How to start a bakery business from home

Starting a bakery business can be exciting and rewarding. However, it takes hard work, dedication, and passion to turn any big dream into reality. But with the right guidance and resources, your business will be baking in no time.

The recipe for success is to have a plan, understand the necessary steps, and be willing to put in the hard work. Of course, the hard work is up to you, but the rest you can learn. This post will show you where to go for more information to help you achieve your business aspirations.

Planning your bakery business

Let’s say you want to bake a chocolate cake.

You start by grabbing a couple of sticks of butter and throwing them in a mixing bowl. Then you pour in sugar — just eyeballing it. Next, you dribble a little vanilla, throw in two or three eggs and some flour, guessing how much, just like with the sugar.

You can see where this is going. This isn’t a recipe for cake. It’s a recipe for disaster.

Any baker worth their salt, or in this case, sugar, knows that you can’t bake without a solid recipe. The same goes for starting a baking business.

When starting your business, you don’t have to be as precise, well-planned, and controlled as you do when baking. But you should still have a plan.

Analysis paralysis happens when you over-plan. A plan that’s too rigid doesn’t account for the things you learn along the way or the changes and challenges you’ll experience.

You probably have a pretty good idea of what you want to do at this point. But if not, here’s a question to get the ball rolling.

Do you want to specialize, or do you want to be a generalist? Nothing Bundt Cakes, Crumbl Cookies, and even Wetzel’s Pretzels are excellent examples of specialty bakeries. Specializing can help you stand out and create a niche where you can be the best.

Being a generalist baker can help you appeal to a broader audience, but it can take more work when it comes to marketing. On the other hand, if you want to create custom orders for people, generalizing might be your best approach.

Brainstorming

When most people think about starting a business, they have an explosion of ideas. The goal is to turn all those ideas into actionable plans. It’s a skill that few people have, but it’s actually relatively easy to develop and can be broken down into these two steps:

  1. Get all of the raw ideas out of your head and somewhere safe.
  2. Structure those ideas in such a way that they become projects and tasks.

You can get the ideas out of your head with a planning technique called brainstorming or mind mapping.

When brainstorming, start by writing down a central topic, like starting a bakery business, and circle it. Then create any number of subtopics, like financing, marketing, and inventory management, to name a few.

Circle each subtopic and draw a line from the central topic to each one. When an idea bubbles to the surface, add it to the relevant topic. When you’re done, it usually looks like a tree seen from above in the winter.

The nice thing about brainstorming is that it doesn’t take much foresight. It’s a very natural process. But when it’s done, you have the beginnings of a structured plan.

Brainstorming can be done on a whiteboard, a piece of paper, or by using special software like Whimsical — a suite of planning tools, including a mind mapping tool that reduces the friction between thinking of something and getting it into your mind map.

Structuring your ideas into a plan

Now we come to the second step. You have a lightly organized map of all the thoughts rattling around in your brain. Let’s look at a couple of techniques to help you turn that map into something more actionable:

  • GTD. GTD (Getting Things Done), is a productivity technique created by David Allen and showcased in his best-selling book of the same name. GTD helps you brainstorm ideas and turn them into actionable projects and tasks. There’s some overlap between GTD and brainstorming, but doing both can still be helpful because brainstorming is an excellent way to structure the ideas immediately as you think of them. From there, you can use GTD to structure those ideas further.
  • Kanban. Japanese automakers created the kanban technique to help manage large projects. It’s a pretty advanced system, but the most popular part is easy to learn and use. Imagine writing each aspect of a project on a 3 x 5 card. Organize those cards into stacks by project, completion state, or whatever works best for you.

Trello is a great tool to manage kanban-style projects. Each task, project, or other item can be placed into any number of columns. In addition, each Trello card can be assigned to different individuals and have checklists for tasks, as well as many other features.

You can use Trello columns to work through your GTD process. Once you’ve finished organizing your business with Trello and GTD, you’ll have a good idea of how to get started. You don’t need to stick strictly to the GTD system. Instead, you can use it as a jumping-off point and set up columns that work for you.

A professional business plan

A business plan is a written document that outlines a company’s goals and how it plans to achieve them. It also covers several other aspects of a company’s future agenda and can serve as a tool for internal decision-making or as a business proposal to pitch to potential investors.

A business plan is essential because it provides a roadmap for the future and sets performance goals. It outlines the steps and resources needed to reach those goals. It also serves as a communication tool, helping owners, investors, and managers understand the company’s objectives and how they will be achieved. As a communication tool, it can help secure financing and provide a benchmark for success.

There are a ton of different resources out there that can help you write a business plan. The Small Business Administration has a great guide that walks you through the process.

Advice and mentorship

When starting a business, advisors and mentors are vital because they have the experience and knowledge to guide you through starting and running a business. They can help you identify potential risks and opportunities, provide advice and contacts, and even help you develop an effective strategy for achieving your goals. Additionally, advisors and mentors can help you stay motivated and on track with your business plan.

