Every now and then I catch the show, “Save My Bakery”, in which baker extraordinaire Kerry Vincent helps bakery owners fix up their business and their baked goods. Although I love baked goods, I’ve always thought it would be hard to have a bakery. The overhead alone must be huge. Then, in a carb-conscious society, you have to get people in your shop. Plus you have to have a large enough variety of items to please different people.
Although there are downsides to running a bakery from home, the biggest being you don’t have a storefront that people can find and visit, a home based bakery is a viable idea. Here’s how you can get started.
1) Contact your state’s occupational licensing board to find out what, if any, regulations regarding commercial food prep. Some states may require you to have an entirely separate kitchen while others only want you to have separate tools and ingredients. Some states may require a visit from a health inspector as well.
2) Decide what types of baked goods you’ll be making. Because you’re home based, you can focus on a specific type, such as cookies or cupcakes. Or you can offer a variety. You can even decide to have a bread business and not do sweets at all.
3) Come up with a business name. Check out this article I wrote for Home Business About.com for tips on coming up with names. Remember to check the name at the U.S. Trademark Office so you don’t use an existing protected name. Also check that you can get the domain name. I use GoDaddy, but you can use any name registrar you want.
4) Decide your business structure. Will you operate as a sole proprietor or form an LLC? If you have a partner, you should consider a partnership. While sole proprietorships are easy, they could put your personal assets at risk if someone decided to sue you over a bad cookie. For more information about legal structure, check out the post here at WAHS on legal structure and other legalities.
5) Get permits and licenses. Check with your city or county government office regarding business permits. You’ve already checked with the state about special licenses for food service. Now is the time to apply for that. Check with your zoning department about laws that might restrict home business and how to get a waiver if possible. Finally, tangible items, such as baked goods, are taxed in many states, so contact your state’s comptroller or tax office to apply for a sales tax permit. The state will require you to collect and pay sales tax. Your city or county might have an additional food tax as well that you’ll want to look into. One perk is that you can sometimes use your sales tax permit to buy goods for your business without paying sales tax. Sometimes it will get you wholesale pricing as well.
6) Get your tools and ingredients and start baking. Also purchase packaging items so you can deliver your bakes goods. You can create or order labels with your business name. Include a phone number or website for ordering. Take quality photos of your baked goods to use in marketing and on your website.
7) Market your business. Decide what’s special about your baked goods. Do you use only organic ingredients? Are they gourmet? Are they seasonal? When you have an idea of what’s special, decide who are the best customers for your baked goodies. There are many ways to get your baked goods into the public. You can make an appointment with local restaurants, cafes and bakeries that target your market. Bring in your samples and sell them either to the owner or on consignment. If you’re baked goods can be shipped, market online.
8) Track everything from how much you spend and make, to who’s buying and the feedback you’re getting. Tweak things that aren’t working right.
Learn more about starting a home-based baking business: