Small businesses and cottage laws

8/1/2011

An in-home business can be a lucrative venture, but state laws prevent certain industries from operating out of a private house.

Many U.S. locations regulate where a food-based business may operate and carry strict guidelines on the necessary sanitation-based features a commercial kitchen must contain. Texas, for example, has a new law coming into effect on September first that will standardize the previously lightly regulated at-home cooking industry.

The Texas Cottage Food Law dictates that truly homemade products must carry a label that states where the food came from (a home kitchen) and announce the lack of health department sanctioning, as well as requires all foods to be sold directly to the customer from the place of origin.

Some states go much further than Texas, demanding the setup of a commercial kitchen in order to sell foodstuff. In Vermont, the opposite is true: As long as sanitary practices are observed (no pets in the kitchen, for example), an at-home baker can cook and sell as he or she pleases.

The U.S. Small Business Administration backs commercial loans for in-home businesses, although grants typically aren't available. Many American small businesses are home-based, and the trend may increase as internet connectivity changes the face of business.