How to start a bakery

A bakery can start in a home kitchen under a cottage food law or in a permitted storefront, and that choice decides what you may bake, where you may sell it and what the label must say. Home baking limits now run high, $150,000 a year in Texas and $250,000 in Florida, but neither state lets a home baker sell freely to cafes and grocers, so wholesale is usually the point where a bakery moves into a licensed kitchen.

By Niomi AscotUpdated October 3, 202615 min read

Federal license: None; FDA registration only once sales to businesses outweigh sales to consumers
Texas cottage cap: $150,000 a year since September 1, 2025, with no local permit
Florida cottage cap: $250,000 a year, online and mail order allowed, no wholesale
California: Class A registration or Class B permit through the county
Nutrition Facts: Exempt for small direct sellers that make no nutrition claims
Teen workers: 16- and 17-year-olds may not run or clean commercial dough mixers

Home kitchen, storefront or wholesale

Bakeries split by where the baking happens and who buys it, and each path has its own regulator:

Cottage baking at home. Legal in Texas, Florida and California under state cottage food laws, with limits on products, sales channels and yearly income that differ in each.
A retail storefront. A permitted food establishment, inspected like any other. Add seating and hot food and it starts to look like a cafe to the tax office and, in Florida, possibly to a different agency.
A custom cake studio. Order-only with appointment pickups. It can run as a cottage operation where the state allows the products, or from a permitted kitchen.
Wholesale to cafes and grocers. Sales to businesses bring manufactured food permits and, past a federal test covered below, FDA facility registration.
A rented commercial kitchen. A permitted shared kitchen by the hour, a common bridge between home and storefront.

Retail bakeries are a business of small shops. The 2023 County Business Patterns file counts 9,219 retail bakery establishments with paid staff and 87,547 employees; 48.1% had fewer than five employees and 86.4% fewer than 20. Commercial bakeries were the opposite shape: 2,842 plants employing 128,252 people. The 2023 nonemployer file reports 32,641 one-person businesses in the wider group of bakeries and tortilla makers, with average receipts near $28,800. Many cottage bakers likely sit in that count, but it is not a census of home bakers.

The outlook

O*NET, republishing Bureau of Labor Statistics data, puts the median baker’s wage at $17.86 an hour or $37,160 a year in 2025, with 249,100 bakers employed in 2024. Growth through 2034 is projected faster than average, 5% to 6%, with 39,900 openings from growth and replacement, and O*NET flags the job with its Bright Outlook label. Most bakers work in manufacturing and retail, and the sample titles run from bread baker and cake decorator to dough mixer. The work context is physical: 72% of bakers report making repetitive motions continually, and 46% work in very hot or cold temperatures every day.

The planned order carries a bakery’s best tickets. Zola’s wedding cost data, a vendor survey, puts average spending on cake and desserts at $917, typically $700 to $1,100.

Cottage food or a permitted kitchen

There is no federal bakery license. FDA describes retail food oversight as handled at the state and local levels, and the SBA notes most small businesses end up holding a mix of state and local licenses. For bakers the first decision is whether your state’s cottage law covers what you want to make and where you want to sell it.

State or city	Agency	License	Key requirements as the agency states them
Texas	Department of State Health Services	Cottage food production operation	Up to $150,000 gross a year since SB 541; most foods allowed except meat, poultry, seafood, frozen desserts, low-acid canned goods and raw milk; operators selling TCS foods must register with DSHS; local health departments may not require a license or permit
Florida	Department of Agriculture and Consumer Services	Cottage food operation, no permit	Gross sales no more than $250,000 a year counting every location; products from the approved list, such as breads, cakes, cookies and fruit pies; no wholesale; label statement in at least 10-point type
California (Los Angeles County)	LA County Environmental Health	Class A registration or Class B permit	Class A sells only directly to consumers, $118 as of October 2026, with a self-certification checklist; Class B may also sell through permitted restaurants, markets and mobile food facilities in the county, $292, issued only after a home kitchen inspection
New York City	NYC Department of Health and Mental Hygiene	Food Service Establishment permit for retail; Non-Retail Food Processing permit for business-only kitchens	Bakeries are named among businesses needing the retail permit, $280; the non-retail permit, $200 a year, covers commissaries and shared kitchens and asks for a Certificate of Authority to Collect Sales Tax

Texas

Since September 1, 2025, Texas home bakers may earn up to $150,000 a year, and the products now include foods that need time and temperature control, such as cream fillings, as long as the operator registers with DSHS and holds them at 41°F or below cold, or 135°F or above hot. Online sales are allowed if you or a household member delivers in person and the buyer sees the full label information before paying. The label carries the state’s private residence statement in capitals, and a DSHS registration number can stand in for your home address. Wholesale runs only through a registered cottage food vendor, and never for TCS foods.

