Updated: Mar 26, 2021
Want to start a baking business from home? Not sure how to do it? Use my 10-step guide to help you get going....
1. Registering your cake and baking business
You need to register your new cake business with your local authority’s environmental health service at least 28 days before you start trading. It doesn’t cost you anything and your registration can’t be refused. An inspector will come to your home to check your food preparation area. Don't panic though, they are unlikely to just turn up at a personal address and are more likely to arrange a time to visit.
It's this inspection that will determine your food hygiene rating, so make sure your records and documentations are as good as they can be.
2. Registering as self-employed
When you’re starting any new business, you need to tell HMRC and let them know that you’re self-employed (sole trader). You will need to pay tax through the Self Assessment system which you can set up yourself online. You need to do this even if you’re going to be running your home baking business part-time or if you have another job.
To set up as a sole trader (the simplest business structure) just telling HMRC is all you need to do to register your business.
3. Setting up your home office
What equipment do you actually need to run a baking business from home? Chances are you'll have most of the equipment already such as a computer, laptop or mobile device. You might just need to add a bit of software or a few apps to what you already have.
Software you're likely to need are items such as email, internet, accounting software, invoicing system, customer management system, social media accounts, e-newsletter system, templates for printing labels.
You're also likely to need to decent printer if you're printing your own labels for packaging.
4. Managing your finances
Now you're running your own business, you'll need to keep track of your income and your expenditure. Not only will this information tell you how successful your new business is doing, this information also needs to be included in your annual tax return so it's really important you keep track of all your finances. Also remember to keep all of your receipts as HMRC may ask you to produce evidence of your expenditure.
There’s lots of small business accounting software available that can help you to manage your business finances, many of which can be used on mobile devices making it super quick and easy to keep on top of things.
You’ll also need to create a separate bank account for your business to your personal finances. And don't forget about setting up customer payment systems. If you're looking for a card-reader system where your customers can pay by card, I can highly recommend the Sum-Up card reader system. I use it myself and it's great. You can grab yourself a discount with my 'refer a friend' link here: Sum-Up Card Reader System.
You're also going to need business insurance when you’re setting up your baking business. Public liability insurance and product liability insurance (often sold together) can cover you if anything goes wrong, say a customer falls ill after eating your cupcakes, or someone trips up collecting their cakes from your premises. You just don't want to take any chances so get yourself insured. You may also need to consider notifying your household insurers that you are running a business from home. Your motor insurance may also need to know if you're planning on delivering your home bakes direct to your customers.
6. Food Safety Requirements
In order to (legally) operate a baking business from your own home you need to obtain a food safety certificate. Your local authorities will be able to let you know who's running food safety courses and there are several available online.
A large part of the food safety process is keeping your paperwork and documentation in order with record keeping of everything that you've baked and sold and traceability records of where all your ingredients have come from. It sounds quite complicated but it's actually quite a simple process that shouldn't take more than 5 minutes to keep your records in order. The documentation and record keeping process all comes together within your HACCP Plan (Hazard Analysis and Critical Control Points).
7. Packaging & Labelling
You're going to need packaging to deliver your cakes and bakes to your customers. You can try your local catering supplier who will be able to source the right packaging for you. There are also several online catering suppliers but I would recommend ordering samples to ensure the packaging is right before placing a larger bulk order.
Also be mindful that there are regulations about what to include on your packaging. You need to ensure your labels include:
name of the food
list of ingredients
storage conditions and date labelling
8. Promotional materials
You'll need to consider printing off some leaflets, flyers or business cards, especially if you want to sell your bakes at local events, fetes, fayres etc as this is the perfect place to position your promotional items. Also think about printing your logo onto stickers to place on your packaging... it just looks so much more professional. I use a company called Vistaprint for my promotional items. They have thousands of templates you can use if you're not great at designing yourself. I've used Vistaprint a lot and created things myself using the self development tool (which I found really easy) and I've also used one of their professional designers to create a menu which I was really pleased with and it didn't cost much at all.
9. Social Media (Facebook)
Whether you're a social media whizz kid or you've never touched it.... you're going to need it! I would suggest at minimum you set up a Facebook business page. Not only will your customers find you through Facebook, but Facebook pages also come up in Google searches. So make sure you create a Facebook business page for your new baking business. Try to be a little clever in your description using keywords of the main things you offer and the area you are based, i.e. what will people be look for when they search for what you offer... 'cakes in London', 'cupcake maker Brighton', 'wedding cakes in Plymouth', 'kids birthday cake maker Bolton'.... make sure you think like your customer when writing your Facebook page description!
Facebook is also a inexpensive way to advertise your business locally. In Ads Manager you can create a personalised 'audience' aimed at people just in your local area making the spend cost-effective as you know you're reaching the right people.
10. Market your business
Your promotional materials and your social media accounts are all part of your marketing, but ideally you need to come up with a marketing plan for your business. Who is your customer? Where are they at? How do you find them? How do you reach them? For instance if you're selling wedding cakes then you'll want to be attending local wedding fairs. Perhaps you can offer free sample slices of your products? You can ask local wedding dress retailers if they will display your leaflets and flyers, perhaps partner up to run an online competition? Look around your area to see who else in the same industry can help promote your business.
If you're selling cupcakes... local fetes, fairs and farmers markets might be a good outlet for you. Also consider the 'gift' option, e.g. local companies buying your cupcakes as 'gifts' for employees/ customers. Or perhaps local cafes will be interested in selling your products?
For further information, training and resources on starting your own cake, baking or food business from home, visit my website at www.mamamakesmoney.com. I offer online training programmes on how to set up your own home based food business including multiple downloads, videos, templates and tutorials to get you up and running within days! Good luck and happy baking!