How to turn your home baking hobby into a bakery business

No matter how much experience you have as a baker, the mechanics of how to start a bakery business from home can get complicated fast. Thinking about the basics of how to open a bakery in general is a great start, but opening a home bakery comes with unique challenges and opportunities. Whether you’re working with limited funds, turning an existing side-hustle into a full time business, or embarking on something you’ve been imagining for years by starting a bakery, you’ll want to look at the opportunity from many angles–from your work-life boundaries and start-up costs to your branding and workspace. 

Here are our 5 tips on how to start a bakery business from home.

1. Know your boundaries 

No matter how you go about it, opening a bakery is a big deal. When a hobby becomes a business, the line dividing home and work, the personal and professional, can quickly blur. This is especially true when your business operates out of your home kitchen. Before starting a bakery from home, pause to consider where your boundaries lie and what potential areas of challenge might be for you. Then, you’ll be prepared to tackle them head on–if and when they arise.

2. Calculate the startup costs

The bakery business can be complicated. As a hobby baker, you likely already have a strong sense of what it takes to produce edible goods–like the cost of ingredients and the amount of physical space needed. But, wrapping your head around the costs of scaling up to a profit-making bakery can take some effort. You’ll want to think about everything from equipment, packaging, and labor costs to insurance, business licenses, and any potential tax implications. When you start selling home baked goods as a home baking business, you’ll also need to comply with local health codes and be ready to provide ingredient information to customers.

Consider making a formal business plan. This should identify your suppliers, anyone you’ll need to outsource to, how you’ll sell your product–whether online or in a brick-and-mortar–and what your total startup costs might be. It may also be helpful to explore what funding options you have and whether you’d benefit from a small loan or grant. And while you may need to start your home bakery business with no money or bootstrap it like the Cupcake Collection until you start generating profits, Clover can offer options like Clover Capital and Rapid Deposit to help you maintain a cash flow.

READ: Why forecasting is crucial to your business plan

3. Know your market

When your customers are hungry friends or family members, market research is probably not a major priority. But, turning your baking hobby into a home bakery business means answering new business questions. Who are your potential customers? What do they like to eat? Who are your competitors in your market? Whether you’re baking cupcakes or focusing on artisanal sourdough, it’s also worth considering the latest food trends. No matter how you look at it, when it comes to turning a profit, it pays to understand your unique selling proposition. 

READ: How to write a marketing plan

4. Develop and market your brand

Once you have a clear sense of what you’ll offer to customers, it’s time to think about branding. A strong brand defines your product by telling the story of who you are and what you do. It should inform just about everything that your customer sees of your business–from your website and social media to your logo and product packaging.

When it comes to branding, consider setting up an online presence. Depending on your business model, this could be a simple website or a fully-fledged online storefront like the one Milk Jar Cookies has. You can also build your brand the old-fashioned way: in person. When you’re out in the community, bring product samples along with you. Consider selling your goods at farmer’s markets for publicity as well as sales. You can even consider booking weddings, parties, or events as you look for additional income streams. 

READ: Low cost marketing ideas for small businesses with zero budget

5. Streamline your workspace and processes

When you turn your hobby into your job, you inevitably start spending a lot more time doing it. Streamlining everything from your physical workspace to technical processes can mean the difference between sanity and success, on one hand, and overwhelm and disaster on the other.

In terms of your physical space, think about ergonomics and flow. Plan out spatially where each part of your baking process will happen. For a home bakery, focus at first on preparing single, high value requested items that tend to turn better profits. Don’t get too complicated too fast. There’s no need to sell 10 different kinds of cupcakes in your first week. It’s also worth remembering that your needs may shift over time. As CT Assorted Sweets grew their business, they began to look for opportunities to move away from home baking into commercial kitchen space.

When it comes to the mechanics of selling your baked goods, streamlined processes also make a huge difference. A great bakery POS system can help you benefit from seamless payment processing and accept all payment types. It can help you manage your inventory, customers, and even employees, when the time comes to enlist more help.

Turning a home baking hobby into a bakery business is incredibly exciting. By selling your products to your community, the work you’ve put into honing your baking craft can start to pay dividends. Getting started comes down to being savvy. With great planning, starting a bakery from home can be an amazing way to share your passion and make a living at the same time. Clover can help, so be sure to reach out to a Clover Consultant for more insights. 

Editorial Team

Quick Service Restaurants (QSR), Start a small business, Strategy

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