How to Start a Baking Business

Time & Money
Starting a baking business can be done with relatively low initial investment, especially if you start from home. Your main costs will include baking equipment, ingredients, and packaging supplies. You’ll also need to consider the cost of permits and licenses, as well as marketing expenses. If you plan to operate from a commercial kitchen, you may have additional fees for renting the space.

Difficulty
6/10

Weekly Time Commitment
20-30 hours

Earnings Per Month
$2,000 - $10,000+

Is Starting a Baking Business The Right Gig For Me?

Before you ask how to start a baking business, you should probably consider whether it's a good gig for you. Start a baking business if you like baking and making delicious treats for others to enjoy. On the other hand, do not pursue this gig if you hate working long hours, or you have a deep need for structure. You will also need to be willing to learn about marketing strategies and how to manage finances effectively.

How to Start a Baking Business: Essential Preparations

You must prepare to start a baking business, or unfortunately, you will be bound to fail. First things first; you need to develop a menu and a pricing structure. You will then need to find somewhere to hold your operations. Following on from this, you will need to find a way to market your business. Then you will bake! Let's take a peak at each of these stages in more detail so you can get a clearer view of how to start a baking business.

Execution

Create a Menu and Pricing

Make your menu reflect your skills and appeal specifically to your target audience. Your menu should separate you from the competition, whether you make classics like chocolate chip cookies or something more unique. Watch your pricing - consider ingredient costs, labor & overheads, and leave plenty of room to make profit.

Set Up Your Operations

Check local laws if you plan on baking from home as a business. You will also need a business license, an appropriate food handler's permit, and you will need to organize regular health inspections from a registered inspector. Though these requirements may feel overwhelming, remember that they keep both you and your customers safe.

Promote Your Business

Advertise on social media - especially visually driven platforms like Instagram and Pinterest - where your baked goods can really shine! Start with promotions such as discounts for first time customers, and create special products tailored to the holidays. Word of mouth marketing may also be helpful - encourage happy customers to share your business, and treats, with their family and friends.

Offer Delivery or Pickup

To increase sales and cater to customers’ convenience, offer delivery or pickup options for your baked goods. Partner with delivery services or set up your own delivery system to reach local customers. Offering flexible delivery or pickup hours can help you stand out from competitors who only offer one option.

Bumps In The Road

Meeting Customer Expectations

One of the challenges when starting a baking business is meeting customer expectations for both quality and delivery time. You'll need to be organized and allow yourself enough time to bake, decorate and package each order carefully. Remember, great cakes will keep people coming back for more. In addition, you can consider delegating some tasks as your business grows, so that you can continue to meet the demand.

Cash Flow Logistics

Cash flow can be tricky in a baking business - especially early on. You might have slow months or, depending on your products, have to shell out for expensive ingredients in bulk. Create a budget for fluctuations in your revenue and reserve money for business expenses.

Dealing With Competition

Baking can be competitive - many local bakeries and online businesses will be competing with you for attention. To overcome this, offer unique products and provide excellent customer service. Building a brand and a loyal customer base through personalized service and custom orders can help you stand out from the crowd.