If you are looking to start a home bakery business this guide is for you. Making (probably) the best food invented as a business in your own home sounds like a dream, right? Well with this guide, a bit of determination and some good baking skills you can do it! And it doesn’t really require much start-up costs either!
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. Caution 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 after a few years.
This guide aims to remove these risks in order 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 make a list of all the bakery products you can make, or could potentially make. By this I mean, with a bit of practice or a new piece of equipment.
I wouldn’t recommend making every product on this list. Making small quantities of a vast range of products when you start off will likely make you a Busy fool. Add a star next to the products that you are particularly proud of and we’ll revisit this list later.
At this stage, we need to consider 3 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 2 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 first open your business, at the 6-month mark and 2 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 a lot 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 here is it is necessary to have a rolling pin and a durable table to make croissants. But to make them more efficiently, a pastry sheeter is recommended.
Other equipment that you might want to consider:
Whilst these tools are not essential to make bread products, they are much quicker than weighing by hand. This means you will be able to increase production levels or spend 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 for you 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 on. 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. Considerations include:
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 are going to 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 are going to 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 in order to generate a profit.
Once you are happy that your business and marketing plans are robust, you begin the squeaky bum time. This is the moment when your home bakery business starts to become a reality! It’s also the point where you are going 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 in order to get a feel for your equipment and take lots of photos to share on social media.
Now you have all your equipment you can follow your 24-month marketing plan to generate sales for your business! The aim is now to deliver the business that 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 lots of smaller sales. What’s important is to not give up and keep striving to achieve the thing 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 it legally and make sure that 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.