Set Up Your Business
Create a plan
Create a plan for the type of manufacturing business you will open.
Choose a business structure
Choose a business structure. LLCs, Corporations, and Limited Partnerships register with California Secretary of State. General Partnerships and Sole Proprietorships register with the County Clerk.
Apply for an Employer Identification Number (EIN)
Apply for an Employer Identification Number (EIN), also known as a Federal Tax ID Number, from the IRS. This is used to identify your business and allows you to hire employees. If you are a sole proprietor, you may be able to use your Social Security Number instead.
Register your Business
Register your Business with the City through the Office of the Treasurer and Tax Collector (TTX).
Choose and file a business name
File a Fictitious Business Name (FBN) Statement at the Office of the County Clerk if you will be using a name other than your given name, the names of your partners, or the officially registered name of your LLC or corporation. Research the name’s availability in your county before filing.
Apply for a Seller’s Permit
Apply for a Seller’s Permit from the CA State Board of Equalization in order to sell taxable goods in the state of California.
Obtain liability insurance
Obtain liability insurance for your business.
Obtain workers’ comp insurance
Obtain workers' compensation insurance.
Choose a Location
Choose one of three location options
Choose between: Manufacturing at home (subject to cottage food laws), in a commercial kitchen, or in your own space.
If you prefer not to take on your own kitchen, you may also choose to use a co-packer – an established food company that processes and packages your product according to your specifications.
Option I: Manufacturing at Home
If manufacturing at home, you must follow California Homemade Food Act regulations including restrictions on gross sales, type of food, and employees.
The California Homemade Food Act (also called the Cottage Food Act) is open to the following types of businesses: 1) Businesses producing “non-potentially hazardous” foods (eg. foods that do not require refrigeration); 2) Businesses making under $50K in annual gross sales; 3) Businesses with no more than one full-time employee outside the immediate family.
There are two classes of homemade food producers. The class you fall under determines who inspects your home kitchen. Regardless of your class, you must attend a food processing course. 1) Class A (Direct sales): If you only sell directly to the consumer, you may conduct your own health inspections; 2) Class B (Indirect sales): If you sell through a third-party retailer such as a market, bakery, or restaurant, your home kitchen must be inspected annually by the county health department. In SF, that would be the SF Department of Public Health.
Option II: Commercial Kitchen
If searching for a commercial kitchen, be sure to consider cost, insurance, storage options, ingredients allowed, delivery rules, and hours.
Option III: Company Kitchen
If outfitting your own kitchen, find a location zoned for Production, Distribution, and Repair (PDR) use. If a space does not fall under PDR, it could require a “Change of Use” or “Conditional Use” application, which can include a public hearing and neighborhood notification.
Visit the Planning Information Center
Visit the SF Planning Department's Planning Information Center at 1660 Mission St. to understand zoning and building codes. These requirements will determine where you open your restaurant.
Taking over a space that already was used for your type of manufacturing saves time and construction costs, as long as the space had recently passed inspections and was in compliance with current requirements.
Consider common manufacturing needs such as loading docks, roll up doors, floor drains, and proper ventilation.
Sign your lease.
Sign your lease. Leases can be tricky, so review the lease carefully with a lawyer before signing.
Prepare Your Space
Submit plans and documents to the SF Department of Building Inspection. Change and resubmit plans as needed.
Water and Wastewater Capacity Charge
If your business will use more water than the previous business or resident, you may have to pay a capacity charge to the SF Public Utilities Commission (PUC). This is especially common for food and beverage manufacturers.
Get an estimate of the water capacity charge from the PUC before you sign a lease. This fee can be high, especially if your location was not used for manufacturing before.
Fats, Oils, & Grease
Install approved grease-capture equipment (i.e. traps or interceptors) in your kitchen to prevent clogged pipes and sewer backups.
Gas and Electric Services
If your business needs new or additional gas or electric services, contact PG&E Building and Renovation Services to start the application process.
Transit Impact Development Fee
If your business will increase the number of people coming to your area, you may have to pay a Transit Impact Development Fee to the SF Municipal Transportation Agency (MTA).
Small businesses may be eligible for Transit Impact Development Fee waivers or reductions.
If you want to install or change a canopy or sign on the outside of the building, ensure you comply with the SF Planning Department sign guidelines.
Registration of Food Facilities
Register your food facility with the US Food and Drug Administration (FDA).
Food & Beverage
Manager’s Food Safety Certification
Obtain a Manager’s Food Safety Certification for yourself and/or a designated employee. This person is responsible for teaching other employees proper food handling.
Food Handler Card
Processed Food Registration
Apply for the Processed Food Registration from the CA Department of Public Health. This license is required to sell your goods to a retailer/wholesaler.
