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Cake decorating classes are back book now >>>, how to start a cake business (in the uk) - the 8-step guide.

Updated: Jan 26, 2022

When I set up my business the biggest hurdle was knowing exactly what bureaucratic hoops I needed to jump through. Setting up any business requires a degree of red tape; anything to do with food, even more so. I could only find one blog post at the time that consolidated all the relevant info into one place; and that's a good few years old now. So here's my nutshell version of how to set up a cake (or sweet food) business in 8 essential steps. It includes points about the emotional and mental side of running a business as well as the legalities!

1) Know why you're starting this business

It's not enough to keep you going that your friends think you make the best cupcakes in town. You need your own reason why you are doing this, one that you can return to time and time again on rubbish days to remember the fundamental 'why' of your business. It usually involves money, but not only money. Maybe you want a challenge, maybe you want a job you can work from home. It will be different for every person but you need to know, deep down, why you are doing this.

2) Work out your business boundaries

If you're working from home (which you probably are), how are you going to maintain the boundaries between professional and personal? When will you be 'open' for enquiries, calls, messages? When will you get your work done and how will you manage this around your family? Think it through: what is your week going to look like and where do you draw the lines.

3) Work out your pricing

Most people start out charging far too little, and while it's fair to say that until your cakes are of a certain standard, it probably won't work to charge the high end of the spectrum, you do need to get your head into gear and think about your costs and how you work out your prices . This will be different for EVERYBODY so don't ask Facebook cake groups 'how much would you charge for this' as it's not a very accurate or reassuring pricing strategy. There are some great business coaches out there; find one and stalk them.

4) Register your kitchen with the Environmental Health Service of your Local Authority

You should do this 28 days BEFORE opening your business. Registration is free. Here is a handy link to where to register . If you have any questions, just give your Environmental Health Officer (EHO) a ring. They WANT to help you and are not there to try and close you down, they want to help you keep and stay open safely. Similarly, when they come and do your inspection (usually within 18 months of you first opening), they are super friendly and helpful and not there to judge you, but there to give you as much information as possible. If you work from home they will ring you in advance to set up an appointment time; they won't just walk into your home and start swabbing worktops.

When you have an inspection from your EHO they are focused on: food storage and labelling, how you manage allergens, how you record data like fridge temperatures, what systems are in place to avoid contamination and the structural integrity of your kitchen. They will ask you questions more than rummage around in your kitchen.

5) Safer Food, Better Business

The government have helpfully produced this extremely useful pack for food business of all sizes and types to fill in and use to store daily and weekly information. It's a good idea to work your way through it, filling in the relevant sections before setting up shop. You can then use the record pages weekly to ensure you are running your business in accordance with best practice. Here is a link to download the SFBB guide . You are likely to need the 'caterers' option if you are starting a cake business from home.

6) Register with HMRC

You will need to register (probably as a sole trader initially) with HMRC . It's unlikely you'll pay tax for a while as the pre=tax income allowance is now knocking on £11,000, but you still need to submit a self-assessment tax return each year. On that note, either set up a simple spreadsheet and get a good filling system in place to keep on top of your accounts now, or outsource to an accountant from the get=go. Do not keep stacks of receipts for months at a time and then tackle them in one go. Believe me, I've learnt the hard way...

7) Get yourself some public liability insurance

Do not be tempted to forego this. What if someone gets sick from one of your cakes, or trips in your home while they're coming to collect their order? Lots of companies now do specific cake decorators' insurance for very reasonable prices. I use C G Lloyds as, although thankfully I've not had to claim, they have really good reviews for customer service and dealing with claims. An insurance policy that covers you up to around £2 million will cost you around £50-60 per year.

8) Level 2 Food Hygiene Certificate

Bafflingly, this isn't a legal requirement, but I think it's a really good idea to have one! You can do the training online and get your certificate electronically, and they email you when it's time to renew, every 3 years. It's just £12 at Safer Food Handler.

So there you have it, the 8 essential steps to setting up your Cake Business. I would recommend that you do all of these and don't skimp; otherwise you are putting not only your customers and the general public, but yourself at risk, too. Safer Food, Better Business, Happier Business Owner & Clients. Have fun! For birthday, wedding & celebration cakes in West Yorkshire (Keighley, Bingley, Bradford, Saltaire, Skipton, Ilkley, Menston, Guiseley, Silsden & beyond!) visit:

www.threelittlebirdsbakery.co.uk

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How to Start a Thriving Cake Business: A Comprehensive Guide

Kurt Graver April 17, 2024 Business Start-up Advice , Business Start-up Guides

Starting a cake business can be exciting and rewarding for passionate bakers and entrepreneurial spirits. The UK’s love affair with cakes shows no signs of slowing down, with the industry generating £1.2 billion in revenue in 2020 (Mintel, 2021). Whether you dream of opening a cosy cake shop on the high street or building a bespoke cake empire from your home kitchen, this guide will walk you through the essential steps to turn your sweet dreams into a thriving reality.

Develop Your Niche and USP

The first step in starting a successful cake business is identifying your niche and unique selling proposition (USP). Consider what sets your cakes apart from the competition. Is it your signature flavour combinations, stunning decorations, or commitment to using locally sourced, organic ingredients? Developing a clear brand identity and target market will help you stand out in a crowded market and attract loyal customers.

Hone Your Skills and Seek Inspiration

To create cakes that keep customers returning for more, you’ll need to hone your baking and decorating skills continually. Attend workshops, enrol in courses, and seek inspiration from industry leaders and cake design trends. Organizations like the British Sugarcraft Guild and the National Association of Master Bakers offer training and networking opportunities to help you stay at the forefront of your craft.

Create a Business Plan

A well-crafted business plan is essential for securing funding, guiding your decision-making, and keeping your cake business on track for success. Your plan should include:

• Executive Summary: An overview of your business concept, target market, and financial projections.
• Market Analysis: Research your target market, competitors, and industry trends.
• Products and Services: Describe your cake offerings, pricing strategy, and USP.
• Marketing Strategy: Your plans for promoting your business and reaching your target customers.
• Financial Projections: Detailed financial forecasts, including start-up costs, revenue projections, and break-even analysis.

Register Your Business

To operate legally in the UK, you must register your cake business with HM Revenue and Customs (HMRC). You must decide on a business structure (sole trader, partnership, or limited company) and choose a name for your business. You’ll also need to register for Self-Assessment and potentially Value Added Tax (VAT) if your turnover exceeds the threshold (currently £85,000 per year).

Obtain Licenses and Certifications

As a food business, you must comply with food safety regulations and obtain the necessary licenses and certifications. This includes:

• Registering your premises with your local authority’s environmental health service at least 28 days before opening.
• Obtaining a food hygiene certificate by completing a food safety course.
• Ensuring your kitchen meets health and safety standards, including proper ventilation, pest control, and waste management.

Secure Funding

Source Equipment and Ingredients Invest in high-quality baking equipment and reliable suppliers for your ingredients. Research wholesalers and local suppliers to find the best deals and ensure a consistent supply of fresh ingredients. Don’t forget to factor in the cost of packaging materials, such as cake boxes, bags, and labels.

Develop Your Brand and Marketing Strategy

A strong brand and effective marketing strategy are essential for attracting customers and building a loyal following. Develop a cohesive visual identity across your logo, packaging, and website. Use social media platforms like Instagram and Facebook to showcase your creations and engage with your audience. Consider offering promotions, loyalty programs, or collaborating with local businesses to expand your reach.

Network and Build Relationships

Building relationships with other industry professionals and local businesses can provide valuable opportunities and support. Attend industry events, join local business associations, and participate in community events to raise your profile and make connections. Collaborating with wedding planners, event coordinators, or local cafes can help you tap into new markets and grow your business.

Manage Your Finances and Plan for Growth

As your cake business grows, it’s essential to monitor your finances and plan for the future. Use accounting software to track your income and expenses, and regularly review your pricing strategy to ensure profitability. Set aside funds for unexpected expenses and invest in your business’s growth, whether expanding your product line, hiring staff or moving to larger premises.

Starting a cake business in the UK requires passion, planning, and perseverance. By developing a unique brand, honing your skills, and complying with legal requirements, you’ll lay the foundation for a thriving business. Remember to continuously adapt to industry trends, listen to your customer’s feedback, and never stop learning and growing as a baker and entrepreneur.

With the UK’s insatiable appetite for delectable treats, there has never been a better time to turn your cake-making dreams into a reality. As the famous quote goes, “Do what you love, and you’ll never work a day in your life.” By following this guide and pouring your heart into your craft, you’ll be well on your way to building a successful and fulfilling cake business that brings joy to countless customers across the UK.

• Mintel. (2021). UK Cakes, Cake Bars and Sweet Baked Goods Market Report.
• The Food Standards Agency. (2021). Starting a food business.
• GOV.UK. (2021). Set up a business.
• Start-Up Loans. (2021). What we offer.
• The National Association of Master Bakers. (2021). Training and Events.

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How To Set Up a Home Cake Or Bakery Business In The UK

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In this article:

Cake business statistics in the UK

Register as self-employed with hmrc, register as a food business & location, learn and follow the legal requirements in the uk. .

• Tell your mortgage lender or landlord

Start thinking about standing out. 

Equipment & recipies, think money & set up your books, establishing your pricing strategy, set up your digital presence, get your name out there in the local community.

• Start baking!

This in-depth, step-by-step guide will explain how to start a bakery or cake business from home in the UK .

If you’ve got experience satisfying sweet tooths around you, turning that skill into a small home baking business run out of your home can be the foundations of something…well, sweet!

In this article, you’ll see how to start a bakery business , as well as:

• Why the cake industry in the UK is a great business opportunity
• Being compliant to sell cakes out of your home
• Listening and selling your goods and services online
• Launching and scaling a cake or bakery business
• The business and mental side of running a small business

The best way to use the information here is to read through it all at once, digest it and see whether you’re up to the challenge, and then go work through all the concepts mentioned here. 

Let’s see how to start a bakery business from home :

The FSB states that there were 5.5 million small businesses (with 0-49 employees) in the UK at the start of 2021, and this accounted for 99.2% of total businesses in the UK. 

What’s more, the British baking industry was estimated to be worth GBP3.6 billion . UK Insurer Simply Business reports that there were 2598 new insurance policies for baking businesses taken out in 2020. That accounts for a 157% increase YoY!

Alan Thomas, CEO at Simply Business says that this increase is largely due to the pandemic , but the Great British Bake Off has also inspired many entrepreneurial bakers. 

The fact is this:

The market is growing, and there there’s ample opportunity for you to get your share.

The type of bakery or cake business you start is up to you. A retail bakery is a potential option, and a good idea, but involves more overheads, like rent, fit-out, part-time staff, and a more expensive form of insurance .

They're entirely different problems to solve when compared to a home baking business.

But before you get too committed to the idea of starting a cake business from home, it pays to ask yourself and define the following:

Know why you’re starting a baking business

What’s your ‘why’?

You love making cakes and seeing the smiles on the faces of people for whom you bake.

But that’s a far cry from a product that’s the basis of a small business that’s growing and scaling. 

When you have though really tough days and weeks where nothing goes right, your ‘why’ is the reason you come back tomorrow , it’s the motivation that pulls you through tough times.

That motivation may be financial, it may be emotional or it may be because you like a challenge.

It will be different for everyone that’s starting a cake business out of their own home , but the point is that deep down, you have to know that reason by heart!

Work out your boundaries

Most of us are familiar with working from home.

But that ‘working from home’ may have a desk or an isolated area where we work, and then move away from when we’re not working.

If your job is baking cakes in your own kitchen, a desk isn’t going to cut it. Your entire kitchen, and a good percentage of your house, maybe your ‘office’. 

What’s more, any small business owner will tell you that they don’t have set hours. Are you prepared to be mixing, baking and decorating well into the AM? What hours will you be open to taking business calls?

Setting boundaries like this as early as possible, before you even get the mixing bowl out, can help you switch off and avoid burnout in the long run . 

Assess the market and competition

You're now starting to see how your business plan can potentially come together.

You read earlier that the market is booming - and it is.

But it’s important to look at the standard out there and who’s setting that standard.

Your friends might be in love with your cakes, but how do your products stack up to the business across town that’s been doing it for a few years?  

Will you compete against them? If so, how? (Protip, niche marketing, which we discuss later in this article is a good way).

When researching the competition, also look at their business as a whole , not just the cakes they make.

How do they talk to their customers, what makes them different? How will I establish local authority?

Learn more about Packhelp's Custom Cake Boxes here

The answers to these questions can help get the marketing specialist inside you thinking. 

This isn’t as big of a deal as it seems - but you need to register as a sole trader at least 28 days before you start operating and even if you have another job.  

You need to tell HMRC that you’re self-employed, so they know that you’ll use their Self Assessment system to pay tax. 

Do this by:

• Registering for a GOV.UK Verify account
• Providing the basic details about yourself and your business
• Specifying your business name
• Then use your Verify account to access HMRC’s Self Assessment portal

It’s from here that you can file your self-assessment tax return online .

Starting your cake business with a partner

In this situation, you’ll need to register as a self-employed partner rather than a sole trader. 

You’ll also need to register your business as a food business with the Environmental Health Service and register your location - and you can do that here .

It’s free to do so, and your application cannot be declined. 

Environmental Health Offices (EHO) are government employees that work for the Environmental Health Service and want to help get your business up and running. But it’s also their job to make sure that your facility is up to standards for preparing food and selling it. 

Once you register, they’ll come around and take a look at your place (usually within a year of you registering) and give you some pointers. They’re not there to close you down , but will give you helpful advice about food storage, labelling, handling allergens and keeping equipment like fridges in good working order. 

In fact, if you go to Google and search ‘environmental health officer near me’, you’ll get the details of your local EHO, who you can call and get advice from even before you launch your cake business from home. 

Interested in how to start a supplement business in the UK? Click here

Protip: It’s at this time that you should also set up a business bank account. You can use your personal bank account, sure, but a dedicated business account makes it easier to keep track of cash flow and gives you access to the business-related products of your bank or financial institution. With the help of digital banking , your business bank account can be open in a couple of quick clicks.

The UK government is well aware of the increase of food companies starting.

But it’s not just cake shops - it’s kebab stores, food trucks, corner stores and more.

Luckily, they’ve created a really comprehensive SFBB guide . Jump down to the ‘caterers’ to see what you need for starting a cake business from home.

This download can be used on a daily, weekly and monthly basis to ensure that you’re meeting food preparation and hygiene standards. 

If you cannot afford business insurance, you cannot afford a business.  

If someone has an allergic reaction to your products or even has a car accident to or from your place after collecting their cake, you may be liable. Simple and cheap insurance protects you, your business, your income and all the hard work you’ve put into it all. 

A good policy won’t cost you more than £70 a year, and that’s a small price to pay for peace of mind. 

There are many home business insurance and public liability insurance providers out there, and some even specialise in home-run cake decorating companies, like Icing On The Cake Insurance .

Other insurers include:

• CG Insurance
• Direct Line Business

It’s worth mentioning that some insurers may lower your premium if you can present a food hygiene safety certificate. But as susal, it's best that you check with your local laws.

Getting a Level 2 Food Hygiene Certificate costs just £12 and lasts 3 years. Learn more from Safe Food Handler . 

If you own your home outright, there’s no need to do this. 

If you have a mortgage, y ou might need to get permission , or at very least inform your lender. You’ll have to check with them directly. 

If you’re renting or leasing, you’ll have to get permission from your landlord to do so.

It’s worth noting that they have to have a good reason to say no , and they can’t waste your time in giving you a response. 

Finally, it’s time to think about yourself for a bit. 

And a good place to start thinking about yourself is standing out.

What’s going to make you different from all the other cake makers?

While your friends swear that you’re the best cake maker they’ve ever had, ‘my friends like it’ probably isn’t going to be the best slogan for your business. 

Niche marketing

Niche marketing is a great way to find your footing in the industry . 

Let’s look at an example. 

Wedding cakes are a huge business opportunity. But there are so many wedding cake makers that it’s hard for you to stand out and compete with established providers. 

But what about wedding cakes for diabetics ?

Yes, the demand for diabetic wedding cakes is vastly smaller than the general demand for wedding cakes, but the supply of diabetic wedding cakes make also be smaller - or entirely non-existent.

  View this post on Instagram   A post shared by The Sugar Free Bakery PH (@thesugarfreebakeryph)

You can then become even more niche by targetting people specifically in your area - ‘ diabetic birthday cakes in Brighton ’, for example. 

This is an opportunity for your brand.

By finding a small niche that’s got a small demand, but an even smaller supply, you can establish yourself as the go-to supplier of that demand. Once you’re established in that smaller niche, you can brand out to diabetic cakes in general.

And then wedding cakes for coeliacs , then lactose-free cakes , and so on. 

In essence, niche marketing takes small bites out of a giant demand, rather than trying to take one giant bite. 

Differentiation

While the cake industry is growing, there are a lot of businesses already out there. Niche marketing is one way to stand out and is vital in creating brand differentiation . 

For example, you could consider investing in your packaging supplies and shipping and sending your cakes all over the country.

There’s a reason not many other companies do this.

But with a packaging engineer and reliable delivery service, you could be one of the few that solves this problem. 

Similarly, another element of your cake making business from home could be that you send out the raw ingredients as part of a subscription service.

If you already have the ingredients to make the cake and containers to pack them in, spend some time documenting the recipes, designing elegant custom cake boxes and branding this part of your business, and people can buy your top-notch ingredients and make your cakes themselves.

Everyone is time-poor, and this concept opens your business up to those that don’t have the time or desire to research recipes and source the best ingredients.

You can supply them with both. 

Remember that part of defining who you are is also creating a logo, creating cake and bakery boxes , letterheads, designing business cards and a loyalty program, ,

Recipes dictate the equipment you need. 

The type of cakes you’ll make depends on the above section of how you’ll stand out.

If you’re making cakes for diabetics, you won’t be needing a whole lot of sugar. So you’ll need something else to make the cake sweet.

If your cakes are vegan, you’ll need something other than eggs to get the consistency of the mix right. 

And the type of cakes you’re making will also define the equipment you need.

Ice-cream cakes will need a lot more fridge than they will oven. That being said, all cakes and ingredients are going to need a lot of cold storage, which means fridges.

Fridges run on electricity. That's an investment that may require a bit of capital, which leads us to our next section. 

Capital, cash flow, pricing, expenses, income. Now is a good time to sit down and crunch these numbers. 

If you need to invest in equipment, what do you need? Can you buy second-hand equipment to keep costs down, or should it be new? Will a business loan help?

Investing this capital will have an impact on the price at which you sell your product. 

Good is rarely cheap, and if your pricing strategy is to get business because you’re the cheapest, you’re winning a race to the bottom. 

Your product is worth more than what physically goes into it, and you should charge accordingly.

You should not be out of pocket for starters. Your business also has operating costs that need to be built into the price of your cakes, your time is worth something, and then there’s a profit on top. 

Generally, for most retail products a 30% profit margin is safe. This is value-based pricing , and it allows you to discount from time to time in order to bring in more sales when you need it. 

Protip: It pays to be aware of the prices of your competitors, but it doesn’t pay to compare your pricing to them. You are not them!

