Do your family and friends love your desserts? Do people keep telling you to start a bakery? Do people request you to make cakes, pastries, cookies, etc. for their special occasions? Do you watch baking reality shows visualizing yourself there and thinking had you been there, you would have won it and used the prize money to start your own bakery?
If the answer to them is ‘yes’, then this blog is for you. We will tell you how to start a successful home bakery business. The home baking business had been getting some popularity in the last few years, but the industry took a big leap after the world was hit by the Covid 19 pandemic.
Since people were not able to order cakes and desserts from outside, they turned to baking themselves. And since personal occasions didn’t stop coming, while the world was in lockdown, people had no choice but to DIY them.
And now that you are already good at it, why not earn some money out of it? The best part is that the cost of home baking is much less than the cost of opening a bakery, as you don’t need to rent a space, burn a hole in your pocket for overheads, and so on.
If you have always wanted to, but are not sure how to start selling baked goods from home, we are here to help. Let’s go!
#1 Find Your Specialty
The first and foremost thing when you start a bakery would be to find your specialty. Normally, a bakery should have a variety of menu options, but it’s also important for you to find your USP.
It’s time to ask your friends and family, which dessert of yours do they love the most. You can also do a little research and find out what the other bakeries or home bakers are known for in your locality or city.
Pick an item that is both your specialty and also not being abundantly offered in your locality. Of Course, you need to include other items in your menu, but remember to focus on your specialty or at least use it to promote your home baking business.
It’s also a great idea to start small, have just a few but good options, build a strong reputation with them, and then expand later. It’s because you might not be able to maintain a great quality if you are overwhelmed in the very beginning, but with time and success, you would be able to hire resources and expand efficiently.
#2 Home Bakery Laws
There are a few special laws that apply to a home baking business, and you need to consider them before you think of how to start selling baked goods from home. These laws vary from one state to another, and you should be able to find them on the website of your state’s Health Department, under the section, “cottage food laws”.
Whether you can produce and sell low-risk foods like baked goods, pickled products, candies, canned foods, dry goods, and more from your home are regulated by cottage food laws. These are usually designed for small businesses putting a cap on the total revenue you can generate from your small baking business while staying legal.
Besides capping the total amount of sales you can make and the types of foods you can create, these laws also restrict where you can sell your products. For instance, you might or might not be allowed to sell your baked goods in your home, at farmer’s markets, online, at roadside stands, events, etc.
Selling at a farmer’s market might be allowed in one state but not in another. So you need to be sure of all the cottage laws in your state before you think of how to open a bakery from home.
#3 Create A Business Plan
Irrespective of the fact that you are starting a full-fledged bakery or just a small baking business from home, you will need a well-designed business plan. If you are confused as to what to include in your home bakery business plan, here are a few important elements:
Company Description and Mission
The first thing to include in your home bakery business plan is its detailed information. It can consist of the description of your business, its vision and mission statements, the kind of baked items that you are planning to sell, and so on.
You can also mention your specialty and what your business is all about. Whether your business will specialize in cookies, brownies, cakes, pastries, cupcakes, or whatever it is.
Home Baking Business Name
You will then need your home baking business name in the plan itself. Pick a unique yet memorable name that is not being used by your competitors. Try using a name that is self-explanatory so that it gives the audience an idea that it’s the name of a bakery.
You need to do extensive market research to find your target market and understand how you can meet the needs of your potential customers through your business. Understanding the current market trends is also going to help you understand how your small baking business can meet the needs of your target audience.
Moreover, there are a few fixed target markets that could fit really well business. Go through the below-mentioned examples, and see if any of them match with you and if you can cater to them through your business:
- Corporate buildings and offices – Offices keep having meetings frequently, and they might require good quality baked items. If you provide them with that for a price lower than that of expensive established bakeries, you might find a permanent target market. You can offer them assorted muffins, small pastries, bagels, doughnuts, and so on in serving trays for easy sharing.
- Schools – Fundraiser events, class parties, PTA meetings, and other functions create a need for baked items too. And if there is even one such school you can consider them your target market, and reach out to them. Assorted cookies, brownies, decorated cupcakes, etc. work really well for school and college functions.
- Restaurants – Sometimes, restaurants want to serve a lot of dessert options, but don’t have the space, time, or resources to produce them. If there are such family-style or busy restaurants in your town, they could serve as a great target market for you. Cakes, cheesecakes, pies, nut bread, seasonal specials, and regional desserts like cannoli, tiramisu, and baklava, could work really well for them.
