Cookies by Dandy Delights
Starting a business may SOUND intimidating, but it’s not. Just like a recipe, it’s a matter of following the steps in sequence. Cottage Food Sandie is here to help! We’ve put together the resources you need to get your business off the ground. Follow these simple steps to get a cottage food business started in San Diego…
2. Check with your local planning office
to determine if you need a business license first, or if you should get your Cottage Food Permit approved first. The San Diego Health Department has a convenient ZONING publication
with contact information to help you decide which to do first.
3. Create a label
for your product in line with San Diego Dept. of Environmental Health, Food and Housing Division requirements. Include sample labels for all flavors and products with your application. Adding them later will be expensive. But, in your first year, keep it simple. Focus on a few products or flavors that you know are well liked. If you have more products and flavors than can be reviewed in an hour, it could cost you an additional $142. See our post on “Labels: Do Say Don’t Say“.
4. Apply for a business permit
(sometimes called a tax certificate or other term) If you live in an unincorporated area of the county, you do not need a business license. If you live within a city or town, you can find a link to the appropriate office HERE. Note: some towns also require a Home Occupation Permit as part of the license or tax certificate.
5. Fill out the San Diego CFO Registration Form and either the Self-Inspection Checklist for a Class A permit OR the Public Health Permit Application-San Diego. for a Class B permit. Take both forms, a copy of your label(s), and cash, check, debit/creidt card, or money order made payable to San Diego Environmental Health for the appropriate amount ($142 for Class A permits or $284 for Class B permits) into the San Diego office (5500 OVERLAND AVE # 100, SAN DIEGO, CA 92123) between 8:30 am-4:30 pm. (Sorry North County, for now the San Marcos office is referring cottage food permits to the San Diego office.)
6. Will you need a Federal Employer Identification Number (FEIN or EIN)?
If your business is a sole-proprietorship, you do not need an EIN unless you hire someone. For banking and tax purposes, your Social Security Number will be your EIN. You can request one, but do not have to have an EIN for a sole-proprietorship with no employees other than yourself.
However, if you have a partnership, LLC, or other business type
, or if you hire an employee, you will need to request an EIN
from the federal government. It is free to do online
with the IRS and you can get the number immediately.
7. Will you need a Seller’s Permit?
The California Board of Equalization only requires you to have a seller’s permit IF your products are taxable. In general, food is exempt from sales tax in California. There are some exceptions (e.g. food that is heated and consumed on premise, food sold in a place charging admission, etc.). If you are uncertain, call the Board of Equalization in San Diego (858-385-4700) for more information. Seller’s Permits are free but sales must be reported quarterly, even if no sales were made.
8. (Optional) Liability Insurance
It is not required,
but liability insurance to protect you from a lawsuit in case someone is harmed by your product is a good idea. If your operate a sole proprietorship, you are the business.
That means if someone gets ill, you could be responsible for the medical bills. It is unlikely that your renter’s or homeowner’s insurance will cover your personal assets in such a case. Get some quotes for business liability insurance to evaluate the risk and benefits. See our post on insurance
Got questions? Email us at firstname.lastname@example.org and we will try to help. Or visit our Facebook page and ask the community!