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Rented a kitchen now what?

post #1 of 2
Thread Starter 
Hello everybody my name is Adam I am new to this site and was hoping I might find some help here. Today I found a kitchen for rent and I want to start a business. Ive been looking at multiple resources all day and am thouroughly confused on what I need to get started. Im going to be making cheesecakes possibly ohter things in the future but for right now just cheesecakes. Also I am a full time student and work 4 days a week. Im planning on renting the kitchen on fridays so my plan would be to get orders during the week and have them ready over the weekend. Im confused as far as the licenses and permits go as well as taxing and insurance and all that stuff. Should I use legal zoom to set up a llc for $150 or is there a better way? How much should I expect to pay for insurance (general liability) I have my servesafe certification does that apply to anything I need? Since im making the food and selling it am I a manufacturuer and retailer? There seems to be alot of specifics and it gets very confusing. If anyone whos done this kind of thing before can tell me what inital steps they took that would be really helpful.

Thanks in Advance
post #2 of 2
Hi Adam,

I just started a business in October 2009. I did so much research on what I needed that I thought my head was going to spin.

First, the city and state you start your business in requires different licenses and permits. For example, my business license was issued in the city and to the address I am renting the kitchen from. My health permit was not issued because the Department of Health will not issue a permit to the same address that already has one. My resale license was a different issue. Since I was not selling items from the same place I was baking them I did not need a resale license hence I did not need to collect sales tax. However, once I have a storefront or place any non-edible items on my baked items I will need one. Once again you will need to check with your state tax board for actual requirements.

Second, as far as insurance is concerned, you will need enough insurance to cover the location you are renting, your equipment and supplies (if you are allowed to store items there) and anyone who tries to sue you. I spoke with several insurance agents and found an agent who issued an umbrella policy for about $50 per month. You can also check with your auto insurance agent to see if they do business insurance. (You may also get a break for multiple polices)

Third, find a good CPA. I learned a lot from mine. The main thing you need to do is keep all your receipts for supplies, marketing, equipment, gas, ect. If you deliver your cakes keep a log of your mileage from the kitchen to your destinations. Also, if you use a cell phone to take orders you can deduct a portion of your bill for your business.

I am still learning more everyday. I hope this gives you some guidelines and if you would like to discuss this further you may email me privately.

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