Cottage food laws: What home-based food businesses need to know

If you want to join 54% of aspiring entrepreneurs who, according to the 2025 QuickBooks Entrepreneurship survey, want to start their own business, you might be interested in knowing that starting a food business from home is easier thanks to cottage food laws. 

These state-level regulations allow small-scale entrepreneurs to sell shelf-stable, nonperishable foods like baked goods, jams, and spice blends directly from their kitchens. By skipping many commercial kitchen requirements, these laws help home-based, food-based businesses thrive while staying compliant.

This guide will help you understand the essentials of cottage food laws so that you can launch your venture confidently.

What are cottage foods?

What foods qualify as cottage foods?

Key rules and regulations for cottage food businesses

Food safety and training

Recent state-level legislative trends

What about microenterprise home kitchens?

The raw milk debate

How to get started as a cottage food producer

Grow your business with confidence

What are cottage foods?

Cottage foods are nonhazardous items made in home kitchens, so commercial facilities are unnecessary. These products are typically shelf-stable and don’t require refrigeration (think baked goods, jams, popcorn, honey, and similar items), making them safe for home production. 

Cottage foods are​​ sold directly to consumers at farmers’ markets, local events, or through personal delivery. If you’re exploring what cottage food laws are, understanding which foods qualify is a key first step in exploring cottage food laws.

But what are cottage food laws, exactly? They set rules for home food businesses, including sales limits, proper labeling (ingredients, allergens), and where products can be sold—often restricted to direct-to-consumer channels like farmers markets.

Why cottage food laws exist

So, why do cottage food laws matter? They’re designed to help small-scale entrepreneurs start food businesses without the high costs of access to a commercial kitchen. However, it’s worth pointing out that these laws protect public health by setting clear rules for safe handling, labeling, and sales.

A related but more specific question is, "What states have cottage food laws?" While most states have some cottage food regulations, the specifics—such as allowed foods, sales caps, and labeling requirements—can vary significantly, making it essential to research your state’s unique rules to ensure compliance.

These regulations strike a balance, reducing red tape while ensuring consumer safety.

What foods qualify as cottage foods?

Not all homemade goods can be sold under cottage food laws, an important fact to consider if you plan to launch a home-based business. These regulations focus on nonperishable, low-risk items that don’t require refrigeration or complex preservation methods. Below, we break down the commonly allowed and prohibited foods to help you stay compliant.

Commonly allowed items

Cottage food laws typically permit items like baked goods without perishable fillings, such as:

• Cookies
• Bread
• Muffins
• Jams
• Jellies
• Preserves made from acidic fruits
• Candies
• Granola
• Fruit leathers
• Raw honey
• Dry herbs

These foods are shelf-stable and safe for home production, making them ideal for small-scale entrepreneurs looking to sell at farmers’ markets or online.

Foods that are usually prohibited

On the flip side, many states prohibit high-risk items under cottage food laws. This includes anything that requires refrigeration, like cheesecakes or cream pies, as well as pickled or fermented foods. 

Meat, seafood, dairy-based products, beverages, and low-acid canned goods (such as certain salsas) are also typically off-limits. If you’re unsure about your state’s rules, i.e., how North Carolina cottage food laws work, always double-check to avoid violations.

Key rules and regulations for cottage food businesses

Running a successful cottage food business means understanding the operative rules. While these regulations vary by state, there are standard requirements related to licensing, labeling, and sales limits. Staying compliant ensures your business operates smoothly while protecting both you and your customers.

Licensing and registration

Most states require cottage food operators to register with the local health department or notify them before selling. Some states go further, mandating food handler permits or even inspections to ensure safe practices. 

If you’ve been wondering where to start with all this, the best way is by checking if your state requires pre-approval or certification to get your business off the ground.

Labeling requirements

Proper labeling is a must under cottage food laws. Labels should clearly list the product name, ingredients, allergens, and your business address. 

Many states also require a disclaimer, such as: “Made in a home kitchen that is not inspected by the state health department.” If you’re selling online or through retail channels, additional details might be necessary. Clear labels keep you compliant and build the all-important customer trust that helps smaller businesses like this thrive.