An experienced mentor’s support can provide invaluable insight and guidance, helping you avoid pitfalls and maximize your success.

Another service provided by the SBA is its SCORE program. SCORE stands for Service Corps of Retired Executives. It’s a collection of people who have successfully created and managed their own businesses for years.

Creating a web and social media presence

The name of your business is significant. It’s deeply tied to the service you provide. But in the digital age, your favorite business name idea might not work if you can’t find a matching domain name.

Domain names

Some people may be confused if your domain name is wildly different from your business name. And it can be very challenging to find the perfect domain name because so many are already taken.

That’s why you should have a few loose ideas for business names and be flexible so you can find a name that’s available as a domain name. Before you settle on your final business name, let’s look at how to find a good domain name.

Here are three pointers:

  1. Keep it short and sweet. Many times, a link is what leads people to your website. But the first time a person visits your website, there’s a good chance they’re going to type it in. Many people will move on if your domain name is too complicated. So keep your domain name easy to spell, say, and share.
  2. Dot-coms are best, but there are alternatives. If you tell somebody your domain name, you could skip the dot-com, and they’d still know what you mean. But hundreds of new domain extensions have been introduced in the last 10 years. So instead of beesbestbakery.com, you could go with beesbakery.catering, .delivery, or .store. But be careful because even if you say beesbakery.store, people may still type in beesbakery.store.com.
  3. Get creative. All the simple one-word domain names, like Amazon and Pandora, have been taken for some time. But simple domains are still available if you think outside the box. For example, Airbnb, OkCupid, and even Facebook are all examples of made-up names.

The best place to get a domain name is from Google Domains, which has reasonable prices, a simple interface, and no ads or upsells.

Social media

Once you have a domain name, it’s time to start thinking about your social media presence. Building your social media presence is a topic we’ll return to shortly. But this is still a good time to think about your names and create accounts.

Fortunately, coming up with your social media names will be much easier than finding your domain name. As long as all social media sites have names close to your business name, you’re OK.

Most social media accounts are accessed through links and rarely searched for by name. So you can be a little more flexible with naming your social media accounts. And nothing is set in stone. You can always change your account names without losing any followers.

Business name

Now that you’ve figured out your domain name and social media names, make your business name match these as closely as possible. Of course, you have a little wiggle room, but it’s best if your business name is the same as your domain name.

Funding your venture

If you’re starting your baking business in your kitchen, your startup costs will be minimal. But your home equipment may not meet your needs once your business grows to a certain scale.

That’s where your business plan will come in handy. If you need to buy a better oven, commercial baking supplies, and specialty tools that you may not yet own, you’ll likely need to seek some funding.

Here are five things to keep in mind as you search for financing:

  1. Know your numbers. A big reason why you created your business plan was to understand your financial needs. You already know your numbers if you’ve finished your business plan. Keep them in mind when talking to investors to prove that you have realistic expectations and understand what it will take to meet them.
  2. Be realistic about your goals. We’re going through some financially challenging times. That can make it very hard to predict what your needs will be down the road. You should have both an optimistic and a pessimistic outlook. Be ready for anything that might come up, and give yourself some wiggle room — but don’t go overboard. You don’t want people to think you just pulled a number out of the air.
  3. Be prepared to answer tough questions. Unless you have a crazy rich aunt, nobody will say, “A bakery business? I love it. Here’s a giant bag of money.” Instead, most people are going to grill you to make sure that you’ve thought things through. You should know your business plan in and out. And you should know things about your business that might not be in the actual plan. For example, investors want to see passion. If you’re truly passionate about starting a bakery, it will shine through, and no question should trip you up.
  4. Be patient. There are a lot of great stories about famous entrepreneurs who had to approach many different businesses before they could get their venture funded. So if you go to a bank looking for a small business loan, don’t be discouraged if the first one — or even the first eight — turns you away.
  5. Have a backup plan. Your first or best idea for gathering funds may be a flop. Stay loose and flexible. Think about other ways you can get the money you need.

Financing sources

This is one of the best times in human history to start a business. There are more ways to find money to start a business than ever before.