When you’re looking for something that you’ve never purchased before, where are you going to go?

You can list your cakes for sale on marketplaces like Etsy and Not On the High Street, but you’re doing that - listing your products on someone else site.

That’s why it pays to have your own site - because you own everything from start to finish. 

Take a look at Browniegod below as an example:

A simple website is easily made with tools like Squarespace, WordPress or Shopify . What’s even better, is that these aren’t just websites, they’re online stores. 

You can list your cakes on your own website, and without people having to reach out to you, they’re able to place an order and pay. 

Complementary to your website will of course be social media. Facebook, TikTok, Instagram, Twitter, Pinterest - they’re just the 5 most popular, and there are certainly more out there.

  View this post on Instagram   A post shared by Browniegod (@browniegod)

Social media marketing is a great way to get your name out there, not just all over the world, but also in your local community. Use hashtags pertinent to your area so that you’re seen by people in that area. 

You can post photos of your beautiful cakes, absolutely, but go one step further and create ‘how-to’ videos, time-lapses of your cakes being made, or videos of your cakes being enjoyed by your customers. 

Digital marketing is one thing, but getting your name established in your local community is just as important. 

Local craft markets are a great way to get known. Holding a stall where you’re giving out samples, or even making a cake on the spot can garner a good amount of notoriety amongst those that aren’t as digitally savvy to your marketing efforts. 

It’s important to remember that offline marketing like this is all about relationship building. You’ll no doubt come across people that want to chat, and when you’re starting out, it pays to chat with anyone that wants it.

Make your customers feel welcome, serve them with real care - maybe treat them to a special gift.

A satisfied customer will provide social proof for your brand. This is what Kanita Ramaxhiku, the CEO and founder of Browniegod, confirms about word-of-mouth marketing:

Networking and building relationships are the name of the game here!

By now, you’ve probably done a lot of everything that’s not baking. If you’re still in love with the idea of making cakes, then that’s a sign that there’s a true opportunity here for you. 

As the orders start to roll in, you’ll start to find your footing and see how things work. 

Those friends that said they love your cakes and motivated you to get the ball rolling? Call on them during rush periods, either to deliver cakes, wash dishes or answer emails. 

We spoke to several cake makers and bakeries that operate with packhelp, here’s what they had to say:

Build resilience

People will undoubtedly say ‘that much for a cake?! ’ ‘People with that attitude can go to M&S for their wedding cake’ says Veteran baker Kelly. 

‘Don’t take unconstructive criticism to heart. Learning to say ‘no’ is the best thing you can do for your business. And be realistic, unless you’re superhuman, you’re going to have to say no from time to time’. 

Always. Take. Deposits.

The order is just an order - it’s the payment, either partial or full, that gets the product made. Kelly also explains that when she started, she didn’t want to scare away new customers she’d worked so hard to get, so she didn’t charge a deposit. 

‘The result was me being ghosted and out of pocket for a significant sum’.

She also explains that it pays to set your boundaries and stand by them. 

• Minimum order quantity for cupcakes/muffins
• Limited tastings
• Paid in full upon or before delivery
• Consider signing a contract for exceptionally large-volume jobs

The customer isn’t boss.

You might be able to deliver your cupcakes in custom boxes , but writing a different name on 100 of them might be a bit too much.

Letting the customer dictate what you can and can’t do for the sake of business is a surefire way to lose money and motivation. 

Be professional but human

Your social media channels are a great way for you to show the inner workings of your brand, build a rapport, and also show off your hard work.

You’re human , and people want to interact with small businesses like yours that are human. 

Social media isn’t a place to air your dirty laundry. 

As tempting as it is to go to social media and vent to your followers, it’s not the place to do so.

Social media has a giant impact on our mental health, both of those that have a high number of followers, as well as those that follow.

If you wouldn’t stand in front of an audience and say it, don’t say it on social media. 

Here’s a quick TL;DR of what’s here:

• Define why you’re doing this
• Register with HMRC as self-employed
• Register as a food business
• Learn and meet the requirements for safely preparing food
• Get insured
• Think about standing out
• Fine-tune your recipes and source equipment
• Set up your books & establish pricing
• Get your name out there

Remember this: you’re starting a genuine business. The fact it’s run from home doesn’t make it any less of a business!

Whether it’s starting a cake business from home, a D2C company or a retail store, starting a business isn’t something that happens overnight. It takes time, an investment of resources and a lot of trial and error. 

But there’s a giant demand for it. If you want to do it, and you’ve got the passion, you’ll make it happen, and turn that passion into profit - and provide a lot of people with a memorable cake for a special occasion in the process!

Maciej Zajac

Co-founder and COO of Packhelp. With a strong background in business development, Maciej drives Packhelp's operational excellence and supply chain. Passionate about optimising processes, he ensures that Packhelp delivers top-notch packaging to businesses of all sizes.

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Published: Jan 27, 2022 · Modified: Mar 18, 2022 by Bronya Seifert · This post may contain affiliate links · 3 Comments

Essential Guide to Starting a Cake Business

Starting a cake business is both exciting and daunting at the same time. You’ve taken that decision to turn your passion of baking and decorating into a business, to make a bit of money back from the hours you’ve happily spent in the kitchen. Friends and family have convinced you it’s a good idea, but how do you actually go about starting a cake business?

What are the legal things you have to do? What are the business things you should do? And what do you need to buy? It seems like a minefield, right?

This essential guide to starting a cake business covers all the things you have to do, many of the things you should do, and some things that it would be nice to do once you’re up and running and have the time.

What to expect?

First off though, if you have another income and hope to replace this with that, don’t expect to do that in your first year, or maybe even second year. Setting up any business takes time. Not because of the legal requirements, the things you have to buy or learning how to make amazing cakes. But you need consistent and regular orders and getting those isn’t instant.

Secondly, don’t ever forget the necessity to learn some business skills. If you’re to have consistent orders, you’ll need to know how and where to get them. It’s all very well knowing how to make the most beautiful cakes, but without some business knowledge you may as well carry on as a hobby.

This guide in divided into 5 sections, some are more ‘dry’ than others, but sadly they are usually the most essential.

Legal and essential admin

Registering your premises:.

In the UK, and many other countries, there are legal requirements if you are selling food to the general public. I’m going to deal with the UK, but if you are in another country, I highly recommend you check out the local laws for food production. You don’t want to come a cropper before you even start.

Selling food means, money changing hands, no matter how small the amount. Even if you are only asking for someone to cover the costs of your ingredients, in the eyes of the UK law, you are selling food. What you’re doing is no-longer a hobby, it’s a business, and as such you should be registered with your local council.

Registering is free

Registering with the council is free and usually easy. You register with whichever council you pay your Council Tax to. Look on their website and follow the instructions. Each Council works slightly different. Some you can fill in a form online, some you have to post it.

Don’t always expect an instant reply, because cake making is considered low risk and isn’t always prioritised. I have known of some cake makers who haven’t heard anything for over 18 months. However, if you have your registration form in, you cover yourself with the other requirements we’re about to discuss and you wait the required 28 days from registration you can start to sell.

Food Standard Agency, SFBB, Food Hygiene Training, Allergen Training

When you are eventually inspected by an Environmental Health Officer from your local council, they will expect you to have certain protocols and procedures in place. Apart from having a clean and well organised kitchen you should also have the correct paperwork.

I have heard of food businesses receiving a 1 score, instead of a 5, just because their paperwork is not up to date. And when I say ‘just because’ it’s actually very important. Having your paperwork done means you are monitoring all the vital parts of your business. If anything goes wrong it is traceable in writing.

Most Councils will expect you to be using the Food Standards Agency’s Safer Food, Better Business Pack . It can be downloaded online and either printer and edited as a PDF and stored on your computer. Not all the sections will be appropriate to you as a cake maker, but make sure you regularly update your pack for your next inspection.

You will also be expected to have a current Level 2 Food Safety & Hygiene for Caterers Certificate, to have done the correct Allergen Training and have your food labelling and allergen information to hand.

None of this is difficult, it’s all pretty easy to find online, but it is essential and legal!

You will also need to register with HMRC or if not in the UK your local tax office as self-employed. For more information on this I highly recommend you listen to The Business of Cake Making Podcast with Accountant Claire Tovey . But here is some basic information.

If you take over £1000 in sales in a year, you legally have to be registered. It’s pretty easy to do via the HMRC website . This will mean, however, that every year you will have to submit a self-assessment tax return. Again is pretty easy as long as you have your records and accounts up to date and well kept. Which leads us onto our next topic.

Accounts and Record Keeping

Keeping your accounts up to date from the moment you start you cake business will definitely help you in the long run. You can either make your own spreadsheet up with monies in and monies out. Or you can use one of the free or inexpensive apps online. Some of which will even integrate with your bank account.

It is crucial to keep a track on your accounts not just for HMRC and Tax purposes, but also to make sure you are covering you costs and making some money when pricing. How do you know how much to charge someone for a cake if you don’t really know how much its costing you – but more on pricing later.

And whilst we’re talking about accounts, here’s little advise about bank accounts. Make sure you have a separate bank account for your business. Whilst, as a sole trader it’s not a legal requirement, it’ll be easier in the long run. Not only for your own record keeping, but also if anyone (like an accountant or the tax man) ever needs to check up on you and your business it’ll mean they don’t have to rifle through your personal spending.

Mortgage Lender/Landlord

Again, this isn’t necessarily a legal requirement, but I would say is essential if you want to keep your home. Running a home business generally must be authorised by either your Mortgage Lender or your Landlord. Some don’t allow businesses to be run from their properties.

Most mortgage lenders will allow it or will be able to advise how your terms can be amended. Landlords on the other hand can be trickier. Sadly, it’s not usually a personal thing, but an insurance issue for them and their own money lender. Renting a property is in itself a business. For them to get the correct funding and insurance they sometimes have to pass on restrictions to their tenants.

Again, whilst this isn’t a legal requirement, I would highly recommend getting Public Liability Insurance. In the very unlikely event that something goes wrong - we’ve all heard of the allergen horror stories, or someone tripping over at a school fete and suing etc. Having Public Liability Insurance will help put your mind at rest. Also, there are some instances where you will not be able to deliver your cakes without it. Some venues insist on it and will ask to see it

You can usually get £2 million, £5 million or £10 million insurance cover. Which you choose will largely depend on what activities you undertake. For example many fairs and markets will insist on £5 million cover as a minimum before allowing you to trade.  

I have Direct Line cover, however there are other insurance companies which will cover Home Cake Businesses.

Home and Car Insurance

Whilst we’re talking about insurance, if you are running your business from home, you may also want to check both your home and car insurance cover. Most home insurance cover will be fine, as long as you have separate Business Insurance. Some will say you are not allowed the general public/customers onto your premises, so you may have to think about collections and consultations etc.

If you are delivering cakes in your own car, you should also check that your car insurance is covered for business. This is usually a tick box and won’t cost you extra, but essential to make sure you are covered.

Terms and Conditions

This is the last of the not legal, but essential if you are to run a professional cake business. Having your own Terms and Conditions in place is crucial when starting a cake business. They set clear boundaries between you and your customer, and they cover you if/when there is a complaint.

My Terms and Conditions are checked over and updated regularly to make sure I am covered, and my customer is covered should anything untoward happen.

They cover everything from delivery times to complaints procedure, to allergens in my kitchen to copyright and ownership of designs.

I know it sounds heavy and maybe a little unnecessary, but honestly one day you may be pleased to have them!

Get Some Business Knowledge and Know How

Getting some basic business knowledge is my number 1, need to haves! Knowing how to brand your business, know who your ideal clients are, how to lean into your niche, set and outline your business plan and goals, and market your cakes is going to be essential if you are going to make any money.

I will touch on a couple of the more important things here but I would recommend you listen to The Business of Cake Making Podcast to get a fortnightly top up of business advise.

Niche Market and Ideal Client

Before you go off and make everything for anyone who wants it, my first recommendation is learning all about Niche Markets and Ideal Clients. Put simply it’s about learning what your strengths are, leaning into them and selling to the people who will appreciate them the most and will pay for them.

Read 4 Ways to Niche your Baking Business and Ideal Client for Cake Makers for more information. As this is so important there is also an Audio Workshop on Niche Market and Ideal Client you can download and work through.

I will just leave you with the old saying “when you sell to everyone, you sell to no-one”

Write a Business Plan and set your business some goals

This isn’t meant to be some arduous task, or complicated document to present sales projections and money forecasting to give to a bank manager. This is a plan to give you a road map for you to focus on when running your business.

If you write a brief business plan for yourself, with goals and targets, you will have something to work towards. It should lay out what your business is, what its selling, who it’s selling to, what your branding is and what your goals are. When you keep focus you are more likely to succeed. Without a plan you, again, may end up going off on tangents and getting nowhere fast.

Listen to The Business of Cake Making Podcast Episode on Business Plans and Goal Setting for more advise.

Naming your Cake Business

Thinking of a name when starting a cake business always seems like a fun task, and to be honest, one a lot of people can get too hung up on. A name should reflect you and your business, and appeal to your Ideal Client. Don’t make it too complicated. Make it memorable. I recently changed the name of my own cake making business as it was no longer relevant to the market and Ideal Client I was trying to attract. Make sure it serves your client as much as it does you.

When coming up with a name I would advise to rest on one that no-one else has claimed. When I say that I mean – can you get the website domain you really want? For example, When I was deciding on Daisy Cake Company I originally wanted Daisy Cakes, but the website address was already taken, therefore I had to adapt it so I could claim my own website domain for business.

Branding your Cake Business

Branding isn’t just a logo! It is a huge topic that ranges from everything from all the visuals, including your logo and colours, to your brand voice and brand principals. I will do another post soon about branding, but think of it like this:

If you weren’t in the room and someone had to explain your company to someone else, what would they say? They probably wouldn’t say ‘it’s the one with a cake on the logo’ or ‘it’s the one with all the pink in its colours’. They are more likely to say ‘it’s the one that's quite classic and makes stunning tall white wedding cakes’ or ‘it’s the one that’s really funky and a bit alternative’.

What is the impression you want to leave people with when they meet you and your business? How do you speak to your customers – are you formal, or are you friendly? Are you classic or are you funky? Are you clean lines or are you colour? Will you be outspoken or do you keep your opinions to yourself? That’s your brand.

Pricing your Cakes

If you do just one thing in your business, make sure you price your cakes properly!

You are in business, which means you should be making money!

The absolute bare minimum is that you cover your costs and pay yourself. Covering your costs means you should know what they are – see Accounts and Record Keeping. Paying yourself, means making sure all your time is covered, and not just the time when your hands on your cake, and paid to at least the minimum wage. I know this sounds obvious, but you wouldn’t believe how any cake makers don’t pay themselves properly.

If you have worked out what Niche you want to work in, and who your Ideal Client is. You should know that the price and value you set will not be a shock to your customer.

Read How Much Do Cake Makers Earn? , 5 Things to Remember when Quoting Cake Prices or Listen to The Business of Cake Making Episode on Pricing for more information. To get more orders from your cake quotes read Preparing and Sending Cake Quotes .

Marketing your Business

Getting your cakes seen is hugely important when starting a cake business for finding new customers. Marketing covers everything from having a website, a blog, your social media accounts and wedding fairs etc.

The main thing I would say about this is be guided by your Ideal Client work. Advertising on everything, will in itself be a full-time job – but you want to be making cakes right? So pick the places you know you’re Ideal Client will be. It may be on Instagram and well as having a website, or having a blog and being on Facebook, or being on Facebook and Instagram and TikTok.

But don’t overstretch yourself. Choose just one or two of the best places for you and your business and really work on them. It’s better to do 1 thing really well, than 5 things badly!

What I would say though, is having a website should be a priority at some point for your business. It’s the one marketing channel you will really own. Facebook, Instagram and TikTok are all very well until they decide for some random reason to close your account. Have a space that is always yours.

Your Mindset

This isn’t something that many people talk about when starting a cake business. Having the right mindset is as important as having the business knowledge.

Knowing and believing you can do it is so very important. There are a few things I’m going to highlight here and they’re all things that you need to do for yourself, before you can even think of running a business.

Why are you starting a cake business?

First ask yourself ‘why’ you’re doing it. Keeping your ‘why’ close by is something you may have heard before. If you always know what is driving you forward, in hard, long days, you’re more likely to succeed.

Set boundaries and keep to them. If you’ve decided to not work past 8pm, don’t reply to a message that comes in a 9.15pm. If you don’t want to work more than 35 hours a week, and that extra last minute enquiry will take you over that, say no to it.

Having your own boundaries will ultimately keep you from over working, over worrying and burning out. Burn out is a very real thing with cake makers (and sadly it usually comes hand in hand with undercharging). Valuing yourself and your time is essential for your own self care.

Listen to The Business of Cake Making Episode on Valuing Yourself with Katie from Malarkey Cakes .

Imposter Syndrome and Comparisonitis

This usually is as result of comparing yourself far to much with others in your field. Believing in yourself is hard enough, comparing yourself to everyone else and still believing in yourself is impossible. Read Why You Should Ignore the Competition when Cake Making for more information

Lastly, and by no means least, I need to talk about Self Care. Looking after yourself is so important if you are to look after anyone else, including your customers. Self care can take many forms from a long hot bath, to switching your phone off after 5pm. For some great advise, with hints and tips listen to The Business of Cake Making Episode with Maria Ditch for more information.

Cake Business Equipment

I have one big bit of advise here, and that’s Don’t Buy Everything!

Seriously, we all think we need all the equipment. I can’t tell you how many boxes of cake tut I have hanging around in storage that’s never used. You know the stuff ‘oh, that mould for a teddy looks great, it might come in handy’ or ‘oooo, £30 is that all for those lettering stamps, bargain!’. None of which have ever been used and all still sit in their boxes.

You really only need a few bits of equipment to get and keep you going. I always say buy the best quality you can at the time. Here’s my quick guide to essentials, but listen to our Top Must Have Bits of Equipment for more information:

• Tins – buy them as and when you need them, but always buy a whole set of one size – don’t buy one and think you’ll buy the other 3 later, because what happens when later comes and you can’t get them?
• Offset Spatula
• Bench Scraper
• Non-stick rolling pin
• Set of basic modelling tools

The other stuff like impression mats, silicone moulds, stencils, tools, cutters, colours, sprinkles etc you have to ask yourself, very seriously – do I really need this, how many cakes will I really use it on, will it cover its cost? If it won’t, don’t buy it! Find another way to make the cake.

I would also recommend finding a few good suppliers for ongoing essentials such as boards and boxes etc. Buying them in bulk from a cake supplies store will always be better and more economical than driving around trying to find them locally in supermarkets.

Starting the Cake Making

Last we come to the actual cake making. I know it seems really far down the list doesn’t it?

There’s not really much to say about this, as you’ve already decided to start a cake business so probably know a bit about this. However, I do have a few things you need to look at.

What are you going to bake?

With this I’m going to refer you back to the work you should be doing on Niche Markets and Ideal Clients. Only bake what you know you’re going to sell.

