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Steps for Launching a Home-based Baking Business

Steps for Launching a Home-based Baking Business

Does this scenario sound familiar? It is a birthday party or a holiday celebration. You bring out your special cake or cookies and everyone begins raving. “These are so good. You should open your own bakery,” everyone coos as they sneak seconds.

It’s true that many successful bakeries started out in home kitchens. Martha Stewart and Debbi Fields are two well-known examples. But should you open your own bakery business and how would you begin? Here are seven key steps to take.

Define Your Business

You may be good at baking bread, pies, cookies and cakes, but that kind of inventory could easily overwhelm a budding entrepreneur. Identify the baked goods you want to sell. Consider marketability and packaging as well as your target audience.

For instance, cupcakes are hot right now. Would a cupcake business work well in your community? Who would be your competition? If there are already cupcake shops, what can you offer that would make you stand out from the crowd. All-natural ingredients? Gluten-free?

Determine What Supplies and Equipment you Need to Begin

Make a complete list of the ingredients you will need. Do you need more oven space? What about counter space? Racks and bowls? Mixers? Start with bare minimum costs and build from there.

Research Local Health Regulations

Home-based businesses must obtain a permit to operate a food business. A county health and food inspector will need to inspect your kitchen to make sure that it meets sanitary standards and that your food preparation and storage methods are up to code.

Some zoning and planning agencies also require home-based businesses to obtain a home occupation permit. If you do not own your own home, check with your homeowners association for any rules restricting the type of businesses you can conduct in your home.

Before you can bake and sell baked goods to the public, you may need to apply for a food handler’s certification, a small business license and liability insurance. Budget in these costs as part of your business plan.

Create a Name and a Brand

Check the Trademark Electronic Search System to find out if a name is already registered. Check the Small Business Administration website for information about registering your business name and other steps, such as obtaining a tax ID number.

Once you have the name of your business, buy a domain name and then create a website that promotes your business. You can build an online store so your customers can place orders online or by phone. Think about a logo that will help people recognize your products.

Shop for Packaging and Bakery Containers

The right packaging is essential to a bakery business. Whether you are shipping your products or just sending them home in a car with a customer, your baked goods – and, as a result, your reputation — can be ruined with improper packaging.

Think about adding your name and logo to your packaging to help with name recognition. Shipping boxes that have pre-printed business information are another idea to consider.

Spread the Word

You can build your business by word of mouth, but the best way to do that is to gain new customers. Brainstorm ways you can get your baked goods in the public eye. Contact the coordinators for local farmer’s markets and flea markets. Look for vendor opportunities at sporting events or arts events.

Find out how much it costs to rent a booth or a table to sell your baked goods. Debbi Fields, founder of Mrs. Fields Cookies, developed a following by handing out free samples. You can do that too. Be sure to include a business card with the sample, so people know how to get more.

Build a Network

Visit local restaurants, coffee shops and bakeries that may be interested in selling your baked goods. Consider offering your goods on a consignment basis as an incentive. In other words, the owner will not be on the hook for any product that does not sell.

Finally, think carefully about the time commitment you will need to make to launch and run this business. If you have young children, for instance, you’ll need to take a serious look at how you will manage the ins and outs of a time-sensitive business with the demands of parenting.

If some of these steps seem daunting, another option is to buy a franchise in an already existing bakery business. While you will not be selling your own product just yet, a franchise investment can give you valuable experience in running a bakery business. Then, down the road, you can translate that knowledge into your own brand.

You also could be on the lookout for an existing bakery business that is for sale. Purchasing an established business sets you up with an established clientele and offers you the opportunity to add your own products in with an existing product line

However you proceed, you can know that you are putting your baking talents to use in brightening the days of your customers.

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by Tricia Drevets // Regular Contributor to Businessing Magazine. Tricia Drevets is a freelance writer who specializes in business and communication topics. A community college speech and theater instructor, Tricia lives in beautiful Southern Oregon.

Opinions expressed by contributors are their own.