Basic info on starting egg business in California

[zephyr66]

Hi all...

I've done a lot of research online and can't seem to find any answers. I have 5 acres in a semi rural community in California (Joshua Tree) with no animal restrictions and am seriously wanting to start a small egg farming business for the local community. I am wanting to do a legit "business" because of the obvious tax write offs, etc. I'm not looking to make much money as I know it is a hard business. I want it to be a side business as I love the chickens I have, want to expand and supply good, quality eggs from humanely raised chickens. But... I can't find anything on what is required to start such a business. Can anyone who is in California give me some info on the ins and outs and how difficult it is and what I need to do to get started? It would be much appreciated. Thanks so much.

Sylvia

 

[dmiravalle]

Quote:
I would first talk to your tax advisor, if you start a small business in Cali, you have to show a profit within so many years, I think 3. Or else you are considered a hobbiest. If the tax board comes back to you down the road and you have all these write offs, and no profit than can and will back you pay back taxes. However even as a hobbiest you have to pay sales tax, without the bene's of write offs. Really research. Go to your local business licensing center and find out ALL the rules. I have done it in the past, but after a friend of mine had to pay over $10K for 5 yrs worth of back tax for her dog business, I let my license lapse. Now I am just a hobby farmer, who gives my product away to friends and family. (wink)

And apparently I have speech problems!! Hope you understand what I meant not what I said!

 

[Mac in Wisco]

I'm not from California, but I'm in the egg business.

Start here:

http://www.cdfa.ca.gov/

Under Laws/Regs click on Inspection and familiarize yourself with the egg rules in your state.

Then contact the appropriate person at the Dept of Ag for further info, you'll have to search the site for the appropriate dept. or give them a call to see who you should talk to. Our state egg program rep sent us a packet that outlined the permits required as well as the facility requirements for processing eggs.

If you have any other business questions give me a holler.

 

[Mac in Wisco]

Quote:
Not just Cali, those are federal rules.

The goal of any business should be to make a profit. If your only goal is a tax write-off, the IRS will frown upon that.

You can make a profit selling eggs though. There are plenty of folks who are willing to pay a premium for eggs that are organic, kept under high welfare standards, or home delivered.

 

[Mac in Wisco]

Here is good info from the dept of ag website:

http://www.cdfa.ca.gov/is/fflders/eqc.html

Towards the bottom of the page there is map of egg program districts with contact info for your district.

 

[dmiravalle]

Quote:
Not just Cali, those are federal rules.

The goal of any business should be to make a profit. If your only goal is a tax write-off, the IRS will frown upon that.

You can make a profit selling eggs though. There are plenty of folks who are willing to pay a premium for eggs that are organic, kept under high welfare standards, or home delivered.

We usually made a small profit, but one big vet bill could skew that all out of wack! I personally didn't want the risk, especially with all the Laws in Cali that keep passing.

 

[WhiteMountainsRanch]

California is AWFUL for any type of business and laws... we are moving out of here and transferring our business as soon as we can. I'm surprised we're still in business... My advise? Sell your eggs cash. Don't worry about a business, licenses, etc... I doubt you will be able to make any money with all the taxes permits and laws... unless you have an egg factory... then good luck with the headaches...

 

[Mac in Wisco]

Quote:
Well, there are a number of factors that go into into determining whether you are for-profit or just a hobby besides showing a profit in a ceratin number of years. If you are trying to be profitable and run your business professionally with good accounting, you can still pass scrutiny by the IRS. If you were usually making a profit it shouldn't have been a big deal, but then again, maybe it was time to call it quits.

I posted a $22,000 farming loss against my non-farm income in the year we started. Since then I have only posted a few thousand a year in profit. Much of that is due to deductions for depreciation on buildings and equipment. Eventually they will be fully depreciated and we will start paying the piper.

 

[Mac in Wisco]

Quote:
She could go that route, but then again there's something to be said for the education behind doing it legit; learning about the agricultural system in her state, how to pull the appropriate permits and pay the appropriate fees, learning the tax laws and proper accounting. The more you can learn about how business is actually done, the better the business person you can be which can lead to further business prospects. Many of the largest businesses in the U.S., including many large ag businesses, were founded by small businessman working from the garage, backyard, or small farm. Somewhere along the way they learned something about business and were able to grow and expand.

While she may be content to just sell a few eggs on the side, if she's serious about starting an actual business, I'd urge her to use the opportunity to learn something about how to do business in her state and basic business management.

 

[zephyr66]

white mountain ranch - thank you so much for the link and for answering my question to get me started. and, to the others, yes, i'm aware of the runnings of a business and taxes - i'm already a business owner (service) and am aware of how that works and am looking for answers related to starting agriculture business. i'd like to just stick to advice related to starting an ag business - thanks! i will check out the links provided and that will give me a start.

also... i am only wanting to sell directly to the community and not stores. i'm wanting to be organic, and since i know i can't be certified organic cause of the red tape involved, i am hoping to be uncertified (natural) and avoid vaccinations and the like. i really did mean a SMALL business - like perhaps 100 hens. and, from what i have heard, they say it is legal to process poultry if you do it on your own property, don't hire help and your net is less than 10K. specifically, i'm thinking of the roosters that i end up with. anyone know about this also?

thanks so much and any more info is appreciated!

sylvia