Starting a home bakery business is a good way to begin your entrepreneur’s journey. Even though you will not have a permanent stand somewhere, there are still many profitable ways to make money by just baking at home.
If you want to learn how to start a baking business with just minimal costs, read this whole blog and ultimate guide!
What are the Advantages and Disadvantages When Starting a Home Based Bakery Business?
A bakery business can flourish if given the right way of nurturing it. Here are the reasons why you should open a home-based bakery business
The Advantages are:
- Getting to do what you love while making money out of it
- Practice your creativity in your products to entice your customers
- Low Startup cost since you have most of the kitchen equipment needed.
- Having both choices of selling online or physically.
- The wide market of people, because of the internet
Despite these advantages, there are still cons that you might not be prepared to take on.
The Disadvantages are:
- You might have to do the extra mile to advertise your business.
- Can be time-consuming at times
- Can remove the fun in your job.
- A lot of permits and licenses need to be processed, which can take a long time before you can start your business.
- Some customers may not like your products which can lessen your market.
- Tough competitions, depending on your place
- Can become crowded in your house when your business booms.
Is Bakery a Good Business?
Yes. Bakeries are profitable when your products have the quality the market wants and when you maintain that quality always.
The North American Pastry Shop company’s findings show that people still acquire a strong feeling of strong satisfaction when eating their best-loved baked product. Feeling very pleased(52%), feeling joyous(21%), comforted(40%), and contented(49%).
How Much Can You Earn By Just Baking At Home?
Bakers estimated, by just taking special orders, you can earn about $200 – $400 per month. If it is 20 hours per week of work, then you can earn between $800 and $1200. However, if you bake and sell wedding cakes you could earn a lot more!
Ways You Can Sell Your Home-Baked Products
Selling your products is never that easy. You need to exert a lot of effort just to sell them. Here are ways you can sell your home-baked products.
1. Creating Your Presence Online
Creating an online presence requires your creativity and, of course, a stable internet connection, so that you can fully interact with your online customers.
Creating a Website
This is one way to advertise your products although creating a website requires a lot of research and also a minimal amount of money to launch your website and to advertise it.
Create a Facebook Page
Creating a Facebook page is fairly easy and the best one to start with. You can even make it for free although you will also need a small sum of money to advertise your Facebook page.
With the Facebook page, you can also connect your website to it, and it is more visible than a website because of lesser competition compared to a website.
2. Sell or Supply for events or food shops.
Rather than waiting for all your products to be sold, which takes the whole day, then why not just sell them all at once by supplying coffee shops or for big events. That way you can guarantee that your products will be sold and nothing will be left, that can lessen your profit.
What are the Requirements Needed to Start a Home Bakery Business?
Even though it is very easy to start a home bakery, there is one task that may take a long time to process. Those are the requirements. You will need to process your permits, licenses, and labels before you could start your business.
But some states do not require these things for small businesses.
Here are some of the requirements
1. Kitchen Layouts
Some states would require you to change your kitchen layout, by adding sinks, adding a storage room, adding a ventilation system depending on the requirements of your state
2. Health Inspection Certificate
Passing your health inspection may be a requirement in your state. Health officials will assess the cleanliness of your product and your kitchen, the equipment you use, the sanitation methods, and the employment practices.
3. Food Safety Certificate
One of the requirements is also for you to process your food safety certification. This is the certification that states that how you prepare your food, and how you handle it is sanitary and not contaminated.
4. Business Name
Processing your business name is also a must because it is required by most states so that you will also have your official name for your business.
5. Labels
This is one of the essential things that is needed by all states. You will need to put it on your product. The labels will state the ingredients, allergens, nutrition contents, and others.
However, if you are not comfortable doing this, you could hire a nutritionist to help you with your labels
What You Will Need To Do to Start Your Bakery Business at Home
These things are not required by the state, but these things will help greatly. This advice will help you be confident in your home bakery.
1. Step Out of Your Comfort Zone!
It’s really hard and very uncomfortable to do things out of your comfort, but it’s the only way to learn and expand your learnings. Life is full of obstacles, which is why we need to face them to learn how to deal with them.
