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Small Business Development Center
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Follow rules to start up bakery

June 10, 2013

Have you ever taken a cake or some homemade bread to a party or friend and have them brag on it and proclaim that you should open your own bakery? Maybe the first time, you were flattered and quickly dismissed the suggestion. But the compliments kept coming as did the suggestions to start your own business and now you have given some serious thought. 

SAN ANGELO, Texas — Have you ever taken a cake or some homemade bread to a party or friend and have them brag on it and proclaim that you should open your own bakery?

Maybe the first time, you were flattered and quickly dismissed the suggestion. But the compliments kept coming as did the suggestions to start your own business and now you have given some serious thought. Or maybe you have several really good recipes. Some belonged to your mother or grandmother or that aunt that is so well known for her cooking.

The more you thought about it, the more you liked the idea of owning your own bakery. Maybe you even did a little bit of research to find out what you had to do to open a food service business only to find out it was going to cost $100,000 (or more) to lease a building, renovate to bring it up to code, purchase the equipment, utensils and inventory needed to operate the business, and have some operating capital.

All of that was OK, until the bank wanted you to come up with almost half of the money you needed. You aren’t alone! Many people have given up on the dream for that and other reasons.

Before 2011, it was illegal to operate a food service out of your home. But, in 2011 the Texas Cottage Food Law was passed allowing the citizens of Texas to operate a bakery from home.

It was a good answer for people who wanted to open their own bakery but were held back because of financing or other reasons. 

The law does not give the individual carte blanche to make and sell anything they want. There are specific guidelines on what can and cannot be sold from home. There are rules about how it can be sold and how it has to be packaged. Additionally, the cottage bakery cannot make more than $50,000 per year in gross revenue.

In this year’s legislative session, modifications to the law were made and are (as of the date this article was written) sitting on the governor’s desk awaiting his signature. These modifications, if approved by the governor, will expand where the bakery products can be sold, increase the variety of products allowed for sale, and require a food handler’s safety course.

Don’t just rush out and start trying to sell home-cooked goods for a profit. There are several things you need to do and know beforehand. While it is easy and inexpensive to start a cottage bakery, you want to do it right and without getting into trouble.

That’s where the Angelo State University Small Business Development Center comes in. We can guide through the steps of setting up your business and explain to you all the things you need to know about a cottage bakery so that you can operate it legally and profitably. All you have to do is call and schedule an appointment. We will be glad to help.

“Business Tips” was written by James Leavelle, Business Development Specialist and Certified Business Adviser I of Angelo State University’s Small Business Development Center. Contact him at James.Leavelle@angelo.edu.

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    James Leavelle, ASU-SBDC Business Development Specialist

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