People always tell you that you're a talented baker and it's something that you love to do. You may have thought about opening a bakery, but thought that the start-up costs would be too high. Should you open a home based bakery business instead? Opening a home based bakery business has many advantages like low overhead costs, but you face some additional challenges that can limit the growth potential of your business. The most important issue to consider is the legality of home based bakery businesses in your state.
- Skill level:
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Things you need
- Business plan
Brainstorm what items you plan to sell. What baked goods do you make that people particularly enjoy? If you are known for making one special thing, that is your niche and is probably what you should sell. If not, evaluate the local market and see what is already available. You don't want to decide to sell cookies if there are already dozens of cookie sellers in the area, but if nobody is making them, you can corner the market quickly. Decide if you want to specialise in one item, like cupcakes, or bake many different varieties of treats.
Think about your potential customers. Without a traditional storefront for your customers to come to, you need a marketing plan to know how to reach them. Some common places where home based bakers try to sell their baked goods is farmers markets, craft fairs and church bake sales. Some also take their baked goods into work or other places of business to sell them.
Evaluate how much you should charge for your baked goods. Go to other bakeries and compare costs for similar items. You don't want to charge too much more or too much less than your competitors. Calculate the cost of ingredients for the items you make, as well as the time involved in making them. The cost you charge should reflect the amount that goes into your baked goods.
Evaluate what equipment you have and what new equipment you may need to start the business. Some of the most essential equipment for high volume baking include a stand mixer such as KitchenAid, an adequate number of baking pans, measuring cups and spoons, an oven with a thermometer because oven temperatures can vary, and a refrigerator and cupboard space for ingredients. You may need more than one mixer and oven, depending on how much baking you intend to do.
The most complicated part of starting a home based bakery business is finding out what the local laws require from such businesses. Twenty four states allow home based baking for sale at farmers markets and non-profit establishments. Some states require that food made for sale must be made in an entirely separate kitchen, even if it is still on your property, such as in your garage or basement. The best way to find out what your local laws are is to check with your county health department.
Tips and warnings
- Failure to follow local laws about selling homemade baked goods can result in serious consequences, including fines and closure of your business.
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