For example, if you decide markets are going to be your thing, don’t experiment with loads of new recipes that you’re not sure will sell. Baking for business can be costly if you’re stuck with stock, because unlike some other hobbies turned into businesses, you can’t pack it up and stick under the bed until the next time.

Stick to what you’re good at, and what you’re customer wants. By all means try new things, but test the market before investing both time, money and ingredients.

Capacity and Work Flow

You need to know your limits of time and space. Do you have the time to make all the orders you’ve committed to, and do you have the space?

If you are starting a cake business from home, you need to think about how it will impact on your household and it’s members. Will you need the kitchen at meal times? Will you need to be ordering pizza on a Friday because you have 3 wedding cakes to make in the kitchen? Do you have enough space to prepare 3 wedding cakes? Do you have enough tins and oven space?

Learning your capacity and workflow boundaries is often a case of trial and error. We all take on cakes that spill over into our personal life, and learn to say never again.

There are some things you can do though. Firstly learn some good time management skills. Download my free Cake Planner here and read Organising you Cake Business orders to help you and listen to The Business of Cake Making Podcast episode on Time Management .

Mastering your recipes

Make sure you have a few ‘go to’ recipes on your menu before starting your cake business. When you have recipes that you know work well, and can be scaled up and down, you are taking half the stress out of baking for a business.

Once you gain experience you’ll know how you can fiddle with recipes to add other flavours, but only do that when you have time and ingredients to give it a go…..don’t do it on a customer cake that’s due tomorrow and these are your last eggs

Starting a cake business from home requires space. You’ll need space for ingredients, boards, boxes, for working, for finished cakes etc.

However, I’m going to let you into a secret – owning a shop or unit or commercial kitchen isn’t the holy grail! Yes, it may get all your tut out of the house. But it come with a whole heap of other things to deal with.

As long as you don’t buy all the equipment (see the Equipment section), set good boundaries for your business and make sure your Workflow and Capacity is under control, your baking shouldn’t rule your house.

For more information about Starting a Cake Business and running it successfully, listen to The Business of Cake Making. Our Fortnightly podcast hosted by cake makers, for cake makers running a business.

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Bake your dreams into a reality: how to start a cake business from home

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calendar October 10, 2024 user Jonathan White folder-open Mitchell & Cooper Insights Guides eye Views

Hungry for a slice of success? You wouldn’t be the only one. If you’re thinking about starting a cake business from home, you’ll be joining the ranks of the 5.6 million small business owners currently operating across the UK ( UK GOV ). 

Recent research by Forbes has shown a consumer preference for supporting small food businesses, with over a third of shoppers surveyed choosing to shop small when it comes to their food and groceries.

You know what they say: if you bake it, they will come. But there are a few things you’ll need to do before you can start monetising your passion, including sourcing the correct equipment, getting the necessary permissions, and creating a solid business plan. 

This detailed guide will teach you how to start a cake business from home, covering everything you need to know, including:

• The benefits of starting a cake business
• Writing a solid business plan
• The legal requirements for starting a cake business from home 
• Health and safety
• The equipment you’ll need to start a cake business

Why start a cake business? 

The KitchenAid 5KSM7591X Heavy-Duty Mixer is a powerful and versatile kitchen tool that can be used for a variety of tasks, including mixing, kneading, and whipping. It features a 1.3 horsepower motor and a 6.9-litre stainless steel bowl, making it ideal for large batches of food. The mixer also comes with a variety of attachments, including a dough hook, whisk, and beaters, so you can easily make everything from bread dough to whipped cream.

A professional range of flexible moulds for mini-pastry cakes and appetisers, for commercial catering and restaurants. Heat range from -50° to 250°C. Other shapes available.

The multiflex moulds enables you to prepare spherical shapes. The versatility of this mould allows you to add surprising inserts and unique effects.

The perfect egg can be created with this easy-to-use multiflex mould. Custom inserts can be added. Ideal for moulding ice cream before decorating and the unique silicon mould ensures easy removal.

This mould is easy to use and perfect for creating your own ice cream on a stick. The mould can also be baked in the oven, opening up the options for both cakes and custom savoury items to be produced.

The mini version of the classic is great for making savoury starters or smaller portions of alternative menus. The easy addition of the ice cream stick makes this a very easy mould to use.

The intricate detail of this mould is easy to replicate due to the flexibility of the LSR silicon. The silicon will also release the mould perfectly ensuring no mixture is left within the mould upon removal.

Microperforated thermoplastic rings can be used up to 180°C / 356°F. Mico holes for evaportion of humidity, micro holes always remain clean, shortcrust pastry is easily removed from the ring, border to ensure more stability, doesn't need to be greased, thermal stability and homogeneous baking. Can also be used as a cutter. Each kit comes with ring and mould.

Microperforated thermoplastic rings can be used up to 180°C / 356°F. Micro holes for evaporation of humidity, micro holes always remain clean, shortcrust pastry is easily removed from the ring, border to ensure more stability, doesn't need to be greased, thermal stability and homogeneous baking. Can also be used as a cutter. Each kit comes with ring and mould.

The larger Truffle mould allows much greater scope for decoration. The undercut is made possible with the Curve Flex special border around the top of the cavity. 

Create the perfect soft platform for additional decoration with this sammler mould. Created with flexible undercut for the ultimate 3D shape.

With the Mini Truffle mould, perfect detail can be ensured due to the high quality liquid silicon even on the smallest of moulds.

The Pillow mould is designed for sinuous, elegant and essential creations. The innovative border within these moulds ensures easy unmoulding while maintaining an innovative shape. 

The new elegant shape is perfect for creating a sweet or savoury 3d Quenelle. The mould is made with maximum care combining beauty with ease of use. 

This classic stand mixer has a robust and durable metal design and a smooth rounded finish designed for professionals. This makes cleaning it a breeze. It’s direct drive motor is silent and long lasting, and the original planetary action provides fast thorough mixing.

The Kitchenaid Heavy Duty K5 Stand Mixer is the perfect tool for any home baker. With its powerful 315-watt motor and 4.8-liter stainless steel bowl, it can handle even the most demanding mixing tasks. The K5 also features a variety of attachments, including a whisk, flat beater, and dough hook, so you can make everything from cakes and cookies to breads and pizza dough. And with its sleek, classic design, the K5 will look great in any kitchen.

Stainless steel mixing bowl 5.2L (5KSMB55) lets you create in style. Designed to fit your sturdy KitchenAid 5.2L bowl lift mixer, this metal bowl will give your mixer a polished look. It easily holds large quantities, so is perfect for batch cooking and entertaining. Its ergonomic handle makes it easy to detach from the mixer and to hold comfortably. Then, when you’re finished, simply pop it in the dishwasher. Durable and odour-resistant.

Setting up a Bakery Business

All you need to know about starting and running your business.

In this article

What is a Bakery business?

The bread and bakery industry in the UK is worth a whooping £8.7 billion. With bread, cake and other baked goods being such a statement of British life, this figure may come as no surprise to many people. It’s no coincidence that a daily cup of tea and slice of cake is a British stereotype that is known across the world.

With certain successful baking businesses being well known across the UK, prospective bakers may be worried that they are entering an already saturated market. However, this couldn’t be further from the truth. When it comes to baking businesses, supply doesn’t usually outstrip demand and growing your business from a home baking business, or a small bakery, is an achievable possibility.

Baking businesses in the UK are on the rise, with home baking businesses increasing by a huge 157% in 2020. Additionally, after the Covid-19 pandemic had such a devastating impact on the retail industry, we are now seeing the number of retail bakery businesses beginning to rise again and the industry starting to recover. This means that now is a great time to start up a baking business.

A baking business can sell a huge number of baked goods. Some of the most popular are:

• French patisserie.
• Croissants.

When starting a baking business, it is important you consider what type of business you want to run.

There are many different types of baking businesses, including:

Retail Bakery

A retail bakery sells baked goods directly to customers, rather than to other businesses.

There are different types of retail bakeries, including:

• A bakery café – This type of bakery includes a dining area for customers to sit in. Bakery cafes usually sell a variety of baked goods and will usually offer hot and cold drinks. Some bakery cafes also offer other types of food, such as sandwiches, soups, salads and snacks. Bakery cafes usually offer both sit-down and takeaway options.
• A counter service bakery – Counter service bakeries are usually smaller. They don’t have an area for customers to sit down, and instead baked goods are only served for takeaway. This type of bakery usually requires fewer staff members.

A retail bakery allows you to have more personal interaction with customers and make any changes or improvements to your menu based on customer feedback. However, upfront costs can be higher as you will need to pay for the premises and hire employees.

Retail bakery owners need to consider the design of their bakery, as well as the products they serve. An eye-catching, attractive shop front and a well-designed, clean interior can help you to attract customers and increase your business.

Commercial Bakery

A commercial or wholesale bakery is a business that sells its products to other businesses and establishments, such as restaurants, shops or cafes. Commercial baking businesses usually enter into contracts with their clients, meaning their business growth, expenses and profits are predictable.

A commercial bakery will need to have business premises and hire employees such as bakers, delivery drivers and cleaners. Depending on the size of the business, a commercial bakery is likely to have to produce its products on a large scale.

Although upfront and overhead costs may be higher than other baking businesses, a commercial bakery usually has steadier income and higher profits.

Home Bakery

A home bakery makes baked goods in their home and sells these directly to customers. They may offer a delivery or pick-up service or may sell their products at markets, streets fairs and other events.

A home bakery business usually has significantly lower upfront and overhead costs than other bakery businesses. However, your potential income may be more limited. You also need to ensure you comply with all legal and health and safety requirements for food from home businesses. You can consult our full guide for home-based food businesses to help you get started.

Catering Van Bakery

Catering vans are becoming increasingly popular in the UK as they are a low-cost, low-risk venture for those looking to set up a baking business. You will likely need to bake your products ahead of time, because of the limited space available in a catering van.

A catering van offers you the flexibility to move around to different locations and operate your business in the hours you choose. However, catering vans are less successful in bad weather and are often seasonal businesses. For more information on catering van businesses, consult our business guide .

Speciality Bakery

A speciality bakery usually focuses on a speciality product. Some examples of speciality bakeries include wedding cake shops, allergy-friendly or gluten-free bakeries, and pie businesses.

Focusing on a specific product type can help businesses to perfect their products. Focusing on a niche can also help bakeries to stand out from the crowd and become more successful. They can also choose to sell their products retail or wholesale. However, it may be more difficult to become established and may take longer to begin making a profit.

If you have a passion for baking and the commitment to set up and run your own business, starting a baking business could be a great option for you. As well as a flair for business, you will also need to be willing to dedicate the time and effort required to make your business a success.

Types of Customers

Cakes, bread, cookies, desserts and other baked goods are popular across all ages and demographics. From young children to working professionals, families and the elderly, a bakery business can appeal to all.

Some baking businesses are designed to attract all types of customers, whereas others are designed with specific customers in mind.

When considering whether you will have a target market and what types of customers you hope to attract, there are some considerations you first need to make:

What type of baking business are you going to run?

The type of baking business you are going to run will have a significant impact on the types of customers you will target. For example, a commercial bakery will target other businesses whereas a counter service bakery may target families and workers on their lunch breaks.

Where will your baking business be located?

The location of your business will have a significant impact on your customer base, particularly if you operate a baking business that your customers visit, such as a retail bakery or a catering van. If you are located in a town centre, you may be more popular with shoppers and workers whereas bakeries located in small villages may be more likely to attract families and groups of friends.

What products are you going to sell?

Your products will have a significant influence on your customer base. Deciding what products you are going to make is an essential first step when setting up your baking business. For example, if you create occasion cakes, you may target people who are celebrating weddings, birthdays, christenings and other special occasions.

Will you offer a delivery service?

If your baking business offers a delivery service, this greatly increases the number of customers you can attract. You will no longer be limited to passers-by and people in your local area.

What is your pricing strategy?

The price point you sell your products at could affect your target market. Products with a higher price point may only be attractive to those looking for premium products or those who are purchasing for a special occasion.

Equipment You Will Need

The type of equipment you will need for your baking business can vary, depending on the types of baked goods you are producing. For example, a business that specialises in wedding cakes will have different equipment requirements than a local counter service bakery that sells bread, pastries and cupcakes.

Below, we have prepared a general list of equipment requirements for baking businesses.

Baking Equipment

Baking equipment can encompass a huge variety of equipment types and your equipment requirements will vary based on the type of business you set up.

Some baking equipment you could purchase includes:

• Mixers – Many baking businesses require several mixers. You will likely need a mixer with a variety of mixing accessories and attachments, such as different whisk attachments. You may also need to purchase a large dough mixer and a countertop mixer. The most common industrial type mixers found in a bakery are planetary mixers, horizontal mixers and spiral mixers. When deciding which mixer is best for your business, you will need to consider the size and capacity of the mixer, the power and the type of mixing they are capable of, for example, can the mixer, blend, whip and knead as well as mix?
• Food processor – A food processor can be utilised when you are making bread, brioche, croissants, pies and some desserts. It is particularly recommended for recipes that require butter.
• Oven – Depending on the type of products you bake, your oven requirements may vary. You will likely need a large industrial oven so you can bake a large number of products at one time. Depending on the size of your business, you may even require multiple ovens.
• Dough proofer – Any baking business that uses dough will likely need a dough proofer. Dough is used in bread, pastries, pizza, cinnamon rolls, biscuits, cookies and doughnuts. A dough proofer can help to simplify the dough rising process, helping you to ensure your products are uniform in shape and size, and the production process is streamlined.
• Bakeware – Bakeware are items such as baking tins, trays, pans and moulds that are used during baking. The type of bakeware you will need depends on what products you are baking. For example, cake pans, bread pans and pie pans are all different, so you need to choose the ones that are necessary for your business.

Baking Accessories

There are a large number of accessories you may need in your baking business. As with baking equipment, your accessory requirements will likely vary depending on the types of baked goods you are making.

Some accessories you may require include:

• Flour sifters/sieves – Sifting flour and other dry ingredients is an essential step in baking. Choose a high-quality sifter to get the best results.
• A bread slicer – If you are baking your own bread, a bread slicer is a necessary accessory as many customers will require already sliced bread. A bread slicer allows you to quickly cut uniform slices of bread.
• Measuring cups/spoons and weighing scales – Precision is key to baking. Measuring cups and weighing scales will ensure you always have the perfect amount of each ingredient.
• Spatulas and spoons – These can be used for folding ingredients together, stirring mixtures, and transferring baked goods.
• Pastry brush – A pastry brush can be used to grease a pan or baking tray, or to add melted butter or egg wash to your products.
• Rolling pins – Rolling pins are used mainly for pastries and biscuit dough. If you are baking pies, pastries, biscuits and cookies, you will likely need this item.
• Chef’s knife – You will need at least one sharp knife that is high quality. Any items in your bakery that need to be chopped, cut or minced will require a high-quality knife.
• Wire rack – This is used for cooling cakes, biscuits and other baked goods. The wire rack allows air to circulate around the food and helps it to cool faster.
• Temperature probe – This can be used to check the temperature of cakes and other products to make sure they are thoroughly cooked.

Storage Equipment

All food must be stored correctly to ensure the health and safety of the consumer.

Your storage equipment requirements may include:

• A fridge and freezer – This is essential equipment for all baking businesses. Ensure the fridge and freezer are set to the correct temperature. Consider how much you will need to store when considering what size fridge and freezer you will need.
• Shelves – These can be used to display shelf-stable items, such as sugar and flour. You will also need additional shelving in your kitchen to store equipment, accessories and utensils.

Other Equipment

• Display cases – This is likely how you will display the majority of your products. You may need a refrigerated display case and one that is at room temperature.
• Packaging – Your packaging should be of good quality and, if possible, recyclable. You may want to display your business name or logo on the packaging as a way of promoting your business.
• Signs – You will need signs that state your pricing, allergens, whether a product is vegetarian, vegan or gluten-free, and signs that advertise any discounts or special offers.
• Cash register and Point of Sales (POS) system – This can help you to record sales and manage the financial aspects of your shop. Your payment system should allow customers to pay by cash, debit card or credit card for their purchases.
• Cleaning equipment – Cleaning equipment is essential in any business that sells food. Some equipment you will need to invest in includes a sweeping brush, a mop, cleaning products, cloths and sponges.
• Aprons, hairnets/hats, and gloves – Having the correct clothing can not only help to protect your clothing from spills, splashes and singes, but it can also help to prevent food from being contaminated.

Typical Pricing

There are many different costs associated with running a baking business. Being aware of the costs can help you to better plan your finances, calculate your initial investment requirements, and predict your potential profit margin.

Some typical pricing associated with setting up and running a baking business is:

This will be your biggest expenditure. The price will vary significantly depending on the size and location of the premises. If you choose to rent your bakery premises, be aware that rental costs are often calculated per square metre. They can range significantly, from £500 to £15,000 per square metre annually.

You will need to make the premises fit for purpose and attractive to customers. This cost may be fairly low if you choose premises that are already designed as a bakery or café business. However, if the property requires a complete renovation, costs will be significantly higher. Renovation costs will also vary based on the size of the premises.

The cost of equipment can vary based on which of the equipment from the list above you require. Some baking businesses choose to buy minimal equipment initially and then expand as their business grows. Equipment costs can range from £3,000 to £20,000.

Repairing and replacing equipment

This is an ongoing cost you will need to factor into your budget. Your equipment is an essential part of your business, and you will not be able to operate your bakery without it. You may need to pay for maintenance or repairs and if your equipment is no longer functional, you will need to pay to replace it.

Licensing costs

Licensing costs can vary depending on the type of baking business you run. Contact your local authority for more information on licensing requirements. You can expect to pay between £100 and £500 per year.

Ingredients and stock

The cost of ingredients and stock should not exceed 40% of your total sale price. Try and buy some ingredients in bulk to reduce the cost and shop around to find the best deals.

Marketing and advertising

Marketing and advertising may be more essential for some baking businesses than others. For example, a home baking business will need to advertise more than a bakery café. It is recommended that you spend no more than 10% of your annual revenue on advertising costs. Once your baking business is established, you may be able to reduce your advertising costs.

Running costs

Running costs are the costs associated with running your baking business. Most of these costs will be paid monthly, although some will be paid annually. Your running costs could include your overhead costs such as electricity, gas and water. If you keep the running costs as low as possible, this can help to maximise your profits.

Business insurance

A baking business will have a variety of insurance needs. This could include Public Liability Insurance, Employer’s Liability Insurance, Equipment Insurance, Contents Cover, and Legal Expenses Insurance. You can expect to pay between £200 and £1,000 per year for insurance.

Many baking businesses need to employ staff. This can include baking staff, cleaners, delivery drivers and counter staff. When calculating the costs associated with employing staff you should consider the number of staff and their hourly wage. You should also account for holiday pay and sick pay.

Safely Running a Bakery Business

It is imperative that you safely run your baking business. This can help ensure the safety of your employees, customers and the general public.

Some safety procedures you should follow at all times when running your baking business are:

Conduct risk assessments

Risk assessments should be carried out before setting up your baking business and at any other time you require them. If your business has five or more employees, risk assessments are a legal requirement. An additional risk assessment is now required for risks relating to Covid-19.

