How to Start a Home Bakery Business
We all know someone who has special talent in the kitchen; perhaps a relative who makes a mean batch of ginger snaps, or a coworker who bakes the best cake you have ever tasted. Or perhaps the prodigy is none other than you yourself, dear reader. You may spend every free hour in the kitchen, spatula in hand, flour covering your face. You have heard your friends or family tell you adamantly, “You should start your own bakery!”
And indeed, many fledgling bakery businesses begin in home kitchens. Although the transition from baking items for friends and family to baking for retail sale appears to be as seamless as a layer of mousse, there is more work involved than simply putting an “open” sign in your living room window and charging money for your goods. The following tips are designed to guide aspiring bakery business owners on their paths to success.
Create a Strong Product
Most people decide to launch their foray into the world of small business ownership because they have an exceptional product. Perhaps friends have sung infinite praises of your pies, or everyone who tries your cookies believes baking is your destiny. Although it takes great service and a solid business plan to be successful, a product is the first thing to think about.
Make your product unique.Your product should offer something special in order to draw customers. Perhaps you offer the only place in the neighborhood where someone can find good rugelach, or you fulfill a demand for gluten-free cakes. If you want to open a cupcake shop, and your town already has five of them, you many struggle to differentiate yourself.
Think about achieving profitability.When creating your baked goods, you want to make sure you are offering a product that can hold its own. If you plan to use the finest spices and real butter in your recipes, for instance, you need to make sure you will make enough on each sale to afford the ingredients and the time it takes to bake it, while still bringing in a profit.
Keep great taste a priority.People need food to survive, but most people want their food to taste good. This is especially true for baked goods. It’s likely that your product already makes taste buds sing, or you would not be thinking about making a career of baking. Just be sure this is the case for a better chance at success in your endeavor.
Prepare for Business Ownership
Before you consider starting your own bakery business, be sure you understand what is involved with owning your own operation. From the costs to the time commitment, think critically about what it means to start a business.
Understand the financial obligations.Be sure you consider the costs involved in starting a new business. Starting a bakery business usually requires fees for certified kitchen space, large-volume production equipment, bulk ingredients and required fees for business licenses and food handler’s certifications, depending on your state requirements. To cover these costs, you may require a small business loan and investors.
Prepare for the time commitment.If you have a family, another job, or other personal commitments, be sure to take a serious look at how starting your own business will affect these parts of your life.
Write a business plan.
Preparing a business plan is critical to any start-up business. Without clear goals and a path to follow, starting your own business can leave you feeling lost and under-prepared. Learn how to write a business plan before launching into your new career.
Procure the proper equipment and supplies.Your trusty countertop mixer might have worked wonders for all of your small batch recipes, but once you are whipping up cakes, tarts and pies for the masses, you will need the right bakery equipment and supplies to accommodate the workload. This includes everything from pots and pans to ovens, refrigeration, pan racks and display cases.
Abide by Local Regulations
The unfortunate truth about home-based food businesses is that many states do not allow them. Check into your area’s health codes to determine the legality of baking from your home kitchen, as well as what permits or insurance you would need to obtain.
Certify your home kitchen.Local health regulation requires a certified commercial kitchen space if you intend to bake and sell goods to the public. If your area allows this to be a home kitchen, you may need to alter the space first in order to comply with local laws. Check with your local city hall for information on getting your home kitchen inspected, or what changes you would need to make to certify your home kitchen for your bakery business.
Find commercial kitchen space.Many people begin by baking from their home kitchens, but once they want to think about selling them for retail, their home kitchen usually doesn’t cut it. Hence, many home bakers opt to move their baking operation to certified commercial kitchen space they can rent by the hour, such as a commissary kitchen. This is usually a more realistic option than purchasing a commercial bakery outright.
Obtain licenses, permits and insurance.Before you can begin baking for the public, you may need to obtain a food handler’s certification, a small business license and liability insurance should something go wrong. Again, check with local authorities to determine what you need to get your business rolling.
Consider opening a franchise.Many home bakers find that they are more drawn to investing in a franchise than starting a business totally from scratch, since the product, the concept and the processes have been tried and proven. Investing in a bakery franchise may restrict your creativity or hamper your individual product, but it can provide a great path for success if small business ownership is your ultimate goal.
Take over an existing bakery.Taking over an existing bakery can be a good way to get your shoe in the door at a place that has already been established, reducing some of the headache of finding a space and buying all new equipment. Beware of buying a place if the reputation may be tarnished, or if you have doubts the location, because these are things that are difficult and sometimes impossible to change, even under new ownership.
Keep it a hobby.After investigating all your options and all the requirements for starting a bakery business from home, you may realize that a home bakery is simply not in your future. There is no shame in continuing to bake as a hobby for your friends and family. Chances are that your talents and treats will brighten a day here and there, which will keep you driven and dedicated even if you do have to keep your day job.
Be Open to Alternatives
Opening a home bakery is a fine goal, but it certainly isn’t for everyone. If your dream to open your own bakery business does not seem like it will pan out, there are other options for running a bakery.
Starting a bakery operation from your home can be a good move if you have all the requisite pieces in place for a successful operation. Many people find that their home bakery business provides them with a way to do what they love while also making a profit. Be sure to investigate local laws before fully investing in a new business, but know that there is usually a way to make it work if you have the skill, the financial support and the drive to make it happen.
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