Creating a business plan is a smart way to get your business from great idea to reality. Creating a business plan can help you to focus your ideas, outline goals, and develop a strategy for reaching them. Even if you plan to keep your business small, a plan can help you build a solid foundation to maintain focus and guide you through the lifecycle of your business.

The Small Business Development Center (SBDC) is a great resource and can match you with a business consultant who can provide feedback and help you to focus your business plan to achieve your goal.

Choosing the right business structure is important for legal and tax purposes. There are several different types of structures that might work for your business. As a one-person show, you may want to structure your business as a Sole Proprietorship where you alone own the company and are responsible for all of its assets and liabilities. This is the most basic type of business to establish and offers you complete control and easy tax preparation with the lowest rates. Your business consultant or an attorney can advise on the best business structure for your venture.

Choosing a name for your business is an important decision. It has to fit and feel right for your brand and business identity. Your name also needs to be registered properly to protect you for the long term. Some things to consider when choosing a name: How will your name look on the web or in a logo? How internet friendly is it? Does it reflect your business philosophy, values, and brand?

You can check if the name you want is available and reserve the name by mail with the CA Secretary of State. Learn more about this process at sos.ca.gov.

Depending on the scale of your operation, there are a few options you can take to choose a location for your pop-up business.

First, if you plan to produce small scale hand-crafted food items such as baked goods, candy, dried foods, honey, jams, and other similar items you could operate as a Cottage Food business from your home kitchen. The full list of approved foods can be found here. Cottage Food businesses are required to register and take a food processor training course, which we will discuss further in the permit section of this guide.

Another option is to lease space in a commercial kitchen. There are several commercial kitchens in Santa Cruz, including:
Kitchen Santa Cruz (216 Fern Street)
Extra Kitchen (254 Potrero Street)
Santa Cruz Food Lounge (1001 Center Street, Suite 1)

Finally, you could lease space from a restaurant during their off-hours. This option may be harder to arrange but depending on the business hours you and the restaurant plan to operate under it could be a mutually beneficial relationship.

Once you have chosen your location, it is time to begin the permit and registration process.

Registering your business name involves a process known as registering a “Doing Business As (DBA)” name or trade name. This process shouldn’t be confused with incorporation and it doesn’t provide trademark protection. 

Registering your “Doing Business As” name is simply the process of letting the state government know that you are doing business as a name other than your personal name or the legal name of your partnership or corporation. 

You can file a fictitious business name statement through the County of Santa Cruz, more information can be found on their website here. If you are operating under your own name, then you can skip the process. 

You will need a zoning clearance even if you plan to operate your business out of your home. If you will be operating as a Cottage Food business you will need a Home Occupation Zoning Clearance, which costs $142 (subject to change). The purpose of the home occupation regulations is to allow for a certain amount of commercial activity without disrupting the quality of life and character of residential neighborhoods.

To operate in your home you must follow the following rules:

(1) Your business can not use more than 400 sq ft, (2) employees cannot work out of your home, unless they also live there, (3) you can’t display advertising, and (4) your business cannot generate more than 6 trips [3 round trips] per day including deliveries and clients.

Also, Beware that operating a home business could violate your lease or Homeowners Association (HOA) charter.

The Zoning Clearance allows the City to review the use and confirm that it is consistent with the Home Occupation regulations. In essence, the Planning Department wants to make sure you won’t have delivery trucks line up outside for delivery and pick up, blocking your neighbors’ access to their homes or that you won’t be operating a manufacturing plant out of your living room.

If you plan to operate out of a commercial kitchen, you will need a zoning clearance for a “New Use” or “Same Use” depending on the type of food or beverage production you will be doing.

The fee covers approximately two hours of staff time as home occupations vary in scope and complexity, similar to new commercial and industrial uses. The Fire Department is routed a copy of the approved Zoning Clearance, and $72 of the $282 (subject to change) covers their review time.

