If you want to start a home bakery business, this guide is for you. Making bread or cakes in your own home and getting paid sounds like a dream, right? Well, with this guide, a bit of determination and some good baking skills, you can do it!
If you are new here. Hi, I’m Gareth. I have been involved in the baking industry since 2005 as a bakery, bakery manager, bakery business owner and now, in my home bakery, a bread blogger. I aim to help you get your new bakery business dream off the ground.
There is a fair amount of planning you should do before you take the plunge, but there is a good reason for this. Too many good bakers start a home bakery to find that they never make any money, attract the wrong customers and end up hating what they do.
This guide aims to remove these risks for you to get the business and lifestyle that you dream of. Whether you are looking to replace a full-time income, top-up a pension or have a bit of fun (and who knows?), the steps in this how to start a home bakery guide will help.
The first step you should take when starting a home bakery business is to list all the bakery products you can make or could potentially make.
I wouldn’t recommend making every product on this list. There is only so much you’ll be able to sell and time to produce. Baking larger quantities will provide economies of scale which increases your bakeries profitability. Add a star next to the products that you are particularly proud of. We’ll revisit them later on.
At this stage, we need to consider three stages of growth for your bakery business.
This is how you want your bakery to operate when you first open. Whilst you are not expected to get everything right from the get-go, you will need a service that gets potential customers excited.
After 6 months, you should have enough customers to generate a reasonable income. Depending on how you finance your home bakery, this is generally the point where you break even or can expect to rely on an income from the business.
By the time you hit two years of opening, you should expect to be hitting your intended returns from your home business. What is important to consider here is how you plan to run your home bakery in the future. Will you employ staff? Expand to a purpose-built home? Expand product range? Need more machines to cope with production volumes?
The reason it’s important to include your 2-year plan alongside your startup business plan is to help you to plan. You want to build a business that fits the lifestyle that you want. Many business owners invest a year or two of hard work to reap the rewards of an easier life at the end of it.
A bakery business doesn’t always have to involve selling to customers or being a market stall vendor. You can sell to businesses, be a recipe developer, equipment reviewer or blogger.
How many products do you expect to sell when you open your business, at the 6-month mark and two years in? Work out expected weekly figures. If you have any customers or market stalls lined up, include expected sales figures in these figures.
Create a 2-year week-by-week plan for how many products you expect to sell. To help with costing, it’s best to provide projected sales on individual items. If you are handy with spreadsheets, you’ll find it easier to do this in Excel or Sheets.
Once you have an idea of what you want to sell, the next step is to work out what equipment you need to get your home bakery started. There are a few options, depending on your budget for start-up costs.
This is the perfect way to start if you have a small budget. As you get bigger, you can invest your earnings into new equipment.
Equipment finance can be used to pay for your equipment. It is often more tax-efficient to finance your bakery equipment instead of paying for them outright, even if you can afford to do so. There are a few leasing vs buying articles online, but it’s wise to speak to an accountant for advice.
Some equipment will be necessary to produce the products you need. Others will be efficiency savers.
A great example is that you need a rolling pin and a durable table to make croissants. But to make them efficiently, a pastry sheeter for laminating and rolling out your dough will make croissants and other pastry products much faster.
Other equipment that you might want to consider:
Whilst these tools are not essential to make bread, they are much quicker than weighing by hand. This means you can increase production levels or spend more time driving sales.
When you start your bakery, it is best to focus on a small range. This way, you’ll reduce waste and have more energy to focus on perfecting your recipes and processes. Return to the product list you wrote earlier and decide which products you want to sell when you startup and those you can add later on.
There might be a bit of “give & take” on your initial range based on the equipment you can afford when you open.
See the article “What equipment do I need to start a home bakery business”
Before ordering your equipment, you need to check that your local authority will let you use your space as a kitchen. You may need to make changes to the area to make it safe for food production. Check with your local state or council for accurate guidance.
Typical concerns include needing separate handwashing facilities, food segregation/ possible contamination, pets and how easy it is to keep your home bakery clean.
You should speak to them to discuss your plan at this point. Depending on where you are, it could be expected that you register with them as a food producer now or later.
Don’t forget to do this!
Taking into account the equipment you want to get, make a plan of how you will lay your home bakery out.
You’ll need to consider the space at great lengths in your home bakery.
Bakery racks are ideal as you they can be wheeled across the room to where you are working or even to cooler or warmer areas to control proofing times. Here is one from Amazon:
The next step is to design your bakery marketing plan. This is, in essence, how you will get in front of your customers. Be it social media, a physical presence or just old-fashioned hustling by speaking to prospects. You should also plan your brand vision and your ideal customer here. Take a moment to check that your intended product range matches what you expect your target customers to want or need.
By this point, you should know what you want to sell, the equipment you want to buy and who you will sell it to. The big question now is “Is it going to make any money?!!” To find the answer, you’ll need to cost your ingredients, finalise your monthly expenses and see how much money you stand to make. To do this, read my how to price bread guide to determine your selling price for each product. Then, using a spreadsheet, plan your projected monthly income and expenses for the next 24 months.
You can then deduct your expenses from your income to see how much money you stand to make!
This is where a little bit of tweak may need to happen. You might need to be more selective with your product range, increase your prices, adjust your portion size or lower your equipment or marketing costs to generate a profit.
Once you are happy that your business and marketing plans are robust, you begin the squeaky bum time. This is when your home bakery business starts to become a reality! It’s also the point where you will have to commit to the project financially.
It is a sensible idea to leave your business with some spare contingency cash. If something breaks or you need a short-notice investment, it’s handy to be able to deal with it right away.
You should also get indemnity insurance. In some areas, this is a legal requirement. If not, it’s still worth considering to protect you from being sued if you make someone ill or cause injury.
Once your funding is in place, start purchasing your equipment and getting your home bakery organised. Do some test bakes to get a feel for your equipment and take lots of photos to share on social media.
Now you have all your equipment, follow your 24-month marketing plan to generate sales for your business! The aim is now to deliver the business you planned by the 2-year target. You might hit a lucky break and get a big repeat ordering customer at the start. You may need to keep going to build up through many smaller sales. What’s important is not to give up and keep striving to achieve what you dreamed of at the start of this adventure.
In this article, we’ve covered the hard work that’s required in how to start a home bakery business. Together we’ve explored how to select your products, run your bakery legally and ensure you get a return on your investment! I have more guides on running a bakery business that you might find useful. If you have found this post has helped you, let me know how in the comments below.
Hi, I’m Gareth Busby, a baking coach, head baker and bread-baking fanatic! My aim is to use science, techniques and 15 years of baking experience to help you become a better baker.
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