Your Texas Start-to-Sell Checklist
Work through these steps in order and you'll be fully set up before your first sale. Each item links to the relevant section of this guide for details.
The interactive Business Setup Checklist (available free with a SellFood account) lets you check off each step as you complete it, tracks your progress, and sends reminders for time-sensitive items like certification renewals. See the tool at the bottom of this page.
Sole Proprietor vs. LLC in Texas
Most home food sellers in Texas start as sole proprietors. Here's how the two structures compare — and the one important caveat specific to Texas cottage food law.
The LLC caveat is real. Texas cottage food law may only protect individual operators — not LLCs or other business entities. If this matters to you, purchase cottage food liability insurance (typically $200–$500/year from carriers like FLIP, Food Liability Insurance Program) and consult a Texas food business attorney before filing an LLC.
For the vast majority of small cottage food businesses, sole proprietorship + liability insurance is the right starting point. An LLC makes more sense once you've grown past $50,000 in annual revenue and have a clearer picture of your risk profile.
Registering Your Business Name (DBA)
If you want to sell under a name other than your own legal first and last name — "Hill Country Honey Co.," "Sweet Texas Bakes," "Rosa's Tamales" — you need to file an Assumed Name Certificate, commonly called a DBA ("doing business as"), with your county clerk's office.
Filing a DBA does not create a separate legal entity or provide liability protection — it simply registers the fact that you, as an individual, are doing business under that name. It gives you the legal right to open a bank account, accept checks, and sign contracts in that business name.
How to File a DBA in Texas
- Contact your county clerk's office. Most accept in-person or mail filings; some now offer online filing.
- Fees vary by county — typically $15–$25 for the first assumed name owner. A few examples: Travis County ($23), Dallas County ($23), Harris County (approximately $21), Bexar County (approximately $20).
- You'll need: the assumed name, your legal name and address, a description of the business, and valid ID for in-person filing (notarized signature for mail).
- The DBA is valid for up to 10 years — set a reminder to refile before expiration.
- Find your county clerk's contact through the Texas Secretary of State website.
A well-chosen business name is worth the $20 filing fee. It goes on every label, your SellFood storefront, your social media, and every farmers market booth sign. Take a few hours to think through your name before filing.
Bank Account & Taxes
Texas has no state income tax on individuals — one of only seven states with this advantage. But federal taxes still apply, and separating your business finances from the start saves enormous headaches at tax time.
Setting Your Prices
Underpricing is the most common mistake new cottage food sellers make — and it's usually fatal to the business. Your price must cover your costs, your time, and return a margin that makes the business worth running.
Start with your cost of goods
Add up every ingredient and packaging material that goes into one unit. Divide bulk purchases by the number of units they produce. Be precise — vague estimates lead to underpricing.
Include your time
Assign yourself an hourly rate — at minimum $15–$20/hour for a new business. Divide your total production time (prep, bake/cook, packaging, labeling) by the units produced and add that cost per unit.
Add overhead
Farmers market booth fees, platform fees, label printing, insurance, and supplies all have a cost. Estimate monthly overhead and divide by your monthly unit volume to get a per-unit overhead figure.
Apply a margin
Aim for at least a 30–40% margin above your total costs. A common starting formula: Total Cost × 2.5 to 3 = retail price. Don't race to the bottom — customers at farmers markets expect to pay a premium for artisan, handmade food.
Research your market
Visit your target farmers markets before your first booth. Note what similar products sell for. Price your products competitively — but never below your cost. If the market price doesn't cover your costs, rethink the product or the market, not your price.
Raise prices when ready
It's easier to raise prices on a growing customer base than to survive on margins too thin to sustain the business. Price fairly from the start. Your craft and your time have real value — price accordingly.
The math test: If you bake 24 jars of jam in a 3-hour session and the ingredients + jars + labels cost $48 total, that's $2/jar in COGS. Add $15/hr × 3 hrs = $45 labor ($1.88/jar), plus $0.50/jar overhead estimate = $4.38 total cost per jar. At 2.5× markup = $10.95 retail price. If jam at your target market sells for $8, you either need to reduce costs, increase batch size, or find a better market — not price at $8 and lose money on labor.
Where to Sell in Texas
Texas offers more sales channels for cottage food sellers than most states. Here's a practical breakdown of each option — with honest guidance on which are best for getting started.
Start with one channel and do it well. The sellers who burn out fastest are the ones who try to manage a weekly farmers market, an online store, wholesale outreach, and event applications simultaneously in their first year. Pick your best channel, build a loyal customer base there, then expand once operations are smooth.
Track Your Setup Progress
The Business Setup Checklist is an interactive version of the checklist at the top of this page — check off each step as you complete it, with reminders for time-sensitive items like certification renewals.
Texas Business Setup Checklist
An interactive checklist that tracks your progress from food handler certification to first sale — with renewal reminders and links to every resource you need.
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