What resources, information, tips, and/or advice do you have for someone who is considering self-employment?

Check with your local Board of Health. It’s likely that you will not be “permitted” to bake commercially in your home kitchen. (Not that that is never done, but if you do commercial food preparation then the facility has to be open to unannounced inspections from the BoH, and that’s problematic in a private residence.)

Consider that if you do work “on your own hook” then you’ll be responsible for paying ALL of the FICA that you only pay half of when you work for a salary.

But do check out the production / facility requirements for doing commercial food preparation in your area. (Leasing or sharing someone else’s commercial kitchen facility is an option – and “commercial kitchen facility” can include such unexpected places as churches and training centers, for example, or diners that are only open for breakfast and lunch, and are closed on nights and weekends.)

Hook-up with a business lawyer for contracts and municipal laws. Have someone (not your tax lawyer) do the billing and simple bookkeeping.

I know in my state you have to use a commercial / commissary kitchen to cook for selling baked goods. Technically the PTO bake sales are against the law.

If you are in the USA, contact the local SCORE for free advice and training.

If you’re working for yourself as I did cleaning houses, the tax man will take ⅓ of your income. To counter that, you must keep track of every receipt, every purchase, and all mileage. Otherwise, you might as well hang up your baker’s hat or tutor’s pen.

The devil is in the details, as they say. I had a client who lived 6 houses away from mine. I walked there. Because I couldn’t deduct mileage, the tax man took a huge chunk out of what she paid me. It all worked out though, because I got a lot of referrals from that one client.

You will still need to pay all the usual taxes, so you will have to deduct the money from yourself. There is a huge penalty if you don’t pay them, and perhaps even jail.

Pay employees (if any) first and pay yourself last. Even if you are a sole proprietor, you probably want to consider a “Limited Liability Corporation” (LLC) to keep the firewall between your personal finances and your company’s liabilities.

Contact the IRS and inform them of your intentions. Ask for forms to be sent to you so that you can pay estimated taxes. (You will pay them quarterly.)
Contact your state, city, county and ask about filing as a DBA (Doing Business As) and what your fictitious name is (your business name), and how to file for that.
If you are the only employee, (so to speak, meaning no other employees) you may not have to pay for Workmen’s Comp. Any employees will have to have Workmen’s Comp, and you have to pay that up front before hiring.
Check with your local city, state, county for specifics.
On your vehicle that you use for business, you can keep track of all receipts, or mileage, but not both. Keep a clipboard and note pad in the vehicle and note every trip, where you went, what for, and the mileage. Check with the IRS for specifics.
Do the research on what all is required. Good luck!

Handing out free samples would be a great way to promote your baking but not sure of the legalities behind that. I know in CA. you have to rent commercial kitchen space to be able to prepare food for sale. I don’t know what state you are in or the requirements such as food handlers certificates, professional kitchen space etc.
You will want to file your taxes quarterly to stay on top of things and the other above tips are all good as well.

Good luck in your endeavors.

My advice would be to REALLY assess the market for your products.

I haven’t read the earlier posts but if you’re going to be producing food, make sure you have a really good handle on the legislation relating to food preparation and the sale of food. I don’t know what the laws are like where you are, but I think you have to meet strict conditions here in Australia.

Call the health department about starting a baking business. They’ll tell you what you’ll need to do to satisfy their regulations. After you get started, they’ll be inspecting your establishment on a regular basis.

Do you also work as an employee where you are paid through payroll? Are you married and have a spouse who is paid through payroll and you file your taxes jointly?

If your answer to either of the above is yes, have the employer take a little more taxes out every pay period so you don’t have to worry about paying taxes separately for any earnings through your business. Typically, the self employed pay quarterly taxes, but you can ignore that if you are paying in taxes through an employer, and you aren’t earning much through your new business venture. Hopefully, you earn tons of money and have to worry about it :). I personally hate having to mail in taxes to the IRS, just being lazy, so I avoid doing it that way.

If you use your car to make deliveries you might be able to deduct some car expenses. Also, if you bake at home there might be other deductions.

Find out about sales tax if food is taxed in your state.

Maybe check to see if there is some sort of insurance to protect yourself if someone gets sick. I have no idea how that works. Maybe some sort of liability insurance?

I guess I think about this in a different direction than most.

First and foremost, congratulations, and good luck.

The things I most wished I’d known when I set out on my own
– No one else’s definition of success matters. But you need to know what you’re working for as clearly and realistically as possible.
– Time is super valuable, but luckily you get a new allotment automatically every day. Motivation and energy you have to protect and cultivate, they decide how successful you’ll be long term.
– Start working on ways to get beyond exchanging hours for money as soon as possible
– There is no perfect pricing model, but being consistent in how you price alleviates a lot of problems.
– I’ve had customers call my cell phone at 6:02 in the morning and 1:30 at night for non-emergencies. People have their own schedules that they consider normal. Set up ways to get away from whatever contact method you’re going to hand out, when your not “working”.
– If something you’ve tried isn’t working now, it’s probably not going to work in a week, or a month, without some serious changes. Start the changes and improvements early rather than waiting.
– People want to give their money to people like themselves, I don’t fully understand it, but started looking for customers with my values and it all got a lot easier.

And finally
– Find a reward that reminds you why you’re self-employed. For me, if it’s a totally perfect afternoon, and I haven’t promised anyone anything, I’ll just go sit in the park until I want to head back. It’s not planned, just a reminder that you can do what you want to do, as long as the work is getting done.

It’s really great if you can volunteer your time and /or merchandise to a good cause. There are wealthy philanthropists out there who love to do business with other philanthropists. I started my business by volunteering my time cleaning for a good cause. A wealthy patron of the same organization heard of my activity and started feeding me a lot of other jobs that paid well.

Even though I made no money at first, I made a great deal through contacts made because of that first volunteer job.

Thank you to everyone! These are exactly the type of responses that I was looking for. I can find plenty of cheerleaders, but not enough practical responses.

Thank you, thank you, thank you!