How to Start a Cake Baking Business From Home

Are you a great baker whose friends are always asking you to "bake just one little cake, please?"

Are you the cake decorator that makes everyone ooh and ah with your beautiful cake designs?

Or maybe you don't do cakes, but you understand cake business ideas inside out making you a natural expert in how to start a baking business from scratch, as long as you don't have to do the actual baking.

In this article, we will go over the essentials of how to start a cake business from home. But before we go any further, we need to remind you of a common theme of all successful cake business stories:

Successful cake businesses make money.

Is the cake business profitable? It absolutely is! But you have to treat the hobby you love as an opportunity to make more money than you spend if your cake business is going to sustain you to reach more people with your scrumptious, eye-popping cakes.

We have to add one more principle to our rule for success in the cake business:

You must take rules and regulations seriously.

Even if you don't like them.

Nothing sabotages more cake businesses than trying to run a cake business from home with pets. Keep Fluffy, Fido, and Izzy the Iguana separate from your cake kitchen. Many states won't make you get a license. They won't make you get a permit. They won't make you get a kitchen inspection or send in samples of your cakes to the health department.

(Some will.)

You don't want one dog hair or cat whisker or whatever it is that other pets could contribute to your cakes to take down your business after a lot of hard work.

Now let's consider how much money you need to get into the cake business.

How Much Does it Cost to Start a Cake Business?

When you are thinking about how to start a bakery business from home, or maybe even how to open a bakery with no money, you have to answer one question for yourself:

Really, how much does it cost to start a bakery from home?

The good news is that the answer usually is, "Not a whole lot more than you have already invested in your cake-making hobby."

You already have the basic equipment needed to start a cake business. Remember, your concern is how to start a bakery business from home, how to start selling baked goods from home that you make at home.

Setting up a full-scale bakery will cost $10,000 to $50,000 at a minimum. But depending on where you live, your incremental costs of starting a cake business from home may be as little as the $10 you spend on an online food handler course in Texas to about $230 to apply for a home food producer's license in Washington State.

Just be aware that when you are considering how to start selling baked goods from home, you need to consider not just how to make money selling baked goods from home, but also how to keep money from selling baked goods from home. Right up front, consider:

• Taking out liability insurance to cover any claims made against you for harmful results of your baking. The mere fact that your cakes don't cause harm is not enough to protect you from legal claims that they did. Affordable liability insurance is available from Insure My Food and the Timmons Insurance Agency in Austin, Texas.
• Operating your business as a Limited Liability Company (LLC0)protects your personal assets (your house, your car, your retirement accounts) against legal claims that come up in the course of your home baking business. Setting up an LLC can cost as little as $50 and as much as $850, if you use an online legal service instead of seeing a lawyer in person.
• Every at-home baking business needs a website to reach and stay in touch with customers. A Facebook page or an Instagram account also help, but they don't provide an online home for your home baking business the way your own professional website will. Castiron allows you to accept orders or custom order requests in a simple, easy to use platform.

Almost no homemade cake businesses get going for less than $500. But anyone can start their business for less than $5,000.

Your Homemade Cake Business Plan

Now that you have an idea of how much or how little you will need to spend to start your at-home cake business, it's time to make some very clear decisions about money in the form of your business plan.

We don't usually like to talk about it, but money is what makes or breaks a home cake baking business. You don't want to launch your online cake baking business with a splash and build up an enthusiastic clientele only to find that you can't pay yourself a dime because you owe all those dimes to your suppliers.

These are the basic parts of your homemade cake business plan. Don't bother looking for some boilerplate homemade cake business description, or a cake business plan pdf, or a small bakery business plan sample, or even a homemade cake business description, before you go through these steps:

Make sure you know how you will pay for your new business and your monthly living expenses before you start. Have a way to keep going while your homemade cake business is beginning to make money. Don't put yourself in the position of, say, canceling your family's vacation so you can make the payments on your new oven.

Make sure you know why you want to have a home cake baking business, instead of just baking and decorating cakes for fun. Consider what you can do differently.

Then, plan for these 10 essential elements of any successful home cake baking business:

1. Equipment. Just don't get carried away.
2. Registrations. If you need a business license or a fictitious name (a "doing business as" or DBA) registration, make sure you have it.
3. Education. Even if you make amazing cakes, chances are that you can still benefit from seminars that expand your knowledge of how to run your business.
4. A decent website. Every potential customer isn't on Facebook or Instagram. Even if your website is a single page with photos of beautiful cakes and how to get in touch with you, you need a presence on the Internet. (Check out our other articles on whether you can sell directly from the Internet in your state.)
5. Insurance. You need insurance both for your home and for your business. We all hope we never have to use it, but insurance is a basic operating expense.
6. Financial advice and a good accountant. Numbers don't lie, but if you don't know how to calculate them, you need the help of a professional who can.
7. Legal advice. You need an established relationship with an attorney, so you won't have to search for one if the need for legal advice comes up.
8. Staff. As your business grows, you will need help. Find or educate great staff to help you keep expanding.
9. Business cards. If you make great cakes, the people your customers serve them to will want to know where they can get them, too. Business cards with your phone, website, and other information are a must.
10. Advertising. You can do that on the Internet, right? Let's consider that point in more detail.

How to Start a Cake Business on Instagram

We are sure that you will agree that Instagram seems like it was made for displaying photos of beautiful cakes. No social media tool will bring more images of your amazing baked goods to more people than Instagram.

But knowing how to start a cake business on Instagram and how to promote a cake business on Facebook isn't the same as knowing all the answers to "how to advertise my cake business" and how to get customers for cake business who buy, not just look.

As a future specialty baker, you will want to reach as many people as possible with as many beautiful shots of your cakes as possible. Just realize that every post for your cake business reveals something about your business to your competition.

You want to strike a balance between reaching new customers and giving away all your beautiful designs and all your creative kitchen designs. You can't copyright a recipe, and unless you make just one unique, extraordinarily delicious cake, you don't want to spend your time and money on a trademark, either. Use social media to get new customers, but rely on customer recommendations to make more sales.

Kitchen Requirements For Home Baking Business

Once you have made your business plan and you are committed to starting your new home baking business, there is just one more hurdle to completing your plans. You need to know your city, county, and state kitchen requirements for home baking businesses.

You're in luck. Home bakery rules and regulations are not hard to follow, as long as you make cakes that don't contain so much moisture (for instance, cream in a tres leches cake) that they have to be constantly refrigerated to be safe to the public.

Do you need a license to sell baked goods from home?

In most states, you won't need a baking license as part of your home bakery business plan, as long as you are not planning to sell across state lines from a home-based bakery website. Interstate sales require federal licenses. But if you are searching for information on home bakery license California, home bakery license Colorado, home bakery license in NC, or how to start a baking business from home in Texas, great news! Licenses aren't required, though you may have to follow rules about selling over the Internet and the kinds of cakes you can sell.