Have you ever considered starting a food based business? There are a variety of options for how a person can start up a food business, but there are some things you need to determine about your business before you get started because there are different food permit options you’ll need to consider!
There are 3 common options I’d like to talk about here to help you weigh your options and your resources and goals. Each food permit (and I’m speaking specifically for Washington State, so check your state laws as they differ in each region), is based on the amount you intend to produce, the way you sell to your customers, and the riskiness of the food your producing.
WSDA Cottage Food Operation
This permit is ideal for a home based baker or canner who would like to sell a food product that is fully packaged and labeled. The product you sell can be made in your home kitchen but you will need to adhere to cleanliness standards and store your supplies in a separate cabinet or space from your home’s personal food and supplies. This also ONLY applies to foods that are considered shelf stable and the least risky for food borne illness. So, you can sell cakes, cookies, canned jams, breads, and other items that do not need refrigeration.
One of the most common things I see is people online selling items that I’m sure are not covered by their Cottage Food Permit, such as pumpkin pies, cheesecake, savory foods, and anything else that needs refrigeration or is not packaged and labeled.
This permit is an annual fee of $230, renewable on the date one year from originally registration. You are limited to making $25,000 annually in food sales, so that’s something to consider. It might be a great way to start out your business and test an idea with plans to expand to a different permit in the future.
WSDA Food Processor License
If you’re looking for a bit more flexibility in your food production options, want to make more than $25,000 a year or want to wholesale your product (which is not allowed with a Cottage Food Permit), you can get a Food Processor License. This expands some of the food you’re allowed to make, however there are higher requirements for your production space. Home kitchen which are shared with your family are not allowed with this permit. You will need a more commercial space either on your property or potentially rented commercial kitchens with a 3 compartment sink and surfaces that are easily cleaned and sanitized.
This is a great option if you want to up your production and have access to a professional kitchen. I hear often about “commissary kitchens” or renting kitchen space that is pre-existing or shared. It’s my understanding that your business would still need to apply for this permit option as they will review how you intend to produce your product and how you will sell it as well.
The license fees vary depending on how many sales you will be taking in over the course of a year, starting at $92 for business sales up to $50,000 annually. This is a great option, and less expensive than a cottage permit, if you have access to a professional kitchen and want some room for growth, especially if wholesale business is in your business plan. In fact, I’m surprised more people don’t choose this option! Keep in mind, however, the timing of the license! It must be renewed by June 30 of each year. That means, that even if you get a permit in May of this year, you would need to renew it just one month later and pay a fee again. So, the most efficient time to start a Food Processor Business is in late summer!
Food and Beverage Establishment Permit
This permit is quite different from the previous two, as it is managed by the county you will do business in instead of the state. The great part of this license is that it covers nearly any food or drink you can dream up, and regulations will vary depending on your planned menu. This is ideal if you’re starting in a commercial space with walk up sales for any kind of food or drink.
This permit brings in a more complicated system because now you’re dealing with customers on site, so the county will want to know how and where you’re taking payments, where are the bathrooms, how you will keep the space clean and they do regular inspections to ensure you’re adhering to standards of the county. You’ll need to do your research on this for what facility capacities you’ll need including refrigeration, ice machines, handwashing sinks, hood vents, fire suppression systems and more.
Also, keep in mind that this permit expires on December 31 of each year, so you would need to renew and pay the annual fees. The county forms don’t make it very clear about annual fees, but in my experience, I was required to pay an annual fee. There are also fees for inspection to start a new business and the permit fees vary depending on what you’re selling and how large your establishment is. This is by far the most expensive option for permitting, not to mention maintaining a physical space.
Do Your Research!
It might seem like a daunting task to figure out which permit it right for you, which I can only imagine is why I see so many people just start up a business on the side without proper permits! I was certainly happy to be more informed even as a consumer, as this helps me decipher whether or not a business is running their operation legally and with some oversight to ensure food safety. I also want to share so that if you’re thinking of starting a food business, you can find the option that is best and can keep your customers safe.