A Texas storefront is a different track: a permit from the city or county health department, or from DSHS where no local department permits, a certified food manager, food handlers trained within 60 days of hire and a sales tax ID before you apply.

Florida

Under Florida Statutes 500.80, a cottage operation stays exempt from permitting while gross sales across all locations stay at or under $250,000. It may sell online or by mail, delivering in person, to an event venue, or by the Postal Service or a commercial carrier, but it “may not sell, offer for sale, or deliver cottage food products at wholesale.” The label needs your name and address, ingredients by weight, net weight, federal-style allergen information and the sentence “Made in a cottage food operation that is not subject to Florida’s food safety regulations.” Local governments cannot ban cottage operations, though home business rules still apply.

Cream, custard and cheesecake items do not appear among the products FDACS names, so ask the department before you put them on a menu. A storefront bakery in Florida belongs to FDACS rather than DBPR, which DBPR’s own jurisdiction page confirms. The FDACS retail permit process asks for water and sewer documentation, suggests applying 21 days before opening, typically inspects within two weeks, and offers optional plan review starting at $55.10 as of October 2026. Permits do not transfer to a new owner or address.

California

California sorts home bakers into two classes, registered or permitted by the county. In Los Angeles County, Class A operators sell directly from home, at bake sales and temporary events, at farm stands and certified farmers’ markets, and through community-supported agriculture boxes. Class B adds indirect sales through permitted restaurants, food markets and food trucks inside the county. The county’s Cottage Food Operations Guide requires the words “Made in a Home Kitchen” in 12-point type on the main label panel, allows one full-time-equivalent employee outside the family or household, and requires a food processor course for anyone preparing or packaging products.

California also caps cottage sales each year, but the current figures could not be confirmed from the state for this guide, and the county guide’s figure predates later changes. Get the current cap from your county environmental health office before you plan a year’s revenue around it. California also allows Microenterprise Home Kitchen Operations where counties opt in, a separate category we did not research.

A California storefront goes through county plan check, such as Los Angeles County’s, and needs one certified food safety person per facility under Health and Safety Code 113947.1.

New York City

A bakery storefront in the five boroughs needs the Department of Health permit at $280 as of October 2026, and you may open 22 days after applying. Someone with a Food Protection Certificate must be on duty whenever you are open; the certificate costs $114 with the classroom course or $24 for the exam after the free online course. A kitchen that bakes only for cafes and stores takes the non-retail permit instead. New York State’s rules for baking at home could not be verified for this guide; ask the state Department of Agriculture and Markets before you sell from a home kitchen.

Selling wholesale to cafes and grocers

Wholesale is where most of the rules above stop. Florida’s cottage law bans it, Texas allows it only through registered cottage food vendors, and California allows sales to restaurants and markets only under a Class B permit and only inside the county.

At the federal level, a bakery stays a retail food establishment, exempt from FDA registration under 21 CFR 1.226, while its yearly sales directly to consumers exceed its sales to all other buyers, and businesses do not count as consumers (21 CFR 1.227). A bakery whose cafe and grocery accounts outsell its counter has, by that definition, become a food facility that registers with FDA. States add their own layer: FDACS issues wholesale and manufactured food permits to establishments preparing food for sale to other businesses, and New York City uses its non-retail permit.

The federal food safety rule for registered facilities scales down for small ones. A very small business averages less than $1,000,000 a year, adjusted for inflation, in human food sales plus the value of food held without sale over the prior three years (21 CFR 117.3). A qualified facility skips the full hazard analysis and preventive controls requirements and follows modified ones instead (21 CFR 117.5).

Wholesale accounts usually want a product liability certificate, consistent labels and a minimum order. Price it from your cost per unit, not from your counter price minus a discount, or the accounts that keep the ovens full will lose you money.