Here are five of them:

  1. Bootstrapping and savings. You shouldn’t put yourself at risk of bankruptcy by taking money out of your kid’s college fund. But if you have a nest egg, consider using some of it to kick-start your business. On the other hand, if you don’t have anything saved and don’t want to ask for money, there’s still hope. You can get started with your bakery this weekend. Just use the tools you’ve been using and make some goods to sell on Etsy. Then you can use the money from your early sales to slowly build up your business on a shoestring.
  2. Friends and family. Your rich aunt may not throw a bag of money at you, but she might be willing to help you get better tools and equipment. You may even have a friend or family member willing to work with you while sharing the financial burden.
  3. Grants. These are tricky. Chances are you won’t qualify for a grant. They’re meant to help underrepresented communities and individuals. For example, if you’re an indigenous tribal member, money may be available to help you start a business. But there are many more scams than actual grants, so be careful and trust only information from official government (.gov) websites.
  4. Bank loans. This is, of course, the most traditional path to securing funding. A microloan might be all you need to get up and running. If you decide to go this path, your SBA advisor will be a very valuable source of information.
  5. Crowdfunding. If you’re doing something entertaining and original, consider crowdfunding. Sites like Kickstarter have a lot of requirements, but they’re a great way to help you get started fast. They also have the added benefit of helping you know whether or not people actually want to buy your products. If people don’t get excited through Kickstarter, you should go back to the drawing board and find something that will excite them.

Legal matters

Always talk to experts and professionals before taking any legal or financial advice you see on the internet.

When you’re first starting, you’ll be juggling a lot. You’ll have to consider funding, marketing, planning, shipping, etc.

It can be easy to put off legal considerations until later. But that’s a bad idea that can turn around and bite you down the road.

As long as money is changing hands, you have a real business that comes with financial and legal obligations. And the fact that you’re selling food makes those obligations even more vital.

Here are eight things to start thinking about early on:

  1. Incorporation. Creating a corporation is a very old method for protecting your personal assets by keeping them separate from your business. A corporation acts as an individual entity that’s separate from yourself. You can run the company while being your only employee and keep yourself safe.
  2. Federal ID. An EIN (Employee Identification Number) number acts like a Social Security number for your business. It’s a necessity if you want to open a business checking account, hire employees, and even work with some contractors.
  3. Local licenses and permits. Every city and sometimes counties and states want to know about your business. They require permits and need you to follow specific regulations. That’s especially true for any business that sells food. Talk to your local officials to ensure you have all your ducks in a row.
  4. Intellectual property. Talk to your advisors about protecting your intellectual property. Protect your recipes through copyright and patent if possible and relevant. Ensure your business name, logos, and important images are trademarked.
  5. Taxes. As your business grows, taxes will get more complicated. But while it’s mostly just you, a good rule is to set aside one-third of your income for taxes. It’s also a good idea to treat your business finances like business finances. For example, treat the money you make from sales as company money and send yourself a paycheck from the beginning. That will ensure you get off on the right foot and stay there as your business grows.
  6. Insurance. It’s extra important for a food business to have insurance. You will, of course, do everything you can to maintain the utmost standards of health and cleanliness in your business. But no matter how careful you are, things can happen. Don’t let a bad batch of croissants bring your business to its knees. Make sure that you have insurance specifically for food-based businesses. The insurance should cover food-based problems and onsite issues like slips, falls, and burns.
  7. Contracts. Every time you sign up for a website, you must agree to the terms of service. Likewise, it’s a good practice to ensure you have a contract with anybody you’re doing business with.
  8. Employment law. Employment laws may be far from your mind if you start up on a shoestring and work alone. But as soon as you bring even one more person on board, you must ensure everything is in order. This is a good place to hire either a freelancer or a firm to help with your HR needs.

Marketing

Traditional marketing typically involves simple advertising, such as television, radio, newspapers, and magazines. It focuses heavily on outbound marketing tactics that involve pushing out messages to attract customers.

Modern marketing uses digital channels such as search engines, social media, email, and websites to reach customers. It focuses on inbound marketing tactics that involve creating content that attracts customers to a brand and building relationships with them. Modern marketing is more targeted, personalized, and cost-effective than traditional marketing.

Learning marketing can be like drinking the ocean. It’s vast, deep, and filled with many things that can overwhelm you. And if you’re not careful, you’ll get eaten alive by marketers trying to sell you information that can be found elsewhere for free. So where do you start?

Let’s start with a top-down/big-picture approach to avoid getting lost in the weeds. The two main aspects of being a marketer are thinking like one and doing the work of one.

Thinking like a marketer

As mentioned, modern marketing involves attracting customers and building relationships. Those are social skills. You need to focus on being relatable, trustworthy, and down to earth. People should fall in love with your brand because it matches their values, ideals, and view of the world.

And while all that’s true, marketing is also a very technical skill. You need to understand things like SEO, analytics, and the ins and outs of working with social media, among many other things.

