taxed.
There is also one more thing to consider: does the venue where you are selling charge admissions for customers to enter? If so, then items that are big enough or packaged for taking away from the venue are not taxable. Things that are sold to be eaten on the premises, however, are taxable. Thus, if you sell a blueberry muffin at a regular farmers market, it wouldn’t be taxed, but if you sold it at a fair where the customer had to buy a ticket to get in, then it would be taxed.
I hope that helps you at least somewhat, but do check with whoever oversees California’s cottage-food laws (perhaps Department of Agriculture) AND California’s sales-tax laws (perhaps department of revenue), since California’s laws are often vastly different from those of any other state.
Sandy, in which state are you starting your cottage-food business. Some require inspections and some don’t. It’s also possible that some municipalities may require inspections, even if the state does not.
Since I’m in Florida, I don’t know about Oregon, in particular, but the main thing would be that all of the cooking would have to be done in your home kitchen. That means that, unless there is something specific against frying, you may fry the doughnuts AT HOME, then package them and sell them at, for example, a farmers market. You would NOT be allowed to fry them at the farmers market.
Also keep in mind that any samples would have to be cut and packaged (e.g. in small cups with lids) at home and you would not be allowed to break doughnuts apart as samples at the market – only the home-packaged samples would be allowed.
Again, remember, I’m in Florida and the rules may be different in Oregon, but these are relatively common constraints.
Wish I could remember what made it work, but I finally was able to add my CFO.
Unfortunately, now, when I try to add products, the form won’t submit.
As with Angel, I have tried multiple browsers and platforms (Firefox and Chrome on Linux, Android and Windows).
Welcome back, David, and thank you for making the Add-CFO page available again.
Unfortunately, it is not fully functional, since the location search never finishes, thus making it impossible to submit the form.
Where are you located?
Most cottage-food laws do not allow selling across state lines.
Even within state lines, they often don’t allow shipping. You may deliver personally or customers may come to you (at your home or at an accepted venue such as a farmers market), but you may not ship (e. g. UPS, USPS, FedEx, etc.).
Even considering all of the above, many states do not allow sauces, salsas or condiments as cottage-food items. Instead, a commercial kitchen and food license are necessary.
Again, it all depends upon the state in which you live, but very few – if any – would permit out-of-state sales and shipping of a BBQ sauce under cottage-food law.
It depends upon the laws for your state. For example, in Florida, you CAN sell the cupcakes online, but the customers cannot be outside of Florida and you may not ship the orders (UPS, USPS, FedEx, etc.). You may deliver the orders personally or customers may pick up the orders at your home (if your HOA, etc. allows it) or at a farmers market where you may already be selling.