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How to Start a Home Baking Business
Starting a home-based baking business? It’s a lot of work but we’ve broken it down into an easy step-by-step process to help you pull it off.
Important things to think on:
- It takes time to make money when you first start your home baking business, so it’s important to have a plan in place for those first months.
- You only make money when you sell, so make sure every customer has a good experience with your business to encourage return business.
- Success has nothing to do with luck. It’s all about planning. You need a good business plan to get ahead. It pays to be smart with your money!
- You must stand out from other home bakers. So, think about what would set you apart from them. Can you make something special?
Let’s address some worries you might be having:
- Skills: You don’t need a degree and you don’t have to be very experienced to open a home baking business. Your skills will improve with time. But if people like your baking now, your baked goods are good enough to sell!
- Set up: Having a lot of baking space and fancy appliances isn’t important when you first start out. Start small and work your way to bigger things. You can buy more baking tools when your business grows.
- Time: You don’t have to quit your job and dive right in. You can start your business as a side project and as it grows, you can dedicate more time to it.
Step One: Choose What to Bake
Your friends and family love your baked goods. But how do you grow into a home business? Firstly, you need to ask yourself what kind of home bakery you want to open. What will you sell? To help decide, ask yourself these questions:
- What are the baked goods you’re known for?
- Who will your customers be?
- What would be popular with customers?
- Is there a demand for any baked goods?
- How can you stand out from other home bakers?
- Is there something that only you can offer?
Step Two: Choose A Good Name
A name is a powerful thing. It lets your customers know what your baking business stands for. Finding the perfect name can take time. Here are a few suggestions:
- Try to avoid using your own name – this is popular amongst all kinds of baking businesses. The problem with this is unless people know you personally, it doesn’t mean anything to your customers… It also doesn’t SAY anything about your business and how it benefits customers. Plus it won’t stand out against all the other baking businesses with similar names.
- Make sure your name is simple and easy to say and understand. Anything that’s hard to say or from a different language could confuse customers. You don’t want to have to explain what your name means over and over!
- When you have a few name ideas, Google them to make sure local businesses don’t have the same name. You don’t want people to mix up your home baking business with someone else’s!
Make a list of 5 good names. Choose your top two, then get your close friends and family to vote for their favourite.
Step Three: Write a Business Plan
A business plan helps you track business ideas, work out who your customers are and plan for costs and growth. This plan should have business details like:
- Set-up tools you’ll need
- Costs
- How your business works
- Set business goals
- Sales plan
- Marketing your business
We’ve put together a step-by-step guide to help you write a business plan. You can see it here.
Step Four: Run Your Business Effectively
Here are some helpful tips that could take your business from good to great:
- Keep customers coming back by making sure your baked goods are always fresh and tasty. Make sure your customers always have a good experience too. Good service is something that everyone appreciates.
- Buy ingredients in bulk if you can. This will help you to save on costs in the long run. But make sure you check the sell-by date – you don’t want to have to throw out ingredients before they’re used.
- Use Social Media to bring in new customers – it’s a quick and cheap way to reach people. Take good pics of your baked goods and use hashtags. If you need some inspiration, go and follow local baking businesses on social media. You can learn a lot from them.
- Make sure your goods aren’t too expensive – research other home bakers pricing to compare yours.
- If you need to use fresh ingredients in your baking, look at what’s in season. Ingredients that are out of season will be more expensive.
- When pricing, round off numbers – for example, R1 sounds better than 97c.
- Avoid payment plans: there is no guarantee that you’ll be paid. When handling orders, it’s better to have your customers pay a deposit upfront. This will help make sure your time and ingredients aren’t wasted!