A home-based food business, often referred to as the cottage food industry, can be an ideal way for someone with cooking skills to earn a living. The cottage food industry includes selling canned goods, homemade foods and even a catering business run from the home. While laws regulating home-based food businesses vary by state, not all states allow the operation of home-based food businesses and knowing your state's specific laws is essential.

States Allowing Cottage Food Industry

Before opening and operating any home-based cooking business in your state, check with your state's food regulation board to determine the legality of operating a food-based operation in your home. As of 2010, only 13 states allow for home-based cooking businesses. These states include:

  • Alabama
  • Indiana
  • Iowa
  • Kentucky
  • Maine
  • New Hampshire
  • North Carolina
  • Ohio
  • Pennsylvania
  • Tennessee
  • Vermont
  • Virginia
  • Utah

Regardless of state laws, individual counties and cities can place stipulations on such businesses, so be sure to check all of the regulations before you start. Since laws pertaining to cottage food vary so widely, the responsibility for knowing the law falls on individual business owners.

Non-hazardous Foods

Many states allow for the production of non-hazardous foods in home-based food industry. These products include breads, candies, honey, jams, popcorn and syrup. Again, these laws vary by state and by county. In 2010, for instance, Michigan passed the Cottage Food Industry law that specifically allows for the production of non-hazardous food without a license or inspection. In North Carolina, a compliance officer from the North Carolina Department of Agriculture and Consumer Services comes to your home to inspect.

Farmer's Markets

Most states allow for the preparation of home-based baked goods, fresh vegetables and fruits, canned jams and honey and candy items for sale at farmer's markets and flea markets without inspection or state licensing. The states allowing for this type of home-based cooking operation typically stipulate the foods must be sold in these avenues only. Before you pursue sales through this avenue, ensure there are no label requirements by your state. The label will typically read "Made in a home kitchen and not inspected by the (insert state) Department of Agriculture." The name of the product should also be included, along with the ingredients used to make the product. Check your state's cottage laws regarding requirement of home labeling.

Business Licensing

Many home-based cooking operations are sole proprietorship or partnerships. If you plan to make a living with your home-based food business, a DBA (doing business as) license is a good idea if you are naming your business. The fee for this registration is between $25 and $35 as of 2011. DBA registration isn't necessary if the name you use contains your legal name. In addition, your state may require other food processing licensing, particularly for catering businesses that produce meat dishes and other dishes that could be hazardous to the consumer if not stored or properly prepared.