So, you’ve finally made the leap to start your baking business and satisfy your friends and family’s love of your signature cupcakes. To cut costs and decrease risk, you realize it’s a good idea to start the business out of your home. You have the kitchen, equipment, tools, and secret recipes to do it.
We know what your thinking, “If Martha Stewart started her wildly successful catering business from her basement in the 1970s, what is stopping me”? Nothing, now what? Well, we’ve provided a few tips for starting a cake business from home that will help you bring your dream to life. As a beginning entrepreneur, you probably have a lot of questions, and we at Medina Baking & Supply are here to answer them.
Below are few things to consider before you dive in head first.
Bread, cakes, cookies… oh my:
Have you decided what baked goods you want to sell? It’s a good idea that you detail what baked goods you intend to sell in an Excel sheet that includes the cost, description, and prices.
Have a plan:
Remember, you are starting a business. Any business requires a plan of action and execution, in order to be successful. Build the vision for your business with a professional business plan that can be used to market your bakery to prospective investors, or other important stakeholders when you are ready to expand beyond your home.
The marketing element of your business plan will help you attract the customers needed to grow your business. Also, knowing the infrastructure of the business you want to start is paramount. Are you going to start an LLC or incorporate?
It is very important to find out all the laws that apply to your home-based bakery business in your state, city, and county. This is one of the most important pieces to building your business and will save you a lot of heartache down the road if you take care of these important items upfront. For example, licensing requirements for starting a cake business from home are different throughout the USA.
Check your local authorities and get the documentation done as soon as you can, to avoid legal complexity. You may find out that your home is not zoned for a home baking business or your Homeowners Association doesn’t permit them.
This may bar you from operating a home baking business out of your home. However, if you are permitted, you will need business insurance to protect yourself. Additionally, do not forget the tax! Yes, you’ll have to pay state and local taxes in the form of employment and income taxes, if you’re starting a cake business at home.
Health & safety issues:
Having your kitchen inspected and certified is an important step in ensuring your kitchen is bakery business ready. This means that proper ventilation and waste management systems should be a part of your home cooking system. Setting up a commercial kitchen in your home may not be feasible. Another option is to rent kitchen space through a co-op or other alternative such as a church, hotel, or other commercial kitchens.
Equipment & supplies costs:
Unless you are going to make a business from a dozen cupcakes, you may need to invest in a second kitchen. This means you will have to seriously upgrade your current equipment to accommodate larger quantities on a regular basis.
You will need to accommodate the new equipment with better supplies like scales, countertop mixers, and plenty of non-stick baking mats. An upgrade in your oven alone can run a few thousand dollars.
A cost-effective option would be to rent the commercial kitchen space as mentioned before. If you’re starting a cake business at home, you could use the kitchen of a local restaurant during off hours. This will help you keep costs low and keep your beloved oven.
Also, if you have a network built, utilize your relationships with customers to help get your brand the publicity it needs. If not, consider building a social media presence using a website, Facebook, and Twitter. And guess what? It’s all free! Happy baking!