Most manufacturers wait to apply for this license until they go after their first retail account.
Your application may require a Hazard Analysis and Critical Control Points (HACCP) Plan which is monitored by the US Food and Drug Administration (FDA).
No trans fats
Don’t serve any foods containing trans fats, per California State law. SFDPH enforces the trans fat compliance program to ensure that no food containing artificial trans fat is stored, distributed, served, or used in the preparation of any food.
Cottage Food Health Permit to Operate
If you will be manufacturing food at home you must apply for your Cottage Food Operation (CFO) Permit from the SF Department of Public Health within 6-8 weeks of your planned open date. Your application will require Proof of Worker’s Compensation Insurance, Proof of Food Safety Certification, and a Business Registration Certificate.
Organic Food Manufacturing
If you will be manufacturing organic food, you must apply for the Food Manufacturing Organic Processed Product License from the CA Department of Public Health.
If you will be shucking, repacking, or reshipping shellfish, you must apply for a Shellfish Handling and Marketing License from the CA Department of Public Health.
If you your product sales to retailers surpass $50,000 in annual gross sales, the FDA requires that you conduct a nutritional analysis of your food or beverage. This includes determining the raw nutrient values of a given product and is necessary to create the nutrition facts label.
Business that sell less than $50,000 of product annually fall under the Small Business Nutrition Labeling Exemption.
If you plan to hire employees, be sure to follow all wage and employment guidelines.
Name your food accurately. This name, often called the "Statement of Identity," can be either the "common name" or a "fanciful name" of the food. It should be placed on the Principal Display Panel (PDP) – usually the front of the box or container.
Include a Nutrition Facts label on the information panel (the label panel adjacent and to the right of the PDP.)
Count, Net Weight, or Volume
Declare the count, net weight, or volume of your product. This must be stated in both US (inches/pounds/fluid ounces) units and metric units (grams/liters). Eg. Net Wt. 8 oz. (226 g).
Packaged foods composed of two or more ingredients are required to include an ingredient list.
Manufacturer, Packer, or Distributor
Identify the manufacturer, packer or distributor on your product label. This is considered the responsible firm and must include the firm’s name, city, state, and zip code.
Some businesses and products are exempt from nutrition labeling, including small businesses as defined by the Food and Drug Administration (FDA). Review the exemptions in the FDA’s Guidance for Industry: A Food Labeling Guide.
All food labels must identify in plain language whether the food contains any of eight (8) major food allergens: milk, egg, fish (eg. bass, flounder, or cod), crustacean shellfish (eg. crab, lobster, or shrimp), tree nuts (eg. almonds, pecans, or walnuts), wheat, peanuts, and soybeans.
While product dating is optional for most food products, there are two types to choose from: 1) Open dating is recommended for all foods that are readily perishable as it provides information in a conventional date format; 2) Lot codes on the other hand, provide information using letters, numbers, and symbols and are used by the manufacturer, rather than the consumer.
Potentially Hazardous Foods (PHF)
Potentially Hazardous Foods (PHF) must have the statement "Perishable Keep Refrigerated" on the label in a conspicuous location, normally on the PDP.
If a confectionery product contains alcohol in excess of ½ of one percent by weight, state that fact on the food label.
All beverages containing juice must declare the percent of total juice on the Information Panel and comply with Hazard Analysis and Critical Control Points (HACCP).
Cottage Food Labeling
Cottage Food producers are required by the CA Department of Public Health (CDPH) to note on their food labels that the product was made or repackaged in a home kitchen. Be sure to follow all CA DPH labeling requirements.
Cottage Food Producers must also state the registration or permit number of the “Class A” or “Class B” cottage food operation which produced the cottage food product and, in the case of a “Class B” cottage food operation, the name of the county of the local enforcement agency that issued the permit number.
Meat and Poultry Product Labels
Labels for meat and poultry products that are being sold out of the state are reviewed by the US Department of Agriculture (USDA) Food Safety and Inspection Service.
Safe Handling Instructions
Raw meat and poultry products (e.g., fresh and frozen) including shell eggs must display safe handling instructions on their labels.
Dietary supplements are regulated differently than conventional foods. Be sure to follow both Federal and State dietary supplement laws.
Obtain a barcode for each product if you will be selling to major retailers. GS1 US issues unique product codes (UPC) for a fee.
Post required posters and permits
Post all required posters and permits including No Smoking signs, minimum wage information, health inspection results, written operational procedures, etc.
Equipment maintenance and permit renewals
Mark your calendar. Schedule equipment maintenance and set reminders to renew your permits and licenses as needed.
Be prepared for SFDPH Health Inspections by checking walls, floors, and ceilings for damage, following best practices for food storage, collecting garbage, ensuring workers have good hygiene.