The legal side of building a business can be overwhelming when you first start. The business world runs on permits. Just take it one step at a time. If you miss a permit -- that's ok. Just get it when you learn about it. That being said, below are the basic permits needed when starting a food permit at home.
Federal
- EIN (Employer Identification Number) can be found on the IRS website
State
- Entity type registration (LLC, C Corp, S Corp, etc). I opted for an LLC due affordability ($800/year) and flexibility in taxes and paying myself a salary. For instance, S Corps may seem to save on taxes, but there are requirements such as having to pay yourself a reasonable salary. When you’re first starting, you likely won’t be making enough money to pay yourself * at all *. Therefore, the S Corp likely wouldn’t make sense for a business starting from home built on savings.
County
- Cottage Food License: A lot more counties have adopted the Cottage Food License in recent years. This is a license that allows you to produce and sell certain kinds of food from your home kitchen. They are county-specific licenses and not all counties have them. For Oakland, there is the option between a Cottage Food License (CFO) A or B permit. These two permits differ in who you can sell to and how much revenue you can make a year.
- Seller’s Permit: This permit is required if you sell tangible personal property.
- Business License: This proves that you are recognized as a legal business entity in your state and municipality.
I started from my home kitchen and $5,000 of my own savings. Getting started at home allowed me the flexibility to experiment without the burden of high expenses from a commercial kitchen. This flexibility meant that I could not only experiment with the actual products I made, but also intentionally find my audience. Unless there is a very specific reason you have to work out of an official space, I highly recommend starting in the lowest cost way possible. In my first year doing pop ups and attempting wholesale to local cafes, I made no money whatsoever. But I learned a lot and that allowed me to 5x my revenue the following year. Sometimes it requires starting small to grow bigger later.