How to Start a Cookie Baking Business

Wednesday, May 1, 2013

How to Start a Cookie Baking Business

Running a cookie baking business is a good way to exercise a love of baking and earn money at the same time. Depending on the laws in your particular jurisdiction, you can run this business from your home or from a commercial kitchen. No matter where you decide to base your business, however, you will have to put hard work into building this business. The hardest part may be attracting customers before you have made a name for yourself.

Step 1

Develop talent for baking cookies and create your own cookie recipes. To compete against packaged cookies available in grocery stores and fresh-baked selections from established bakeries, your cookies will have to be something special.

Step 2

Brainstorm ideas for making your cookies unique. For example, you may cut them into unique shapes, make over-sized cookies or bake them with healthy ingredients. You may also offer custom cookie baking to attract customers who want something different for holidays, events and celebrations.

Step 3

Decide how you will sell your cookies. Offer delivery of freshly baked, still warm cookies or open a store from which to sell your unique cookies. You may also sell your cookies through a truck or stand at special events and fairs or set up a kiosk in a local mall. If local laws will allow it, you may even bake your cookies at home and take orders for them in person, by phone and online.

Step 4

Apply for licensing for your business. You will likely need a general business license as well a license to prepare and sell food. You can usually apply for a business license through your local county clerk's office or the department of licenses and inspections in your city. The department of licenses and inspections may provide licenses for food vendors as well, but in some places, you will have to apply through your state's health department.

Step 5

Choose attractive cookie packaging that meets your state's health requirements. Include ingredients on your labels.

Step 6

Submit to an inspection by your state's health department or licensing agency. A representative will probably have to inspect your kitchen and packaging. He may also review your recipes before you are licensed. You may be subject to future inspections as well.

Step 7

Purchase liability insurance. You will need this coverage in the event someone becomes ill or dies after eating your cookies.

Step 8

Prepare a menu of your cookie selections and set prices. Include pricing for custom-made cookies and shipping or delivery.

Step 9

Create and market a website for your cookie baking business. Use keywords related to your cookie baking business throughout the site to make it easier for potential customers to find you. Use online ads to draw visitors to your website, and add your website address to all of your marketing materials.

Step 10

Use multiple methods to market your cookie baking business. Work of mouth referrals can be helpful, but using business cards, fliers, direct mail, newspaper ads and even radio spots will also work to get the word out about your business. Online ads may prove helpful as well.

Things Needed

Business license
Commercial vehicle license (if delivering cookies)
Baking supplies
Merchandising supplies
Marketing materials (business cards, brochures, fliers)
Purchase the necessary equipment

Tips

Boost your chances of making sales by offering complementary services or products. Offer cookie gift baskets or bouquets to increase your customer base.
While you may start out baking in your home kitchen, you may eventually need a commercial kitchen to handle larger and more frequent orders.

Warning

Some states do not allow businesses to sell food prepared in home kitchens. Check with your state's department of health before you get started.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Wednesday, May 1, 2013