Sales limitations

Cottage food businesses often face restrictions on how much they can sell annually, with caps typically ranging from $25,000 to $50,000, depending on the state. 

Some states allow broader options like retail store sales or third-party delivery with extra requirements. Knowing your state’s rules helps you plan your business strategy effectively.

Food safety and training

Even though cottage food laws allow you to operate from home, food safety remains a top priority. Some states require food safety certification or handling courses to ensure you understand proper practices. 

While home kitchens aren’t always inspected upfront, they may be checked if complaints arise. Safe preparation, storage, and transport of your products are essential for compliance and protecting your reputation and customers.

Recent state-level legislative trends

Cottage food laws are evolving to better support small-scale entrepreneurs. Lawmakers are recognizing the need to expand opportunities while maintaining safety standards. These changes include allowing more types of foods, raising sales caps, and promoting consistency across regions. 

For anyone navigating cottage food laws, staying updated on these trends can provide new opportunities and clarity. This table summarizes the major themes:

Expansion of allowed foods

Some states are broadening the list of approved cottage foods, allowing items like freeze-dried fruits, low-risk pickled goods, or even temperature-controlled products under specific exemptions. 

These updates reflect a growing trust in home-based producers and aim to give entrepreneurs more flexibility in what they can sell.

Raising sales caps

To help businesses grow, many states are introducing bills to increase annual revenue limits for cottage food operations. By raising these caps, lawmakers hope to support entrepreneurs in scaling their ventures without the immediate pressure of transitioning to costly commercial facilities. 

This change is a game-changer for those looking to expand within the framework of cottage food laws.

Preemption and statewide consistency

Another emerging trend is the push for statewide consistency in regulations. Some states are proposing laws to limit local health departments from adding their own rules, which can create confusion for sellers. By encouraging uniform standards, these efforts make it easier for home-based food businesses to operate confidently and focus on growth.

What about microenterprise home kitchens?

In reading about cottage food laws, you might have encountered microenterprise home kitchens. These operations allow the sale of full meals and TCS (time/temperature controlled for safety) foods, like prepared entrees or dishes that require refrigeration. While they offer more flexibility, they also have stricter rules to ensure safety and compliance.

Microenterprise home kitchens typically require special licensing and mandate that meals are prepared and sold on the same day. This model is gaining attention as legislation emerges in states like Minnesota and Hawaii.

It offers an alternative for entrepreneurs who want to expand beyond traditional cottage food limits—a path worth exploring for those ready to scale up.

The raw milk debate

Raw milk often comes up in discussions about cottage food laws, but it’s a topic all its own. Known for its potential health risks, raw milk is highly regulated, with rules varying widely across states. Some allow its sale under strict conditions, while others ban it entirely. 

Importantly, raw milk isn’t typically included in cottage food provisions due to safety concerns. For entrepreneurs thinking through their retail options, it’s important to investigate where your state stands on this debated product and ensure compliance with any applicable laws.

How to get started as a cottage food producer

Launching a cottage food business starts with understanding the rules in your area. If you’re thinking about capitalizing on your grandmother’s secret recipe for cookies, for example, begin by reviewing your state’s cottage food laws.

You can check resources from:

• The Department of Health
• The Department of Agriculture
• Local or state-specific guides

Once you know the requirements related to:

• Food labeling
• Kitchen set-up
• Distribution

Put together a compliance checklist. You may also need to:

• Follow labeling guidelines
• Complete required training
• Secure necessary permits

To stay on track, use good bookkeeping practices to keep detailed records of your revenue and products sold. This helps you adhere to sales caps and meet all regulatory obligations.

Grow your business with confidence

Understanding cottage food laws is the first step toward building a thriving home-based food business. By staying compliant with regulations, focusing on safe practices, and exploring opportunities like microenterprise kitchens, you can turn your passion for food into profit.

While you’re perfecting your muffin recipe, consider how much easier all of this will be with access to accounting software, like QuickBooks, to manage your finances and grow your venture.