Owning a homemade food business is the dream of many cooks whose doughnuts, salsa, bread or pasta sauce has garnered rave reviews from friends and family. Starting up a homemade food business intersects with many sets of laws, from business formation requirements to zoning, employment, occupational safety and food health laws. Learn about legal impacts and requirements before launching a homemade food business to help avoid liability or legal enforcement actions.
Potential for liability is the largest consideration for a person starting a homemade food business, including whether the product is likely to cause allergies or choking hazards, whether it's something perishable or whether it's packaged in materials that might break. These considerations raise the questions of whether the business should be incorporated and whether it should be headquartered outside the home to minimise potential for the business owner's house to be attached in any potential lawsuit.
Several types of laws impact the start-up of a homemade food business. Zoning and land use laws dictate where in a community different kinds of businesses are allowed to operate. Incorporation laws allow a homemade food business owner to choose from among a number of different business structures. Occupational safety laws control the storage of many ingredients and cleaners, and dictate safety protocols for operations of stoves, ovens and other machinery. Consumer health laws may require inspection of the food manufacturing and packaging premises and periodic inspection of the product. Employment and labour laws apply to the hiring of any workers.
The size of a homemade food business in terms of the amount of equipment used, amount of ingredients stored and products manufactured, and amount of money generated will affect how laws apply to the business. Many states have home baking or farm produce sale laws which allow homeowners to make and sell relatively small quantities of food products--bread, cakes, honey--to customers with either no business permits or a simple, inexpensive home business permit. Food businesses over the state law size limits will have to comply with more complex zoning and inspection requirements. The number of employees, if any, will also affect which labour and employment laws apply.
Most states' business laws, as well as regulations of the U.S. Food and Drug Administration, require all food producers, including homemade food businesses, to accurately label the product with all ingredients. Some products must also include nutrition information identification. Each state also has laws regarding how a homemade food producer may identify product origin. A product cannot be labelled "Made in Vermont" or "Product of Washington State," for example, unless it meets state law standards for the percentage of ingredients, production and packaging for that state.
The time to consider what laws apply, what requirements you must meet or permits you must obtain is well before launching the actual manufacturing business. A local small business administration or economic development office can help point you in the right direction with a package of start-up business information and a list of attorneys who provide business formation services in the area.
Selling homemade food products subjects the business owner to laws regarding false and misleading advertising wherever the product is marketed. Internet marketing reaches all over the world, so homemade food business owners need to exercise knowledgeable caution in the claims they make regarding their food products, as well as explore compliance with the labelling and ingredients laws in any jurisdiction where the product is purchased by consumers.