With state cottage laws owning your own home bakery is now possible. It is far easier to get started and more affordable than a store-front bakery. Not only that, but it also gives you more freedom and control over your business.
The top ten percent of home bakers make roughly forty-three thousand a year or more. Due to laws, your income potential is capped but can provide a nice work-life balance and provide enough income to live the lifestyle you desire. Eventually, your home bakery business can be expanded to a storefront or online bakery if you wish.
The following are five essential steps to follow to start a home bakery business that is profitable and sustainable:
Step One: Pick Your Baking Niche
The first step is to develop your menu and decide who your target audience is. A home bakery business means you have to do all the work and won’t have the space to offer as many items as a traditional bakery.
Step Two: Don’t Forget About Marketing
All home bakeries must have a website and one social media page to advertise their work. Without it, you would need to rely on word-of-mouth marketing which can be a slow process solely. A website allows you to get your information and treats in front of people quickly, no matter where you are.
Step Three: Price Correctly and Value Your Time
Start pricing your products correctly from the start and don’t allow haggling of any kind. Being a home bakery business means all costs and time go through you. If you lower your prices, you will have to pay for it in the end. Figure out how much time it takes to complete each product, the full costs of each recipe down to each ingredient, and the amount required to get it done. Please put this information together in excel files to keep them organized and create pricing estimates within minutes. This means you should be able to price one cookie or one-hundred cookies using a simple formula easily.
Step Four: Remember Your Legal Requirements
Be sure to register your business correctly with your local, state, and federal government. Beyond a business license, you also need to get familiar with cottage laws in your state. Each state has different rules and limitations to what you can sell and regulations on how to sell them. For example, each product you sell typically needs a label of the ingredients and that it was made in a cottage food kitchen. This way, those purchasing your items understand exactly where the products are coming from and ensure their safety.
Step Five: Develop Proper Contracts
Before you finish or start a baking job, always create a contract, and get it signed or agreed upon. This way, there is no confusion while you create the product or when turning it in. The more information you get upfront with confirmation, the more you can protect yourself and your profits.
If starting a home bakery is something you believe you want to do, be sure to follow each of these steps. Understanding your local cottage laws and legal requirements is essential to running a profitable home bakery. From there, you will need to market and continue to perfect your craft. Word of mouth marketing and providing superior cakes and other sweet treats are necessary to succeed and profit within this industry.