Starting A Home Bakery Business
4 Essential Steps To Getting Started

Discover the critical steps involved with starting a home bakery business.
If you get these steps right, you're set up to start a thriving home
baking business, get them wrong, and your homebased baking
business will have only a small chance of survival.


Why Starting A Home Bakery Business Makes Sense For Many Entrepreneurs


Right now, there are a lot of people starting a home bakery business.  Food-based businesses are in demand these day. Consumers are crazy about baked goodies.

The nichier the better. Retail bakeries and cupcake specialists are adorning Main Street because consumers just can't get enough of a quality baked goodie.  This is why the timing is ripe for starting a home bakery business.

Sound strategy coupled with a hot niche and your burning desire to start a home baking business comes in. So, if you are considering starting a home baking business, then keep reading.


How To Get Started In Your Own Home Based Baking Business


Below we give you one woman's story of the steps she took to start her own home based baking business.  The steps she took are the same steps you will need to take when starting your own home baking business.


Starting A Home Bakery Business - Step One. Concentrating On Your Niche


When starting a home bakery business, picking the right baking niche concept can make you or break you. If you happen on just the right niche at the right time and market your home baking business to the right people, you business will take off.


The Secret To Starting A Home Bakery Business That Will Thrive Is To Find A Niche Within A NIche


The real secret is finding a niche within a niche and then becoming knonw as THE one to go to within that particular niche. which is what the home based business owner featured below did.

This is what the home based business owner featured below did. She found herself in the midst of the right niche at the right time.

  • And her business took off because her targeted customer base just couldn't get enough of her home baked goodies.
  • When you read her story below, please note: she did not start her business with the intention of being everything to everyone - she served a particular niche, and served it well.


Starting A Home Bakery Business - Step Two. Testing Your Product For Market Demand


The next step she took in getting her home baking business off the ground was actually testing the market.

  • She didn't just go full-speed ahead creating a business that nobody wanted.
  • She started by focusing in on a hot concept, then she tested the waters to see how well her concept was received in the target market.
    • The key to determining whether you have a home baking star on your hands is to listen intently to customer feedback and watch for word of mouth referrals.
    • When you start your home baking business, and your phone starts ringing off the hook with requests, then you know you've hit on a hot concept. Take that concept and move on it.


Starting A Home Bakery Business - Step Three. Establishing Your Prices


One of the first things you will run into is that people will began approaching you to ask you how much you will charge for your goodies.  Immediately after you start to get the inkling that your idea might just take off, step back and begin to determine just how much you will charge for your product.


Begin To Anticipate Your Targeted Pricing Range BEFORE You Start Offering Your Goodies


When people begin to test you work, they will begin to ask you about your pricing.

Don't wait for customers to come to you before thinking about what you will charge because oftentimes, you will spout out a price that, after much consideration, is way too low for you to earn a profit.

  • Begin to anticipate the question of how much do you charge for your goodies.
  • Be prepared to understand how much it costs you to create your goodies, and how much your competition is charging for similar goodies.
  • Also, resist the temptation of telling your customers the price 'depends'...give them range - they are asking because they are interested.
    • You don't have be the cheapest provider around, but if you price too high, you will find yourself without a business.
    • So, your goal is to determine just how much you will need to charge to make your profit, keep your customers coming back, and keep your business in operational mode.


Starting A Home Bakery Business - Step Four Step 4. Creating/Constantly Evolving Your Business Practices So That Your Home Baking Business Will Thrive


When starting a home bakery business, you have to determine and plan, upfront, how you will ensure that your business can survive increasing costs, changing customer demands, as well as increasing competition.

  • For instance, you will need to begin to shop around to see if there are ways you can buy quality ingredients in bulk.
  • You will also need to determine just how your business will survive.
  • You will need to set goals for your business, and to create a plan of action that helps you to establish and maintain the stamina involved to keep your business growing at a manageable and profitable rate.

Let's read her story below and see the steps she took to make her dreams of starting a home bakery business a reality.


Dear Latarsha And Other Home Baking Enthusiasts,


Below is the story of how I got started in my home baking business.  My journey to starting the business hasn't necessarily been easy, but it's been enjoyable.

Starting a home bakery business was one of the best things I could have done for myself and my family.  I absolutely love the fact that I took the steps needed to start my own home-based baking business.


