When starting a bakery, it is very imperative you consider more than just what flavor cookies and mouth-watering delicacies you intend offer to your customers. Depending on the laws of your state and county, there will be vital licenses and permits required to legally run your bakery.
Starting a bakery will be daunting, but fun at the same time. With equal parts passion and dedication, you can start a business that boasts of a reliable customer base waiting for a chance to try your delicious treats. According to reports, the total annual revenue for the retail bakery industry is approximately $3 billion, and in the small commercial bakery industry, it is about $7.5 billion.
Owing to that, the bakery business is a competitive industry that still ensures a good chance of financial success to those who can provide their customers quality products on a daily basis, and who are able to build their business in a smart way.
Have it in mind that you can choose to start a small bakery operation out of your home, receiving orders online, and decide to never expand beyond that. Or, if you are a bit more daring, you can choose to start in a storefront, hire a team of employees, and develop your own unique brand, eventually starting your own franchise.
However, note that every state has specific regulations, so you are advised to check with your local government to see what business licenses and permits you will need to start a bakery in your area. Even your city or county may mandate specific business licenses and permits.
Licenses and Permit Needed for a Bakery Business
Your requirements will vary depending on the sort of bakery you intend to start, but you may encounter the following licenses and permits when starting your bakery:
Just like with other businesses, cities and counties tend to require a bakery to have a business license issued by the city or county.
These are more or less annual licenses, renewed each year for a fee. If the business is in an unincorporated area of the county, the county will have to issue the license, while bakeries within the city limits acquire a license through the city.
Food handler’s License
Note that any business that handles food in the United States will require a food handler’s license or a food and safety certificate. You will also be expected to prove that you have the proper knowledge in terms of food handling and storage. The owner will need this license as will any employees who assist in the cooking of your baked goods.
Fire Department Permit
In some places, the local fire department mandate bakeries have a fire department permit. This involves a routine check of the premises to inspect the installation of the ovens and ascertain that the bakery has adequate fire protection. Some ordinances specify a bakery or restaurant has an overhead sprinkler system that the fire inspector might check.
If you intend to start a catering-style bakery business, then have it in mind that you need a catering or food vendor license. This notably applies if you make the food yourself and deliver it, not if you prepare the food in the client’s kitchen.
Health Department Permit
Also, note that your bakery will need a permit from the local health department. The health department might also mandate certain employees of the bakery to obtain food handler’s cards. These are certificates the employee receives after completing a food safety class.
The health department will periodically inspect the bakery to verify the business is complying with health and safety standards set for food establishments.
Certificate of Occupancy
After your location must have passed the final building inspection, the local building or zoning department in your city will issue a certificate of occupancy. Note that this certifies that the building has been properly constructed and maintained.
However, the process for acquiring a certificate of occupancy varies widely from jurisdiction to jurisdiction and on the building’s structure. Search for your state + certificate of occupancy and follow the steps on your local government’s website.
Homeowner Association Rules
If you intend to start and run your bakery from home, note that you will have to check the homeowner association rules and regulations first to make sure that operating a business out of your home is allowed. This tends to be a very crucial issue that affects those who live in town homes or condos.
Employer Identification Number (EIN)
Just like with a business license, all businesses are expected to also obtain an employee identification number to efficiently operate in the U.S.
In the United States, an EIN is assigned by the IRS and it serves as a tax ID number for your business. Just get ready to sit on this one for a while – the IRS only issues one EIN per day. You can apply for an EIN through the IRS website, or by fax, phone, or mail.
A resale permit lets your bakery source certain non-taxable purchases (wholesale food inventory, for example) if these items are bought to be used in the manufacture of products for resale.
Resale certificates prevent the double collection of sales tax on these types of products; rather than collecting sales tax on the product when you buy it, it’s collected when your customer buys it. The state then mandates the business to report regularly on sales tax collected and pay it to the state.
Employee Health Permit
Aside from your building requiring a health permit; the employees handling food and beverages will also need one. Note that the FDA has specific training resources for employee health and foot protection. Employees are expected to complete a state-approved food handler’s course and get a food handler’s permit.
The food handler’s course teaches employees about proper sanitation practices, food storage, and food handling, to avoid spreading food-borne disease.
Assumed Business Name
In the United States, a good number of municipalities require an assumed business name (or “doing business as”) license unless you intend to use your full legal name in your business name. Some might require that your bakery be a recognizable version of your first and last name.
However, once your bakery doesn’t fall under your municipality’s rules for using your name, you will have to get an assumed business name permit. Note that this ensures that this keeps your full legal name and the name of your bakery on file at the county clerk’s office where citizens can find out who precisely owns a business.
Your sign is a very vital aspect of your bakery marketing plan. However, right before you mount any signs to draw attention to your restaurant, you will need a sign permit from the city government.
Note that specifications around what is acceptable especially in terms of size, location, and lighting will vary by city. If you rent or lease the building, it is also advisable that you get written approval from your landlord coupled with the official sign permit.
Dumpster Placement Permit
Although not often considered, this permit is very much needed. Note that the dumpster placement permit allows your bakery to situate a state dumpster outside your kitchen, where employees can dispose food waste. The stipulations and cost of the dumpster placement permit depend on the size of the dumpster, the exact placement of it, and the restaurant location.
List of Legal Documents You Need to Run a Bakery
In The united states of America and of course all over the world, the bakery industry is amongst the industries that is highly regulated so as to avoid costly health breaches in the country. If you are considering starting a bakery company, then you are expected to meet the legal documents requirements as stipulated in the constitution of your country.
These are some of the basic legal document that you are expected to have in place if you want to start a bakery company in the United States of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Memorandum of Understanding (MoU)
- Employment Agreement (offer letters)
- Operating Agreement
- Company Bylaws
- Operating Agreement for LLCs
- Insurance Policy
Is Professional Certification Needed to Start a Bakery?
The bakery industry is one of the industries that is highly regulated so as to prevent costly health breaches that might arise if not properly taken care of, as this could endanger the health situations of a country. It is for this reason that if you are looking towards beginning a bakery company, then you should acquire relevant certifications with the appropriate bodies.
While it is safe to say that, there are necessarily no professional certifications required for this industry, it’s indeed a necessity that you get acquainted with the following industry regulators in the United States of America.
- American Bakers Association
- Retail Bakers of America
- Progressive Baker
- Independent Bakers Association
- American Society of Baking
- American Culinary Federation