You might have a hobby in baking at home, and this passion may potentially turn into a side business as a supplementary source of income. If so, are you required to apply for a licence?
Well, the simple answer is: you do not!
This applies whether you are living in an HDB flat, or a private residence. However, there are certain guidelines that you should follow if you wish to pursue a small scale, home-based baking business.
Home-Based Small Scale Business Scheme Guidelines
The Housing & Development Board (HDB) and Urban Redevelopment Authority (URA) oversee the Home-Based Small Scale Business Scheme, which allows home owners to carry out small scale businesses (such as baking businesses) from home.
Some of the guidelines in the Home-Based Small Scale Business Scheme that you should follow are:
1. No registration of your HDB flat address as your business address
HDB flat addresses cannot be registered as business addresses. This is because HDB flats are strictly for residential use.
On the other hand, you may register the address of your private residential premises as your business address, provided that there is no material change of use of your residential premises.
2. Be considerate to your neighbours
While baking, you must be considerate of your surroundings. There should not be any excessive noise, smoke, or smells that might pose a nuisance to your neighbours.
3. No recruiting of employees outside of your household
You are not allowed recruit employees outside of your household to assist you in the preparation and delivery of your baked goods. No one may earn a salary off your home-based business apart from members of your household.
That said, if you require an extra helping hand from time to time, it is perfectly fine for your friends and family to help you by purchasing your ingredients, mixing or preparing them or even attending to the oven. You may pay them a small sum for their efforts if you wish to, but the payments should not be treated as a form of salary (especially in relation to your friends).
4. No loading/unloading of goods via vans or trucks
You are not allowed to load and unload goods via vans or trucks, which implies that you are not allowed to produce your baked goods in bulk.
For delivery purposes, try transporting your baked goods via car or public transport instead. However, only small quantities of food can be transported at any point of time.
Remember that under the Home-Based Small Scale Business Scheme, the sale of your food is strictly meant to supplement your income instead of being your main source of income.
5. No putting up of signboards or paid ads
Your baked goods should mainly be sold to your friends, relatives and people that you are familiar with. While sharing about the sales of your cupcakes and cookies on social media is permitted, you are not allowed to pay for advertisements on social media or any other online platform.
You are also not allowed to physically put up paid advertisements or display a business signboard outside your home.
6. No selling of food at stalls
You are not allowed to set up food stations or stalls at events/food fairs, and you cannot sell your home-baked goods at food establishments.
Food Health and Safety Standards
Even though home-based bakers are not required to apply for a licence to sell their baked goods, they are advised to follow the food hygiene guidelines issued by the National Environment Agency (NEA).
This is because one of the potential hazards of consuming home-baked goods is that the food was not hygienically prepared. Food establishments such as restaurants or food outlets are subject to a graded system of appraisal which indicates the overall hygiene, cleanliness and up-keeping of the premises where food is prepared (A being the best, and D being the worst). Customers can see displayed grades and decide whether to patronise the eatery.
However, residential premises are not subject to such an appraisal system. Customers of home-baked goods may therefore be at greater risk of falling ill after consuming such goods if the goods were not hygienically prepared.
NEA’s food hygiene guidelines cover:
1. Personal hygiene
Bacteria and other forms of micro-organisms that cannot be seen with the naked eye can be found on our hands, and they can be transmitted easily onto the food that you handle. To reduce the likelihood of an illness or a stomach-ache, you must wash your hands thoroughly with soap, before and after the food preparation process.
Additionally, wash your hands again should you visit the toilet halfway through preparation, or after handling waste products.
For extra precaution, you can wear gloves during the preparation process and the handling of the finished baked goods. Also, do not handle and bake food when you are feeling unwell or sick.
2. Kitchen hygiene
Your kitchen must be kept clean and hygienic. All food preparation surfaces and equipment, such as bowls, mixers, ovens, spoons and cups, should be cleaned and sanitised regularly, before and after every session in the kitchen.
This reduces the chance of contamination, and the attraction of unwanted household pests such as flies, cockroaches and rats. These pests carry harmful bacteria and dirt which can cause serious food-related illnesses.
Be wary of brushing off crumbs off the table, and sweep anything that hits the floor. If you have pets and children, refrain from allowing them to enter the kitchen whilst you are preparing food.
3. Food safety
Whilst choosing ingredients for your baked goods, be sure to obtain ingredients from approved sources.
Also, check that the ingredients have not passed their expiry dates.
4. Storage safety
Store your ingredients at the right temperature, and in the right places. Your refrigerator must be kept clean and food items should be stored in a proper manner. For example, raw food items should not be placed on top of cooked food.
Harmful diseases such as salmonella and E. coli may become prominent in your refrigerator if raw foods are not stored properly. These diseases can cause diarrhoea, fever and vomiting.
You can read the NEA’s food hygiene guidelines for the Home-Based Small Scale Business Scheme in full here.
Joining a Baking Community
If you decide to target a wider audience, you may wish to join a baking community, such as Bakerro or Homebakee. Depending on what the baking community offers, being part of a baking community may help you connect with other bakers and provide access to recipes or events. They may also promote your baked goods, and simplify the process of delivering and selling your baked goods.
Baking communities that help promote and sell your baked goods may have additional requirements for you to meet before they will assist you your business. These requirements can include passing a taste test or obtaining a food hygiene certificate from a certified agency.
Therefore before signing up to join a baking community, check the baking community’s requirements for joining and whether you are willing to fulfil these requirements (if any).
Going Public with Your Business
If the demand for your baked goods increases and you wish to increase sales, you might have to go beyond the scope of the Home-Based Small Scale Business Scheme.
For example, instead of purchasing the ingredients yourself, you might require a supplier. You might need a larger delivery vehicle, or the assistance of extra staff. Finally, you might also need an area where customers can purchase and consume your food.
If you choose to go beyond the scheme, you will need to obtain a Food Shop Licence. To obtain this licence, you are required to submit planning permission approval from either the URA or HDB, and documents such as a tenancy agreement.
Apart from this, you will have to comply with the Code of Practice on Environmental Health when renovating your premises, and your staff will need to obtain food hygiene certificates.
For more information, check out our article on the legal requirements to open a restaurant in Singapore.
Incorporating and operating a business is expensive. Therefore, you should be sure to do so only if you have the funds, along with a reasonable prospect of success. Important considerations include the costs and location of premises, operating costs and the level of commitment that you are willing to put in. Starting a business is a huge leap compared to a home-based one that is governed under the Home-Based Small Scale Business Scheme.
Bakers take pride and joy in their craft. Satisfied smiles and contented customers are the driving force of their efforts, motivating them to continue baking.
Baking is also a passion that can be easily translated into a source of income. However, while doing so, you must ensure proper hygiene standards, so that consumers can safely trust in the preparation methods of your home-baked goods.
The guidelines mentioned above emphasise the importance of food safety, and increase a home-based baker’s responsibility regarding the proper preparation of baked goods and conduct of business.
With all this in mind, the trust and demand for home-baked cakes, muffins, cookies and brownies will surely increase.
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