How to Start a Home Based Bakery Business

Monday, October 27, 2014

How to Start a Home Based Bakery Business

A bakery (or baker's shop) is an establishment that produces and sells flour-based food baked in an oven such as bread, cakes,pastries, and pies. Some retail bakeries are also cafes, serving coffee and tea to customers who wish to consume the baked goods on the premises.

If everyone raves over your baked goods, starting a home-based bakery business may be just what you’re looking for to leave the rat race, do what you love to do and make money doing it. You can sell your home-baked goods at local farmer’s markets, do mail order or both. If your home-based bakery business remains small, you do not need to add new equipment, but simply use the equipment and appliances you already have in your kitchen.

Starting a home bakery isn't as easy as it sounds. To successfully start and run a home-based bakery, you'll have to comply with local laws and treat the business seriously.

Read the following tips to give you an idea of how to start a bakery at home:

Things Needed

Fully-equipped kitchen
Baking supplies (mixing bowls, spoons, spatulas)
Appliances (oven, stove, fridge)

Instruction:

Step 1

Come up with a business plan. A home-based bakery takes as much planning as a business located in a downtown shop. Include information about start-up costs, cost analysis, and the costs of your ongoing business operations in your plan. Set clear goals for your business and aim to complete them.

Step 2

Contact the county health and food inspector. Even home-based business must have a permit to operate a business that deals with food. The county health and food inspector will come to your home and inspect the kitchen to make sure that the kitchen is clean and sanitary, and that your food preparation and storage methods are up to code and keep people who eat the baked goods from getting sick.

Step 3

Identify the baked goods you are going to sell. Create a sheet that lists out each baked good you intend to sell, a description you can use in your marketing materials and prices.

Step 4

Buy bakery containers. Contact a local container store or one online that sells food containers. Choose to have the boxes and containers printed with the name of your business, website and business phone number. If you have to ship the goods, you may also want to purchase shipping boxes that come pre-printed with your business information.

Step 5

Build a website. Buy a domain name and create a website that describes the types of baked goods you offer and how customers can place orders. You can opt to build an online store so customers can place orders online or simply have them call your business line to place the order.

Step 6

Contact coordinators for farmer’s markets, flea markets and other local vendor opportunities. Find out how much it costs to rent a space at the sales spot to sell your goods. Set up a booth or table where appropriate, hand out free samples, business cards and stock your area with a variety of your baked goods for customers to buy from you. You can also have sheets available for customers to place special orders.

Step 7

Contact restaurants, local bakeries, cafes and coffee shops. Call or visit some of the local eateries that may be interested in buying your baked goods from you or stocking the store shelves with your goods. Speak with the store owners or managers who have the decision making ability to choose if they will buy the goods directly from you and then resell them to clients or allow you to sell the baked goods on consignment.

Step 8

Determine the legality of home-based bakeries in your area. While opening a home-based bakery might seem easy, you should be aware that there can be limitations involved. For example, in some states, home-based bakers are prohibited. In others, there are many permit and insurance requirements that you'll have to meet before opening your bakery's doors. Check with your state's health department or food and agriculture agency to determine if starting a home-based bakery is legal in your area.

Step 9

After you've determined that you can open a home-based bakery, you'll want to modify your home kitchen into a commercial kitchen area. This will allow you to sell baked goods to customers. There's a good chance that you'll have to modify your kitchen somehow before inspectors will certify your kitchen. Research what modifications you have to make and complete them before an inspector makes his first visit.

Step 10

Get all your paperwork in order. Home-based bakeries can require that their owners have food preparation certificates. In addition, liability insurance and permits can be required of a home bakery's owner, like they would of any other business owner.

Step 11

Research your target market. You need to know to whom you plan to sell your baked goods so that you can direct your advertising and marketing efforts accordingly. Decide who will make good customers and aim to sell your products to them.

Step 12

Make sure you stand out from the crowd. Offer baked products that are new, different, or special somehow. This can be something that can get you an edge on competing bakery businesses.

Step 13

Spend money on advertising your products. There will likely be many bakeries with which you will have to compete. Don't scrimp on advertising and marketing. Invest in professional photographers and advertising companies. Your advertising efforts can have a big effect on how successful your business will be.

Step 14

Experimenting with recipes and offering different batches of baked goods under the same name will likely hurt your business. If you must experiment with recipes, make sure to clearly advertise deviations from the normal recipes. For example, you can market a cookie with a different icing than you normally put on top of the cookie as a seasonal cookie.

Tips

Look into certifying your kitchen.
Many home-based bakery owners find that they want to expand or create more product than they first anticipated. When this happens, they often look to renting outside space to help keep up with the demand for their products. When looking for additional space to bake your goods in, make sure that the space complies with the pertinent inspection requirements.
Keep your customers satisfied with consistent-quality products.

Reference

How to Start a Home Based Bakery Business

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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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Monday, October 27, 2014