Like any business in the food industry, bakery businesses must fulfill certain regulatory obligations.
It’s important to apply for bakery licenses to operate your business without any repercussions.
The US government makes specific licenses mandatory for business owners. These licenses apply at federal, state, and local government levels.
If you are planning to start a bakery, here’s a guide on required licenses and how to get them.
Bakery Licenses for Brick & Mortar Bakery Business
While setting up your bakery business, list down the necessary business licenses. We have broken down the required bakery licenses into two categories. The two categories would be –
- The business-related license.
- Food-related licenses.
1. Business Licenses, Permits, and Registrations for Bakery
Here is a list of business licenses you need to safeguard your business from any legal repercussions.
Federal Tax ID
Your federal tax ID is issued by the IRS. It is also called the EIN or Employer Identification Number. Almost all US-based small businesses require an EIN. It’s important to have an EIN for your Bakery if you are hiring employees to work for your business.
How to Get Your EIN for Bakery Business?
You must head over to the IRS website to determine your eligibility for federal tax ID licenses. Check out the online application process for your EIN. Once you clearly understand the application process, you can apply for the EIN.
So, how much does getting your EIN for Bakery Business cost? It’s free of cost.
State Tax ID Number
The state Department of Tax and Revenue is responsible for issuing the State tax ID for your bakery business.
How to Get a State Tax ID number?
Aside from working as your tax ID, the state tax ID number also helps stay safe against identity theft for sole proprietors. Tax obligations for your small bakery business vary as per your state laws. As per SBA, it’s best to check your state regulations for filing taxes when starting your business.
Seven US states don’t impose taxes on your business income. The states that impose taxes will determine the same as your small business structure for the Bakery.
The state tax ID application process is also the same as the federal tax ID.
DBA or FBN Name Registration
Here’s one of the most important bakery licenses if you are running a small business as the sole owner and operator.
The name DBA (doing business as) suggests an alternative name for a small business. A business owner can use a more market-friendly name instead of the business’s original name for ease of operation. For example, a bakery startup owner named Jane can operate her Bakery under “Crusts n Cookies.”
Getting your license and registration to run your Bakery under a different name is mandatory. Your business might face legal repercussions in the absence of a DBA/FBN license.
How to Get a DBA License?
Visit the SBA website to check your eligibility and see if your Bakery matches the required criteria. You are ready to file for a DBA registration.
Zoning and Land Use Permits
It’s best to check your local government’s regulations on your bakery business operations. The local governments of several places in the USA don’t allow you to run several business operations for specific reasons. A zoning permit allows you to run your bakery business in a particular location.
The local governments of a few states might restrict business operations in a geographical area. Few designated areas are meant only for residential or industrial purposes.
Building Permit
If you want to renovate a building or a commercial business location for your bakery business, here’s the bakery license to get. A building permit allows you to remodel the commercial building to fit your business needs.
Sign Permit
Before you are ready to put up a sign outside the store, it’s important to get a signage permit. There are city-specific rules for putting up signage for your business outside the store.
How do you get a signed permit for a bakery business?
Visit the municipal office or the local government office to get approval for your bakery signs. A signs permit will cost you around $20 to $50.
Building Health Permit
Building a health permit is another bakery license you need to start your bakery business. Your commercial building must meet certain safety regulations to get the permit.
This ensures that your Bakery meets public health and safety regulations. However, not all states make getting your building health permit mandatory. This bakery license will cost around $50 to $1000.
Dumpster License
You’ll also need a dumpster license for your bakery business. This bakery license ensures that a state dumpster helps you with proper food waste disposal. This permit costs $10 to $100 weekly.
Sellers Permit
Seller permits or reseller permits have different names in different states of the USA. However, almost all products or service-rdelated businesses require a sales license. In some cases, bakery owners may also have to get a certificate of occupancy.
Worker’s Compensation License
A worker’s compensation license is also mandatory if you have even a single employee working at the Bakery.
2. Food Licenses & Permits
Note that some state-specific permits, licenses, and certificates are mandatory when starting out. These licenses depend on your business activities, structures, and geolocations.
For example, one permit is issued to food service establishments in New York. In addition, a different license has been issued to bakeries for food processing and preparation.
Some jurisdictions in the USA make it mandatory for bakery employees to have a handler’s permit. It applies to employees responsible for the preparation, service, or storing food to have a food handler’s permit.
So, the two most important licenses to handle food safety for a bakery would be –
Food Handler’s Permit
Employees who have completed a government-approved food safety course are eligible for a food handler’s permit. The permit usually costs around $5 to $30.
How do I get a food handlers permit? Well, you must complete the food safety course. Many culinary schools in the USA also have programs for food safety courses.
Food Service License
The bakery business falls under the food industry, and it mandatorily requires a food service license. The costs for food service permits range between $100 to $1000.
Bonus Point: Food Licensing for Home Bakeries
Your home bakery business requires a food license to safeguard the public. Here are some licensing requirements your home bakery must fulfill –
Low-Risk Food Preparation
Home bakeries producing cakes or other baked goods must limit the production of low-risk food. The FDA has guidelines as to what low-risk food is and what high-risk food is. The low-risk ones are easily stored at regular room temperature. It’s important to follow the FDA guidelines and resort to low-risk food preparation for a bakery.
Also, there is state-specific guidance regarding approving and prohibiting home-cooked foods.
State-Based Regulations
The cottage industry laws vary by state. There are two categories in Iowa –
- Cottage food businesses
- Home food businesses
Home bakeries are in the second category and require proper licensing and inspection.
In the case of New York city, businesses there’s a home processing exemption. They make approved food products right at home, and bakery goods sold in New York must be pre-packaged and labeled correctly.
Final Thoughts
Again, it’s crucial to note that your bakery business requires location-specific and business structure-specific licenses. All the above-mentioned Bakery licenses are crucial. But before you apply for one, check out your city and state regulations. Build a checklist of licenses mandatory for your location and structure and start applying for them.
You can work with management providers who help you go through necessary licensing procedures, which can help immensely. While they help you identify and fill out the licensing paperwork, you can focus on managing your business.
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