- Health-Conscious Customers – If you live in a neighborhood where people are highly concerned about health and fitness, you can include low-calorie and gluten-free baked items to tap that market, like granola, flourless cakes, nut bread, trail mixes, and more. Make sure you label if any allergens are present in your goods, and you can also make vegan-friendly products for such customers, and label them.
#4 Necessary Bakery Equipment
The next to consider is the equipment needed to start a bakery from home. This will play an influential role in deciding the cost of opening a bakery from the comfort of your house.
Your current kitchen might have some of the things you need for your small baking business but you still might have to add on. A convection oven could cost you around $2,000 or higher, and if you want to bake bread, you might need a dough proofer and warmer, costing around $1,200.
You can set aside $1,200 or more for bakery dough mixers, $1,200 for a large refrigerator, and another $1,000 for additional miscellaneous equipment needed to start a bakery. You might also have to add certain equipment or make amendments to your kitchen layout to meet the state laws regarding a home baking business. These could include installing additional sinks, creating separate food storage and food preparation areas, adding a sprinkler system, updating your ventilation system or hoods, and so on.
#5 Transportation and Delivery
To run a successful home bakery business you will need to provide your customers with their ordered items in time and in the best quality. No one likes to receive a cake with the frosting stuck on the top of the box, broken cookies, dispersed pie, etc.
And usually, people order from bakeries for occasions and you can’t get late. Moreover, even if there is no occasion, no one would want to get their items later than the expected time.
So you need to make sure that your delivery partner is highly efficient, and can deliver your items to your customers on time. You can also tie up with a food delivery platform that can both list your home bakery on their app, and even deliver your goods for you.
If you want to deliver your products yourself, you will need a reliable vehicle and stackable food crates or solid boxes that can keep the food safe even during transportation.
#6 Licenses, Permits, Health Inspection, and Certificates
Every business requires some kinds of licenses and permits, and even though yours would be a home baking business, it would still require them. In fact, since food is involved, there are specific requirements that you need to fulfill before you start a bakery even from home.
- Licenses and permits – These might vary depending on your geographical location, but some of the common things required are home occupation permit, health and safety permit, sales tax permit, and more. Since your business would be producing consumable products, it will have to comply with the local health codes and regulations.
- State and Food taxes – For information on state tax, you can contact the state tax office, and get your sales tax permit which will require you to pay the sales tax either monthly or quarterly on your sold products. In some states, you even have to collect food tax over and above the sales tax, and you will need to fulfill the formalities for this if that is the case.
- Health Inspection – Your state may also require your home baking business to pass health inspections. Health officers will visit your home bakery and assess everything like your equipment, means of storage, employment practices, sanitation methods, and so on. They might also check if you are storing your ingredients and the final products at the correct temperature in the proper way. In some states, it’s forbidden to use a residential kitchen for commercial food production and they might ask you to build a separate kitchen for your small baking business in that case. You will also have to get an inspection done by the local fire department.
- Food Safety Certification – There is something called the food safety certificate that you might also have to obtain to be able to run a successful home bakery business. You will basically have to complete some food safety courses that will educate you on how to handle food properly, how to store it, and preparation techniques that can mitigate the risk of foodborne illnesses and cross-contamination.
#7 Sales & Marketing
Once you are done with all the above, all you need to do is start baking and selling. To sell your baked goods, you will firstly need a strong marketing plan that can tell the people in your neighborhood and city about your home baking business.
The first thing you can do is create a nice website that can act as your virtual bakery. Users can have a look at your menu, prices, how the items look, what your other customers think about you, and your contact details for them to reach out to you to place the order.
Make sure you optimize your website for local SEO so that whenever people in your town are looking for a home bakery, google tells them about yours. Listing on google business and google maps can also help in getting visibility in your locality.
Create social media accounts on popular platforms like Instagram and Facebook, and use them to build an audience. Keep posting content regularly so that your audience keeps engaging with your brand and keeps growing to eventually convert into your customers.
Listing your home bakery with food delivery platforms like UberEats might also help in marketing your brand. Regular users of the app would just open it and look for bakeries to order from, and if they like what they see on your listing, they would instantly order from you. If they like it, they might give you a good review, recommend you to friends, and even order from you again, and that’s how you can grow your business.
So what are you waiting for? If you have gone through all the above-mentioned points, you are ready to go for it. Happy baking!