2. Learn from other Baker’s Mistakes
There is a saying that the wise learn from others’ mistakes and the unwise learn from their own mistakes. Although I know that some people find it difficult to learn from other mistakes, it’s really important for the success of your business. When your business is huge, only one major mistake can ruin it.
3. Your Love and Skills for Baking
Yep, that’s right. This will divide people who love baking or are just in it for the money.
Skills are also very important when starting a business. Flexibility, leadership, and management are some of the skills you have to master so that you can easily handle problems.
What Equipment and Supplies Do You Need to Start Your Business?
1. Oven
You will need an oven. The bigger, the better it would be as you can bake at larger masses at a time.
It is recommended that you start with an 81-liter oven (0.6m x 0.6m) to start your bakery business so that you will be able to accommodate substantial orders.
Recommended Baking Products:
2. Kitchen scale (Digital Scale)
Same with measuring cups and spoons, a kitchen scale is also important because you will need it to measure your ingredients or your products precisely. With it, you will be able to avoid inconsistent cookie or muffin shapes and qualities.
Recommended Baking Products:
3. Heavy Duty Mixers
It is great to invest in an expensive heavy-duty mixer. Based on my experience, having this kind of mixer will be able to mix a lot of the mixtures without giving up and overheating compared to a cheap mixer that easily overheats when mixing a lot of dough and batter.
Heavy-duty mixers are good things to invest in because they will still be usable as the tie goes on when you have larger orders.
Recommended Baking Products:
4. Mixing Bowls
Mixing bowls are one of the “must-haves” when starting your business. You should have at least three different sizes.
There are also stainless, ceramic, and plastic mixing bowls. See to it that before you buy that you look for a durable one.
Recommended Baking Products:
5. Sifter or Strainer
Sifting your ingredients is important because sifting eliminates any ball or clumps of flour or baking soda from your batter, so invest in one.
Recommended Baking Products:
6. Chef’s Knife
A large chef’s knife can be useful for your everyday baking. Slicing fruits, chopping nuts, slicing butter, there are just a lot of things you will need for your knife.
Recommended Baking Products:
7. Flat Silicone Spatula
Like a knife, a silicone spatula is essential to your baking needs. You can use it when melting something, or you can use it to scrape that last bit of batter. Spatulas are great because they can get to any corner that hasn’t been mixed in your mixture.
Recommended Baking Products:
8. Well-Built Balloon Whisk
Even though you could just use a spoon instead of a whisk, it’s just not the same.
When you use a whisk in making curd or mixing a frozen curd, it is smoother compared to doing it with a spoon.
It also prevents burning stuff, so whatever will it be, invest for a good quality balloon whisk, or risk one of the wires coming undone and flicking sauce in your face.
Recommended Baking Products:
9. Piping Bags
Piping bags may come in handy when it comes to designing your products. It’s best to make sure that you purchase good-quality piping bags. The kinds that don’t easily pop on the sides.
There are also reusable piping bags that you can use for your business. They will save a lot of money compared to buying disposable piping bags.
Recommended Baking Products:
10. Piping Tips
Piping tips are on the end of your piping bags. It comes in different sizes and shapes which is useful when choosing a design that fits your product.
Recommended Baking Products:
11. Cupcake or Muffin Tins
Often, bakers start at selling cupcakes, cookies, muffins, and even brownies rather than starting with layers of cakes, which are very tiring.
Starting with at least two tins is recommended so that you can prepare another batch while the other one is baking.
Recommended Baking Products:
12. Pastry Baking Pans
You will need this, obviously, for baking small sweets like cookies and crinkles.
This also can be used for roll cakes, focaccia bread, and others.
Recommended Baking Products:
13. Cookie Scoop
You can use this to measure your cookies and muffins evenly. When it comes to the size, it’s up to you. If you want to sell larger sweets, then go for a big cookie scoop. If not, then go for the smaller one.
Recommended Baking Products:
14. Brownie Pan
No one gets bored eating brownies. With that fudgy feeling, it can usually please anyone. It is also easy to prepare. Just make the batter, pour it into your tin, bake, then slice it.
Rather than cookies, you will have to shape them one by one and even freeze them, to get that ultimate taste, before you can bake them. This is why starting with a brownie business is easily started compared to other businesses.
Recommended Baking Products:
Here are other disposable supplies you will need for your business.