Pay attention to the Hazard Analysis and Critical Control Point (HACCP) principles

The HACCP principles help you to manage food safety hazards that could arise when storing, preparing and baking food. You can identify potential risks and implement measures to ensure these risks are reduced or removed. You should also keep records of any actions you take in line with HACCP.

Implement cleaning procedures

Having effective cleaning procedures is essential for food businesses. A cleaning schedule and cleaning policies should be in place that cover the cleaning of equipment, and surfaces, handwashing procedures, and cleaning the food preparation, baking and storage areas.

Safe storage of stock

As part of your baking business, you could be storing frozen, refrigerated and cooked food. This food must be stored at the correct temperature to prevent spoilage or deterioration. You should also ensure food is covered to prevent cross-contamination.

Ensure correct cooking temperatures

All cooking businesses, including bakeries, must ensure they are cooking at the correct temperature. This is to reduce or eliminate the risk of food poisoning. Ensure your oven or other cooking equipment is set to the correct temperature and use a food thermometer to ensure food is thoroughly cooked.

Keep up-to-date records

When you receive a visit from the Environmental Health Office (EHO), they will likely want to see up-to-date records of cleaning schedules, risk assessments, health and safety policies, allergens and temperature checks. Ensure you keep clear, up-to-date records in your baking business.

Legal Requirements

When setting up your baking business it is crucial that you comply with all legal requirements. Failure to do so could result in a fine, forceful closure of your business or, in serious circumstances, a prison sentence.

Below is a list of general legal requirements you will likely have to adhere to:

Apply for a food business registration

You must apply for a food business registration at least 28 days before you begin trading. You can apply for your registration on gov.uk , and it is free of charge.

Register as self-employed with HMRC

Running your baking business as an individual or as a self-employed person requires you to register as a sole trader. You will need to register the name of your business and keep records of all your income, profits and expenses.

Ensure all staff have food hygiene training

All food businesses must ensure staff are trained in food hygiene. If you receive a visit from the Environmental Health Office (EHO), a food hygiene certificate is the best way of demonstrating your compliance. It may also increase your likelihood of being awarded a five-star food hygiene rating.

Implement a Food Safety Management System (FSMS)

An FSMS is a legal requirement for food businesses. An FSMS is a systematic approach to controlling food safety hazards and ensuring safe practices are followed. Your baking business’s FSMS should be based on the principles of the Hazard Analysis Critical Control Point (HACCP).

Comply with allergen requirements

Food businesses are legally required to label their food products with information regarding the 14 allergens. If any of the food you sell contains any of the 14 allergens, this information must be visible to customers.

Apply for a music licence

If you plan to play any background music in your bakery, you will need to apply for a Licence to Play Background Music from the PPL PRS . You will need to pay an annual fee for this licence.

Comply with the Bread and Flour Regulations (1998)

The Bread and Flour Regulations must be followed by all baking businesses. The regulations state the nutritional value of bread and flour that must be adhered to.

Comply with the Meat Products and Spreadable Fish Products Regulations (1984)

If your baking business sells any meat products such as sausage rolls, meat pies or sandwiches, you will need to ensure you comply with this legislation . It concerns how you name and label meat products and the minimum meat content that is required by law.

Apply for a Waste Carrier Registration

If you need to transport any waste, you will need to register as a low tier waste carrier in England, Wales or Northern Ireland or a professional collector or transporter of waste in Scotland.

Comply with Fire Safety legislation

As the business owner, you will be responsible for fire safety in your premises. This could include conducting fire risk assessments, implementing fire safety measures, ensuring staff are both informed and trained on fire safety, and implementing emergency procedures.

Comply with employment legislation

Your baking business must comply with all areas of employment legislation, including recruitment, pay, working hours, holidays, sickness, maternity, paternity, discrimination and dismissals.

Positives of Owning a Bakery Business

There are some great positives to owning a baking business:

Set up the business you want

As you are in control of the business, you can do anything you want with your bakery. You can choose which products to sell, the design of your premises, your price point, and the type of bakery you run. This offers you creative freedom and self-sufficiency.

A high markup on products

The cost of ingredients will be relatively low, meaning you will have a high markup on the products you sell. Your selling points will be significantly higher than the costs of the ingredients and food products. Even when you factor in any overhead costs, you should still have great profit margins.

You can be creative

You can make creative products with beautiful decorations. You can also be creative with flavours, textures and ingredients until you create your perfect products. People who love baking and being artistic will find the creativity involved in a bakery business rewarding. Being creative can make your work more enjoyable.

Connect with the local community

A bakery or café is often a pivotal part of the local community and can become a meeting point or hub for all types of people. You could also become involved in the big events and celebrations in people’s lives. You can become more involved in your local community and make new connections.

You can start small and grow your business

If you don’t have an external investor or a large capital with which to start your business, you can start smaller and grow your business in time. You can start a home baking business initially, which won’t require you to have premises or other employees. You could even bake part-time initially before working up to a full-time business. As your business grows and you begin to make a profit, you can invest your profits back into your business and purchase more equipment, hire employees or invest in marketing and advertising.

High demand

Bakeries and baked goods continue to be staples in the UK and are consistently in high demand. The bakery industry is one of the most lucrative industries in the country and is growing year on year. Food, including baked goods, is considered a recession-proof industry. Even in difficult financial times, bakeries still seem to succeed.

Running a baking business can be great fun, especially if baking is something you are passionate about. You can be creative, do something you love, have face-to-face interaction with customers and have fun every day at work. Many baking business owners consider baking to be a vocation, meaning running their business is particularly rewarding.

Negatives of Owning a Bakery Business

However, there are some important cons to owning a baking business you should be aware of:

It can be long hours

Bakers often have to start very early in the morning to ensure their products are baked, cooled and decorated before the bakery opens. You will then have to keep the bakery open long enough to sell your stock and make a profit. You will also have to consider the time it takes to order ingredients, clean and do your business accounting. This can be time-consuming and mean you work long hours every day. You may also have to work weekends.

It can be high stress

As the business owner and baker, you will have a large number of responsibilities. You will be responsible for every aspect of the business, including marketing, ordering ingredients, baking and running the business. This can be highly stressful, especially when your business first opens.

Ingredients can be expensive

Some baked goods require expensive ingredients. You may also need to use a large number of ingredients to create your products. This can mean your running costs are higher and profit margins are lower.

Potential for wastage

Baked goods have an extremely short shelf life, with some products needing to be sold the day they are baked and others only having a shelf life of a few short days. Any products that you don’t sell will then need to be thrown away in case they spoil or become stale. This can have a big impact on your profits.

Can be competitive

Not only will you be competing with other baking businesses, but you will also be competing with supermarkets, cafes and coffee shops. This can make it more difficult to make your baking business a success.

The food industry is highly regulated

No matter what type of baking business you run, you will need to ensure you adhere to strict health and safety laws and regulations. This includes regulations on handling food, cleaning, the use of equipment and cross-contamination. You may have to undergo specific training and be inspected by the relevant authorities.

High start-up costs and running costs

A baking business has a lot of associated costs including the cost of the premises, staff, equipment, ingredients and overhead costs. The high initial investment that is required can make it more difficult for you to start up a baking business. You will also need to ensure consistent profits to cover your monthly costs.

Up and down profits

Some days are likely to be busier than others. Many baking businesses also find that certain times of year are quieter than others. This can make it difficult to predict your profits and plan how much stock you need to bake.

Planning Your Bakery Business

An effective well-designed business plan is essential to ensure the success of your baking business.

When planning your business, there are several important considerations you will need to make:

Deciding what type of baking business you are going to set up is the first step when planning your business. This will impact your premises, staff requirements, your target customers, and the types of products you sell. Consider your local competition, your budget, and your own baking and business skills when deciding what type of baking business you will run.

What baked products will you sell?

You could decide to focus on one specific product, such as occasion cakes, French patisserie or pies. Alternatively, you could offer a large variety of baked products. You also need to consider whether you will offer gluten-free, vegan or allergen-free products.

Your location will have a significant impact on the types of customers you are likely to attract. It will also impact your premises’ rental costs.

What are your equipment requirements?

What equipment do you need to start your baking business? Calculate the costs of renting the equipment rather than buying it. Consider if there is any equipment you can buy later on, once your business is more established and you have begun to make a profit.

What local competition do you have and what are their price points?

Being aware of other baking businesses can help you decide what type of business to run and how much to charge your customers. If your local area already has several successful bakeries, you may want to focus on an untapped niche and target different customers.

How will you finance your business?

Can you finance the business yourself or will you need to source outside investment? Calculate your start-up costs and running costs and estimate when you are likely to start turning a profit to help you figure out how you will finance your bakery.

What are your business objectives?

Business objectives are crucial for creating a successful business plan. Your business objectives highlight the targets and goals of your baking business and help you to create a one-year, three-year, and five-year business plan.

Your business objectives should be SMART:

• S = Specific
• M = Measurable
• A = Achievable
• R = Realistic
• T = Time-bound

Have you complied with all legal requirements?

Ensure you have filed all your paperwork and have complied with all legal requirements before starting a baking business.

Download our business plan

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How to start a cake business: 5 simple steps

Our experts

Written and reviewed by:.

Regardless of what or how many markets you choose to target, there is no arguing that a cake-making business could be a lucrative (if time-consuming) venture to start. So whether you’re planning on launching a cake empire or finally following the dream of turning your hobby into a small enterprise, we’ve put together a ‘bite-size’ guide to help any bakery-loving entrepreneur start a cake business Mary Berry would be proud of.

These are the steps for how to start a cake making business:

1. Make sure you stand out

Cake making is like any food business, competitive; and it’s important that you stand out from the rest of the market. You could do this by offering something unique, such as an exclusively free-from range or a variation on an old classic – like Love Cheescakes that make individual-sized flavoured cheesecakes. However, though innovation will get you noticed, quality will remain key to a sustainable business.

Regardless of natural talent, being an expert in all or certain areas will help you evolve from an enthusiast to a master pastry chef or skilled cake-decorator; therefore investing in training– even in just one of the many specialist areas – could be the game-changer in your business. Several qualifications are available in the different areas of cake creation, from a range of NVQs and City & Guilds qualifications such as cake decoration or sugarcraft to more time flexible online courses. The costs and timescales vary considerably so make sure you research the most appropriate option for you and your business..

You just have to take a look at the frenzy that develops around the Great British Bake Off every year to know that the UK is a nation of a dessert fans. Moreover, as the demand for elaborate and unusual cakes continues to increase, you can always count on weddings, anniversaries, birthday parties and other ‘cake-required’ occasions to keep you in business, alongside the steady rise in Britain’s café culture. But make sure you stand out!

2. Plan ahead

Whether you’re launching a cake-making business to create a sustainable full-time venture or as part-time additional income stream, a cake making business can mean sufficient overhead costs and a hectic schedule. You have to consider initial set-up costs such as necessary equipment, as well as material costs, delivery costs, sample costs and storage so having a business plan in order to monitor cashflow is vital (take a look at our  business plan template )..

A plan will also help with developing a growth strategy as you can monitor your firm’s development and keep track of upcoming bookings. It’s important to know when to push for more business and when you’re in danger of overbooking and letting a customer down (which could be detrimental to your start-up).

According to Allegra Strategies there were 16,501 coffee shops across the country by the end of 2013 and this has only expanded in 2014 as the UK witnessed a rise in quirky cafes  – which means your cake-making business will have a plethora of potential suppliers available if you decide to branch out from a customer-direct model and expand your revenue streams.

3. Understand food safety

Whether you decide to run your cake enterprise from home or a fully equipped business premises, food safety and preparation regulations must be in place and followed.

Dairy, un-cooked and prepared products must be stored and transported at a certain temperature, it must also be correctly labelled and sell-by dates must be monitored. As well as ensuring that storage and transportation is up to scratch, a cake-making business must have a proper cleaning schedule in place to minimise the chances of cross contamination and food poisoning.

4. Register your premises

Another red tape measure that a cake-making business owner must meet is registering your premises with the local authority 28 days before the company begins trading – even if it’s from your home kitchen.

The premises must meet hygiene regulations, such as having pest control in place, adequate lighting and ventilation, hand washing, drinking water, separate storage and drainage facilities. The rules also require a separate sink in or near the kitchen for cleaning. Getting expert advice from your local authority may help, especially if the initial launch is going to be from home.

Once you have registered your premises, an environmental health officer has the right to make an unannounced visit. It’s up to you to have any information that may be required on your premises – this will include records that cover machinery maintenance, cleaning schedules, and the ingredients and origins of food. If you fail an inspection or an officer feels that you have prevented them from carrying out their inspection, you can be prosecuted and fined.

5. Be as creative online as you are in the kitchen

Selling your cakes or your cake-making services online can be a great way to reach a large audience. And whilst you can create a website inexpensively, the quality – especially the images on your site – will be essential to generating business. Social media will also be a great way to showcase your business, with image heavy social channels like Instagram and Pinterest offering a cake-making enterprise a great way to engage with potential audiences and find new customers.

Additionally adding videos of your business’ process from cake creation to delivery will help you to show customers how professional your company is and how great your products look – it will also help you develop relationships and word of mouth recommendations (especially if the customer you deliver to shares your video with their followers too). Even if you plan to have a physical location or feature at markets and pop-up events, an online presence can gear people towards your physical location and vice versa.

A cake-making business can be a great way to build a sustainable enterprise from a hobby you’re passionate about that you can start out relatively small scale and with little investment, to a fast-growing business with a generous profit..

Once you’re set up

Once your cake making business is up and running, you should look to grow. The options below can help you with this:

• Design a website – designing a website is the best way to launch your business to the world. Find new customers and advertise your services.
• Card readers  – let your customers pay by card and add speed and efficiency to your payment processing.
• Payroll services – use a payroll service provider to ensure that staff salaries are handled easily and effectively.

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Home » Entrepreneurship » How To Start A Cake Baking Business

How To Start A Cake Baking Business

• January 18, 2023

People buy cakes on their birthdays, wedding anniversaries, or as a snack at home. This means there is plenty of demand, and it can become a lucrative business idea if you have a flair for baking and want to be your own boss.

Do you love to bake cakes and have a knack for the business part of it? Starting a cake-baking business could be a great business venture for you.

To start a cake baking business, you will need to consider the following key steps. 

• Develop your cake baking and decorating skills – get formal training if possible
• Learn critical business skills like marketing, accounting, etc.
• Create a budget and comprehensive business plan
• Pick a catchy name and research your target market
• Source high quality baking supplies and equipment
• Set up a certified home or commercial kitchen
• Choose a business structure and register your business
• Get necessary insurance like liability and food hygiene insurance
• Promote consistently on social media and do local outreach
• Soft launch and get feedback before full launch
• Officially launch with promotions to attract customers
• Handle taxes appropriately by registering and filing on time

The key is to combine excellent baking talent with solid business knowledge and planning. This includes budgeting, licensing, promotion, customer feedback, and legal compliance.

Read on for more details on the key areas required to turn your hobby and skills into a successful cake baking business.

1. Make Sure You Have the Right Skills and Knowledge

The first step is to sharpen your baking skills. There is a big difference between baking cakes for personal home use and learning how to bake cakes for others. There is less chance for errors in the latter case and you must be an expert in all the available baking techniques – or at least use your marketing to promote the kinds of cakes that you excel in. This could be fairy cakes, cookies, tiered occasion cakes, or perhaps you only bake gluten free.

That includes having extensive knowledge of the ingredients and flavour recipe to get the best taste and design. The recommended learning pathway is to attend a culinary school or take certified assessments in the baking and decorating industry.

It is also possible to follow the DIY baking route with online resources or learn from more experienced friends. However, that requires a lot of practice, trial and error. Not everyone must get formal cake-baking qualifications but it might be necessary as you look to expand.

2. Gain the Necessary Business Skills

Talent in how to bake a cake is not sufficient for business success. Of course, a talented baker would certainly make great cakes, but their chances of success in attracting customers are limited.

You have to learn the necessary business skills and understand the core of finance and marketing. Get started by taking online courses in business fundamentals, attending cake-baking business workshops, and networking with other entrepreneurs.

The goal of these engagements is to learn how to present your little success stories as a cake-baking expert to prospects. Another idea is to partner with a business-oriented individual who manages the business aspect while you focus on baking.

3. Plan Your Budget

Planning your budget comes immediately after you have sorted out how to bake the cakes and the necessary business skills. A cake-baking business is like any other business idea and you need sufficient capital to start.

Hence, you need a budget that precisely estimates how much money you need to invest and the type of costs involved. A complete cake-baking business budget would include the cost of ingredients, equipment, advertising, packaging and other miscellaneous expenses. It is necessary to make allowance for extra expenditures to cover inflated prices or little emergencies.

The perfect budgeting skill is to overestimate costs rather than underestimate them and get stranded. Take your time to budget and have an excellent idea of whether you are financially ready to start the business.

4. Create a Comprehensive Business Plan

Some prospective vendors wrongly assume that a cake-baking business plan is the same as a cake-baking budget. While the budget might be interpreted as a subset of the business plan, there is more to creating a business plan.

A comprehensive business plan must contain your long-term goals, an action plan to achieve them, and a list of all necessary resources. It should also include short-term goals, such as sales targets for baked cakes in the first year and a detailed financial plan.

Hence, the perfect business plan is one that is flexible and organised for easy reference and overview of progress made as you develop the cake-baking business. Tracking the business’ growth helps you avoid repeating the same mistakes and build more successful strategies.

5. Pick a Name for Your Business

Your choice of name for your cake-baking business is important for its branding. The business name is the digital identity of the brand and must be catchy, memorable and reflective of the business’s core values.

Brainstorm business name ideas that fit a cake-baking business with friends and family. You can take a clue from the existing names in the baked cakes industry to develop ideas. The name you eventually pick should be available as a business domain name and for setting up your social media accounts.

6. Research Your Target Market

Although cakes are popular and preferred by numerous people, the truth is not everyone would buy cakes. For those who buy, not everyone eats the same type of cake. Hence, you must be willing to research your target market to guide your cake-baking process.

Do a detailed market survey of your target locations and observe the type of cakes in huge demand. Remember to check the general price range of cakes in that area too. You need to make sure you’ll be baking what the people want.

That does not mean you copy the business ideas of competitors. Simply draw inspiration from them and try to have a unique selling point such as:

• Unique cake flavours
• Organic and natural ingredients
• Special dietary requirements
• Custom designs for special occasions
• Gluten-free cakes
• More convenient cake delivery services

7. Source Your Supplies and Equipment

Starting a cake-baking business also requires having all the necessary equipment, baking tools, and ingredients. Since you’d be selling to others, it is best to invest in only high-quality supplies to effectively compete in the cake-baking industry.

Examples of high-quality baking supplies to purchase include:

• Cake tins and moulds
• Decorating tools (icing bags, nozzle sets, cutters)
• Food colouring and sprinkles
• Packaging materials such as boxes and ribbons
• Kitchen equipment including ovens and fridges

Remember that the above tools and equipment must meet food safety standards. Do your market research and buy from only trusted and reliable suppliers.

8. Set Up Your Business Premises

As a cake-baking startup, you have the choice of running the business from home until you are more financially buoyant or renting a place. Baking from home is cheaper but might require that you register with the local council to ascertain if there are any restrictions in place.