Labels: allergens and Nutrition Facts

Allergens follow the package, not the product. FDA’s allergen labeling questions and answers put labeling duties on food a shop packages ahead and offers for sale, and leave out food placed in a box or bag because a customer just ordered it. The nine major allergens are milk, egg, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans and sesame, which was added on January 1, 2023. Where the 2022 or 2026 Food Code is adopted, a permit holder also has to tell customers in writing when a major allergen is an ingredient in unpackaged food (Food Code 3-602.12), which reaches the open bakery case.

Most small bakeries are exempt from Nutrition Facts, until they make a claim. Under 21 CFR 101.9(j)(1), a business selling directly to consumers is exempt if its sales to consumers are no more than $500,000 a year, or its food sales to consumers no more than $50,000, judged on the most recent two-year average, provided the food carries no nutrition claims or nutrition information on the label, in labeling or in advertising. “Low sugar” on a cookie bag, or “high protein” in an Instagram caption about it, can cost you the exemption. A separate low-volume exemption covers products selling fewer than 100,000 units a year from firms with fewer than 100 full-time-equivalent employees; it needs a notice filed with FDA, unless the firm has fewer than 10 such employees and the product sells fewer than 10,000 units.

Setting up the business

Entity and EIN. Form the LLC with your secretary of state, then get the EIN, which the IRS issues free.

Sales tax often spares baked goods sold to go. The Texas Comptroller does not tax bakery items, whole pies or single portions, sold without plates or eating utensils, and exempts kitchen processing equipment such as bread machines and electric slicers. New York exempts bread, rolls, donuts, cakes and pies but taxes food sold heated, plated or for eating at the store’s tables; a bagel sold whole is exempt, toasted and buttered it is not (NY TB-ST-283). In California, cold food to go is generally exempt, but without separate records the 80-80 rule can make every sale taxable (CDTFA). A cottage license is not a tax exemption: Florida’s statute says so in as many words.

Insurance. California requires workers’ compensation from the first employee; most Texas private employers may opt out; Florida requires it outside construction once you have four or more employees. Farmers markets and wholesale buyers commonly ask for general and product liability certificates before you set up a table or ship a tray.

Custom orders. Take cakes on a written order with the pickup date, servings, allergens and a deposit. Bakers who take orders by message alone tend to learn this after a no-show in December.

Equipment and space

A storefront usually starts with a deck or convection oven, a proofer, a planetary mixer, a sheeter if you laminate dough, reach-in and walk-in refrigeration, sheet pan racks, scales and a display case. The 2026 Food Code shapes two purchases that people underestimate: a three-compartment sink must be big enough to submerge your largest equipment and utensils (4-301.12), and mixer bowls and full sheet pans decide that size; and food-contact surfaces of cooking and baking equipment must be cleaned at least every 24 hours (4-602.12). Buy NSF-listed equipment where you can, since equipment certified to an ANSI-accredited sanitation standard is deemed to comply (4-205.10).

A cottage kitchen must be your home, though Texas also allows the home of a nonprofit’s director or officer. Florida adds that you may sell only products stored on the premises. Budget for a label printer and a tested template early, because every state above wants a specific statement on the label.

Pricing and money

Case items are usually priced from ingredient cost per unit plus labor and overhead, custom cakes per serving or per tier with design charges and a deposit, and wholesale at a discount to retail with a minimum order. The cottage caps are revenue ceilings, not targets: a Florida baker counts every sale at every location toward $250,000, and a Texas baker toward $150,000.

Published fees for the opening budget, as of October 2026: LA County Class A at $118 and Class B at $292, plus $167 an hour for extra label review; Florida plan review from $55.10; New York City’s retail permit at $280 and non-retail permit at $200 a year. Oven, mixer and build-out quotes will be your real startup numbers; we found no published estimate with a stated method worth repeating.

Hiring and safety

The dough mixer rule. Federal child labor rules list bakery machines as hazardous for 16- and 17-year-olds, who may not operate, set up, adjust, repair, oil or clean any horizontal or vertical dough mixer, batter mixer, bread divider, rounder or molder, dough brake, dough sheeter, combination bread slicer and wrapper, or cake cutting band saw (29 CFR 570.62). The exception is narrow: a portable countertop mixer that is not hardwired, runs at no more than half a horsepower and has a bowl of five quarts or less. A weekend crew of high school students can box, decorate and run the register, but cannot run or clean the floor mixer or the sheeter.

