Hey Commonwealthers of Pennsylvania! You are one of the lucky ones who can legally set up a home-based bakery under the Food Safety Act passed in 2010.

The rules are as follows:
1. No animals/pets are permitted in the home at any time.
2. Children are not permitted in the kitchen area during food processing for the business.
3. The water supply serving the home must be from an approved supply. Private sources
must be tested annually for coliform bacteria and Nitrate/Nitrite by the home owner.
4. Department approval may not be in conflict with any local zoning or ordinances. A
written statement from the local municipality must be obtained stating such.
5. Registration and fee ($35.00) by the Department of Agriculture are required, no
exemptions.
6. All ingredients must be separate from those for personal use (separate shelves,
separate cupboards, etc…) and must be properly labeled, stored and protected.
7. There must be restricted use of the home kitchen during any commercial processing.
8. Any required laboratory testing of food products is arranged for and paid for by the
producer.
9. Products must be properly labeled as follows (with some labeling exemptions for
baked goods):

*Name of product
*Name and address of manufacturer
*Ingredients listed in decreasing order by weight
*Allergen declaration if needed
*Net weight or unit count3
10. Nutritional labeling must be included on food products being shipped / sold in interstate commerce. Home businesses may qualify for a small business exemption from nutritional labeling requirements by applying with FDA.
11. Processors must comply with all applicable state and federal laws and regulations.

There are a few additional rules for home bakers, particularly in regard to labelling:
Bakery items made and sold directly to a Commonwealth consumer by the baker (or their employee) do not require any labeling information directly on the products or any form of display of ingredients, but must be available upon request. All other baked goods (bake-off, purchased product) would require full labeling. Items sold at retail, not owned or operated by the baker; require one of the following forms of labeling:
(1) If products are in packaged form all required labeling information must be on the package
(2) Products loose and bulk displayed must have all required label information posted by the display
(3) Bakery items sold at establishments for consumption on the premises, such as a restaurant, require that the label information be available to the consumer upon request.

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Using your 401(k) (or other retirement account)

In many cases, 401(k) savings can be used for small business start-up costs without being penalized for early withdraw or higher tax rates. Using your retirement to finance your business is a risk only you and your financial advisor can make, understanding that many businesses fail within the first year. However, many businesses fail because of a lack of capital; so, if you have a good business plan and just need the money to make it happen, it might be a worthwhile risk.

Since other lending options can come with as much risk as using 401(k) savings, it’s often a very attractive choice. Not only do you avoid having to qualify for commercial lending or commit your personal assets to guarantee the loan, but you also avoid having to give up control to an investor.

There are two different ways you can use your 401(k) savings to start your business. In one method, the process is similar to taking a loan against your 401(k), but the maximum cash you can take is $50,000 or 50% of the balance of your 401(k), and if you default on the loan repayment, you’ll be nailed with the extra taxes (unless you are over the age of 59½).

The other method may require the assistance of a CPA or tax attorney who is familiar with the ROBS loan (Rollovers as Business Start-Ups). In this method, a firm will help you create a 401(k) plan for your new business using the funds from your old 401(k). The 401(k) then purchases stock in the company, furnishing you with the start-up capital you need.

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In addition to cakes, many small businesses also offer cupcakes and cake pops. While this might seem an obvious choice, there are some additional considerations you’ll want to address when deciding what options to include in your bakery menu. There are some very good reasons to consider cupcakes in your business plan:

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