Some minimum expectations are that you properly equip the cake kitchen and have necessary safety measures like fire extinguishers and first aid kits. You must also register as a food business before you can legally be allowed to sell commercially, make deliveries or host events.

Alternatively, consider renting a cake shop if you have the finances. The physical shop must comply with all health and safety standards. You should also consider proximity to the target buyers.

9. Choose Your Business Structure and Register Your Business

The preferred business structure is an important decision before you can start a cake business in the UK and many other developed countries. The popular business structures are sole proprietorships, partnerships, limited liability companies (LLCs) and limited liability partnerships (LLPs). They are all different and you may determine the relevant authorities to register your business.

• Sole proprietorships: the simplest business structure that is managed by one individual who is responsible for every profit, liability or legal issues that arise.
• Partnerships: describes a business structure that is jointly run by two or more owners who share the liabilities of the startup.
• LLCs: formed by one or more owners of LLCs all enjoy limited liability and fewer government regulations than a full corporation
• LLPs: the joint owners also enjoy limited liability and tax advantages although some partners are more responsible for certain obligations

You are to register the cake-baking business when you decide on a business structure. The Companies House and HMRC are the common legal registration agencies. Do due diligence to confirm if there are any licences or permits needed.

10. Get Your Cake Business Insured

Starting a cake-baking business without any insurance policy is quite risky. Nothing is certain and things might go wrong due to personal mistakes, accidents or property damage. Having insurance minimises the impact of such business risks.

The type of insurance for your business depends on the business structure you choose and the specific industry. Some common insurance types are public liability insurance, professional indemnity insurance, product recall insurance and food hygiene insurance. Additional ones to consider are the buildings, content and business interruption insurance.

Unsure about the correct insurance type for your cake-baking business? Reach out to a legal advisor for explanations and guidance. A good insurance plan can save your business from severe financial and legal jeopardy.

11. Promote Your Cake Business

Social media advertising has eased marketing for those who don’t know how to promote a cake-baking business. You can create engaging content about cakes, decorations and baking and post it on the business’s social media handles. Creating valuable content is a simple promotional strategy to attract qualified prospects.

You can also offer discounts or free samples as a strategic advertising method. However, understand that marketing is not a one-time thing. Consistency is crucial if you want effective results and business growth. Frequently review existing advertising strategies and evaluate performance metrics to know what techniques or platforms are generating the most prospects.

Other methods to promote a cake-baking business include paid advertising like Google ads or Facebook Ads. A catchy website also works to reach more target audiences and we encourage you to participate in more local events as a cake business owner.

Lastly, don’t overlook the importance of physical marketing and one-on-one outreach. Convince previous customers, friends and family members to tell their network about your delicious cakes. It is an excellent approach to building a loyal customer base.

12. Soft Launch Your Cake Business

Some cake vendors make the mistake of selling to the public shortly after improving their cake-baking skills. Before you launch the business, try what we call “soft launching”. A soft launch is the process of testing out your products (baked cakes) with friends and family. Think of it like internal feedback on how to refine your recipe and what to adjust before selling to paying customers.

You must understand that the feedback is to improve you and not bring you down. Therefore, sincerely appreciate everyone who volunteers to test your cakes. It is important to make your friends feel free to give their honest opinions before the actual business launch.

Every comment is crucial at this stage and improvements should be made with another soft launch if possible. Aim for perfection before entering the cake-baking market.

13. Launch Your New Cake Business

Go ahead to launch your new cake business if you have ticked every item on the checklist. Those include carrying out a soft launch that gives a perfect idea that the cakes would meet customer expectations. The next item is confirming you have reliable suppliers of baking items. It is best to have a backup in case something happens.

It is also expected that your soft launch and previous promotional announcement have aroused the interest of a few cake lovers. You can consider launching the business with a discount or giveaway to attract such interested prospects. The first set of customers is important for providing word-of-mouth feedback to potential buyers.

Promoting your cake-baking business does not stop after launch. Keep trying social media and other engaging advertising strategies to reach out to more people. Also ensure consistency in the quality of your cakes and put efforts into building a professional brand.

14. Set Up and Handle Your Business’s Taxes

Ensuring complete compliance with all tax regulations is the last step of setting up your cake-baking business. Taxation requirements vary for each country and the UK requires registration for VAT and getting a Unique Taxpayer Reference number. Businesses in the UK also have to create an account with the HMRC to file tax returns before deadlines.

It is best to remit all tax payments early and avoid problems or legal issues with the tax authorities. As a new cake-baking business, you may get confused with interpreting some of the compliance regulations. For such scenarios, do not hesitate to consult an accountant to assist with managing your finances and tracking all incomes for accurate taxation.

You should also keep every business document and income receipt in a safe place and organised manner. Electronic copies should be backed up. Keeping every necessary business document makes it easier to file your taxes before the deadline.

Final Thoughts

Learning how to start a cake-baking business is like turning your passion into profit. You’d certainly do great as a cake lover running a cake-baking business.

Like any other business, effective planning is a recipe for success. This article helps you with steps to perfect your baking skills, pick a business name, research the market, promote your cakes and finally launch the business. You should carefully read through the step-by-step processes and take note of the common mistakes to avoid.

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How To Start A Cake Making Business

Cameron Fleming | 9 November 2022 | 2 years ago 0 0 0

Deciding on Your Recipes

What Equipment do You Need for Your Business?

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Creating a budget for your business.

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A Food Handler’s License

A business permit, public liability insurance, a vat number.

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How to Start a Baking Business from Home

Read Time: 4 Minutes

Posted: 02 Dec 2020

02 Dec 2020

Updated: 7 Jun 2022

During the Coronavirus pandemic, many turned to their kitchen as a new-found source of revenue, selling their goods online and in the local community. From casual cake baking to brilliant brownie bakers, we’ve perfected a recipe for success to help you cake it ‘til you make it and launch your home baking business into the world. If you think you can *rise* to the challenge (okay, we’ll stop), read on… 

Why Should You Start a Home Baking Business?

With a 20% rise in home baking businesses over the past year alone, there are (muffin) baskets of reasons why starting up is a fantastic idea for any budding baker, such as:

• You can express your creativity through your cake baking
• There’s always a market for delicious baked goods – and plenty of niche markets for you to delve into
• You can sell online to a large market or locally
• Creating things for special occasions to put a smile on someone’s face
• Getting paid for doing what you love – that’s the dream, isn’t it?

Home Baking Business Ideas

If there’s something in particular that you’re good at, why not become an expert in that area? There are lots of bespoke home baking business ideas to get your teeth into! Here are a few:

• Celebration cake baker
• Sweet treat boxes
• Specialist in catering for vegan, dairy or gluten-free bakes
• Cake decorator
• Dessert delivery service
• Bread baker
• Home-based pastry chef
• Doughnut baker

How to Start a Baking Business from Home in the UK

Step 1: register your home baking business.

Before you sell even your first cake pop, you’ll need to register with HMRC as self-employed. This is so the HMRC knows how much you’re earning and properly collect income tax. 

Register online here to receive an email with 10-digit Unique Taxpayer Reference (UTR). HMRC will also set you up with an online account where you can access lots of different resources to help to set up your home baking business.

If you’re working on your own, you’ll also need to set up as a sole trader. This is super simple – you just need to tell HMRC that you’re a sole trader ! If you’re working with others, such as a partner or employee, you’ll need to register as a limited company .

At this point, you’ll also need to think about a name for your business . 

Step 2: Follow food regulations

When you’re using your own kitchen to start a baking business from home, it’ll need to be even cleaner than usual. 

Although ‘ regulations ’ might sound a little intimidating, a lot of it is common sense. However, you should think about getting a food hygiene certificate, namely taking a level 2 course if you’re new to working with food, which will give you a good overview of the regulations you’ll need to follow.

Try to keep your personal items in a separate fridge, and, if possible, keep pets out of your kitchen. You should also keep your children out while you’re working.

Step 3: Register your premises

28 days before you start selling your goods, you’ll need to register your premises as a food business with your local environmental health service. 

Once registered, you may be inspected by your local authority and will be rated out of 5 using the Food Hygiene Rating Scheme , which looks at the following:

• Handling of food
• How food is stored
• How food is prepared
• Cleanliness of facilities
• How food safety is managed

Step 4: Get insured

Business insurance is a key step when setting up your home baking business. Public liability insurance and product liability insurance are usually sold together and can be used to protect you from claims against your food causing damage or illness, or if you accidentally cause damage to your customers’ property when delivering their order.

Step 5: Permissions

If you live in a rented property, you’ll need to get your landlord’s permission before starting a baking business from home. This shouldn’t be an issue, however, as the law states your landlord can’t unreasonably withhold or delay their permission.

If you’re living in your own home, you may need permission from your mortgage lender.

Step 6: Find your unique selling point

With heaps of home baking businesses starting up during the pandemic, you need to figure out why people should choose your baked goods over anyone else’s. Is it because your flavours are the most creative? Your decoration the most stylish? Or do you cater to different allergens and dietary choices? 

Once you’ve found your unique selling point , you can begin to build your cake baking brand around it, choosing colours and styles that will appeal the most to your target audience.

Step 7: Set up online

Creating an online presence so even more people can find (and fall in love with) your delectable goods is a great way to spread the word about your home baking business.

You can create a website using software like wix.com, and set yourself up as a brand on social media. Make sure all the pictures of your bakes that you take are high quality with good, natural lighting for the best first impression.

Step 8: Pricing

One of the biggest questions entrepreneurs ask themselves is: how much should I charge for my cake baking?

First off, we recommend figuring out the price at which you break even – how much would you have to charge to make it worth it? That includes the cost of the ingredients, your time and overheads for the year (e.g. insurance, equipment and utility costs).

It’s also a good idea to look at the prices your competitors set for similar products to get an idea of what customers are willing to pay.

You can always tweak your prices if you find your product is too expensive or you manage to make savings elsewhere, so make sure to keep an eye on your in-goings and outgoings and change accordingly. 

Step 9: Brand your packaging

Adding your branding to your packaging is a great way to add a professional touch and make a delivery more memorable. Adding stickers with your logo design on , using colourful greaseproof paper and even including a postcard to say thanks for the order are all small things that make a big difference.

Need More Guidance?

We hope this guide to setting up your own home baking business has helped you take the first steps in starting a baking business from home. From flyers and business cards to stickers and postcards, make sure you’re fully stocked up on marketing essentials to keep driving your business forward.

If you need any further help with how to start a baking business from home or want to know more about our products, contact us here .  

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How to Start a Bakery Business

Inspired by the return of shows such as The Great British Bake Off , home baking businesses have been booming in the UK – with reports showing there has been a 230% increase in recent years. If you have a passion for baking and fancy a new (or existing) career in a rewarding and creative industry, it might be time to consider looking into how to start a bakery business. 

In this article, we will outline everything you need to know about starting a bakery business. We’ll look at the different types of bakeries, conducting market research, how to write your business plan and the legal requirements you need to be aware of. 

Types of Bakeries

How to write your business plan, equipment needed for a bakery, registering your food business, food hygiene training, food labelling and packaging, what is a bakery business.

A bakery business typically creates and sells food products that are baked in an oven. However, the scope for what you can create, and which products you choose to sell, is huge and only limited by your creativity and innovation.

Typical bakery goods include items such as:

There are many benefits to starting a bakery business, too. For example:

• Low start-up costs. The start-up cost of a bakery business can be as little or as much as you like. There are certain elements that you’ll need to have, but overall, the start-up costs are much lower than other businesses – especially if you choose to start the business from home.
• Creating your own working schedule. While you may need to work longer hours to begin with, once you’re established, you’ll be able to dictate when you want to work and which jobs you decide to take on. If you open your own cafe, for example, you’ll have the power to choose which hours it’ll be open to and from, and on which days of the week. 
• The ability to be creative in your job. You’ll be in charge of choosing what you produce, how you do that and what it looks like. 
• Diversification opportunities once the business takes off. Once you’ve established your bakery business, the opportunities to expand into further markets are endless.

There are two main types of bakery businesses – retail and wholesale. 

Retail bakeries are the most common type of bakery , and they have a number of different business models and niches for you to choose from. These include, but are not limited to, the following:

• Bakery cafe – This is a cafe that sells baked goods alongside other food and drink products – for example: coffee, tea, paninis, sandwiches, etc. There is also usually a place for customers to sit and eat their food. 
• Bakery counter – Similarly to a bakery cafe, a counter may choose to only sell baked goods, or they may also offer other products, such as teas and coffees. However, this is typically a ‘take-away only’ space, and isn’t required to have a place for customers to dine in. 
• Bakery food truck – This is a portable space to sell your baked goods from, and you may choose to drive to a number of locations or park yourself up in a designated space where customers will know to find you. Due to the lack of space, you may find it easier to create your baked goods at home rather than making them onsite. 
• Home bakery – Selling directly from your home is a viable option for people who want to avoid the higher start-up costs of buying or leasing a separate premises to sell their baked goods from. You could also offer a delivery service for a set price to increase your profits. For inspiration, check out our article: ‘ Ideas for Starting a Food Business from Home .’

In each of these business models, you also have the opportunity to specialise what you offer – for example, you may choose to only sell gluten-free products in your bakery food truck, open a café that specialises in French bakery goods only, or open a wedding cake business from your home. 

On the other hand, wholesale bakeries don’t sell their products directly to customers . Instead, they sell to other businesses – for example to supermarkets, restaurants or cafes. Due to the nature of this business model, wholesale bakeries are expected to produce high volumes of their products if they want to be successful. This means there are much higher start-up costs involved, as you would need to have a large enough space to meet the demands of commercial orders, and potentially employ others to help you do this.

Need a Course?

Our Starting a Home Food Business course explains the fundamental steps you need to take in order to comply with the legal requirements and food safety regulations. It also covers how to write a business plan, conduct market research and ways to promote your business.

How to Write a Business Plan for a Bakery

Once you’ve decided that you’d like to start a bakery business, the first thing you need to do is conduct market research. This will help you to identify several key areas that are important to focus on if you want your business to be successful. 

It will help to identify who your target audience is, what they are looking for, how often they want it, how much they are willing to pay for it and whether you will have any competition.

Things that you need to find out during the market research stage include:

• What kind of bakery are you going to open?
• How many different products will you offer?
• Which recipes will you use? Have they been tested?
• Who are your customers and what is their demographic?
• Will you sell your products online, in a shop or both?
• Are there any local events that you can sell your products at?
• Will you rent or buy premises outside your home? Where will this be?
• Will you have a delivery option? What are the costs and demand for this?
• Is there any existing competition? What do they offer?
• Do you need any insurance, certificates or licences to operate the business?

Every business needs a plan. The idea is that you write down, in one document, everything about the business to make your opportunity sound as attractive as possible to potential business partners and financial lenders. It also helps you to keep a focus on what your business objectives are so that you completely understand what you are aiming towards and how you are going to get there.

Writing a business plan doesn’t have to be a complicated job and it doesn’t have to be very long. As long as you get all the key information written down in a logical order, then your business plan is good to go.

Topics to include in your business plan are:

• The name, address and contact details of your business.
• Information on the management of the business; who’s in charge?
• Your company’s Mission Statement: in one sentence, summarise the aim of your bakery business.
• Where you will operate from; where is your office or kitchen, how big is it and what are the overhead costs involved?
• Your start-up costs; what equipment do you need to buy? Do you have any insurance or training to pay for?
• The everyday costs of the business; how much will you spend on ingredients and overhead costs on a weekly or monthly basis?
• Funding and financial projections; where do you plan to get the money from to start the business and what are your projected profits/losses for the next month, year, 2 years, etc? How will you maintain the cash-flow?
• Will you work on the business full-time or alongside your day job?
• Does your business have any competition and what are the features or benefits of your own business that will make it stand out?
• What is your marketing strategy?
• Do you have the logistics in place to deal with delivery, customer service, insurance, etc?

We’ve put together a simple template that you can use to get you started:

It’s vital that you have a well-equipped kitchen before you can open your bakery business – even if you’re planning to bake at home rather than in a commercial kitchen.

The type of equipment you’ll need will depend on whether or not you decide to specialise in one product, for example a wedding cake business. However, generally speaking, you’ll need:

• An oven – A convection oven is usually the type chosen by bakers as it provides dry heat and therefore cooks food evenly. However, if you’ve chosen to specialise in artisan bread, for example, you may prefer a deck oven. 
• Space to prepare and knead your dough if you’re going to bake bread or pastries.
• Shelving and storage racks. 
• A cart or trolley to move large bags of ingredients around – especially if you have a commercial kitchen to work in.
• Non-stick trays.
• A food mixer.
• Digital scales for accurate measuring.
• Cooling racks.
• Measuring spoons for accuracy of ingredients.
• Mixing bowls.

Legal Requirements for a Bakery Business

Once you have organised your business plan, it’s time to focus on making sure that your business will be legally compliant.

Selling food online without the proper registration or other legal requirements in place can have dire consequences not only for business owners, but for the health, safety and wellbeing of your customers.

According to the Government, anyone who is regularly selling food must register as a food business through their local authority. On the Government website , you can input your postcode and this will direct you to where you need to apply. This licence is free to obtain, and cannot be refused.

However, you must register as a food business at least 28 days before trading . If you are already trading, you must register as soon as possible. 

Trading without proper registration can result in a fine or prison sentence of up to two years.

You must also register with the Government as a sole trader in order to complete a self-assessment tax return each year. The Government classes anyone who is self-employed as a sole trader.

Once you have completed the necessary registration, you will receive a visit from the Environment Health Office (EHO) within 28 days of submitting your registration form. The EHO will ensure that you are compliant with all the relevant food hygiene legislation and are therefore safe to be trading.

During the inspection, EHO inspectors will assess three areas of your home food business:

• The physical condition of your premises. This means measuring your cleanliness, and whether you have suitable ventilation and pest control measures. 
• Food hygiene. This involves ensuring that you and any employees have safe preparation methods, cooking and storage of food, and making sure you know how to safely cool or reheat your products.
• Food safety. This means inspecting the precautions you have in place for this, such as having a food safety management system implemented and used. HACCP (Hazard Analysis and Critical Control Point) is an example of this. You can find more information on HACCP in our article here .

Once they have completed their inspection, the EHO will issue you with a food hygiene rating. If you’d like to learn more about what to expect from an EHO visit, you can do so in our article, here .

Food safety is immensely important, and you must do everything in your power to ensure that you follow all the guidelines. By law, all food handlers must have an understanding of the basic principles of food hygiene and know how to protect the food they serve from contamination. 

Our Level 2 Food Hygiene and Safety for Catering training course is designed to help learners understand the basics of food hygiene so they can work safely, comply with the law, minimise contamination and ensure the food they handle is safe for consumers to eat. Our range of HACCP courses cover everything you need to implement an effective food safety management system.

A vital part of food safety is having a sound knowledge of allergens. All food businesses have a duty to protect their customers from the risks allergens can present. 

Any food has the ability to cause an allergic reaction, however, certain foods are more likely to cause a reaction than others. 

There are 14 named food allergens which, by law, must be declared if they are used as an ingredient in a food product.

