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Home bakery

Many states let you sell certain home-made foods under cottage food laws, with limits on what, where and how much you sell.

Updated

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What the public data shows

U.S. businesses with no employees in the Census Bureau’s Bakeries and Tortilla Manufacturing category (NAICS 3118), 2023.

Broad match — Bakeries and tortilla manufacturing.

Businesses with no employees
32,641
The middle business took in
$5,000–$9,999
in sales for the year, before expenses
Average sales per business
$28,831
pulled up by a few large ones

How much these businesses took in, 2023

  • Under $5,00033%
  • $5,000–$9,99919%
  • $10,000–$24,99926%
  • $25,000–$49,99910%
  • $50,000–$99,9996%
  • $100,000–$249,9994%
  • $250,000–$499,9991%
  • $500,000–$999,9991%
  • $1,000,000–$2,499,9990%
  • $2,500,000–$4,999,9990%
  • $5,000,000 or more0%

78% took in less than $25,000 for the whole year — many are side or part-time businesses. If you plan to do this full time, your plan needs sales well above the middle. The local plan works out exactly how much.

What these numbers are — and aren’t. Sales (receipts) before any expenses: not profit, and not what the owner takes home. Counts every business with no paid employees that filed a tax return, including side businesses. The Census Bureau adds a small amount of noise to protect privacy. Businesses with employees aren’t included.

Source: U.S. Census Bureau, Nonemployer Statistics 2023 (released 2025) (data files), retrieved 2026-10-31.

Main caution: Cottage food laws decide what you can sell from a home kitchen. Some foods, and some ways of selling, need a licensed kitchen.

What it costs to run

These are the categories to price with local quotes. The plan lists every one of them for you.

Every order

  • Ingredients per order
  • Boxes, labels and packaging
  • Delivery costs
  • Other per-sale costs

Every month

  • Store platform, apps and subscriptions
  • Storage or workspace
  • Product liability insurance
  • Ongoing marketing and ads
  • Bookkeeping and tax preparation
  • Other monthly costs

To start

  • Mixer, pans and baking equipment
  • Food-handler training
  • Business registration and local licenses
  • Website, logo and booking or store page
  • Other one-time costs

Your own pay is part of the cost, too. The plan works out the price that covers it — or start with how much to charge for home bakery.

Licenses, insurance and rules to check locally

Requirements differ by state, county and city. Check two layers:

1. Your own license, if the work needs one

Some work needs a personal license or certificate (a food-handler card, for example). Search the CareerOneStop License Finder (US Department of Labor) for your kind of work and state.

2. Business licenses, permits and insurance

Start with the SBA: Apply for licenses and permits guide, then your city or county. Questions to answer:

  • What does your state’s cottage food law allow, and are there sales limits?
  • Which foods need refrigeration and so fall outside cottage rules?
  • What labeling does your state require?
  • Does your state charge sales tax on baked goods?

Check local prices before you set yours

Get three real prices from home bakery businesses near you, the way a customer would: their websites, a quote request, local listings and review sites, or neighborhood groups. Note what each price includes. Enter them in your local plan — it shows where your price sits and whether your costs leave room to compete.

Test demand before you spend

Pre-sell a small first batch at your real price to people who match your customer — through a simple order page, a local market or your network — before investing in more stock or equipment.

Decide your pass mark before you start — for example, a set number of paid orders within 30 days.

Questions your local plan has to answer

  • What do local competitors charge? Ask for quotes the way a customer would.
  • How long does each order take you, including travel and preparation?
  • How many orders can you deliver in a week at a quality you’re proud of?
  • How will customers find you, and what will it cost to win each one?

This profile is educational. It describes how this kind of business generally works; it doesn’t show that it will be profitable where you are, and it isn’t legal, tax or financial advice.