When to scale your cottage bakery to a commercial kitchen

The five signs

1. You're turning down orders every week.
2. Your state's cottage food sales cap is in sight.
3. You want to sell wholesale or retail to stores.
4. Family life is suffering.
5. You want to hire help.

What changes when you go commercial

• Licensing: full retail food establishment license required.
• Equipment: commercial mixer, ovens, walk-in cooler. $30-100K typical.
• Insurance: jumps from $500/yr to $2-5K/yr.
• Labor: at least one part-time employee.

Three paths

1. Shared commercial kitchen: $15-25/hr rental. Lowest risk.
2. Lease a small bakery space: $2-6K/mo plus build-out.
3. Buy an existing bakery: $100K+ but fastest revenue.

The financial test

You need 12 months of $8-15K/mo cottage revenue and 6 months of expenses saved before commercial makes sense.

Use Siftii to know when you're ready

Siftii shows your real margins, monthly trend, and forecasts when you'll hit your state cap. Try free →