HOW TO START A COTTAGE BAKERY SELLING SUGAR COOKIES IN TEXAS
This post is most specifically about the Texas cottage food laws where Sweet Like G is based from.
Sweet Like G didn't see daylight until a little over a year ago and largely due to the fact that I was sort of clueless on where to start. Coupled with fear of not understanding the rules, I put it off for many years and now want to share with you information to help you start your own cottage bakery!
Let's get started on the requirements needed under the cottage food laws in Texas.
no LICENSE IS REQUIRED IN TEXAS
That's right. While some states require paying fees for permits, licenses, and even inspections of your home, Texas is a state that allows you to start selling any of the approved list of items without any permits/licenses. However, you will need a food handlers certification. I got mine from here.
With no license required, once you finish your food handler's certificate, you can start baking out of your home kitchen!
Required labels under cottage food law
So what's required on the label?
Business Name
A business name is required on your labels. If you are doing business under a name that is not your given name (think Sweet Like G vs Griselda's Cookies) I recommended you register your DBA(Doing Business As) name with your local county clerks office. Pricing varies per county so please visit their website first to gather your information. For example. Tarrant county allows you to fill out forms online, and the cost is $23 for filing a DBA form.
Physical Address of Cottage Operation
This requirement is often disfavored by bakers as it does require you to disclose your home address in Texas. This label is the only place you do have to disclose that information however, and you do not have to disclose it online publicly if you choose not to do so.
Required Statement
This statement is word for word, "This food is made in a home kitchen and is not inspected by the Department of State Health Services or a local health department", and is required on every label.
I also disclose this statement in similar terms, not word for word, on my website as it advises potential clients of my products being a cottage food bakery item.
List of Allergens
Most, but not all, sugar cookie recipes contain the allergens of eggs, milk(butter), and wheat (flour). Some bakers use pure almond extract so keep in mind of all your ingredients and list the allergens accordingly.
Product Name/Common Name
Each label is required to have the common name of your product. In some instances I have seen bakers leave a blank space available in order to mark the changing flavor in with pen. I have also seen others list their product name on a separate label so they simply just slap on the correct labels without having to change or write on their main label of never changing information. As long as all required information is legibly printed (avoid hard to read fonts such as cursive) on your label, how you present and style your label is completely up to you!
Other Possible Requirements
If you are selling any items with frozen raw and uncut fruits/veggies you will also have to disclose that information on your label or your invoice the following statement. "SAFE HANDLING INSTRUCTIONS: To prevent illness from bacteria, keep this food frozen until preparing for consumption". My sugar cookies do not call for these items so I do not have this on my labels.
Canned/Pickled items also have their own requirements. Learn more about those here.
Optional Additions
Depending on the size of your label, this is a great time to decide if you can fit any other optional information such as your social media handle, website, or a QR code.
Next, let's dive into requirements and recommendations about taxes.
SALES AND TAX PERMIT, IS IT necessary?
If you are only planning on selling tax-exempt baked goods, like sugar cookies, then no permit is required. This makes it easy as you do not have to collect and pay state sales taxes on your baked goods. Keep in mind though, you will still have to pay federal taxes on the income you make from your business, which in Texas is capped at $50,000 for cottage food operators.
If you are selling candies, any baked goods sold with a utensil, or anything heated (learn more on the other taxable items here), all are taxable items and will require a sales-tax permit from the state. It is free to apply for a permit in Texas, but keep in kind that other fees may arise depending on your business needs. As for myself, I obtained a sales-tax permit only when I expanded to selling my digital products and pay my state sales taxes quarterly.
time TO Start selling!
Aside from the above requirements, it is necessary know the do's and don'ts of selling cottage food bakery in Texas. Some of the topics that come to mind are: no shipping of cookies, no custards or any refrigerated items allowed, charging tax on items such as candies, and no wholesale allowed. All of these, and other common questions can be found on the Department of State Health Services website.
Another amazing source of information is Kelley Masters website, texascottagefoodlaw.com .
Joining the Cookie Business Owners Facebook Group is also a good start to learning how to run a sugar cookie business, along with more specific groups to Texas such as Texas Cookiers Facebook Group.
Recommendations
As you start your sugar cookie business, I recommend the following:
Open a Business Bank Account
Keeping your business and personal finances separate makes it so much easier to run your business, makes accounting easier for tax season, and allows you to keep better track of your expenses and revenue without confusion. Don't want to start a business account at a major bank? Square is a great option that can offer similar services.
Square "helps millions of sellers run their business-from secure credit card processing to point of sale solutions". Their services give you access to baking, savings, and allows you to obtain a debit card to have immediate access to your funds without having to transfer. This is a great option for anyone who is not quite ready to open an account with a national bank.
Keep in kind that square's processing does have fees per sale transaction. Learn more on their website, and use my referral code to receive free processing on your first $1000 in the first 180 days.
Website
Another great service Square offers is the ability to create a free website (with a sponsored domain: square.site) that is very easy to use. If you want to remove the sponsored handle, you can purchase your own domain for as little as $10-20 per year.
Other good website builders include, but are not limited to, WIX, Shopify, and Squarespace (not to be confused with Square). For my personal website I transitioned from Square's Weebly website, as I felt limited in my ability to sell instant downloads and wanted more options to customize. Nevertheless, Square sites are a great option for anyone looking for an easy to use website builder. I currently use WIX for my main site and still utilize Square's free website for my holiday cookie presales.
A website is not necessary, but highly recommended.
Social Media
Starting business pages on social media is a great way to get connected to potential clients and the baking community. I recommend starting with a Facebook business page. This allows you to connect it to a business Instagram and is often needed to utilize features on other websites such as WIX.
I also recommend joining Sugar Cookie Marketing Facebook Group as they have many great resources available in learning how to market your business using social media.
It is important to understand that social media accounts are not in your FULL control and losing access to your accounts could mean losing access to all of your clients. This is a great reason why I recommend having a website, there you can build a subscriber list and have full control of your client list.
Final thoughts
The information in this post is meant to be helpful only and is not in any way legal advice and I am not a lawyer. Please consult a lawyer/attorney for any legal advice regarding your business needs.
All links and recommendations are not sponsored and are of my own opinion.
If you found this post helpful, kindly consider liking, commenting, & sharing as I hope to make an impact by providing value to the sugar cookie community.
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