How To Start A Home Bakery (Part I)

If you love baking and think you have what it takes to share your creations with your community, you may be thinking of turning your passion into a business. That is how it started for me. I’ve always loved baking, and I make delicious food and desserts, but I didn’t know how to decorate cakes beautifully. I wanted to take a class on cake decorating just to be able to make my son’s birthday cake, and I really hadn’t planned to turn it into the business it is today. Since I’ve become a cake artist and instructor, I get asked a lot about how to start a home baking business. I also surveyed my audience on Instagram about what they wanted to know about starting a home bakery business, so here I will share with you my personal experience and give you the knowledge and essential tools to start off. First, make sure it is legal in your country and that you’re able to get the right license before selling food products from home. And at the end of this post you can download a useful cheat sheet I created for you that helps you get organized with things like orders, pricing strategy, and even a draft terms and conditions. This article is very useful not only to home bakers but to anyone who is thinking of starting their own home-based business. Now let’s dive into seven essential points for starting your home bakery.

1. You are the brand

I want you to know that the brand name and logo are NOT important. So don’t spend hours and days procrastinating about what your brand name will be and what are the colors of your logo. Remember that nowadays, people want to connect with people and get to know the story behind the brand. So, consider that you are the brand in everything that you do and make sure that you put your name clearly for everyone to see. Even if you decide to have a fancy name and logo, your name and face should be there for people to connect with you.

2. Practice makes progress

Initially, I would advise that you keep practicing cake baking and decorating as much as possible because I believe that practice makes progress. An excellent way to keep practicing without eating all that cake is by giving it all away at first. Friends, neighbors, and people in need. You can check out hundreds of cake pictures on Instagram or Pinterest to try and make different designs and styles. Don’t shy away from the stuff that is difficult or you don’t like. In fact, try to enhance your skills in these areas too, so do a lot of research and watch videos on how it’s done, such as fondant decoration, Swiss meringue buttercream, etc.

3. Say cheese

Take pictures or, even better, shoot videos of all the cakes you make. Even if you don’t have time, or are too lazy, just take that picture. It will serve you well in the long run when you have a pool of images and videos to start posting on social media. The best camera to take a picture with is the one you already have. Nowadays, with the quality of smartphones, you can take great photos with your phone, and you don’t need any fancy or expensive equipment.

Try to make sure that your pictures look good by shooting next to natural light or in a lightbox, and whatever you do, please don’t use your flash! Taking good pictures needs some work, so you need to research and practice different styling techniques for your photographs. You can read my 7 steps to better photographs and then do the rest of your research on YouTube.

4. Be organized

I mean in all aspects of your business. Organize the folders on your laptop, your orders, pictures, etc. Set up a Google Drive or Dropbox that you can access anywhere, especially on your phone. You can store documents and images that you need to open anytime while you’re on the go. You will need a document to contain your prices, another for your sales orders, customers database, etc. Since you’re running your own business, you need to keep track of your income and your business expenses so make sure you maintain those records too.

5. Tools to help you in your business

Order form: since cakes need a lot of customization and when you have several customers contacting you simultaneously, messages can start getting confusing. Think of creating an order form where your customers can type in their orders, upload a picture, and even put in their delivery time and location. Don’t forget to get the customers’ basic information such as name and contact details. Once you create your own website, your order form can be housed there, but in the beginning, when you still don’t need a website, use one of the many options available online. If you want a true tried and tested order form that I’ve used in the first few years of my business, scroll down to the bottom of this page to download the cheat sheet. You can use it or create something similar with the data that you want to collect from your customers.

Online design tools: Canva or Vista Create are design tools that you can use for free or for a small charge to unlock a lot of cool designs. They help you create beautiful and polished artwork that you can use for social media, videos, presentations, etc. I use Canva on a weekly basis to create Instagram stories, and email newsletter artwork and I can’t live without it!

Photo / Video editor tools: If you are posting your cakes, you may need a photo editor and a reliable video editor. I use photo editor apps on my phones, such as Snapseed and Lightroom. And for videos, Adobe Premiere Rush on my laptop and Splice on my phone. I love them both, and they’re very easy to use. It’s worth investing in a small monthly subscription to use all the premium features of these tools. After all, it is your business and you need to invest some portion of your expenses in online tools.

6. Pricing

I know that this is a big one; that’s where many people struggle and get stuck. But, before we get into it, know that your prices will not please everyone. For example, you can position your brand as high profile and provide luxury products that cater to those who can afford them. Or you can cater to the mass public with lower prices. And yes, there is something in between too. So, after you do your research, pick your style.

To identify the prices you want to charge, you need to perform some research. You need to first know how much it costs for you to make a cake. Get the prices of all your ingredients and calculate how much your recipe costs per cake (including frosting or fondant). Then add the cost of packaging such as cake boards, boxes, logo stickers, ribbons, or any other item you put on the box. Now you know the cost of the whole cake.

The next step is to contact some competitors and ask about their prices for similar cakes. I mean both retail shops and home bakers. Retail might be cheaper than home bakers charge as they have mass production. Get to know how much they charge for buttercream versus fondant cakes. And don’t forget to identify the prices of different sizes like small, medium, and large cakes. Two-tier, rectangular sheet, printed, and cakes with unique decorations such as flowers, macarons, toppers, etc.

Finally, the most crucial step is determining how much you want to charge for the number of hours you work on each cake. Since orders are customized, and everything is done by hand, the bulk of the price is your time. Put all your findings in a spreadsheet to analyze and move the numbers around until satisfied. You can always go back and edit this spreadsheet. I edit my prices annually and on special occasions if there’s a price increase in my material. I created for you a pricing template so that after you do your market research, you can just plug in all the numbers. You can download it in the cheat sheet below.

7. Terms and Conditions

As a home baker taking limited orders and blocking your calendar and time for cakes, it can be frustrating if you get last-minute cancellations. Your customers also need to know the terms of payment. Therefore, it is worthwhile to set up terms and conditions, which entails a down payment that the customers should pay to confirm the order, the cancellation policy, and when the remaining balance should be paid. The cheat sheet download below also contains example terms and conditions for you to use as an inspiration while drafting your own version. You need to send this to every customer who is about to confirm an order.

Also, think about how you want to collect payment from customers. You can start off with cash payments, but if you want to collect down payments you may need to have an online option or bank transfers. Once you have a license you can use an online payment processing website that caters to e-commerce businesses such as Stripe or a local app for online payments such as Zbooni or Noqodi.

I know that is a lot of information, take it one step at a time, and don’t be overwhelmed with it all. Next week I’ll go into more details about digital marketing, how to promote your business, the different channels to do so, and how to gain new customers constantly. Let me know if you found this article and the tools useful, and if you have any other topics around business setup that I should cover.