Do you have a passion for baking? If your school or a local non-profit group is holding a cookie sale fundraiser, are you the person to contact? Do you binge-watch baking competitions on television, wishing you could enter and win the main prize, which would allow you to create your own bakery? Then you might want to think about making a living off your talent to create delectable sweets.
Baked goods businesses have seen a significant increase in popularity in recent years, although they have really been around for quite some time. It was in the 1970s when Mrs. Fields began selling her delicious cookies. 1 Several entrepreneurs have started selling homemade cakes, cupcakes, and cookies from their homes in recent years, and many of these businesses have expanded into normal retail bakeries and even franchises.
Home baking may result in a variety of delicious delicacies, such as the ones listed below:
Cakes and cupcakes are popular desserts.
Brownies and bars are a type of dessert.
Dog goodies are available.
Starting a home-based bakery may appear to be a pleasant and simple endeavor — after all, you're already in the baking business. However, there are several disadvantages to starting a home-based baking company that you should consider before baking your first batch of goods.
Here's an outline of the process, as well as some resources, for turning your passion for baking into a home-based company.
Advantages of Starting a Home-Based Baking Business
There are a variety of compelling reasons to begin selling your baked products from your own home, including:
Do what you enjoy doing, provided that you enjoy baking.
The ability to express oneself creatively. It's possible that you put a particular spin on your baked products.
It's simple to get started. You already have a kitchen and some basic cooking expertise.
There's always a market for delicious baked goodies to be found.
You can sell your baked goods locally and/or online, depending on how easily they can be delivered or transported to customers.
INCORPORATE YOUR HOME-BASED BAKING BUSINESS
The Drawbacks of Starting a Home-Based Baking Business
There are disadvantages to all enterprises, even those that entail the sale of baked products from home, such as the following:
Your state's occupational or health department will often oversee food service enterprises, so you'll need to research your state's rules regulating the sale of food products that have been baked at home and ensure that you abide by them before starting your business.
The majority of states mandate that your baking equipment (such as mixers and spoons) and supplies (such as flour) be kept separate from your personal culinary equipment and supplies. In some instances, you'll require a separate cooking space. 3 If you live in a state that allows you to use your own kitchen, you'll still need to purchase additional equipment and materials. 4
Because you only get money when you sell baked products, you might spend a significant amount of time in the kitchen in order to produce enough goods to sell in order to fulfill your revenue objectives.
While your family may adore your food, your clients may not share the same sentiment.
Competition may be fierce, and you'll need to know how to distinguish yourself from the pack.
Unless you are really fortunate, it is very possible that you will outgrow your house kitchen.
What You'll Need to Get Started in a Home-Based Baking Company
It goes without saying that you should be able to bake and that your recipes should be delectably delicious. When beginning a baking business, there are a number of additional items to consider and acquire, such as the following:
A sufficient level of ability and understanding in the preparation of safe meals and the identification of potential dietary concerns. Customers who are allergic to peanuts, for example, will want to know if you have peanuts in your kitchen, so they may avoid purchasing from you. 5
A background in retail or food service would be advantageous.
A sufficient quantity of ingredients, as well as space for storing them, a regular shopping schedule, and reputable suppliers are all required. Always keep in mind that you may need to keep your equipment and ingredients separate from your personal belongings.
Any licenses or inspections required by your state, county, and/or city will be covered by this policy. A health inspector may pay a visit to your residence. 6
An awareness of your competitors, as well as how your baked products will distinguish themselves from the competition.
Starting a Home-Based Baking Business: What You Need to Know
If you're ready to start earning money while you bake, here are the steps to take to get your home-based baking company up and running.
Find out about the rules and regulations that apply to food service enterprises in your particular state.
Obtain the licenses and permissions you'll need to get your firm up and running. This information will be available from your local municipal or county government authorities. It is possible that you will be able to obtain the information you require and file for your license online.
For further information on whether or not you are required to collect sales tax on your food goods, contact the tax or comptroller's office in your home state. Obtaining your sales tax permit may frequently be accomplished online. 7 They're normally free, but you'll have to pay sales tax on the things you sell on a monthly or quarterly basis, depending on where you live.
Determine whether or not you are required to collect a food tax. Some states and municipalities not only collect sales tax, but they also levy an extra tax on food purchases under certain circumstances. 8 Most states and municipalities provide company startup information on their official websites that should be able to assist you in answering this question and obtaining information on how to go about doing so.
Organize your firm as an LLC or other business entity (rather than as a sole proprietorship) in order to best protect your personal assets against a lawsuit in the event that someone becomes ill or has difficulties with your food products.
9 If you have a business partner, you'll want to formalize your relationship by forming a partnership.
Make a decision on the sorts of baked items you will sell. For first, it will be most convenient to concentrate on one or two products, such as bread or cookies. As you get more established in your business and realize what is successful as well as what your clients want, you may begin to extend your menu. Also, think about what will make your baked products stand out from the crowd. For example, are all of your products comprised entirely of organic ingredients? Is it true that they are gluten-free?
Create a business strategy for your company.
Separate cooking equipment and materials should be purchased. This is most likely a necessity in your state, but it is also beneficial in keeping your personal and company costs distinct, which is important for home business tax considerations as well.
Place an order for packaging and labels for your products.
Prepare your baked goods.
Offer your delicacies for sale. Create a marketing strategy that outlines how you intend to locate and reach your target audience. Take them to your local farmer's market, sell them online (you can have online ordering with personal delivery, or you can ship your things if they're durable enough to ship), and/or consign them at local cafes, restaurants, and other businesses that serve food are all possibilities. You could want to think about launching a food blog to assist advertise your product, for example.