You will need to complete several steps to begin your legal home baking business in New Jersey:
- Check with your municipality to make sure you are allowed to have a home business, specifically one is that not a retail outlet, and that does not serve multiple customers/clientele on-site at one time, i.e., consulting with a client v. having a café in your dining room, for example
- Pick a business name and although not a requirement, we suggest you register the business as an LLC with the state. An LLC can provide your business with an extra layer of protection.
– We recommend you meet with an accountant to decide how you will structure your business and visit Small Business Administration (sba.gov) for guidance on setting up your tax ID and other vital business documents
- We strongly suggest you get small business insurance to protect your assets
– We recommend Food Business & Culinary Insurance Solutions | FLIP (fliprogram.com), but you can certainly explore local options
- Get your NJ Cottage Food License Application (this will be finalized and available for all after the publication of the rule change)
- Become a Certified Food Handler Manager through ServSafe® or other approved food handling course
– Why Manager Level certification? Because you will be the “manager” of your home kitchen business. Visit ServSafe® for more info on classes and certification near you. We recommend ServSafe because it is one of the most widely used food safety systems.
- Fill out the application with all the requested information:
– Name, address, business name, tax ID (if applicable)
– The baking section which will detail what types of items you plan to sell; this may include major ingredients and major allergens
– A valid full bacterial coliform well-water test performed within 60 days prior to application OR a recent water bill from your municipality OR a recent water test report from your landlord or apartment property manager, should you live in a multi-family unit or rent a single-family home
– A copy of your food handler manager’s certification
– Other pertinent information as may be required
– a payment for $100 for a two-year permit (these will be renewable, and renewal is recommended no later than 45 days prior to lapse)
Getting Started FAQs:
– Do I have to pay taxes on my home-baking income?
Yes, if your income exceeds the minimums for income tax, you will have to pay taxes according to all applicable state and federal laws. Many bakery items are not subject to sales tax in NJ, but you should consult your accountant for guidance.
– Is there an income cap for home-based baking businesses?
Yes, your gross income cannot exceed $50,000 from a home-based baking business.
– What’s the best way to have my private well tested?
Many companies in New Jersey offer well testing for a fee, which can vary widely. We recommend shopping around to find the best price for the bacterial coliform test. We do not recommend using a home testing kit, as the state may not accept the results. You can also call your county office to see if your local Department of Health offers water sampling.
– How long will it take for my application to be approved?
The State Department of Health will be taking and processing applications on a first-come, first-serve basis, meaning they will be approved in the order they were received. When the rule change goes into effect, we, of course, anticipate that many of you will be eager to get your applications in. Please be patient- the first licenses may take a little while to be issued due to the volume of applicants. This will become a faster process over time as the submission of applications slows down to a more manageable level. The DoH has assured us that they will try to make the process as smooth as possible- but this is a whole new process for them, as well.
– Does my kitchen need to be inspected before I begin selling my goods?
NO! There is no requirement for an initial Department of Health inspection, but other stipulations regarding labeling and penalties are addressed later in this document.
If I use a commercial kitchen and do wholesale distribution and am insured and licensed, has anything changed for me?
No! You can continue to work out of a commercial kitchen under the current commercial regulations; the rule change only affects the addition of a set of cottage food regulations. You may, of course, apply for a Cottage Food Operator’s license and move your business to your home, but then you will be governed by the home-producer regulations, which will limit where and how you can sell your goods.