Here are three pointers to help you get started:

  1. Understand strategy vs tactics. Strategy is the overall plan for achieving marketing objectives, while tactics are the specific actions and steps that need to be taken to implement the strategy. Strategy is the big picture, and tactics are the details.
  2. Find your people and lead them. As mentioned, your business needs to be loved. It’s not enough to have the lowest price or the flashiest gimmicks and ads anymore. You need to have a brand that appeals to people emotionally and personally. And you do that by providing the best baked goods for those people. For example, if your niche is gluten-free dog treats, you need to appeal to dog people who care deeply about their pets.
  3. Get out on the long tail. If you open up a doughnut shop, you’ll be competing with every other doughnut shop in your area. They’ve been around longer, have more experience, and already have a handful of diehard fans. It’s going to be hard to compete with that. So you’ve got to find a small niche with less competition. Be like Voodoo Doughnut. It’s famous for unique and creative doughnut creations, like the Fluffernutter, the Voodoo Bubble, and the Bacon Maple Bar.

Seth Godin teaches all three of those concepts and many more. At the time of this writing, he has written 20 bestsellers and publishes excellent advice on his popular daily blog. The best book to get you started is This Is Marketing. Even if you’re hiring marketers, it’s a good book to read to help you understand this critical aspect of your business.

Doing the actual work

Learning to think like a marketer is hard. But learning to do the actual marketing work is also hard. It’s just hard in a different way. Fortunately, you already have a head start. You’ve probably spent a lot of time noodling with one or more social media platforms. It’s a good idea to start marketing on those platforms since you’re already familiar with them.

From there, you can learn marketing from legitimate sources. One great place to get started is Udemy.

Udemy provides dozens of highly rated and high-quality courses on marketing. They generally run about $200 a piece, but Udemy offers frequent sales that can bring those courses down to as little as $11 each.

Software

In the beginning, you’ll be wearing many hats. Fortunately for you, running a business by yourself is easier than ever, thanks to some fantastic software.

Here are three of the most versatile tools available:

  1. Jotform is the premier data-collection and work automation tool. Its versatility means you’ll constantly find places in your business processes where it’s the perfect match.
  2. Google Docs, Gmail, and Meet are Google’s cloud-based suite of tools that will let you and your team communicate and work together in real time. And when your business grows, you can use Workspace, designed for companies of every size, from tiny mom and pops to massive enterprises.
  3. Notion is a knowledge management tool. It provides a collaborative editing environment that lets you use smart tables and embed other software into your pages. You can even embed Google’s and Jotform’s tools into your Notion pages, making it a great center for all your business processes.

Business processes

It’s easy to forget about business systems in the beginning. The E-Myth Revisited by Michael Gerber is an excellent book that will teach you how to work on your business, not just in your business. The 4-Hour Workweek by Timothy Ferriss is another outstanding book that will teach you how to automate and outsource much of your business.

Here are some common processes and tricks for managing them:

  1. Accounting. This involves bookkeeping, payroll, and taxes. Quickbooks is the most popular choice for small businesses and the self-employed.
  2. Human resources. This department handles hiring, firing, managing benefits, and more. Most of your HR can be done with Jotform. You can use it to receive resumes, fill out legal documents, manage employee lists and information, and much more.
  3. Customer service. Keeping your customers happy is the most important part of your business. This is another area where Jotform is your friend. You can create forms to collect service requests, return requests, and product feedback.
  4. Research and development. Customers need to stay excited about your brand. It’s part of your job to find innovative ways to make that happen. You can track all of your research using Google Docs. It’s also great for collaborative work.
  5. Marketing. This is so important we dedicated a section of the article to it. Google Docs can help you manage your campaigns, and Jotform has many marketing templates you can use to collect email addresses, do market research, and much more. Buffer can help streamline your social media marketing by automating posts, and Mailchimp will help you launch professional email campaigns without getting flagged as spam.
  6. Market validation. Before investing large sums of money into your business, determine if your target market is interested. Pitch your idea or product to prospective buyers. It will be clear whether the idea is worth pursuing or if you need to go back to the drawing board.
  7. Quality assurance. It’s important to ensure your end product meets the highest standards possible. Jotform can help you streamline the inspection process. And Jotform Approvals can automate your policies and procedures for decision-making.
  8. Shipping and receiving. It’s important to keep records of ingredients purchased and products shipped. You’ll need that information to maintain inventory and evaluate costs. Jotform can help you streamline the data entry involved by letting you create forms perfectly adapted for your business. And Jotform Tables can help you manage, organize, and evaluate that data.
  9. Storefront. Jotform can make setting up an online store one of the easiest parts of building your business, thanks to the Jotform Store Builder.

Wrapping it all up

There’s a lot involved in starting a business. But the most important thing is to start. Don’t overthink it. Don’t over plan it. Don’t spend too much on it. Don’t psych yourself out. Just roll up your sleeves and get to work.

Starting a business takes a lot of planning up front, but it’s mostly to get the ideas out of your head and somewhere safe. Once you’ve done that, just get back to work.

Whatever success looks like for you, here’s hoping you’ll see it. And here’s to you for taking the first steps!

Photo by Andy Li on Unsplash

AUTHOR
Lee Nathan is a personal development and productivity technology writer. He can be found at leenathan.com.

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