Your Start-to-Sell Checklist
Here's everything you need to do, in order, to go from kitchen to customers in Delaware. For detailed information on the registration and permitting steps, see the Licenses & Permits page.
Choose Your Products
Decide what you'll sell. Review the What You Can Sell guide to make sure every product qualifies as non-TCS under Delaware's cottage food regulations. Develop your recipes, test them with friends and family, and finalize your ingredient lists.
Complete Food Safety Training
Enroll in a state-approved 8-hour food safety course (ServSafe, FoodSafePal, or another ANAB-accredited program). Cost is approximately $175. Keep your certificate — you'll need it for registration.
Choose a Business Structure
Decide whether to operate as a sole proprietor or form an LLC. See the comparison below for guidance on what works best for most cottage food sellers in Delaware.
Register Your Business Name (DBA)
If you're operating under a name other than your legal name, register a trade name (DBA) through the Delaware One Stop portal at onestop.delaware.gov. Fee is $25 statewide.
Prepare Your Application Materials
Gather your product lists, complete ingredient lists, sample labels, kitchen floor plans, and written recall contingency plan. These are all required for your CFE registration application.
Submit CFE Registration & Pass Inspection
Apply with the Division of Public Health ($30/year), pass your kitchen inspection, and receive your CFE registration certificate. Details on the Licenses & Permits page.
Get Your Business License & EIN
Obtain your Delaware business license ($75/year) through One Stop and apply for a free EIN from the IRS. Open a dedicated business bank account to keep finances separate.
Start Selling
Find your first farmers market or community event, set up your booth, display your CFE registration certificate, and start building your customer base. Welcome to the First State food scene.
Business Structure: Sole Proprietor vs. LLC
Most cottage food sellers in Delaware start as sole proprietors — it's the simplest and cheapest path. But as your business grows, forming an LLC can provide valuable liability protection. Here's how they compare:
Sole Proprietorship
- Formation cost: $0 (no state filing)
- DBA filing: $25 statewide via One Stop
- Business license: $75/year
- Annual fees: $75 business license only
- Liability: You are personally liable for all business debts and claims
- Taxes: Report on personal return (Schedule C)
- Best for: Starting out, testing the market, low-volume sellers
LLC (Limited Liability Company)
- Formation cost: $110 one-time filing fee
- Filing agency: Division of Corporations at corp.delaware.gov
- Annual franchise tax: $300/year (due June 1)
- Registered agent: Required — must have DE physical address
- Liability: Personal assets separated from business debts
- Taxes: Pass-through by default (Schedule C)
- Best for: Growing businesses, higher revenue, peace of mind
Start as a sole proprietor to keep costs low while you test your products and build a customer base. If your cottage food business grows beyond a few hundred dollars per month in revenue, consider forming an LLC for personal liability protection. The $300/year franchise tax is a real ongoing cost, so make sure your revenue justifies it before filing.
Business Name Registration (DBA)
If you operate your cottage food business under any name other than your personal legal name — for example, "Sarah's Sweet Kitchen" instead of "Sarah Johnson" — you need to register a trade name (DBA, or "Doing Business As") with the state.
As of February 2, 2026, Delaware transitioned to a new statewide DBA registration system. Key facts:
- Where to file: Delaware Division of Revenue through the One Stop portal
- Fee: $25 — covers the entire state (replaces old per-county filings)
- Notarization: No longer required
- Expiration: Trade names do not expire, but you must maintain an active business license to keep the registration valid
- FAQ: revenue.delaware.gov/trade-names-faqs
Choose a business name that's memorable, reflects your products, and isn't already in use in Delaware. Trade names are registered on a first-come, first-served basis. Note that registering a DBA does not give you trademark protection — if brand protection matters, consider a federal trademark registration separately.
Bank Account & Taxes
Open a Business Bank Account
Even as a sole proprietor, open a dedicated bank account for your cottage food business. This makes bookkeeping easier, looks more professional, and simplifies tax time. Most banks will open a business account with your EIN, business license, and DBA registration (if applicable). Some banks offer free small business checking accounts.
