What Licenses are Needed to Start a Bakery: A Complete Guide

Hey there aspiring bakers and bakery enthusiasts! Are you thinking of starting your own bakery business? Well, along with the fun side of baking tasty treats, we’re afraid there’s plenty of essential paperwork involved too. That's right, we're talking about the not-so-glamorous side of starting a bakery: business licenses, permits, and inspections from your local health department.

Now, before you run away screaming, let me assure you that it's not all that bad. While it can be a bit overwhelming and confusing at first, once you understand the ins and outs of getting your bakery business up and running, it'll be a piece of cake (pun intended!). And we’re here to ensure you have all the information needed to get your bakery off to a great start.

In this blog post, we're going to break down the following different licenses and permits you need to acquire your baking business in the current bakery industry.

• Business licenses

• Employer Identification Number (EIN) or business tax ID number (TIN)

• Resale permit

• Food handler's permit

• Building health permit

• Dumpster placement permit

• Food service license

We'll also walk you through the steps you need to take to get everything squared away with your local health department. So, grab a cup of coffee (or tea, if you prefer) and let's get started!

Business License

Alrighty then, let's talk about the first item on our bakery business checklist: the all-important business license!

Think of a general business license as your official permission slip to operate your new bakery business. It's like getting a driver's license, but instead of letting you hit the road, it lets you hit the oven (and the mixer, and the frosting, and...you get the idea).

Most business types will require a general business license, so there’s no skipping this step. Therefore, it’s crucial to have your bakery license in place before you open a bakery of your own.

Now, depending on where you live, the process of getting a business license can vary. But generally, you'll need to visit your local government office, fill out some paperwork and pay a fee. Some of the documents required to obtain a business license issued are:

• Assumed business name permit: Allows a business to operate under a different name from the legal name of the owner or owners.

• Bakery business plan: Outlines the goals, strategies, and financial projections of your business.

• Health department permit: Confirms that your bakery complies with the county health department's safety standards.

• Employer Identification Number: An ID number used for tax purposes.

But here's the good news: once you have your bakery license, you can proudly display it on the wall of your bakery for all your customers to see. Even if you plan to run a home bakery, it shows that you're a legit bakery owner and that you've gone through all the necessary steps to operate your bakery in a legal and responsible manner.

So, don't be intimidated by the process of getting a business license. Think of it as the first essential step on your journey to bakery greatness!

Employer identification number (EIN)

Alright, moving right along to the next item on our list: the Employer Identification Number, or EIN for short. This document is also referred to as the business tax ID number (TIN).

Now, you might be thinking, "I don't need an EIN, I'm not planning on hiring any employees!" But here's the thing: even if you don't plan on hiring anyone right away, you'll still need an EIN for tax purposes.

An EIN is like a social security number for your business. It's a unique identifier that the IRS uses to track your business's tax obligations. And even if you're a one-person operation, you still have tax obligations (sorry to be the bearer of bad news!).

Without a tax ID number, your bakery cannot open a business bank account or apply for small business loans, business line of credit or any other type of financial support. Failing to apply for one can also result in penalties and fines by the IRS, which can be detrimental to your financial stability. So, if you haven't applied for a TIN yet, it's crucial to do so to ensure your business is legally compliant and financially supported.

The good news is that getting an EIN is pretty straightforward. You can apply for one online through the IRS website, or you can fill out a paper application and mail it in. And best of all, it's free!

So don't skip this step, even if you think you don't need an EIN right now. Trust us, it's better to get it out of the way early on, so you can focus on what really matters: making delicious baked goods!

Top tip: To make your tax management a breeze, we encourage you to discover how EPOS systems integrate with top accounting software. EPOS systems that include these integrations allow you to track all your important financial information with detailed real-time reports in one system. These are generated automatically by the accounting integration found in your bakery POS software to make your baking adventure stress-free.

Resale permit

If you plan on selling any items that you've purchased wholesale (i.e. ingredients, packaging materials, etc.), you'll need a resale permit. This allows you to buy those items without paying sales tax, since you'll be collecting sales tax from your customers when you sell your baked goods. So, make sure to report the sales tax collected regularly in order to avoid errors such as double tax collection.

The process of obtaining a resale permit can vary depending on where you live, but typically, you'll need to apply for one through your state's department of revenue or taxation. You'll likely need to provide some basic information about your business, including your EIN and business license number.

Once you have your resale permit, make sure to keep it handy whenever you make wholesale purchases. You'll need to provide it to the vendor in order to avoid paying sales tax.

Now, you might not be planning on buying anything wholesale, and thinking you don't need a resale permit. But here's the thing: even if you don't plan on buying wholesale items right now, you never know what the future holds. It's a good idea to have the permit in place, just in case you decide to start buying wholesale items down the road.

Again, don't skip this step, even if you think it's not relevant to your bakery business at the moment. You'll thank us later!

Top tip: Regardless of the supply chain you decide to use for your bakery, check out how our smart inventory management system can be your secret weapon against supplier costs. By keeping a keen eye on your stock levels, you can avoid over-ordering and the dreaded stockpiling of products that may never be sold. This not only saves you storage space but also reduces the risk of obsolescence. So, start implementing smart inventory management strategies today. Your wallet (and storage space) will thank you.

