Do you have a passion for cooking and baking?
When people try your baked goods, do they ask for your recipe? Are your goodies the first to sell-out at the local bake sales? Do you love being in the kitchen and creating new recipes? Do you need more money…, but want to be home with the kids? If you answered “yes” to at least two of the questions above, then starting a home baking business might be right for you.
Everybody loves home-baked cookies and cakes…
But, not everyone has the time to bake. Especially in light of all the responsibilities that come with our modern life. People run from one thing to the next (jobs, errands, school meetings, and more), leaving little time for the kitchen. Or, if they do have time, not everyone enjoys baking. This is where your home business can be helpful to people. So…how do you start your business?
First, you must determine a need…
- Are there busy moms that might prefer their children have snacks with nutritional value and no preservatives?
- Are there people who throw parties frequently that would like appetizers or pastries brought in for them?
- Are there offices that might like treats brought in for the employees regularly (say a hump day or end of the week treat)?
- Maybe social groups that have tea and cakes at their meetings?
Deciding what niche you will serve will make marketing easier.
Any business you can think of fulfills the needs of a specific group of people. By making this decision early on, you can save yourself a lot of time and streamline your marketing efforts. By knowing what group you will be marketing to, you can more easily develop recipes. Your business will have a purpose, and it will fill the needs of a group of people that will be excited to buy what you are offering.
Next, you should look at the competition for the niche you are choosing…
As with any business researching the market is essential.
- Are there other businesses serving the group you have chosen already?
- What is your competition charging?
- Do people like their quality?
- Is there room for another business serving the same group?
- Are the prices you want to charge reasonable for the market you will be serving?
Now, you need to determine the cost of producing your product
Find the recipes you will use for your business. Make a list of the ingredients used in each of your recipes. Then, determine the cost of those ingredients. Let’s say you are going to sell cookies by the dozen, what is the cost for the ingredients to make that dozen cookies. In addition to eggs, flour, sugar, etc., don’t forget to include the cost of packaging those cookies. Plastic wrap, Styrofoam, gift bags all have a cost as well.
Next, you will determine the price you will charge.
A good rule of thumb is to use a percentage food cost to determine your price. The percentage range should be between 25-35 percent. So if your dozen cookies cost $1.50 to produce, at 30 percent food cost, you would take your cost $1.50 divided by .30 equals $5.00. So, you would charge your customer $5.00 for that dozen cookies. That would make your profit $3.50 per dozen cookies.
- If you charge a 25% food cost; $1.50/.25=$6.00
- If you charge a 30% food cost; $1.50/.30=$5.00
- If you charge a 35% food cost; $1.50/.35=$4.28
A 30% food cost is pretty standard but you will also need to consider what your competition is selling the same product for and what your market will be willing to pay.
Focus Your Efforts On The Success Of Your Business
All business take time to set up. A home baking business has a smaller cost of start up than many other businesses. You can work from home and set your own schedule. It may seem a little complicated at first, but if you work through the steps I have outlined you are on your way to success. Here are a few more pointers you need to consider;
- Point One: Create a home baked good that people will crave and talk about. Your business will grow fastest by word-of-mouth. Make a list of products you can make that are so good that customers won’t be able to get enough.
- If you have several products take them to the places your customer base will be, and give out free samples. Have fliers with your prices or business cards available to hand out when you do this.
- Point Two: Customer care is important. Give people a product they want at a price they are willing to pay. Deliver their goods on time. Don’t take so many orders that you end up sacrificing quality to meet demand. If you need to create a waiting list for your products it is better than being late or delivering a lesser quality.
- Point Three: Decide how much you want to work and develop a work schedule. If your orders increase to a point where you are exceeding the amount of time you have allotted for work, you may need to create a waiting list or hire help to meet the orders.
For a more detailed outline of how to start a home baking business buy this e-book “Cake Decorating Business Secrets”. It will give you more detailed, step-by-step instructions on how to set-up your new business, promote your business, avoid common mistakes, and save money while creating the business of your dreams. Available at Clickbank only through this link
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