15. Glassine Paper or Silicone Baking Sheet
Baking paper can be costly and can enhance the price of your baking product. I used glassine paper for my baking business. Others used silicone baking sheets that are reusable at the same time, not yet tried, so it’s up to you on which you like best for your business.
Recommended Baking Products:
16. Cupcake Liners
For your cupcakes. Just make sure to have the same size as your tin.
Recommended Baking Products:
17. Non-Stick Spray (Your Baking Friend)
This will make your life easier in your business. No more spending time trying to get your cookies perfectly from the baking parchment because using this, your cookies will just slide easily from the paper.
Recommended Baking Products:
18. Ziploc Bags
Ziploc bags can be used to store products without ruining their quality.
Recommended Baking Products:
How Much Will it Cost to Launch a Baking Business at Home?
Here is the list that you will be most likely spending for the start-up of your home bakery
- Repairs and upgrades- $10,000 – $30,000
- License and Permit Fees $1000 – $2000
- Insurance Fees $500/ year
- Kitchen Equipment $20,000 – $40,000(depends if you already have the equipment in your home
- Marketing $1000
- Miscellaneous expense $5000
Overall $37,500 – $78,500
Although some people were able to start their home bakery business for around $5,000 and $10,000, it’s still best to make sure that you have more than needed in case something goes wrong.
So, how can you spend your money wisely when purchasing tools and equipment for your business?
1. Research is Key
Though it may take a long time for you to research and acquire long-lasting quality equipment, just think about the long run of your business.
2. Purchase Tools and ingredients in Bulk
Buying from wholesale retailers can save you a lot of money compared to single-supply buying. You may think that you will not be needing all of it, but again, think about the future of your bakery.
How to Start a Baking Business at Home
1. Make Your Business Plan
Creating a business plan is important because it will help and guide you through your business.
A business plan is about your strategy on how you will keep your business afloat.
So how do you create your business plan?
1.1 Write Your Business Type
Are you managing your business alone or do you have a partner?
1.2. Create Your Identity or Logo
Spend a portion of your time creating a very unique logo that your buyers will remember or recall your product.
1.3. Scout your Competitions
Whether it is online or a physical shop, order from them, taste their products. What makes people buy their products? How can I be better? Ask yourself these questions and write the things you will be doing.
1.4. Create a Budgeting System
Creating your budget system is vital to your business. List down all your expenses and liabilities. This will help you decide where to put each of your dollars and the best thing about creating a budget is it will discipline you on spending your money.
Don’t forget to include savings in your budget. Saving a portion of your profit can be used for sudden emergencies or offers in the future.
1.5. Create Your Menu
Plan ahead of time and list all of the products you will be selling.
1.6. Employees
You may not yet need them now, but you will need them at some point. Plot down the things your staff will be doing and think about the management.
2. Create Your Marketing Plan
A marketing plan is your action plan on how you will uplift your product. Whether it is writing blogs or making good offers, your goal is to engage and create that trust within your customers.
Here are some things to include in your marketing plan.
1.1 Market Research
Market research can consist of interviewing groups of people or visiting certain areas to find the potential product for your business.
1.2. Core Purpose
For a business to stand strong, determine the sole purpose of the business. Why do you do what you do? What is the focus of your business? What are the goals of your business? Why should the market buy your product?
1.3. Choose Your Target Market.
Pleasing everyone can lead to disappointments, so start small. What age groups of people are you planning to convince to buy your product? Is your product for 1st class, 2nd class, etc.
1.4. Product Description
Create an indulging product description that is rooted in the wants and needs of your buyer. List all the benefits the customer will gain when purchasing your product.
1.5. Set The Right Price
It’s not good that you are selling a lot while losing profit at the same time. It is crucial for your business that you get that price right.
To get your price right, calculate all your expenses. That includes oven usage, electricity usage, water usage, stove usage, ingredients, etc.
Also, consider the buying power of the market and competition. Be alert and competitive with your competitors to keep your business rising.
Getting your price right will lead your business on the right path.
1.6. Advertise Your Product
The goal of your advertisement is to communicate with the customers that they should try your baked sweets.
Here are some ways you can advertise your product.