Food handler permit

Now, this one might seem a little daunting, but don't worry, it's not as scary as it sounds. A food handler's license simply means that you (or any employees involved in food handling in your bakery) have completed a food safety class or course.

The course can typically be completed online, and it covers topics like proper hand washing techniques, food storage, and preventing cross-contamination. The idea is to make sure that everyone who handles food in your bakery has the proper knowledge to do so in a safe and hygienic way.

Once you (and anyone else who handles food in your bakery) have completed the training, you'll receive a certificate that you can display in your bakery. Alternatively, as a result of completing it, your workforce can also obtain food handler's cards. These all show your customers that you take food safety seriously, and it can also help you avoid any potential legal issues down the road.

So, don't be intimidated by the food handler's permit. Think of it as a way to level up your bakery game and show your customers that you're committed to providing them with safe and delicious baked goods!

Building health permit

Okay, next up on our list is the Building Health Permit.

Now, this permit is less related to food safety, and is actually more about the building itself. A Building Health Permit is typically required by your county health department and it ensures that your bakery meets certain health and safety standards.

The permit process can vary depending on where you live, but it usually involves a visit from a health inspector. The inspector will check the following areas to make sure that your bakery is a safe and healthy environment for you to prepare and sell your baked goods.

Your bakery's location

Regardless of the type of baking business you want to start running, you must meet the legal health and safety standards.

Now, if you are thinking of starting a home bakery, you have to check the homeowner association rules to make sure you comply with the local and national regulations to operate the bakery from the commodity of your house.

On the other hand, if you decide to lease a commercial space to open a bakery, you must ensure your space meets all zoning requirements. This might include checking plumbing, hazard management, having a sign permit in place, etc.

Your bakery equipment management

As part of the health department inspection process, inspectors will evaluate the bakery's equipment and procedures to ensure that they meet all applicable regulations and standards for food safety. In this case, like in any other food establishments, the inspector will be keen to know if your bakery and its appliances have adequate fire protection to minimize any type of hazard.

A fire department permit in place

A fire department permit is typically required for businesses that use fire, such as commercial ovens, stoves, and heating systems. Therefore, the inspector will see if you have this permit ticked off your health and safety checklist in order to grant you the Building Health Permit.

Now, we know that the thought of a health inspector coming to your bakery might be a little nerve-wracking, but don't worry. The inspector is there to help you, not to shut you down. If they do find any issues, they'll usually give you some time to fix them before coming back for the final building inspection.

Even if you don't end up needing a Building Health Permit because you decide to venture down the home-business route, it's still a good idea to make sure that your space is clean and safe for you and your customers. Plus, a clean and well-maintained bakery just looks more professional, which is always a good thing!

Dumpster placement permit

Now, we know what you might be thinking: "What in the world is a Dumpster Placement Permit? Do I really need one of those?" And the answer is...maybe.

A Dumpster Placement Permit is required in some cities and counties in order to place a dumpster on your property. This permit ensures that the dumpster is being placed in a safe and legal location and that it won't cause any issues with things like traffic or public safety.

If you're not sure whether or not you need a Dumpster Placement Permit for your bakery, it's a good idea to check your state government website. They'll be able to tell you whether or not this permit is required, and if so, what the process is for obtaining one.

Even if you don't end up needing a Dumpster Placement Permit, it's a good idea to be mindful of where you're placing your food waste. Make sure it's not blocking any fire exits or obstructing any sidewalks or walkways. After all, the last thing you want is for your customers to have to navigate around a big, smelly dumpster in order to get to your delicious baked goods!

Food service license

If you're planning on serving food (including baked goods) to the public, you'll likely need a Food Service License. This license ensures that you're following all of the local health and safety regulations for preparing and serving food.

The specific requirements for a Food Service License can vary depending on where you live, but they typically involve things like having a properly equipped kitchen, correctly labeling and storing food safely, and making sure that your staff has a food and safety certificate.

In some cases, you may need to submit a detailed plan of your kitchen and food handling procedures in order to obtain your Food Service License. Again, it's always a good idea to check with your local government to make sure you're meeting all of the requirements.

And hey, even if you're not required to have a Food Service License for your bakery, it's still a good idea to follow all of the local health and safety regulations for preparing and serving food. Not only will this help you avoid any legal issues, but it'll also give your customers peace of mind knowing that they're eating safe and delicious treats!

Final thoughts:

Opening a bakery can be quite the endeavor, with various licenses and permits needed in order to ensure compliance with local laws and regulations. From health department permits to bakery licenses, it can be quite the juggling act to keep everything in order.

But fear not, my fellow bakers, for there is a solution. Investing in a bakery point of sale (POS) system.

No matter how far along you are in trade, Epos Now is constantly expanding a POS system that can cater to every need:

• Gain every advantage with hundreds of apps and partnerships with the best software in every industry

• Sell safely and speedily with the latest transaction technology

• Use Epos Now Payments to incorporate card processing into your POS with a simpler, easier style

• Manage your business stress-free with cloud technology that gives you instant access to the latest business data, from anywhere in the world!