Why I Decided To Start My Own Home Baking Business


After having my first child, I didn’t want to go back to my job and leave my child in day care after only 6 weeks.

So I searched everywhere for a home based business that would allow me to bring in an income and allow me to spend as much time as possible with my child.

I had always been a good baker. I grew up with a mom who taught me how to decorate cakes all while I was growing up....and that’s where it all started.


My Niche Discovery Actually Happened By Accident


Because I was a new mom who was surrounded by other new moms, I was focused on all things baby.

I was so focused on babies and children and started baking cakes for friends with babies the same age as mine.

  • They were a hit so I decided to start a baking business specializing in anything kids!
  • I first had to think of a menu or product line: mine was Birthday cakes, cupcakes, Baby Shower cakes, cake pops, and small desserts.
  • I thought this would be a simple line up to start with and one that might actually bring a profit.


When Starting A Home Bakery Business, The Second Thing I Had To Tackle Was Pricing


First, I tried to do some market research and find out what bakeries were charging for the same items.

But I had to consider my own costs and pricing luxuries, because running a home based bakery meant that I didn't have the overhead of an actual location, which meant that I could beat some of their pricing and still make a profit.

But on the flip side, I didn’t have the wholesale buying capabilities that a shop has, so, I had to factor in the cost of needing to use better ingredients in my product than the competition..


My Home Baking Business Pricing Strategy - Step One - Tracking My Costs


I decided a good way to do it was to make something and track how much it cost to make, how much it cost to buy each ingredient and the amount I used in the recipe.

Then I tried to figure out the amount of energy used to produce it, and the usage and depreciation of my equipment.

It was all so fractional because my production was so small, but I did come up with what I thought was the best estimate of my cost per item.


My Home Baking Business Pricing Strategy - Step Two - Thinking Through My Pricing From A Customer's Perspective


  • When I derived my pricing using the strategy highlighted above, my pricing was much higher than I thought it would be (it actually made me question whether or not I can make this work.)
  • Then I compared it to what others were charging.
  • I certainly didn’t want to price myself out of the market, so I came up with a happy medium that allowed me initially to make a small profit, while beating my competitions’ prices - not by much, but I did beat them.


My Pricing Strategy Breakthrough


The more thought I put into pricing, the more I began to think about profit margin. I knew that I wanted to become known as THE premier baby cake baker.  So, with that strategy in mind, I figured that I needed to find a strategy that will enable me to produce, and price at a higher profit margin.


The Quest For A Higher Profit Margin Made Me Re-Think How I Configured My Recipes


Initially, my recipes were all based on the home baker - measured in cups and teaspoons.

What I figured out was that I needed to correct that, as it didn't work out quite nicely when I set my mind on optimizing my profit.  So I turned measurements into weight so I could lower my energy cost and produce more than one small batch at a time.

This ONE move, was the strategy that really made a difference in making my business a profitable home baking business.  I utilized the internet and search engines to figure out how to convert all of it, and I did a lot of math.


What I Did To Further Control My Cost


I also purchased a deep freeze, I found out from interviewing bakers that they all froze their creations to keep it fresh and allow them to decorate it and always deliver it on time.

So I started making bigger batches and freezing some of what I made... This really reduced cost!

Also, I searched online for wholesalers of ingredients.  Even in smaller volume there was a huge price difference between buying flour or sugar at my local market or Sam’s Club.   So I bought the bigger packages and saved.


Starting A Home Bakery Business - The Never-Ending Battle With Pricing And Cost Control


Pricing is a never ending issue.  As the cost of supplies continues to increase, I have found that I have to at times increase my prices in order to not compromise the quality of the ingredients I use.



Starting A Home Bakery Business - My Bottom-Line Piece Of Advice


My best advice is to plan upfront how you will control your cost and profit margins.I wish you luck in starting a home baking business that your targeted niche just can't get enough off.

I leave you with four pieces of advice that will help you to be on your way to starting a home bakery business that will meet your needs.

  1. Control cost by buying wholesale.
  2. Increase your profit market by making bigger quantities.
  3. Establish your pricing by pricing yourself within the range of the market.
  4. Make a plan, continue to adjust and improve it and stick to it!!


Here's To Starting A Thriving Home Baking Business!


P.S. Here's A Few More Tips To Make Your Home Based Baking Business A Hit...