Starting Your Own Cottage Food Business

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Posted on February 27, 2018 by lakebillypies

Starting your own cottage food business, getting started is the hardest part.

Thank you cottage food law! I have always wanted to start my own business. As much as baking has been my passion, being an entrepreneur has also been a dream of mine. I currently have a great day job as a fundraiser for Northeastern Illinois University in Chicago, and fully appreciate my career in development. Being in the non-profit sector is a natural fit, I feel a sense of purpose in my work, and have met incredible people along the way. I was also a volleyball player in college at Valparaiso University, and I think because I am a former collegiate athlete, and probably because of my personality overall, I love the grit of managing a big fundraising event, just as I love the challenge of starting my own business. And who the hell doesn’t like pies.

“Never say ‘no’ to pie. No matter what, wherever you are, diet-wise or whatever, you know what? You can always have a small piece of pie, and I like pie. I don’t know anybody who doesn’t like pie. If somebody doesn’t like pie, I don’t trust them. I’ll bet you Vladimir Putin doesn’t like pie.” -Al Roker.

When you are working to pay the bills, starting your own business seems damn near impossible. My husband, Tom, and I were able to save money and buy a modest house on a private lake in Lake County, Ill. I grew up in this neighborhood, and my parents still live here. It’s beautiful, and we are lucky. Everyday I wake up and can’t believe this is where I get to live. I never thought I would own a home, and here we are, pinching pennies and loving every second of lake life.

A true lakebilly, my husband, Tom.

So how does one start a business without the capital? I can work to get a loan, or pitch investors, but taking the risk of starting a bakery and quitting my day job is just not plausible for us. My husband is a brewer, and we need both incomes to cover our bills. I started to read up on food trucks and other options where I might be able to start a side business with less risk, and that is when I stumbled upon the cottage food law. I want to grow this business organically, and hopefully in the future I will be looking to secure funds for my own storefront.

As I start this journey, I want to write down my experience. The ups and downs, the problem solving, and overall operations of getting this thing off the ground. There are a lot of entrepreneurs out there, I’m nothing special, but I have to believe that we all go through similar problems, maybe if I write this down we can help each other, especially if there is someone interested in starting as a cottage food vendor. As of right now, I am officially going to be a vendor at the Mundelein Farmers Market in Illinois. I’ve decided to start with one this summer, really dial in my recipes and figure out the process of how in the holy hell I’m going to make a bunch of pies in my home kitchen. Let me tell you what I have needed to do to get this far…

The Cottage Food Operation Law (Public Act 097-0393), which is an amendment to the Food Handling Regulation Enforcement Act, became effective on January 1, 2012 in the State of Illinois. This new law allows certain foods to be prepared in private home kitchens to be sold only at an Illinois farmers’ market, which is defined by the Act as a “common facility or area where farmers gather to sell a variety of fresh fruits and vegetables and other locally produced farm and food products, directly to consumers.” The foods that can be prepared for sale at farmers’ markets are limited to selected non-potentially hazardous foods, which are foods that, even without refrigeration, will not support the growth of germs that can make people sick.

For the steps below I will use examples from my own experiences in Lake County, Ill.

STEP 1: RESEARCH AND PRODUCT
Can you operate in your state, and your county? Many states have passed cottage food laws, the last I checked it is now more than 40. PickYourOwn is a good place to start, and has a good summary of states and state-specific information. You need to do some real research beyond this though. If your state does allow cottage food operation, has your local county or city passed an ordinance allowing you to sell your homemade goods? When I looked into Illinois I discovered that the state had passed a Cottage Food Operation Law, and the county I lived in had passed an ordinance. How exciting! As I read more I realized that this was a real possibility for me.

What product(s) do you want to sell? Each state has their own rules and regulations on what non-potentially hazardous foods are allowable. Again, research is key. In Illinois I can sell fruit pies, my brownie pie and my cookies, but I can’t sell pies that are cream, pumpkin, meringue, sweet potato, and so on. Be sure to check your local allowed and prohibited foods list.

STEP 2: REQUIREMENTS
You will need to look into your local ordinance requirements and what the farmers’ market requirements are.

Local Ordinance
What are the requirements to legally operate in your area? Most areas are going to be similar, but again, you need to talk to your local health department to find out your specific requirements. In Lake County I was able to find a very helpful document that gave me a general outline and someone to contact. When I talked to the contact, I discovered that I needed to register with the local health department, and to do that I needed to obtain an Illinois Department of Public Health (IDPH) food service sanitation manager certificate by completing a state approved course and passing an examination. I was given a helpful list of companies and places where I could register for the course. This was also my first cost associated with my business, Lakebilly Pies. The course cost me $200. I’m not sure most folks would describe an 8 hour course as fun, but I really enjoyed it! I was in the room with restaurant owners and managers, and I learned great information about food safety. I passed the test with flying colors, but there was a ton of content and I studied for a few nights before going into the class as they recommended by ServSafe.

Some overall advice, you need to give yourself enough time to set up and get through all these requirements before you start selling at your farmers’ market. This is not going to happen in a week, it takes a few months to get up and running.  I had to sign up for the course, and after taking the test, it took a week to get the results. Then I had to put my application in with the health department. They got back to me quickly with my certificate, but this was just the start.

Farmers’ Market Requirements
Decide what market(s) you want to sell at. Once you figure out which ones work best for you, make sure they are taking new vendors, look at costs associated with a space and what day(s) they operate. Each farmers’ market will have their own vendor rules that you need to comply with. Many, but not all, will require you to have vehicle and general liability insurance. My local markets require this, and it is another expense. I shopped around and the company that I found with the most reasonable rate was FLIP. They start at $299 for general liability and you can add additional insured for free (many farmers’ markets will want themselves listed as an additional insured on your policy).

STEP 3: REGISTER AS A BUSINESS

I’m not going to incorporate yet so I needed to register Lakebilly Pies as a DBA (Doing Business As) with my county as a sole proprietor. Illinois has a helpful page about starting a small business. When I do decide to incorporate, I will do so through the state and let my county know. If you are starting your business outside of Illinois I’m sure there are similar resources available from your state.

County Clerk
I headed over to the county clerk and filled out an assumed business name application, $5 filing fee. Then they gave me a list of Lake County newspapers. I reached out to get Lakebilly Pies published as a legal notice once a week for three consecutive weeks. I was not expecting the $80 to do this, but I had to do it so that’s that.

Illinois Department Of Revenue 

You must register with the Illinois Department of Revenue if you conduct business in Illinois, or with Illinois customers. This includes sole proprietors (individual or husband/wife/civil union), exempt organizations, or government agencies withholding for Illinois employees.

Next step, register with the Illinois Department of Revenue. I registered electronically through MyTaxIllinois. Some states do not make it a requirement to register with their department of revenue as a sole proprietor, but be sure to do your research.

STEP 4: FARMERS’ MARKET APPLICATION
Once you know which farmers’ market(s) you want to be at you will need to fill out an application. For Mundelein, they made it easy. I filled out my application, which dates I could attend, and submitted via email along with my food sanitation course certificate and proof of insurance. I just sent in the check for my space, and I’m excited to sell my pies!

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So this is where I am now. I have a ton to do before my first day selling pies, but it’s only the end of February. I feel like I have it together, and I’m getting all this background stuff completed early. More to come as I continue to navigate this. If you have any questions, reach out to me, we can figure it out together.

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