Start a Bakery in California
From cottage food at home to full commercial bakery. Multiple paths to your baking business.
California offers more options for home bakers than almost any other state. Cottage Food (AB 1616) allows direct sales of shelf-stable baked goods from your home kitchen with minimal permits. MEHKOs (AB 626) allow selling certain prepared foods from home with health permits. Or go full commercial with a licensed kitchen. Revenue caps have increased—cottage food operations can now earn $75,000/year. This makes home-based baking a legitimate business, not just a hobby.
Important Notices
Cottage Food Product Restrictions
$75,000 Revenue Cap
Labeling is Non-Negotiable
Important Notices
| Item | Low | High |
|---|---|---|
| Cottage Food Registration County-dependent, Class A is free | $0 | $100 |
| MEHKO Permit (If Applicable) For non-shelf-stable items | $200 | $1,000 |
| Home Kitchen Upgrades For MEHKO compliance | $0 | $3,000 |
| Commercial Kitchen Rental Monthly, if not using home | $500 | $2,000 |
| Commercial Lease + Buildout For retail bakery | $20,000 | $100,000 |
| Equipment (Home) Mixer, pans, tools | $200 | $2,000 |
| Equipment (Commercial) Commercial oven, mixer, etc. | $10,000 | $50,000 |
| Initial Ingredients Flour, sugar, etc. | $200 | $1,000 |
| Packaging & Labels Required cottage food labels | $100 | $500 |
| Business Registration CA LLC | $70 | $150 |
| Liability Insurance Annual | $300 | $1,500 |
| Food Handler Card Required | $15 | $25 |
| Website/Marketing Initial investment | $100 | $1,000 |
| Total | $31,685 | $162,275 |
Licenses & Food Safety Requirements
Cottage Food Registration (Class A)
For direct sales only (farmers markets, from home). Self-certification with your county. Shelf-stable goods only: cookies, breads, brownies, dry mixes. Revenue cap: $75,000/year.
Cottage Food Registration (Class B)
Same as Class A but allows indirect sales (wholesale to stores, restaurants). Requires kitchen inspection. Revenue cap: $75,000/year.
MEHKO Permit (AB 626)
Microenterprise Home Kitchen Operation permit. Allows selling non-shelf-stable foods from home (requires refrigeration, etc). Health department inspection, limited meals per day.
Food Handler Card
Required for all food workers in California. Online course and exam. Valid for 3 years.
Commercial Food Facility Permit
Required for commercial bakery with retail or wholesale operations. Full health department inspection and ongoing compliance.
Business License
Local business license required. Home-based businesses may need separate home occupation permit.
Cottage Food Labeling
Required label statement: 'Made in a Home Kitchen That Has Not Been Inspected by the Department of Public Health.' Plus: name, address, ingredients, allergens.
Licenses & Food Safety Requirements
Los Angeles
Massive market, diverse tastes. Strong farmers market presence. Competitive but endless demand. LA County has active cottage food and MEHKO programs.
San Francisco
Premium pricing, artisan-focused customers. Strong farmers market culture. High costs but high margins. SF permits cottage food and MEHKO.
San Diego
Year-round farmers markets, beach community customers. Growing food entrepreneur scene. County supports home food businesses.
Orange County
Affluent customers, premium baked goods market. Strong gift and specialty food demand. Multiple farmers markets.
Sacramento
Growing foodie scene, farm-to-fork culture. Strong farmers market presence. Lower costs than coastal cities.
East Bay (Oakland/Berkeley)
Strong artisan food culture. Diverse customer base. Good cottage food acceptance. Multiple farmers market opportunities.
Bakery Costs in Other States
View all 50 statesCalifornia Bakery Tips
Farmers Markets Build Customers
California has excellent farmers market culture. These are your best direct sales channel. Apply to multiple markets. Regulars become loyal customers and word-of-mouth marketers.
Custom Orders = Premium Pricing
Custom cakes and special orders command premium prices. Birthday cakes, wedding desserts, corporate orders. These require more from you but pay significantly better than market sales.
Dietary Niches Pay
Gluten-free, vegan, keto baked goods have dedicated, underserved customers who pay premium. Less competition, loyal customer base.
Plan Your Graduation Path
Cottage food is a great start, but $75K cap limits growth. Plan how you'll transition: shared commercial kitchen, MEHKO expansion, or eventually your own bakery.
California Bakery Tips
Choose Your Path
Cottage Food (Class A/B) for shelf-stable from home. MEHKO for more items from home. Commercial kitchen rental for flexibility. Full retail bakery for maximum scale. Most start cottage food to test market.
Understand Product Restrictions
Cottage Food: shelf-stable only (cookies, breads, brownies, brittle, granola). MEHKO: expanded but limited daily meals. Know what you can sell under each permit type.
Register Appropriately
Cottage Food: self-certify with county (Class A) or apply for inspection (Class B). MEHKO: apply through county health department. Commercial: full health permit process.
Get Food Handler Card
Online course takes 2-4 hours. Required for any food business. Keep certificate current—expires every 3 years.
Set Up Your Kitchen
Cottage Food has minimal requirements (pets out during production). MEHKO requires more setup. Commercial requires full commercial kitchen compliance.
Create Required Labels
Cottage food requires specific label statements, ingredient lists, allergen warnings, and your name/address. Non-compliance can shut you down.
Price for Profit
Cost ingredients + packaging + labor + overhead × markup. Cottage food margins are good (lower overhead) but volume is limited. Don't underprice—your time has value.
Find Your Sales Channels
Cottage Food: farmers markets, from home, online orders. Class B adds wholesale. MEHKO can use delivery apps in some areas. Build direct customer relationships.