Conducting an allergen risk assessment is a key way to ensure you are complying with regulations. As you are legally required to provide allergenic information on your products, an allergen risk assessment may be the easiest way for you to identify where allergens occur in dishes, where the risks of cross contamination are and how you can best mitigate the risk. We have created a free, downloadable allergen risk assessment which you can find here . 

We also have free and downloadable allergen labels for you to use.  These are quick and easy ways to communicate allergens with your customers and reassure them that you are dedicated to food safety.

Food labelling is another crucial part of food safety. There are regulations regarding certain information that must be displayed on labels, and also specific allergen regulations for distance sellers. Distance selling is the indirect selling of products rather than directly to customers over a counter or face to face. Therefore, if you’re selling food online – via a Facebook or Instagram page, for example, you are a distance seller.

You must be able to provide allergen and intolerance information for your customers, especially with the introduction of Natasha’s Law , including any ‘may contain’ cross-contact allergens which you also handle. To find out more about precautionary allergen labelling, check out our article, here .

You’ll also have to decide what kind of packaging you’ll use in your bakery, and which materials it’ll be made from. For more information, check out our article: ‘ What are the Different Types of Sustainable Food Packaging? ’.

Food Allergen Awareness

Our Food Allergen Awareness training is designed to help food handlers identify and label allergens in order to ensure their customers remain safe from harm.

There are a number of potential health and safety risks in a bakery, whether you are working from home or in a commercial kitchen. Being aware of these risks can help you to put control measures in place to prevent accidents or ill-health from occurring to yourself, or any workers you may employ. 

The most common health and safety risks in a bakery include:

• Occupational dermatitis.
• Exposure to harmful substances.
• Slips, trips and falls.
• Manual handling.
• Appliances and machinery.

It is primarily an employer’s duty to ensure that health and safety measures are put in place. However, everyone that handles food has a part to play in adhering to, and upholding them so they remain effective. 

There are numerous pieces of legislation that place legal duties on employers to protect the wellbeing of their employees. For example:

• The Health and Safety at Work, etc. Act 1974.
• The Management of Health and Safety at Work Regulations (1999).
• The Control of Substances Hazardous to Health Regulations (COSHH).

For more information, check out our article which contains a free, downloadable checklist: ‘ Health and Safety in a Bakery ’.

Staff need to be sufficiently trained to handle occupational hazards, and it’s always helpful to improve their knowledge. Check out our range of Health and Safety courses which cover the fundamentals any bakery would need including Workplace First Aid and Control of Substances Hazardous to Health (COSHH) .

We wish you all the best in your bakery business venture! If you have any further questions about the topics discussed in this article, don’t hesitate to get in touch with us at High Speed Training. You can contact our friendly team on 0333 006 7000 or email [email protected].

Further Resources

• Starting A Home Food Business
• 5 Key HACCP Considerations for the Bakery Industry
• Health and Safety in a Bakery: Free Checklist
• How to Start a Street Food or Food Truck Business
• How to Start a Cupcake Business
• How to Start a Food Business From Your Home
• Cake Decorations: Which Flowers are Edible?
• Selling Cakes from Home: Do I Need a Food Hygiene Certificate?
• Pest Control Quiz

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Her favourite article is Ideas for Starting a Food Business From Home

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Veena Azmanov

Cook, Bake, Decorate with Confidence

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Start a Cake Business from Home

Starting a cake business from home is a fun decision but also not an easy decision. Knowing what you need to do and where to find the right information is most important. In this post, I share with you important and useful advice and tips on how to start your home-based cake business. I’ve divided it into four sections, covering the most important and essential steps and elements of starting your cake decorating business.

Starting a cake decorating business from home is a significant decision that requires careful consideration of various factors. Weighing the pros and cons is crucial as you embark on this journey. This post provides essential information and key points to consider, serving as a comprehensive guide to help you make an informed decision.

Disclaimer: I am not a lawyer, professional consultant, or legal expert. The information shared here is based on my personal experiences and accumulated knowledge from starting my own legitimate home-based business over the years.

You’re likely reading this post because you have a passion for cake decorating. You’ve probably created numerous cakes for family and friends, and their consistent praise has sparked the idea that you could turn this hobby into a career. Yet, the path to starting your own business can be daunting, and you may be unsure of where to begin.

Rest assured, many of us in the cake decorating business started exactly where you are now. Our shared passion for creating beautiful, delicious cakes is what drives us. So, let’s explore this passion together and turn your cake decorating dreams into reality.

The only way to do great work is to love what you do. Steve Jobs

Cake decorating – hobby vs. business?

Today, I want to delve into the essential considerations for transitioning from a cake decorating hobby to a formal home-based cake business. The emphasis here is on the word “formal,” as the legal aspects of running a business, while not always exciting, are crucial for long-term success and compliance.

There are many cake decorators who operate informally, claiming to run a business without officially registering it. Additionally, some individuals consider themselves ‘cake hobbyists’ but consistently take cake orders and earn income from it. If you’re making money from cake decorating and want to establish it as a professional venture, formal business registration is a must.

Whether you’re a novice contemplating the start of a home-based cake business or an experienced hobbyist looking to elevate your passion into a legitimate profession, this post will provide valuable insights.

I’ve included detailed information to ensure you have a comprehensive understanding of what it takes to start a formal cake business from home. So, grab a cup of coffee, put your feet up, and take your time reading through this guide. Often, the best way to tackle a complex subject is to go through it thoroughly once and then review it again. The second reading usually makes everything much clearer.

Making the Decision: Transitioning from Hobby to Business

Deciding to transform your cake decorating hobby into a formal business is not an easy decision for many. Often, the challenge lies in not knowing where to start, leading to hesitation or even abandonment of the idea. The fear of the unknown can be daunting, but having been through this journey myself, I can assure you that it’s often easier than it seems.

When I first started, I felt overwhelmed by the legal requirements and the thought of creating a business plan. However, with careful planning and perseverance, I successfully launched my own cake business from home. I hope to share what I’ve learned to help make your journey smoother.

To simplify the process, I’ve broken down the essential steps of starting a home-based cake decorating business into four comprehensive parts:

• The Legal Stuff : Understanding and obtaining the necessary permits, complying with taxes, and adhering to regulations.
• The Business Plan : Crafting a detailed business plan to guide your operations, finances, and growth.
• Marketing & Social Plan : Developing effective strategies to promote your business and engage with your audience.
• Your (Personal) Plan : Preparing yourself personally and professionally to ensure a smooth transition and sustained success.

By tackling each of these parts systematically, you’ll gain clarity and confidence, making the journey to starting your own cake business manageable and achievable. So, let’s dive in and explore each part in detail.

I – The legal stuff

Starting a home-based cake decorating business requires careful attention to legal and regulatory matters to ensure compliance and protect your business. Here’s a checklist of the legal steps you should plan for:

1. Business Structure and Registration

• Choose a Business Structure: Decide whether you will operate as a sole proprietorship, partnership, LLC, or corporation. Each structure has different legal and tax implications.
• Register Your Business Name: If you choose a business name different from your own, you’ll need to register it with your local government, often called a “Doing Business As” (DBA) name.
• Get an Employer Identification Number (EIN): An EIN from the IRS is required for tax purposes and if you plan to hire employees.

2. Licensing and Permits

• Business License: Obtain a general business license from your city or county government.
• Home Occupation Permit: Some localities require a permit to run a business from your home.
• Cottage Food License: Many states have cottage food laws that allow you to prepare and sell food from your home kitchen under certain conditions. Ensure you meet the specific requirements for your state.
• Food Handler’s Permit: Some areas require a food handler’s permit or food safety certification, which typically involves completing a food safety course.

3. Health and Safety Regulations

• Kitchen Inspection: Your home kitchen may need to pass a health inspection to ensure it meets local health and safety standards.
• Labeling Requirements: Follow labeling laws for packaged goods, including ingredient lists and allergy warnings.

4. Insurance

• Business Insurance: Obtain general liability insurance to protect against accidents and lawsuits.
• Product Liability Insurance: Covers claims related to the food products you sell.
• Homeowner’s Insurance: Check if your homeowner’s insurance covers business activities; you might need an endorsement or separate policy.

5. Tax Requirements

• Sales Tax Permit: Register for a sales tax permit if your state requires you to collect sales tax on food products.
• Income Tax: Keep detailed records of your income and expenses for tax reporting. You may need to make estimated tax payments throughout the year.
• Self-Employment Tax: Plan for self-employment taxes if you are running a sole proprietorship or partnership.

6. Zoning Laws

• Zoning Compliance: Ensure your home business complies with local zoning laws, which may restrict certain business activities in residential areas.

7. Contracts and Agreements

• Customer Contracts: Draft clear contracts for large orders, detailing the terms and conditions, payment policies, and cancellation policies.
• Supplier Agreements: Establish agreements with suppliers to ensure reliable sourcing of ingredients and materials.

8. Intellectual Property

• Trademark: Consider trademarking your business name and logo to protect your brand identity.

9. Record Keeping

• Maintain Records: Keep detailed records of all business transactions, licenses, permits, and correspondence with regulatory authorities.

10. COVID-19 Considerations

• Health Guidelines: Follow any additional health and safety guidelines related to COVID-19, including sanitation practices and social distancing measures for deliveries or pickups.

Additional Resources

• Local Small Business Development Center (SBDC): Offers free consulting and assistance with navigating legal requirements.
• State Department of Health: Provides information on food safety regulations and licensing requirements.
• IRS Website: Offers guidance on business taxes and obtaining an EIN.

By addressing these legal considerations, you can ensure that your home-based cake decorating business operates smoothly and complies with all necessary regulations.

II – The business plan

Yes!! It’s a cake business from home but It’s still a business, and that’s the first thing to realize. Run it like a business even if it is from home. Here is an example for you to see – Sweet Creations is just a generic name

Example – Business Plan for “Sweet Creations: Home-Based Cake Decorating Business”

Executive summary.

“Sweet Creations” is a home-based cake decorating business specializing in custom cakes for all occasions. Our goal is to provide high-quality, beautifully decorated cakes that are both delicious and visually stunning. Our target market includes individuals and businesses looking for unique, personalized cakes for celebrations, events, and special occasions. By leveraging our passion for baking and decorating, along with a strong focus on customer satisfaction, we aim to establish a loyal customer base and achieve steady growth.

Business Objectives

• Achieve a monthly sales target of $5,000 within the first year of operations.
• Build a strong online presence through social media and a dedicated website.
• Develop partnerships with local event planners and venues.
• Offer exceptional customer service to ensure high customer satisfaction and repeat business.

Business Description

Sweet Creations is a sole proprietorship based in [Your City, State]. Operating from a fully equipped home kitchen, we will offer custom cake decorating services for birthdays, weddings, anniversaries, corporate events, and other celebrations. Our services include cake design consultation, custom cake creation, and delivery.

Market Analysis

The demand for custom cakes is on the rise, driven by the increasing number of celebrations and events. Our target market includes:

• Individuals planning personal celebrations (birthdays, weddings, anniversaries).
• Corporate clients hosting events and celebrations.
• Event planners and venues seeking unique cake designs for their clients.

Competitive Analysis

Our main competitors include local bakeries and other home-based cake decorators. Sweet Creations will differentiate itself through:

• Unique, personalized cake designs.
• High-quality ingredients and attention to detail.
• Exceptional customer service and flexible delivery options.

Marketing Strategy

• Online Presence: Create a visually appealing website showcasing our portfolio, services, pricing, and customer testimonials. Utilize social media platforms like Instagram, Facebook, and Pinterest to share cake designs, behind-the-scenes content, and promotions.
• Networking: Partner with local event planners, venues, and wedding coordinators to generate referrals.
• Promotions: Offer introductory discounts and referral bonuses to attract new customers.
• Customer Engagement: Maintain a customer database to send personalized offers, birthday reminders, and follow-up messages.

Operations Plan

• Location: Operate from a home kitchen, ensuring it meets all local health and safety regulations.
• Supplies: Source high-quality ingredients and cake decorating supplies from reputable vendors.
• Production: Develop a streamlined process for order management, cake creation, and delivery.
• Staffing: Initially, the business will be operated by the owner. As demand grows, consider hiring part-time help for baking and delivery.

Financial Plan

• Startup Costs: Estimate initial expenses for kitchen equipment, supplies, marketing, and website development.
• Revenue Projections: Project monthly revenue based on an average of 20-25 cake orders per month, with an average order value of $200.
• Expense Projections: Include costs for ingredients, utilities, marketing, and delivery.
• Profitability: Aim to achieve a profit margin of 50% by carefully managing costs and pricing.

Risk Management

• Compliance: Ensure all operations comply with local health and safety regulations.
• Quality Control: Implement strict quality control measures to maintain high standards for taste and decoration.
• Insurance: Obtain necessary insurance to protect against liabilities and unforeseen events.

Sweet Creations aims to carve out a niche in the custom cake decorating market by offering unique, high-quality cakes and exceptional customer service. With a well-defined market strategy and a focus on customer satisfaction, we are confident in our ability to build a successful and profitable home-based business.

III -The marketing plan

Next, we need to think of some marketing strategies to help get our home-based cake business out. Let people know we exist!! Here is a sample Marketing pan – Sweet Creations is just a generic name I used.

Example – Marketing Plan for “Sweet Creations: Home-Based Cake Decorating Business”

“Sweet Creations” aims to establish itself as a leading home-based cake decorating business offering unique, custom-designed cakes for various occasions. This marketing plan outlines strategies to build brand awareness, attract new customers, and foster loyalty among existing clients. Our primary marketing channels will include online presence, social media, local networking, and strategic partnerships.

Marketing Objectives

• Increase brand awareness in the local community within the first six months.
• Achieve a steady growth rate of 10% in customer acquisition month-over-month.
• Generate at least 50% of new business through referrals and repeat customers by the end of the first year.
• Build a strong social media following with at least 2,000 followers on Instagram and 1,500 on Facebook within the first year.

Target Market

• Individuals planning personal celebrations such as birthdays, weddings, anniversaries.
• Local event planners and venues seeking unique cake designs for their clients.

Unique Selling Proposition (USP)

Sweet Creations stands out by offering highly personalized, beautifully crafted cakes made from high-quality ingredients. Our attention to detail, artistic designs, and commitment to customer satisfaction set us apart from the competition.

Marketing Strategies

1. Online Presence:

• Website Development: Create an attractive, user-friendly website showcasing our portfolio, services, pricing, and customer testimonials. Ensure the website is optimized for search engines (SEO) to increase visibility.
• Blog: Maintain a blog with content related to cake decorating tips, trends, and behind-the-scenes looks at our creations to engage visitors and improve SEO.

2. Social Media Marketing:

• Instagram: Share high-quality images of our cakes, behind-the-scenes content, and customer testimonials. Use relevant hashtags and engage with followers through comments and stories.
• Facebook: Post updates, share customer reviews, and create events for promotions or special offers. Utilize Facebook ads to target local customers.
• Pinterest: Create boards showcasing different cake designs and decorating tips to attract potential customers searching for inspiration.

3. Local Networking:

• Community Events: Participate in local fairs, farmer’s markets, and community events to showcase our cakes and connect with potential customers.
• Workshops and Classes: Offer cake decorating workshops to engage with the community and build brand awareness.
• Partnerships: Collaborate with local event planners, wedding coordinators, and venues to generate referrals.

4. Customer Engagement:

• Email Marketing: Build a customer database to send newsletters, special offers, and personalized birthday or anniversary reminders.
• Loyalty Program: Implement a loyalty program offering discounts or free services for repeat customers.
• Referral Program: Encourage satisfied customers to refer friends and family by offering incentives such as discounts on future orders.

5. Promotional Campaigns:

• Seasonal Promotions: Offer themed cakes and special discounts for holidays and special occasions.
• Introductory Discounts: Provide discounts for first-time customers to encourage trial.
• Contests and Giveaways: Host social media contests and giveaways to increase engagement and attract new followers.

6. Public Relations:

• Press Releases: Send press releases to local media about the launch of Sweet Creations and any notable events or milestones.
• Customer Testimonials: Feature positive testimonials on our website and social media to build credibility and trust.

Budget Allocation (amounts are just examples)

• Website Development and Maintenance: $1,000
• Social Media Advertising: $500 per month
• Local Event Participation: $300 per event
• Workshops and Classes: $200 per class
• Promotional Materials (flyers, business cards): $200
• Email Marketing Tools: $50 per month

Performance Metrics

• Website Traffic: Track the number of visitors, page views, and conversion rates.
• Social Media Engagement: Monitor likes, shares, comments, and follower growth.
• Customer Acquisition: Measure the number of new customers gained each month.
• Sales Growth: Track monthly sales and revenue to ensure targets are met.
• Customer Feedback: Collect and analyze customer reviews and feedback to improve services.
• Month 1-2: Launch website and social media profiles, start building content.
• Month 3-4: Begin social media advertising and participate in local events.
• Month 5-6: Launch email marketing campaigns and loyalty program.
• Month 7-12: Host workshops, run seasonal promotions, and continue building partnerships.

Here are some simple and easy marketing strategies you can use for your home-based cake decorating business:

1. Social Media Marketing

• Instagram and Facebook: Create profiles for your business and regularly post high-quality photos of your cakes. Use relevant hashtags and engage with followers through comments and messages.
• Pinterest: Share images of your cake designs and decorating tips to attract people looking for inspiration.
• Stories and Reels: Use Instagram and Facebook Stories and Reels to showcase behind-the-scenes content, cake-making processes, and customer testimonials.

2. Word-of-Mouth

• Encourage Reviews: Ask satisfied customers to leave reviews on your social media pages and Google My Business profile.
• Referral Program: Offer discounts or free goodies to customers who refer new clients to you.

3. Local Networking

• Community Events: Participate in local fairs, farmers’ markets, and community events to showcase your cakes and connect with potential customers.
• Partnerships: Partner with local event planners, wedding coordinators, and venues to offer your cake decorating services.

4. Email Marketing

• Newsletter: Collect email addresses from your customers and send out a monthly newsletter with updates, special offers, and baking tips.
• Special Offers: Send personalized offers and discounts for birthdays, anniversaries, or holidays.

5. Flyers and Business Cards

• Local Distribution: Distribute flyers and business cards at local businesses, community centers, and bulletin boards.
• Collaborations: Leave flyers and business cards with local wedding shops, party supply stores, and florists.

6. Online Listings

• Google My Business: Create a Google My Business profile to increase your visibility in local search results.
• Online Directories: List your business on local online directories like Yelp, Thumbtack, and other service-oriented platforms.

7. Special Promotions

• Seasonal Offers: Create themed cakes for holidays and special occasions and promote them on your social media and website.

8. Content Marketing

• Blog: Start a blog on your website where you share baking tips, recipes, and cake decorating ideas. This can also help improve your SEO.
• Tutorials: Create simple cake decorating tutorials and post them on your blog, YouTube channel, or social media platforms.

9. Customer Engagement

• Personal Touch: Send thank you notes or follow-up emails to customers after their orders to show appreciation and encourage repeat business.
• Surveys: Conduct surveys to gather feedback and understand your customers’ preferences and needs better.

