FOOD NEWS: Homemade food to be legal (to sell) in California soon. (January 2013)
Good news? Maybe… Maybe not.
Unfortunately there is a $35,000 CAP on the annual sales volume allowed for homemade food for the calendar year 2013. Which to me seems pretty silly. I get why they think there should be a cap, but it limits what people can produce…
WHO CARES if people sell $35k or $3.5 MILLION? If they’re doing well the gov says,
“Yeah, sure, you can make and sell homemade food, but, sorry, you can only sell $35,000 worth.”
Yeah? What if?
What happens if the food you produce is good enough to attract a whole food chain store who would like to place a $100k order for their 100 stores? Are you supposed to turn that money down and say:
“Sorry, my local government doesn’t want me to sell more than $35k, so I can’t take that money and make a better living for my family, because my local government is throttling my ability to make a living from home.”
Even if you do accept the order, you would have to lease separate building/location, purchase new equipment, licensing, permits, insurance, and all sorts of other local and federal fees, thereby increasing your expenses, and subtracting from your profits, and your bottom line. You may or may not make a profit on that order, and the risk is you move into a new storefront and you can’t keep that revenue coming in, and you could be in a worse position than if you stayed in your home based business.
It seems the writers of the bill missed the point of why it’s called a “HOME BASED BUSINESS”.
The limit increases to $45k in 2013, and $50k in 2015.
The costs of producing that amount in sales wouldn’t create much of a margin to produce a livable income even with a 50% margin at $50k in sales. (meaning you’re doubling your money). At $50k in sales, that’s only $25k in gross profit, which if you paid yourself a $25k salary that would mean you broke even (employee salary is an expense). Not to mention that a $25k annual salary is not a lot in this day and age, and does not allow one to make a productive living from home. There would have to be more income coming in from somewhere else.
Did I mention the Act limits you to just one full time employee? It doesn’t say though that you can’t hire multiple part time employees, but at a maximum of $50k in sales (in 2015), that doesn’t leave much revenue for growing your business.
This is a “Toe in the Water” bill for California, and overall, despite the negative feel of this article, I still support it because it’s a step in the right direction, even if it is a baby step.
Increase that amount to $100k-$250k or remove the revenue cap entirely, and then we’re talking. Allow at least 5 full time employees, and that is real progress.
For now though, this is good… I guess.
For those interested in reading the California Homemade Food Act, here it is: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201120120AB1616
RootSimple.com had this to say:
…A bit late to report this, but AB 1616, the California Homemade Food Act was signed into law by Governor Brown last week. The bill will allow Californians to produce “non-hazardous foods,” such as such as jams, jellies, bread and honey, in a home kitchen and sell them. The bill takes effect in January. There is still, however, a lot of work to be done to figure out exactly how local health departments will implement the bill. Many municipalities are short of money, so fees for home kitchen inspections will be an issue. There will be a need to balance costs to county health departments while at the same time not making fees so prohibitively high that home based entrepreneurs will be unable to afford them. Home based businesses, in my opinion, have a great deal of potential to provide employment in what seems to be a recession with no end in sight. Built into the language of the bill is the requirement that homemade food proprietors take a food safety course that will, most likely, be offered online….”
SOURCE: California Homemade Food Act Signed Into Law!