Business License & Insurance Question

[sarah01]

Hello,

I'd like to start a home-based business in Michigan making/selling baked goods (nationally). I will be using a licensed commercial kitchen from a local facility since I do not own one myself. Do I need to purchase a separate license for this kitchen for my goods? Do I need liability insurance for my product? If so, what is the approximate cost for the insurance. What else would I need? Any suggestions and advice would be greatly appreciated!

Thanks!
Sarah

[chrose]

Sarah, in my experience anyway you do need a business license to sell anything commercially as well as a tax ID number. If you are using a licensed kitchen to prepare your products you should be fine from that aspect since the kitchen is licensed. As far as liability goes, if you want to keep your house and anything else you own, you will absolutely need liability insurance. I wouldn't let anyone have so much as a taste without it! And you shoud get as much as you can possibly afford! Even as much as $1,000,000. Really. I don't know what you're making but what if you had a product that was peanut free, but the kitchen you're using had peanuts in it before you and something got in your product and someone allergic to peanuts ate something you made! You get my point! You should get in touch with your local health dept. since codes vary from state to state as far as packaging etc. goes. You can't be too cautious. As far as costs for insurance, that can vary too. It's a lot to go through, but don't let it scare you off if you have something good to sell.