Flour dust. OSHA lists flour, sugar and starch among materials that can explode in dust form. The risk grows with bulk handling, but daily sweeping and no compressed-air blowdowns are sensible in any bakery.

Training. Texas storefront food handlers certify within 60 days of hire and Texas cottage operators complete food handler training; California cottage preparers take a food processor course; New York City needs a certificate holder present every open hour.

Finding your first customers

Google Business Profile. A storefront can set an opening date up to a year out and appear 90 days before it. A home baker who does not receive customers at home should not show the address: Google’s guidelines say an address shown on the map should have permanent signage, so a pickup-by-appointment baker fits Google’s service-area setup instead. Food photos must avoid significant alterations, heavy filters or AI, and for a cake studio that rules out mockups presented as past work. Our Google Business Profile service covers the setup.

A site that takes orders. Custom and holiday orders need lead times, a deposit and pickup slots, and Texas cottage bakers must show label information before payment. Our website builds put the portfolio and the order form on one page.

Reviews. Google’s contribution policy bans discounts and free goods for any review, so a free cupcake for a review is out, and the FTC rule in force since October 21, 2024 covers incentives tied to positive reviews and hiding negative ones.

Local Services Ads are a pilot. Google’s food and beverage pilot runs only in Atlanta, Boston, Indianapolis, Miami and San Jose, requires only a verified profile, and describes sit-down service, so a pickup-only or home bakery may not fit.

Markets and partners. Farmers markets suit Texas and California Class A bakers, wedding planners and venues feed cake studios, and a permitted kitchen opens cafe wholesale. The bakery marketing page covers custom orders and holiday preorders once the doors are open.

What trips up new owners

Pitching a grocer from a cottage kitchen. Florida bars it, Texas allows it only through registered vendors, and California only with a Class B permit inside the county.
Assuming a cheesecake is a cottage food. Texas now allows TCS foods with registration; Florida’s published list does not name them.
Printing the wrong label statement. Texas, Florida and California each require their own wording, and Florida and California set a minimum type size.
Writing a nutrition claim on a bag and losing the Nutrition Facts exemption.
Putting a 16-year-old on the floor mixer. Only a small countertop mixer is allowed.
Planning around a California cap you have not confirmed with your county.

Frequently asked questions

Can I sell baked goods from home?

Yes, in most states under a cottage food law. Texas allows up to $150,000 a year with no local permit, Florida up to $250,000 with no permit, and California requires county registration or a permit.

Do I need a license to open a bakery storefront?

Yes: a retail food permit from your local or state agency, such as FDACS in Florida or the Department of Health in New York City, plus zoning, building and sales tax registration.

Can a home baker sell to coffee shops?

Not in Florida, which bans cottage wholesale. Texas allows it only through a registered cottage food vendor and never for TCS foods, and California allows it with a Class B permit inside the county.

Do I need Nutrition Facts on my packaged cookies?

Not if you sell directly to consumers, stay at or under $500,000 in consumer sales (or $50,000 in food sales) and make no nutrition claims anywhere.

What has to go on a cottage food label?

Your name and address or, in Texas, a registration number, the product name, ingredients, allergens and your state’s home kitchen statement. Florida also wants net weight and ingredients listed by weight.

Do I need to register my bakery with the FDA?

Not as a retail bakery, which is exempt. Once your sales to businesses exceed your sales to consumers, you generally need to register as a food facility and hold your state’s wholesale permit.

Can I hire a 16-year-old to help in the bakery?

Yes, but not to operate or clean commercial dough mixers, sheeters, bread slicers or dividers. A portable countertop mixer of half a horsepower and five quarts or less is the exception.

Do I charge sales tax on cakes?

Often not when sold to go. Texas exempts bakery items sold without plates or utensils, and New York exempts bakery products unless they are heated, plated or eaten at tables.

Sources

Checked on October 3, 2026. Rules and fees change, and many are set state by state or city by city: confirm the current requirements with the agency that issues them before you apply.

Starting out, or ready to grow?

One team, operating since 2015, runs local SEO, ads, reviews, websites and the CRM for local businesses. Every business that reaches out gets a free consult, an honest evaluation and a plan it keeps.

Get a free plan Marketing for bakeries