How to Start a Small Food Business in California? 

If you’re looking to start a small food business in California, the process can be more straightforward than you might think. With the right information and strategies, you can begin operating without dealing with extensive licensing and permits. Below are key guidelines to help you navigate the regulations and get started quickly.

1. Understand What Types of Food Businesses Don’t Require Permits

One of the biggest challenges for food entrepreneurs is obtaining permits. Fortunately, certain food operations in California don’t require permits, making it easier to start. These include:

  • Food Carts: If you plan to sell prepackaged, non-potentially hazardous foods (e.g., chips, cookies) or fresh, uncooked fruits and vegetables, you won’t need a permit for your food cart or Compact Mobile Food Operation (CMFO).
  • Vending Machines: Stocking vending machines with non-perishable items like bottled drinks, candy, and snacks also doesn’t require a permit.
  • Farms: If you grow produce, you can sell raw fruits and vegetables directly from your farm without needing a permit, whether you’re selling to local markets or grocery stores.

2. Leverage Cottage Food Operations (CFOs)

California’s Cottage Food Law allows small-scale, home-based businesses to sell certain low-risk foods without a commercial kitchen. This includes baked goods, jams, and other non-perishable items. There are two categories:

  • Class A CFOs: You can sell directly to the public but must register with your local Environmental Health Department. While no permit is needed, registration fees vary by county, and you must stay under the $50,000 annual gross sales limit.
  • Class B CFOs: These allow indirect sales through retailers, but require health department inspections and permits.

3. Use Shared-Use Kitchens

Shared-use kitchens or kitchen incubators provide a cost-effective way for food entrepreneurs to operate legally. These kitchens are fully licensed commercial spaces that rent out cooking and storage facilities to multiple businesses. As the kitchen owner is responsible for the health permit, you won’t need to secure one for your business, but make sure the facility complies with all food safety regulations.

4. Get the Right Licenses and Taxes in Order

Even if your business doesn’t require a permit, you’ll still need to comply with local business registration and tax requirements:

  • Business Registration: Depending on where you live, you may need to register your business with your city or county. This can usually be done online.
  • Sales Tax: Most grocery and food items sold in California are exempt from sales tax, but if applicable, Shef (for platform-based businesses) will calculate, collect, and remit these taxes on your behalf. Consult a tax professional to ensure you comply with personal income tax or other obligations.

Final Tips

Starting a small food business in California can be a rewarding venture with the right approach. By understanding which operations don’t require permits, leveraging cottage food laws, and utilizing shared-use kitchens, you can minimize red tape and focus on growing your business. Remember to stay informed about your local regulations, maintain food safety standards, and consult experts when necessary.

Taking these steps can set your business up for success, allowing you to focus on what matters most: delivering great food to your customers!

*Disclaimer: This article or any content hereof is not a substitute for professional legal advice, does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.