How to start a bakery business in the US: from home or a storefront

To start a bakery business in the US, first decide whether you'll bake at home under your state's cottage food law or in a licensed commercial kitchen. Home baking is the cheapest start: most states let you sell shelf-stable baked goods such as breads, cookies and many cakes straight to customers, up to a yearly cap. California's 2026 cap is $88,878 for a Class A home kitchen, Texas allows $150,000 and Florida $250,000. A storefront or wholesale bakery needs a health permit, an approved kitchen and full food labels. Either way, label your products correctly and take custom orders ahead.

Not legal advice. Cottage food and health rules are set by each state and county. Check your state agency and local health department. Figures were read on the sources' own pages on October 20, 2026.

Home bakery or storefront: which should you start with?

Many bakers start at home, build a customer list, then move into a shared commercial kitchen or a storefront once they hit the cap or want to sell chilled cakes.

Step 1: Check your state's cottage food rules

If you'll bake at home, your state's cottage food law decides what you can sell, how much, and how. Here are four large states, summarized from our cottage food laws guide, which is based on the state agencies' pages:

Read the details for Texas and other states before you start.

Most cottage food laws exclude foods that need refrigeration to stay safe, such as cheesecake, cream pies and custard fillings. Those need a licensed kitchen.

Step 2: Write your plan and price your bakes

Decide what you'll sell, to whom and at what price. Cost every recipe before you set a price.

Use the free cake price calculator and recipe cost calculator for your bakes, and the bakery business plan template (or the home bakery version) for the plan.

Step 3: Register the business and get tax IDs

Even a home bakery is a business, so set up the basics early.

• Choose a structure (sole proprietorship or LLC) and register a business name if you trade under one.
• Get an EIN online from the IRS, which says you never have to pay a fee for one.
• Ask your state about sales tax. Some baked goods sold as groceries are exempt in some states while others are taxable. Check with your state revenue department.
• Check home business rules with your city or HOA for a home bakery.

Step 4: Set up your kitchen

Your kitchen depends on your route.

Home bakery: follow your state's kitchen, training and inspection rules (Texas requires food handler training, for example, and North Carolina inspects home kitchens), keep business ingredients and equipment clean and separate, and bake only the foods your state lists.

Commercial or storefront bakery: most health departments approve your plans before construction. The FDA Food Code, which most states base their rules on, asks for plan review before a food establishment is built or converted, a permit application at least 30 days before opening, at least one handwashing sink and a three-compartment sink for washing utensils unless an alternative is approved.

Step 5: Get your permits

Home bakery: register or apply where your state requires it (for example, county registration or a permit in California, free state registration in New York).

Storefront: apply for your food permit, and make sure the person in charge is a certified food protection manager, which the Food Code requires unless your health department rates you low risk. The 2026 Food Code, released September 17, 2026, also asks for a written employee illness policy.

Selling to cafés and stores? If your sales to other businesses become worth more than your sales direct to customers, you're no longer a retail food establishment under FDA rules, and you may need to register with the FDA as a food facility.

Step 6: Label your products correctly

Labels are where many new bakers slip up. For food packaged in a food establishment, the Food Code points to the FDA's labeling rules (21 CFR 101): a label shows

1. the common name of the food;
2. the ingredients, in descending order by weight, including sub-ingredients;
3. the net quantity;
4. the name and place of business of the maker, packer or distributor; and
5. the major food allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, soybeans and sesame.

Cottage food labels add your state's home-kitchen statement (California asks for "Made in a Home Kitchen" in 12-point type, for example). Make labels free with the food label maker, which has a US mode with the nine major allergens and US Letter sheets.

Nutrition Facts? Small sellers are often exempt. FDA's rule exempts a retailer with annual gross sales of not more than $500,000, or food sales to consumers of not more than $50,000, as long as the label and ads make no nutrition claims. Bakeries with facilities for eating on site, and foods made and sold only in your own shop, have their own exemptions under the same rule. Saying "low sugar" or "high protein" can bring the full panel back.

Step 7: Buy equipment and packaging

Buy for what you'll actually bake each week. A home baker may need only a stand mixer, extra sheet pans, a good scale and packaging. A storefront needs commercial ovens, a mixer, proofing space, refrigeration and display cases.

Packaging is also part of your brand: clear boxes or bags, labels, and stickers with your ordering QR code so customers can reorder.

Step 8: Hire help when you need it

You may start alone. When you hire, plan pay from real wages: the BLS national median for bakers was $17.86 an hour in May 2025. Every hire needs a Form I-9, and you must report new hires to your state.

Step 9: Take custom orders ahead

Bakeries live on pre-orders: birthday cakes, holiday pies, weekend bread. Make ordering easy and set the lead time you need.

How Menuthere helps. Menuthere's Free plan gives you an ordering page and QR codes with 0% commission and 50 orders a month, with the major allergens, calories and a halal mark tagged on each item. Lite (US$17 a month) adds unlimited orders, scheduled pickup and delivery times, card payments through your own Stripe account, and dishes that need notice: make a cake orderable only a set time ahead, on the days you bake it. See online ordering for bakeries and Menuthere for bakeries, or try the free cake order form.

Take cake orders days ahead, not at the last minute. with 0% commission.

Create your free ordering page

Worked example: what a pound cake costs you

A classic pound cake uses a pound each of flour, butter, sugar and eggs (about 9 large eggs) and makes two 9 × 5 inch loaves. Here are the ingredients at the BLS U.S. city average retail prices for September 2026:

At a 30% ingredient cost, you'd price each loaf at about $12.05 ($3.61 ÷ 0.30), before packaging, labels, your time and oven energy. Wholesale prices from a supplier will be lower than these supermarket averages, so recost with your own invoices.

Against the cap: a Texas cottage baker at $12 a loaf could sell 12,500 loaves a year before reaching the $150,000 limit. In California, Class A's $88,878 is about 7,400 loaves.

Your bakery start-up checklist

• Home or commercial route chosen
• Your state's cottage food rules read (cap, foods, sales channels, label statement)
• Recipes costed and priced
• Business structure, EIN, sales tax checked with your state
• Registration, permit or plan review done
• Labels with name, ingredients, net quantity, business name and address, allergens (and home-kitchen statement if cottage)
• Packaging and QR stickers
• Ordering page with lead times for custom orders

Related guides

Planning a full sit-down or counter-service restaurant? Read our step-by-step guide on how to open a restaurant, with a 6-month timeline. You may also want to read how to start a home food business and how to start a coffee shop.