You will need a copy of your zoning clearance to obtain a business license.

To obtain a Zoning Clearance, visit the Planning Department, located at 809 Center Street, Room 101, between the hours of 7:30AM-Noon and 1:00PM-3:00PM, Monday through Thursday (Closed Fridays).

When you arrive at the Planning Department, sign in for the Planning Counter and wait for the on-duty planner to become available. The planner will review the Zoning Clearance request and complete the form with you at the counter. Once you’ve paid the fee, the planner will give you a receipt and copy of the Zoning Clearance form to bring to the Finance Department.

Business licenses are an annual fee levied on businesses operating in the City of Santa Cruz as a way to monitor business activity in the City and best prioritize our resources to help businesses. Most businesses are subject to a basic business license fee of $145.15, plus employees fees of $2.55, $4.95, or $7.40 for each employee depending on the type of business.

You can download the application from the City of Santa Cruz website, here. Completed applications, along with proof of zoning clearance, can be mailed or submitted in person to the payment counter at 809 Center Street, Room 101.

As a food business most of your products will be subject to sales tax so you will need to obtain a seller’s permit and will be responsible for collecting sales tax. You can register for your seller's permit online here.

If you are working out of a restaurant or commercial kitchen, your business will most likely be covered by their health permit. You should check with the owner of the space you are using and the County Environmental Health Department to be sure the necessary permits are in place.

If you will be operating as a Cottage Food business you will need to register as a Cottage Food Operation with the County through this form. You will also need to complete the Cottage Food Operator training. More information about this can be found here.

Depending on the specific details of your food operation, you may need other permits so reach out to the County Health Department to be sure you know what permits you need.

Anyone involved in the preparation, storage or service of food in a food facility must have a California Food Handler’s License. This can be obtained by completing one of the accredited courses here.

Finally, if you plan to sell your products at the Farmer’s Market you will need a permit from the County Health Department as well.

You can visit CalGold.ca.gov to get a list of all potentially applicable permits and licenses.

Once you have your permits in place you’re ready to get into the production side of the business. Now is the time to refine your product in preparation of launch. Work on your marketing plan and begin spreading the word about your new business.

Starting and running a business is a lot of work, so it's important to celebrate the wins! Launching your business is definitely cause to party, so big or small do something to mark the achievement of getting your business up and running! Congrats!

Operating a pop-up food business is largely based on meeting your customers where they are or where they will go. The key to your success will be getting your products in front of a diverse audience and building your fan base. Pop-up businesses have an advantage over regular restaurants - limited availability. If your product is high quality and highly desirable you can build off the excitement factor of only being available a certain day and time of the week.

If you are operating as a Cottage Food business you can focus on growing your retailer network to get your product out there through already respected establishments. By partnering with a thriving businesses you are able to gain credibility for your product and build awareness with new customers.

A good website can go far. Consider investing a little money in a website that effectively tells your story, breaks down exactly what you do, and clearly shows how to reach you. You should also pay special attention to your overall brand look and feel and make sure your website matches your packaging, menu, and any other printed materials you pair with your products.

Depending on what kind of business you have you may start to outgrow your location or even your business model. If you decided you need to hire on 1 or more on-site employees or your business grows to use more than 400 square feet, you will no longer be permitted to operate out of your home. There are lots of opportunities to grow into a rented commercial space within the City and we can help you through that process. 

You are permitted to employ residents or family members that live on site.

The online property database, Space Available, is a great resource for helping you find the perfect location.

There may come a time when your business has grown too big to run alone, and you will be ready to hire on 1 or more employees. This is a great opportunity to expand your business capacity, provide jobs to the community, and maybe even get you some time off; but you will want to consider to the additional costs and complexity this may add. 

You will need to obtain an employer Identification number (EIN), set up records for withholding taxes, report with California’s new hire reporting system, obtain workers compensation insurance, and find out if you are required to pay unemployment or disability insurance taxes.