10. Networking Groups

• Join Local Groups: Join local business groups, chambers of commerce, or online forums to network and share your business.
• Collaborate with Influencers: Partner with local influencers or bloggers to review your cakes and share their experiences with their followers.

11. Sampling

• Free Samples: Offer free samples at local events or to nearby businesses to showcase your products.
• Pop-Up Shops: Set up temporary pop-up shops in collaboration with local businesses or markets to reach new customers.

12. DIY Kits

• Cake Decorating Kits: Sell DIY cake decorating kits with all the necessary materials and instructions, promoting them online and locally.

By leveraging these simple and easy marketing strategies, you can effectively promote your home-based cake decorating business and attract a loyal customer base.

IV -Personal planning

Embarking on a journey to start a home-based cake decorating business requires personal preparation and planning. Here are steps you can take to prepare yourself:

1. Skills and Education

• Culinary Training: Consider taking courses in baking and cake decorating to refine your skills. Look for classes offered by culinary schools, community colleges, or online platforms.
• Stay Updated: Keep up with the latest trends and techniques in cake decorating by reading industry magazines, watching tutorial videos, and following expert decorators on social media.

2. Business Knowledge

• Business Education: Learn the basics of running a business, including marketing, accounting, and customer service. You can take online courses or attend workshops.
• Plan Your Business: Develop a comprehensive business plan outlining your goals, target market, marketing strategies, and financial projections.

3. Time Management

• Create a Schedule: Develop a daily and weekly schedule to balance baking, decorating, marketing, and administrative tasks.
• Set Boundaries: Establish clear boundaries between your work time and personal time to avoid burnout and ensure you maintain a healthy work-life balance.

4. Financial Preparation

• Save Money: Save enough money to cover your initial startup costs, including ingredients, equipment, marketing, and permits. Aim to have a financial cushion to support you until your business becomes profitable.
• Budgeting: Create a detailed budget to manage your expenses and track your income. Use accounting software or spreadsheets to stay organized.

5. Workspace Preparation

• Organize Your Kitchen: Ensure your home kitchen is well-organized and equipped with all the necessary tools and equipment for cake decorating.
• Health and Safety: Clean and sanitize your kitchen to meet health and safety standards. Set up designated areas for baking, decorating, and storing ingredients.

6. Legal and Regulatory Knowledge

• Understand Regulations: Familiarize yourself with local health and safety regulations, zoning laws, and business licensing requirements.
• Documentation: Prepare all necessary documents, such as business licenses, health permits, and insurance policies.

7. Marketing and Branding

• Build Your Brand: Develop a unique brand identity, including your business name, logo, and brand colors. Create business cards and promotional materials.
• Online Presence: Set up social media profiles and a website to showcase your work and attract customers. Consider taking a course in digital marketing to enhance your online visibility.

8. Customer Service Skills

• Communication: Practice clear and professional communication to handle customer inquiries, orders, and feedback effectively.
• Relationship Building: Focus on building strong relationships with your customers to encourage repeat business and referrals.

9. Support System

• Seek Support: Inform your family and friends about your business plans and seek their support and understanding as you embark on this journey.
• Network: Join local business groups, baking associations, or online forums to connect with other bakers and entrepreneurs for advice and support.

10. Mindset and Motivation

• Set Goals: Define clear, achievable goals for your business and personal development.
• Stay Positive: Cultivate a positive mindset and stay motivated by reminding yourself of your passion for cake decorating and your reasons for starting the business.
• Self-Care: Prioritize self-care to maintain your physical and mental well-being. Take breaks, exercise, and engage in activities you enjoy outside of work.

By preparing yourself in these areas, you can set a strong foundation for your home-based cake decorating business and increase your chances of success.

Cake Decorator Turned Blogger

How to advertise and market your cake business?

Effective communication and Customer Service in Cake Business

Three Business Tips for Aspiring Cake Decorators

Frequently asked questions.

So people know we exist, and we can stay in people’s minds even when they do not need our services. If they see our product in their feed once in a while, it will keep us in mind when they need a cake or recommend us to their friends. Get your business out on social networks. Create a Facebook Page , Instagram, and Twitter account. Share your goodies so people can see your work.

Costs can vary, but typically include ingredients, equipment, permits, and marketing expenses.

Consider the cost of ingredients, time, and market rates. Use a pricing calculator if needed. I wrote about it in detail – How to Price your cakes .

Why do you need a Website or Blog for your cake business from home? I know there are some of you that think having your social networks such as Facebook and Instagram is all you need to attract customers. True and yet not wholly accurate. I spoke more about this in this post – What if Facebook didn’t exist? Would your business still survive?

Now getting a website – can be done in two ways. You can hire a professional web designer, or you could do it yourself (DIY) Unfortunately, I could not afford it at the time, so I had to go the DIY route. It’s straightforward and this step by step method with progress pictures will help you start your blog efficiently and effortlessly.

I highly recommend a few resources here that might help you.

• If you are in the US – Every state in the US has its own rules and regulations for cottage laws. You can visit this website – cottage food laws Forage and  Cottage Food laws by state to see the rules/regulations concerning your state. Also, in the US how to start an LLC – step by step may be a helpful guide to use.
• If you are in the UK – There is a cake decorating school that has lots of cake business-related posts –   Paul Bradford Sugarcraft School .

Did you enjoy this article/tutorial? Please ⭐️⭐️⭐️⭐️⭐️ it Don’t forget to Save it for latter. You can also find a collection of my  tutorials and recipes on  Pinterest . Follow me on Facebook , Twitter , and Instagram for more. Of course, make sure to Subscribe to my blog to receive my tutorials, and recipes by email.

Cake decorating tutorials

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see all cake decorating tutorials here

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33 Comments

Your article was very informative and helpful. I have been planning for a long time to start a cake business from home, but unable do it because I am working. Thank you so much for all the tips and advice given.

You are very welcome Geetha

Enjoy it?. No.

Hey Veena ji, I have start cake business online for my local city. but am not make cake….am buy cake and sell customer base on order. Now almost 1 month of my business but no order received. please suggest me some tips about my business modal.

Hey Vinod. Sounds like you need to reach out more to local people and advertise your business. I have listed a few good tips on this post that may be useful. Connect with the cake decorators who you order cake from. Collaborate together and think of win-win strategies for all. All the best.

Five Things You Should Know Before Starting A Cake Business From Home

The life of a cake maker isn’t for everyone. It has demands and pressures like no other job. There will be issues and problems that only your cake friends will be able to relate to. It’s a lot more than just rolling out icing.

It’s also a lot more admin than people think. I used to say I spent 75% of my time on my laptop, shopping for ingredients, drawing designs, talking to customers and only 25% actually making cakes!

I ran a successful cake business from home for many years, only closing my order books for good last summer to concentrate on other parts of my business full time. Here are my top five things I think you should know before starting a cake business from home:

1. Your Kitchen

Your kitchen doesn’t have to be perfect, but it does have to reach a certain standard. One of the most important things you should do before embarking on your new career is to get your kitchen registered with and checked by the council. You must register at least 28 days before opening.

There are lots of different things to be aware of and a few hoops to jump through but once it’s checked and you get your rating, customers will be more confident in buying from you, you will be listed publicly as having a council checked kitchen and you get a fancy window sticker to display your rating. It also, most importantly ensures the safety of your future customers.

2. Self Employment

This is something that I feel causes some confusion amongst bakers. I know from conversations I’ve had with hobby bakers that a lot bake just for the cost of the ingredients. If this is done occasionally, then it falls under a hobby in the eye of the law. If, however, it is done regularly and even a small profit is made, you are considered trading and by this point a lot of things could happen. Namely, if you are on any income support or benefits, they will need to be recalculated. If you work full time, the tax may need to be altered and most importantly, you will need to complete a tax return at the end of the financial year.

Even if in the first few months of starting your career as a cake decorator you only bake 2 cakes and make a grand total of £12.76 profit, you must declare your income.

3. How Much Should I Charge?

The harsh reality is that 9 out of 10 businesses don’t survive their first year. That may sound a bit depressing but it’s worth knowing what you are getting into. When I started my cake business it was my secondary income after a full time job. Later, as my business grew, it became my only source of income, but this was a slow process, about a year and a half. I honestly don’t think I could have lived on just cake income at the start. One of the main reasons for this was I didn’t charge enough for my cakes (You can read more about this in my article here ) and I didn’t have a business plan in place.

It may be sugar and flour but you need to treat it with the same respect as you do any other business. It’s a fun hobby but when it comes to turning it into a career, there’s so much more you need to think about than just sprinkles!

4. Let’s Get Personal

When you calculate how much you want to charge, it won’t be in everyone’s budget – and that’s ok. But, something which used to upset me and the statement I know a lot of my fellow bakers get, is ‘But it’s just a cake?!’  I think you and I both know, it’s never  just a cake. There will be people that compare your hours of work to a supermarket buy but you cannot take it to heart. I know its hard because you may feel it’s a reflection on you and your work but I promise, it isn’t. There will be customers who ask you to make a three tiered cake with handmade models for tomorrow and, unless you are actually super human, you’re going to have to let them down and say no. Saying no was a big thing for me, I ended up making myself ill one month because I took on too much because I didn’t want to let anyone down.

You have to put yourself, and your family first and don’t let negative comments get to you or bring you down. We’ve all had them, you need to keep your head up and rise above it.

5. Cake Life

I think the most important thing to know before starting a cake business from home, is that when you do, you will have one of the best jobs in the world. You are part of so many special occasions, you make so many people smile, your art and talent will bring joy to so many families, and that is really something to be proud of. There will be long days and longer nights, you will need to buy in extra storage space for tins, moulds, cutters and you won’t be able to simply walk past a Lakeland without ‘popping in’. But it really is an awesome job that is so much more than just cake.

Even my worst day as a cake decorator and running my own business was better than the best day in any previous job I had.

For more about setting up your own cake business, make sure to check out my book ‘ Cakes, Bakes & Business ‘. From the rules surrounding getting your kitchen ready, registering as self employed, insurance, advice on pricing your cakes, and marketing advice that is both relevant and easy to implement. As well as a Cake Contract and Terms & Conditions template, Cake Disclaimer template, Cake Pricing template and Accounts template.

Happy baking!

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Starting a Cake Business from Home

This is a course for those who have enjoyed cake decorating as a hobby and would like to take it to the next level.

Running once a year, the course has been designed to give students the necessary information required when setting up a cake business from home and a couple of practical projects to take their decorating from the novice look to the professional finish.  Information such as current legislation, public liability, marketing, cake costing, business plan and advertising.

“This is the BEST course I have ever taken. I now run my own Biscuit business from home. Thank you so much Dawn and the team xx” - Sarah Bates

“A highly recommended course for anybody who is wanting to start their own journey in a cake business from home. You will learn so much. I am so glad i did it x” - Teresa’s Cakes and Bakes

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How to Create a Home Bakery Business Plan (Template Included!)

by Aurelia Lambrechts | Home Baking Biz Tips

How to Create a Home Bakery Business Plan

I’m beyond excited that you’ve decided to take action to read this post because your life could be starting on a NEW path from here on out…

Deciding to create your Home Bakery Business Plan means that you are actively responding to your dream. Today your dream has officially started to become a reality.

Acknowledging that you are a baker at heart is extremely difficult in our corporate world. It’s frowned upon to pursue a career that’s RICH in CREATIVITY and IMAGINATION.

So I just want to give you a room full of applause for being brave enough to start accepting who you were made to be.

We are Home Bakers and the world needs us.

The world needs the comfort, joy and hope that pure home baking brings.

And that’s why I’ve made this post and  FREE Workbook to help you create your own Home Bakery Business Plan !

I want to give you the jump start you need to start your Home Bakery.

Creating your business plan will give you a lot of insight into yourself, your ideal clients, what you want to bake and why you want to do it.

Most importantly it will help you figure out where you want to go …

Because “If you don’t know where you’re going, any road will take you there.”

By outlining where you want your business to go, you have a much greater chance at success because you will always be aware of where you are heading.

Your free Home Bakery Business Plan workbook is waiting for you in my free Resource Library. Follow this blue link to access the library and then download & print out your workbook 👉 Access your free workbook here!

Awesome! Let’s get stared!

YOUR HOME BAKERY BUSINESS PLAN

Step #1: your executive summary.

It might sound super intimidating to create an “executive summary”, but don’t worry 🙂 An executive summary is super easy to create through answering a few questions. It’s basically just about WHAT you do and WHY you do it…

IF YOU HAVEN’T STARTED YOUR HOME BAKERY YET:

You might not be able to a nswer all of the questions below yet, BUT you can share your research and all the steps you’re taking to ensure your business’s success.

1. YOUR MISSION STATEMENT

What is the purpose of your Home Bakery? What value do you add to your city/town? Why did you start your Home Bakery Business?

2. HIGHLIGHTS OF YOUR GROWTH

3. your products & services.

Write down a short summary of the products & services your Home Bakery will offer in order to make your business profitable.

4. YOUR GOALS FOR YOUR HOME BAKERY

Time to dream, my friend! What are your goals for your Home Bakery?

What do you want your business to look like 1 year from now, 2 years from now and 5 years from now?

STEP #2: Your Home Bakery Business Description

Now we are going to dive into your business culture & brand which is something that EVERY business is either working on or has figured out.

1. WHAT SETS YOUR HOME BAKERY APART?

Why should someone buy from YOUR Home Bakery above others? What makes your business different?

2. THE PEOPLE YOU SERVE

Every business needs clients in order to survive and thrive! So it’s super important to define WHO your business’s ideal clients are:

How old are they? What do they do for a living? What do they care about most? Why have they come to your baking business? How can you help them? What are their goals & aspirations? What are their hobbies? Which things make them happy?

3. YOUR HOME BAKERY’S CULTURE & BRAND

Another way to think of “culture & brand” is simply to see it as your business’s personality & looks; it’s the first impression that clients get from your Home Bakery Business…

When people interact with your Home Bakery, what do you want them to feel? How would you describe your Home Bakery’s Personality? What purpose does your Home Bakery serve?

4. YOUR HOME BAKERY’S ORGANIZATIONAL STRUCTURE

Organizational Structure simply refers to the legal definition of your business. If you are the only person working in your Home Bakery – which is pretty much always the case – then you are automatically defined as a “ sole proprietor “.

Even if there’s one other person in your business who cleans for you or helps you out with deliveries or admin, etc. you are still a sole proprietor.

You’ll include this organizational structure definition when submitting your tax information each year.

Related: Home Bakery Certificates, Licenses and Insurance

If you decide to expand your Home Bakery in the future, you can do the necessary research to figure out whether you should register your business as a Partnership, CC, LLC, etc.

The motivation for changing your business to one of these other organizational structures is for financial reasons. If your business should go bankrupt while you are a sole proprietor, then YOU are by definition bankrupt as well.

But if you have an LLC, CC, etc. then only your business will be bankrupt and not YOU as a person.

This may sound like super scary stuff, but you don’t need to worry AT ALL, okay? Home Bakeries typically do not shuffle around tens of thousands of dollars each day so our risk is SIGNIFICANTLY lower.

We also typically do not buy like 5 company cars and employ 20 people and stuff like that.

Our Home Bakeries are small and safe 🙂

STEP #3: Competitor Analysis

Before launching your Home Bakery business, I encourage you to THOROUGHLY research your largest competitors (popular bakeries with staff) and other Home Bakeries in your city, town and suburb.

Doing this is important because it will enable you to make more informed decisions and chart your own, unique course moving forward that serves a REAL need in your community and beyond.

Be mindful when you’re researching & analyzing your competitors though…

It’s SO EASY to be swooped up in a wave of comparison when you look at other Bakeries; their high skill level, beautiful website & branding, EPIC social media…

Guard your heart and analyze with your HEAD. Be HAPPY for them because they’ve worked super hard to get to where they are.

They may be your competitors, but they are NOT your enemies.

ALWAYS BE HAPPY FOR OTHER BAKERIES. BAKERS SUPPORT EACH OTHER AND THEIR SUCCESS. PERIOD.

See these businesses as inspiration for where YOU could be in a few months! It’s 100% possible!! By completing this home bakery business plan you’re taking a GIANT LEAP towards your own success!

Related: 5 Mindsets Shifts of Successful Home Bakery Owners

Also, I know all too well how tempting it is to just copy their cakes, their designs, their website design etc., but doing this will ONLY DAMAGE YOUR BUSINESS!!

They became successful by doing THEIR own thing and so will you if you do YOUR own thing.

Now, when doing your competitor analysis, you’ll want to take the following steps:

1. IDENTIFY YOUR COMPETITORS

Now you’re going to list of all of your competitors. Which other Bakeries bake goods that are similar to yours (or similar to what you want to bake in the future)?

Write down the Bakery’s name with links to their website & social media:

The Free Home Bakery Business Plan Workbook has very handy spaces for you to easily fill in 👉 Access your free workbook here!

If you’re brand new to the Home Bakery scene, then you may not know who your competitors are.

Here are a few ways to find them:

• Search on Google: This is the easiest way to find your competitors. Search phrases like “delicious cake [your town/city]”. You can even get more specific by searching for “home bakery [your suburb]” which will give you results for Home Bakeries closest to you. I encourage you to click through to look at all result pages from 1 – 4 to get a more thorough scope (and because Home Bakeries mostly not listed first).
• Search on Social Media: Social media – especially Instagram – is THE place to be for businesses today. Bakeries that are worthy competitors will have social media accounts. Search hashtags in Instagram like #[your city]cakes or #[your city]food. Or simply search for “Home Bakery [your city]”.

2. STRATEGIES & GOALS OF YOUR COMPETITORS

Cool, now that we know who your main competitors are we need to find out what their angle is for reaching their ideal clients – because you can learn from them and also readjust your own strategy accordingly.

What are they promoting? (Their products, services, lifestyles, feelings…)

What strategies do your competitors have in common ? (Like Instagram lives, Facebook lives, certain types of promotions or giveaways…)

Which things  set each competitor apart from the others on your list? (What do they do differently than all the rest?)

What goals do your competitors have? (I know you’re not a mind reader, but what assumptions can you make from analyzing their business? Sometimes Bakeries will even share their goals on their about pages on their websites…)

3. PRICE RANGE OF YOUR COMPETITORS

Check out the prices of all of your competitors for each different type of bake they sell. This will give you a better idea of what your future clients will be comfortable paying for baked goods.

4. STRENGTHS & WEAKNESSES OF YOUR COMPETITORS

Now that you’ve analysed each of your competitor’s websites, social media, products & services, you should have a pretty good idea of:

who they are, what they are doing, why they are doing it, who they are doing it for and where they are going with their business…

Let’s dig a little deeper. Use the next section on the home bakery business plan workbook to make a list of some of their strengths and weaknesses.

What are they super good at and what can they improve on or change completely ?

STEP #4: Audience & Market Research

Back in STEP #2 of your home bakery business plan we identified and described your Home Bakery’s ideal client. Go ahead and look back to refresh your memory because now we’re going to dig deeper…

1. SURVEY YOUR AUDIENCE

Surveys are hands-down the best way to gather priceless insights into the minds and needs of the people you want to serve – especially because surveys are anonymous.

