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Recipes, thoughts and rants from Mallow & Hop.

Getting The Cottage Food Operation License, Class B - Los Angeles

Karen Marshall

Sometimes it feels like politicians are speaking a different language - legalese is dense and purposely made to be interpreted in seemingly infinite ways. Throughout most of my adult life I haven't had to deal with this. But here I am, applying for a Cottage Food Operation permit through a law that went into effect only in 2013. Though a state law, California left the details up to the counties to enforce, meaning that most experiences I read about didn't accurately set my expectations for mine. If you're looking to start a Class B CFO in Los Angeles County... I hope this helps you. Here's what I did.

Permits/Licenses to Acquire:

  • Food Handler's Certificate - In New York, I took an online course of about 4 hours, then scheduled a test for which I had to treck to East Harlem. Like college, I sat in a large auditorium and had to make sure there was an empty seat between myself and the next test taker. We had our pictures taken, and if we passed, we were sent a Food Handler's card in the mail. In Califonia, I took a similar online course and an online test almost immediately after. My certificate arrived via email. For both states, the passing grade was above 70% which, considering the ease of the questions, terrifies me about the prospect of eating out. It cost $12.25. 
  • DBA - In order to represent myself as "Mallow & Hop" despite being a Sole Proprietor, I am required to file a "Doing Business As" with the city. California's laws regarding this matter are incredibly dated, and require you to "Publish" your intent to do business under a fictional name in a paper of a certain circulation size for 4 consecutive weeks after you file the paperwork, so that the public can know. A minor industry has popped up around this requirement, and tales of business owners being hounded on the steps of city hall by people trying to sell their publishing services abound. I myself used British Weekly's 30dollarDBA, and had them file the paperwork for me additionally. I filed for both Mallow And Hop and Mallow & Hop. Cost: $96. They sent me a copy of the British Weekly. The entire back half is solely DBA announcements.
  • Seller's Permit - Hilariously, the seller's permit required me to input my expected monthly sales and profit, which was a true wild guess. I will be filing my taxes yearly, rather than quarterly, and have both a Retail and Wholesale Permit.
  • Business Tax License - This was fairly simple to fill out and, if I recall correctly, cost me nothing. I had to do some research to find out my NAICS code (31134 - Nonchocolate Confectionery Manufacturing) 

  • The permit itself - Sent in the application on June 1st, and was contacted on June 11th. The city's fiscal year ends in June, so processing it before July would mean that I would be charged another $254 on July 1st. They asked if I'd like to hold off on processing it until July and I chose to do that. So your yearly fee is not a yearly fee based on your application date - it's July - June of each year.

Business Services:

  • Yellow Pages - Created a listing on YellowPages.com so that my home address was not required on the labels.
  • Approval from Zoning - This was a huge pain in the butt! I called a number of different services mid May and many of the zoning officials had never heard of the CFO law! I was finally given contact info from my contact from the Specialty Food Services office, and I called the phone number to find that it only led to an answering machine stating that the employee had switched departments. I left a VM there and with his old office that he gave the number for, both with no response. I called a city employee with his former job title, who gave me his current phone number - left a VM there, no response. Finally my contact told me to email instead, and it was all resolved within 3 hours. Government Officials: they're just like me! They also don't want to talk on the phone! I was sent a list of ordinances that I had to agree to, which I did. NOTE: I had to provide zoning with a copy of the permit application, which I'd already sent in! Make sure to save a copy of that page as a PDF or print multiple copies.
  • Insurance - I chose to purchase insurance through the Food Liability Insurance Program, which for CFOs with little income is only $299 / year. 

Changes to my Home:

  • I set aside specific shelves in my cabinets and fridge area for Mallow & Hop ingredients. Sugar is repackaged from the open paper containers in which it is sold to a large plastic tub. There are two storage shelves dedicated to holding the pots and pans for the business.
  • I installed a dog gate to keep my animals completely out of the kitchen and food prep area. I can't speak highly enough about the GMI Keepsafe Expansion Gate - the dogs don't even try to barge through or jump over, and it folds away cleanly against the wall on the rare occasions it's not in use.
  • I installed a paper towel holder in my bathroom, since it's more hygienic than using a hand towel, and required in commercial kitchens.
  • I bought bleach and bleach testing strips to make sure the sanitizing solution is the right strength.
  • I bought a fridge thermometer which terrifyingly told me I'd been running at about 46 degrees F for the last year or so. Adjusting the temp and making sure the airflow was unobstructed got it down to mid-high 30s.
    • The inspector who came by checked the bathroom, general kitchen area, and for my bleach and strips. He asked a few questions, but the inspection was not as thorough and terrifying as I had expected. I can't speak to what he was taking note of in the minute or so he was looking around, so I don't know what I did that was maybe extraneous. He checked my hot water and that I had gloves, but I think creating a separate shelf space was unnecessary for his approval.

Label Design:

Other Purchases:

  • Squarespace - I used to design my own websites, but the time for that has flown now that Squarespace exists. Don't do what I did - remember to use all those 10% discount codes from the podcast ads! What a waste of $10! Because I cannot ship my marshmallows, I chose the basic economy plan that provides only 1 store item. I ended up purchasing my domain through them as it was free if you signed up for the year.
  • Frontier Labels - I used Frontier Labels after walking around the commercial kitchen in NY and looking at everyone's packaging in their storage areas. I highly recommend purchasing the $6.99 sample packet for physical versions of all of the different paper offerings. It was very useful, and ended up being a huge influence on my final label design.
  • PaperMart & Clear Bags -  Sites with what I found to be the best variety of packaging options. 
  • Uline - The essential in packaging, bags, boxes, heat sealers (I am lucky to still have mine from my previous business). This go around saw me purchasing a label gun and a roll or two of "Best By" labels.
  • Costco Membership - True bulk purchases are still beyond me. Costco is useful for sugar. Bless my car for negating the need to drag a granny cart full of 100lbs of sugar across cobbled streets to a commercial kitchen in Brooklyn.

What I Chose Not to Do:

  • LLC - Literally stands for "Limited Liability Corporation" and is a buffer between yourself and the law should things go wrong with your company. Unfortunately, it comes with an $800 yearly tax, which is just more than I can justify. I chose instead to rely on insurance and a sole proprietorship. More risk, but less investment.
  • Opening Company Bank Accounts and Credit Cards - I opened a bank account and credit card for Fred's Marshmallows back in the day, and it felt like a license to spend money because it was "for the business". Not doing so will make taxes hell, but so long as I have no employees and a limited income, I will keep it this way. I may change this in the future. 

Other Helpful Resources

Feel free to shoot me an email if you have any questions. Now - finding places that will let me sell my product!

Blog soon,

Karen