Delaware Tax Obligations
Delaware's tax landscape is unique — and mostly favorable for small food businesses:
| Tax | Applies? | Details |
|---|---|---|
| State Sales Tax | No | Delaware has no state or local sales tax — you do not charge customers sales tax |
| Gross Receipts Tax | Yes | Tax on total business revenue (not profit). Rates range from ~0.10% to ~1.99% depending on activity. First $80,000/month is generally exempt for many categories. Contact (302) 577-8780 |
| State Income Tax | Yes | Graduated rates from 2.2% to 6.6% (top rate on income over $60,000). Cottage food income is reported on your personal return. State deadline is April 30 |
| Federal Self-Employment Tax | Yes | 15.3% on net self-employment income (Social Security + Medicare). Required once net earnings exceed $400/year. Deduct half on your federal return |
| LLC Franchise Tax | LLCs Only | $300/year flat rate, due June 1. Late fee of $200 plus 1.5% monthly interest. This is a privilege tax, not income-based |
Track every dollar earned and every dollar spent on your cottage food business. Keep receipts for ingredients, packaging, labels, market booth fees, training costs, and any other business expense. These reduce your taxable income. Delaware also requires you to keep production and sales records for at least three years — these same records will support your tax filings.
Estimated Startup Costs
Here's what it typically costs to get a Delaware cottage food business off the ground:
| Item | Cost | Frequency |
|---|---|---|
| Food Safety Training | ~$175 | One-time |
| CFE Registration | $30 | Annual (Apr 1 – Mar 31) |
| State Business License | $75 | Annual (expires Dec 31) |
| DBA Registration | $25 | One-time |
| EIN | Free | One-time |
| Labels & Packaging | $50–150 | Ongoing (varies) |
| Initial Ingredients & Supplies | $100–300 | Ongoing (varies) |
| Estimated First-Year Total | $455–755 |
Setting Your Prices
Pricing is one of the most common challenges for new cottage food sellers. Here are foundational principles:
Cost-Plus Pricing
Calculate the total cost of every item — ingredients, packaging, labels, booth fees (amortized per item), and your time. Then add a profit margin. A common starting point for cottage food is a 3× to 4× markup on ingredient cost, but this varies by product and market. A batch of cookies that costs $4 in ingredients should sell for $12–16, not $6.
Market Research
Visit local farmers markets and craft fairs before you start selling. Observe what similar products sell for. Price competitively but don't undercut yourself — customers at farmers markets expect to pay more for handmade, local products and are often willing to do so.
Don't Forget Your Time
Your labor has value. Factor in the time you spend baking, packaging, labeling, transporting, and selling. If you're spending 4 hours making a batch of 24 cookies and selling them for $2 each, that's $48 in revenue — minus ingredients, packaging, and booth fees. Pay yourself a living wage.
Where to Sell
Delaware limits cottage food sales to direct-to-consumer, in-person transactions within the state. Here are your best venues:
Farmers Markets
The #1 venue for cottage food sellers. The Wilmington Farmers Market, Dover Farmers Market, and New Castle Farmers Market are all excellent starting points. Apply early — popular markets fill up.
Craft Fairs & Festivals
Delaware's festival circuit — Apple Scrapple Festival, Middletown Peach Festival, Delaware Watermelon Festival — draws large crowds eager to buy local food.
From Your Home
Customers can pick up directly from your home. Great for building a loyal local customer base with repeat orders — especially for custom cakes and specialty items.
Local Delivery
You or a designee may deliver directly to customers within Delaware. This works well for larger orders, custom cakes, and building relationships with repeat buyers.
Community Events
Church events, school fundraisers, charity functions, and community gatherings are all approved venues where you can sell cottage food products.
Remember: no online sales (advertising is OK but transactions must be in-person), no shipping, no wholesale to stores or restaurants, and no sales outside Delaware. Display your CFE registration certificate at every venue where you sell. See the Shelf-Stable Foods page for the full sales channel breakdown.
Business Setup Checklist
Track every step of your Delaware cottage food business setup with an interactive checklist — from training to first sale.
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