People tend to share their TRUE desires and thoughts a lot easier when they have the security of anonymity.

Create your own FREE survey on SurveyMonkey or Typeform and then share it with your audience. I recommend sharing it with your email contacts, your social media, local family & friends.

You don’t want your survey to be too long – because then people will be too lazy to answer the questions! Trust me… Keep it to 3 questions 😉

What are the best 3 questions you can ask your audience to understand their needs & desires better?

2. HOW CAN YOU HELP/SERVE YOUR AUDIENCE?

In Step #2 we covered your brand’s personality and in Step 3 we defined the brand personality of your Competitors. With this information in mind, here are a few questions for you…

How can YOU, as a unique human being & baker, help your audience?

What makes your Home Bakery different from all other Bakeries (big & small)?

In what ways can your Home Bakery’s unique qualities benefit your ideal client that’s different from all the other Bakeries in your town/city & suburb?

STEP #5: Your Home Bakery’s Products & Services

And now it’s time for the BEST part – your baked goods & services! Yay! 😄

These are the 2 things that will bring profit to your Home Bakery , so it’s super important to put thought, heart and proper planning into this…

1. YOUR MENU – THE BAKED GOODS YOU WILL OFFER

Which products do your ideal clients need? Refer back to the answers from your survey to get good ideas.

HOWEVER, I do believe that people are aware of what they want, but they aren’t necessarily always aware of what they NEED. So trust your own talents and passion on this as well…

2. THE BAKED GOODS YOU WILL NOT OFFER

Defining what you DON’T bake is just as important as defining what you DO bake. Which products will NOT be on your menu and why?

I’ve also got an amazing free guide for you in my Home Bakery Resource Library to help you find the perfect niche for your business. Join the library to get the free guide on finding your niche.

3. YOUR SERVICES – WHAT YOU WILL OFFER

Which services do your ideal clients need? Refer back to the answers from your survey to get good ideas.

Will you offer delivery? Are you considering to offer customization? Will you offer on-site catering or set-ups? Will you offer rental services for cake stands etc.? Get specific here.

4. THE SERVICES YOU WILL NOT OFFER

Defining which services you DON’T offer is just as important as defining which services you DO offer. Which services will you not offer and why?

5. HOW ARE YOUR PRODUCTS & SERVICES DIFFERENT?

Refer back to your competitor research: How are your products & services different from theirs? Is there anything you could add that would make your menu & services feel even more valuable than theirs?

This sure is a LOT of information to keep track of! You can easily have it all on hand by downloading your free Home Bakery Business Plan Workbook 👉 Access your free workbook here!

STEP #6: Your Home Bakery’s Sales & Marketing Strategy

  Wow! Look how far you’ve come already – I’m so proud of you for putting in all this hard work to create your Home Bakery’s Business Plan…

It’s the first and biggest step you can take to start turning your Home Bakery dreams into a reality! 😄

The last step in your home bakery business plan is working out your sales & marketing strategy. Without a strategy there’s nothing you can do besides “waiting and hoping” your business will grow. A strategy makes it all REAL! Let’s dive in!

1. HOW WILL YOU MARKET YOUR BUSINESS & BAKES?

Take some time to consider which platforms and methods you want to use to market your business and baked goods…

Do you want to use a Facebook group, page or ads? Are there some local Food Markets you’d like to trade at? Do you have some contacts and connections who love your baked goods you can ask to “spread the word” via email or with a flyer?

RELATED: The 4 Essentials of Home Bakery Marketing

Once you’ve decided on some methods, research them online for better results.

2. YOUR MARKETING SCHEDULE

It’s important to set a day and time aside for yourself to spend on Marketing – otherwise life will find a way of soaking up all of your time! When will it be?

Related: How to Plan your Home Bakery’s Work Schedule

3. LAUNCHING YOUR HOME BAKERY (IF YOU’RE NEW)

If you haven’t started your Home Bakery yet, it will help to create a “launch” strategy for your business. How will your business officially come into existence?

What are some things you can do to launch your Home Bakery with a bang and get people excited about what you bake?

4. HOW WILL YOU GROW YOUR HOME BAKERY?

You’ve made it to the last question! Congrats! This last section is about coming up with strategies to grow your business.

This doesn’t necessarily mean employing staff and moving to a larger facility (or opening a retail bakery) – unless that’s what you desire.  This last section pertains more to how you will grow your profits and client base.

Will you outsource certain tasks like cleaning, branding, photography, deliveries, social media management, website building, etc.?

Will you expand your menu & services?

How will you look after your clients to keep them coming back?

Think about things that you can do to keep your Home Bakery Business growing and thriving.

And that concludes your Home Bakery Business Plan my friend! I’m so proud of you for taking action and taking this first step towards starting your baking business 😄

Now you might be wondering, what happens next?

The perfect next step for you is to check out my Ultimate Guide to Starting a Part-Time or Full-Time Home Bakery.

What info are you looking for?

Hi! I’m Aurelia 🙂

I help home bakers create a Home Bakery Business with consistent orders so they never have to worry about a stable income.

Popular Posts

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POPULAR BAKING BIZ TIPS

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Got a question? Something to add? Let’s chat in the comments section down below! (I respond to every single comment)

Investment range

$2,000 - $7,000

Revenue potential

$62,000 - $310,000 p.a.

Time to build

Profit potential

$37,000 - $125,000 p.a.

Industry trend

Here are the most important aspects to consider when opening a cake business:

• Location — It’s a good idea to set up your cake business in busy areas with a lot of foot traffic and attract walk-in customers. Also, align your location with your target market and their preferences.
• Find a niche or specialization — Stand out from your competitors with a unique offer such as custom-designed cakes, diet-specific offers, cultural or regional specialties, cupcakes, mini cakes, or cakes for special occasions such as birthdays, weddings, and anniversaries.
• Invest in equipment — You will need various cake-making equipment such as ovens, mixers, refrigerators, baking pans and molds, scales, decorating tools, and storage solutions. 
• Licenses and permits — Since you will be handling food, you will need a food service license and possibly a health department permit. Also, if you plan to bake cakes at home you will need a home occupation permit .
• Find suppliers — Find reputable suppliers for all the fresh ingredients you need to make the cakes.
• Legal business aspects — Register for taxes, open a business bank account, and get an EIN .
• Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
• Online store — Take your cake business online and create a store where people can see and order cakes from you. Make sure you use platforms like Instagram and Pinterest to showcase your work, get listed on Google Business and Yelp, and optimize your listings.
• Packaging — Protect your cakes during delivery and use packaging as marketing material.

Interactive Checklist at your fingertips—begin your cake business today!

You May Also Wonder:

Is a cake business profitable?

A cake business can be an extremely profitable venture, even if you are a solopreneur and operate from home. You will not have any significant operating expenses because there is no need for rent or equipment to purchase.

Is it hard to start a cake business?

Starting a cake business can be challenging due to the need for baking skills, creativity in design, and knowledge of business regulations and marketing. However, with passion and proper planning, it can also be a rewarding venture.

Can I sell cakes from home?

Yes. The process of starting a cake business from home is easy and requires little capital. You can deliver the product to clients’ doorsteps or even have the client book their preferred courier, which reduces overhead expenses. You can also accept orders online through your website or social media channels.

Is cake baking a good business?

Cake baking is a good business, because it will allow you to be your own boss while also ensuring consistent revenue. It’s also good for people who want to make some extra income from their side hustle, or those looking for artistic and innovative work that offers plenty of opportunities to learn new skills along the way.

What makes a cake business successful?

A cake business is successful when it offers high-quality cakes, unique designs, excellent customer service, effective marketing, and profitability.

How do I attract customers to my cake business?

To attract customers to your cake business, use social media to showcase your cakes, collaborate with other businesses, attend wedding fairs, offer tastings and consultations, and encourage word-of-mouth referrals.

How can I make my cake business unique?

To make your cake business unique, specialize in a niche, offer personalized and custom cakes, experiment with flavors and ingredients, incorporate alternative designs, and emphasize quality and attention to detail.

Step 1: Decide if the Business Is Right for You

Before entering the baking industry, you need to know about the advantages and challenges that come with it. To help you determine if this is the best career path for you, here are some of the typical pros and cons of starting your own cake business:

Pros and Cons

• Work from home on your own schedule
• Low start-up costs
• Simple model with steady year-round income
• Easily scalable and can be transferred to production facility
• Unsold products often go stale, leading to loss
• Target market is mainly local, hindering potential

Cake Industry Trends

For broader industry information, read this Step By Step article on starting a bakery . 

Industry Size and Growth

• Industry size and past growth — The global cake market was valued at $65.68 billion in 2023, according to market analyst Grand View Research. Thanks to increased urbanization and more disposable income, the US market has also been enjoying steady growth.
• Growth forecast — The global market is projected to grow about 3% annually through 2030.(( https://www.grandviewresearch.com/industry-analysis/cakes-market ))
• Number of people employed — As of 2023, more than 220,000 bakers were employed in the US, according to the Bureau of Labor Statistics.(( https://www.bls.gov/oes/current/oes513011.htm ))

Trends and Challenges

• Grocery stores and supermarkets are adding in-store bakeries
• Increase in bakery-cafes
• Rising interest in healthier and diet-related products, such as sugar-free, gluten-free, dairy-free, organic, and low-sodium options
• Online sales of cakes are rapidly increasing as more consumers appreciate the convenience of placing an order while at work or on the go
• Shelf-life issues of ingredients
• Capturing fickle consumers

Popular Products

Here are the most popular types of cake consumed in the US in 2017(( https://www.statista.com/statistics/235492/category-share-of-cake-sales-in-the-us-by-cake-type/ )):

What Kind of People Work in Cake Shops?

• Gender — Around 54% of all bakers are female, while around 46% are male.(( https://www.zippia.com/baker-jobs/demographics/#gender-statistics )) 
• Average level of education — 31% of bakers have a high school diploma while 26% hold a bachelor’s degree.(( https://www.zippia.com/baker-jobs/education/ ))
• Average age — The average age of an employed baker is 41.7 years old.(( https://www.zippia.com/baker-jobs/demographics/#age-statistics ))

How Much Does It Cost to Start a Cake Business?

Startup costs for a cake business run from $2,000 to $7,000 or more, and vary depending on the equipment you already have. For instance, if you have a reliable refrigerator and oven, this reduces your costs. The amount that you spend on marketing will also fluctuate your start-up capital requirements.

You don’t need expensive equipment to bake cakes. Most of the necessary tools and equipment will likely already be available in your kitchen. You can easily buy any other items you need from Amazon or eBay , or from a local food and beverage supplier. In addition to equipment and tools, you’ll also need ingredients and packaging material. Finding a grocery or local dealer is your best bet for good deals on bulk baking goods. 

How Much Can You Earn From a Cake Business?

The median cake size is 10 inches in diameter, with an average sales price of $60. If you start out as a solopreneur working from home, you can expect a profit margin of about 60%, which means you’ll make around $36 for each cake sold. 

In your first year or two, you might sell 20 cakes a week. This would give you more than $62,000 in annual revenue, and a profit of around $37,000. After you scale up your operations with a production facility and a full-time staff, your margin will fall to 40%, but you might sell 100 cakes a week. This would give you more than $310,000 in annual revenue and a profit of nearly $125,000. 

What Barriers to Entry Are There?

In any food business, the biggest barrier to entry is often the stringent regulations and licensing requirements. Food businesses are regulated by the FDA, which provides a comprehensive guide on starting a food business .

Another barrier to entry includes developing new recipes to stand out in a crowded market. Consumer preferences and dietary requirements change from time to time. You need to establish an adaptable menu that you can customize according to your customers’ changing desires.

Related Business Ideas

How to Make and Sell Cupcakes: A Step by Step Guide

Baked to Perfection: How to Start a Cookie Business

Baking Dreams: Starting a Successful Donut Shop

Step 2: hone your idea.

Now that you know what’s involved in starting a cake business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an Opportunity

Research cake businesses and bakeries in your area to examine their products, price points, and customer reviews, and see what sells best. You’re also looking for a market gap to fill. For instance, maybe the local market is missing a good gluten-free and vegan cake maker.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as sponge cakes or cupcakes.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine What Sort of Cakes You Will Make

The next crucial step is determining what sort of cakes you will produce and sell. Would you like to offer a wide variety of pre-made and custom cakes? Or maybe you’d prefer to focus on a single type of cake, such as cheesecakes or sponge cake, and build your brand that way.

Chocolate is the most-searched-for type of cake online, followed by red velvet and carrot.(( https://www.bakeryandsnacks.com/Article/2019/07/12/Top-10-The-world-s-favorite-cakes-revealed/ )) It’s a good idea to do some research and determine if it is more viable, in your area, to focus on wedding cakes, birthday cakes, cupcakes, or some other segment. 

If you are new to cake baking, you need to spend some time developing recipes and designing a menu. However, if you are a seasoned cake baker, you may bring the recipes you developed over the years, reducing the time spent conceptualizing. You might also consider offering baking classes or online courses to boost your revenue. 

One thing to keep in mind is that sponge cakes last longer than most other cake types before they go stale, reducing your potential losses. Another money-saving option is offering frozen cakes, a market segment that has seen significant growth in recent years.  

How Much Should You Charge for Your Cakes?

Your prices will depend on which types of cake you choose to offer, as well as costs, overhead, and your target profit margin. Keep in mind that your prices will need to be in line with those of your competitors. 

Once you know your costs, you can use our profit margin calculator to determine your markup and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.

Who? Identify Your Target Market

You could choose to concentrate on custom cakes, which would likely get you a lot of birthday orders. In that case, your target markets would be parents, offices, and residential communities, and you could find them on Facebook and LinkedIn. If you specialize in a certain kind of cake, you might want to focus on selling wholesale to local grocery stores, restaurants, and cafes, which you could find on Google Maps and Yelp. 

Where? Choose Your Business Premises

In the early stages, you’ll probably run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers and may choose to rent out a storefront or production facility. Find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Cake Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “cake” or “cakes,” boosts SEO
• Name should allow for expansion, for example, “Dessert Delights” over “Vegan Delights”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Discover over 250 unique cake business name ideas here . If you want your business name to include specific keywords, you can also use our cake business name generator. Just type in a few keywords, hit Generate, and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Here are the key components of a business plan:

• Executive summary — A brief overview of the cake business, highlighting its mission, goals, and key accomplishments
• Business overview — A detailed description of the cake business, including its mission, vision, values, and legal structure
• Product and services — Clearly outline the types of cakes and baked goods offered, emphasizing any unique or specialty items
• Market analysis — Evaluate the target market for the cake business, including demographics, trends, and potential customer needs
• Competitive analysis — Identify key competitors in the cake industry, analyzing their strengths and weaknesses to highlight the business’s competitive advantage
• Sales and marketing — Outline the strategies for promoting and selling cakes, including pricing, distribution, and promotional activities
• Management team — Introduce the key members of the cake business team, emphasizing their qualifications and roles in ensuring success
• Operations plan — Detail the day-to-day operations of the cake business, covering production, supply chain, and quality control processes
• Financial plan — Present a comprehensive financial projection, including startup costs, revenue forecasts, and a break-even analysis
• Appendix — Include supplementary materials, such as resumes of key team members, detailed market research, or any additional information that supports the business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider finding and hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose Where to Register Your Company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to cakes. 

If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state. 

Choose Your Business Structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your cake business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• Partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) — Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corporation — Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corporation — This refers to the tax classification of the business but is not a business entity. Either a corporation or an LLC can elect to be an S Corp for tax status. Here, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online or by mail/fax. Visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund Your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans — This is the most common method but getting approved requires a rock-solid business plan and a strong credit history.
• SBA-guaranteed loans — The Small Business Administration can act as a guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants — A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Angel investors — Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding — Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal — Self-fund your business via your savings or the sale of property or other assets.

Your best bet for funding a cake business is likely personal assets and friends and family, though if you have an exciting concept you could also give crowdfunding a shot. 

Step 8: Apply for Business Licenses and Permits

Starting a cake business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

Since you intend to launch a cake business, you will also need to go through the FDA to get approval. The FDA has a set of guidelines for acquiring licenses and permits to operate your cake business:

• Small Entity Compliance Guide: Registration of Food Facilities
• Registration of Food Facilities and Other Submissions
• FDA Guidelines for Labelling Food Products

You may also need state-level licenses and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your cake business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability — The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business property — Provides coverage for your equipment and supplies.
• Equipment breakdown insurance — Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation — Provides compensation to employees injured on the job.
• Property — Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto — Protection for your company-owned vehicle.
• Professional liability — Protects against claims from clients who say they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) — This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential Software and Tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

Many excellent software tools, such as BatchMaster , FlexiBake , Bake Diary , and Cake Boss , are focused on baking and can help you with sales, inventory, pricing, design, and more. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , FreshBooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences of filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop Your Website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Here are some powerful marketing strategies for your future business:

• Tempting social media content — Utilize Instagram and Pinterest to display your exquisite cake designs, attracting and engaging a broad audience.
• Website and local SEO — Employ local SEO techniques to ensure those searching for “cakes near me” or “custom cakes” find your bakery easily. Optimize your bakery’s online presence to dominate local search results, ensuring easy access for nearby customers searching for custom cake orders.
• Online ordering system — Implement an easy-to-use online platform that highlights your cakes’ customization options and streamlines the ordering process.
• Striking branding and packaging — Develop unique branding and packaging that make your cakes visually appealing and memorable.
• Seasonal promotions — Launch promotions during holidays and special events to draw customers looking for festive cakes.
• Engaging email newsletter — Regularly send updates about new flavors, promotions, and baking classes to keep your customers connected and informed.
• Baking blog — Share recipes, decorating tips, and the latest trends in cake design to showcase your expertise and engage with your audience.
• Customer creations and testimonials — Highlight real customer experiences and reviews to demonstrate the joy and satisfaction your cakes bring to various celebrations.
• Cake tasting events — Organize tasting sessions for potential customers, particularly targeting those planning significant events like weddings.
• Baking workshops — Conduct cake decorating classes to build community and deepen customer loyalty through interactive learning.
• Local vendor partnerships — Collaborate with event planners, florists, and venues to offer bundled services and mutual promotions.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your cakes meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your cake business could be: 

• Gorgeous custom birthday cakes at great rates!
• Frozen cakes — fresher longer 
• The cupcake of your dreams 

You may not like to network or use personal connections for business gain but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a bakery, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in cakes and desserts for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in cakes and pastries. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a cake business include:

• Pastry chefs
• Marketing lead 
• General manager

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Cake Business — Start Making Money!

For many people, celebrations aren’t complete without cake. So, a birthday party isn’t complete without the celebrator blowing the candles on a cake. Newlyweds must slice their cake together during their wedding reception, and so on. The cake industry is enjoying steady growth so you should have no trouble finding customers, especially if you can offer something unique and unforgettable. Of course, it has to taste good too!

Now that you have the necessary knowledge, you’re now ready to start your entrepreneurial journey. It’s time to get out there, roll up those sleeves, and start baking and selling beautiful cakes.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Cake Business Name
• Create a Business Plan
• Register Your Business
• Register for Taxes
• Fund Your Business
• Apply for Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Cake Business — Start Making Money!

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