Giveaways
This is usually the most famous way of promoting your business. Some businessmen would let their staff stand on the road giving a free taste of their product to strangers passing by. The point is, you should still get your message to the customer.
Coupons
Giving coupons to your potential buyers gives them the urge to visit your shop online just to exchange their coupons. While in it they also get to see the other products you offer.
Flyers
One of the common ways to advertise is flyers. Giving flyers and slipping them into houses can pay you later on.
Gain Public Awareness
Publicity is what everyone wants. Publicity is gained through news articles, interviews, reviews, etc, so it is also great to participate in activities that will gain you your publicity.
3. Get Your Packaging Right
You wouldn’t want your product to be damaged when it reaches your buyer. You will want it in the same condition as where it came from. That’s why it is best to test your packaging before using it in your business or you could also observe the packaging of other restaurants and coffee shops.
4. Delivering or Shipping
When delivering your products, it boils down to two choices using your car (if you have one) or you could ship them.
When using your car, make sure that your car meets all the health and other requirements of your state.
If you choose the shipping option, it is best to invest in a courier that will handle your products with care. That’s why it is best to look into all of the couriers before you avail of their service.
5. Start With Crowd Pleaser Products(Cookies, Muffins, Pastries)
Starting a business will not immediately be accepted by the market. They don’t know if your products can meet their standards. That’s why it’s best to start with sweets that are loved by everyone and will be impossible for them to resist.
What Are The Lucrative Products In Bakeries
So what are products that will lift your business? Bakers share that their bakeries produced cookies, ranking first at 89 percent, accompanied by cakes at a percentage of 79 percent, while cupcakes at a percent 73, muffins at 68 percent, cinnamon rolls at a percent of 65, and ranking at last, bread, at 57 percent.
When it comes to sales, cakes rank at first by 24 percent accompanied by cookies (11 percent), bread at 11 percent, and cupcakes at 8 percent.
Cakes are the most profitable products in bakeries because they can be sold at high prices, considering the efforts you put in.
Starting Small Can Also Lead To Big Success
In July 2018, Dragica Antonijevic, who lost her job at the factory in 2009, started to think about how she can provide for her family financially, despite having an unemployed husband and two children, she has to find a way how to support her family.
With her family recipes passed down from grandmother to mother to her, Dragica willingly started her baking business. Starting with three pans, a mini-oven, and a refrigerator, she started baking cakes and other goods. Though the problem is she had a hard time selling her products.
So she had to go from door to door, just to get her products noticed, begging shop owners to try her product.
“No one knew the quality of my products, so I decided to find my market,” she said.
After a lot of hard work, stores from northern Kosovo, The place where she lives, eventually agreed to carry her products. As her products were getting known, Milos and Marta, her business name, started to receive more orders.
Dragica and Bojan, her husband, were very satisfied with the bunch of increasing orders they received However they encountered a new stumbling block, their existing equipment. With it, they would have a hard time producing the orders on time.
So in 2015, they applied for a USAID program that will be able to fund their business and bank loan. With the money they got, they purchased new equipment, a commercial oven, and a heavy-duty mixer. Then they built a facility that will be able to escalate their production, enhance the quality of their baked goods, and enlarge their product’s scope.
After these renovations, more and more orders started to come in, so they hired 9 staff, and continued their increasing production. Accompanying that, they were able to win a huge contract to supply baked goods to the main university in the northern part of Kosovo. They also started supplying their products to all places of Kosovo and Serbia.
Since the USAID funded their business, their business’s sales multiplied 4 times.
USAID assistance provided the Milos and Martas the assistance they needed for their business to boom up. “Without USAID support, we would not have had the budget or the capacity to achieve the success our business is experiencing,” Dragica said.
By 2020 the couple hopes to construct a two-story manufacturing facility.
Conclusion
Starting a home bakery, like all businesses, has to be nurtured and cared for. Although it does not mean you just work hard every day. You have to work smarter, not harder. Think of some ways that you can improve the status of your business and write them down.
Starting a business at home is easier compared to starting a business elsewhere. You just need to have the inspiration, skills, motivation, and love to keep your business floating.
How about you? What can you say about this blog? Has this helped you? Thanks for reading this blog. I hope it has helped you very well.
Related Articles: