How to Start A Cake Business From Home

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Starting a cake business from home can be very appealing if you already are spending a lot of time cooking at home and want to make money out of it. Before you start, there are some questions you should ask yourself. With this article, we’ll give you an overview of all the specific questions, legal obligations and expenses you need to plan and think of before launching your cake business. 

Choose the Right Legal Status for a Cake Business 

The first thing you’ll need to do is to choose which business entity is the best for your business. This element is important because of the registration fees and legal obligations you’ll be bound to, so be really careful when you do your research on this subject. 

Freelancing (also called sole trading or sole proprietorship depending on the country you come from) can seem like the obvious first choice. But don’t forget that if you opt for this status, you’ll be fully liable for your business finances. If your goal is to make your company grow, if you want to ask for a bank loan, look for funding, or if you think you’ll take financial risks, it may be better to go with a limited liability company. 

Because this is an important decision, we strongly advise you to start seeking out information immediately. To help you with that, we have a bunch of articles concerning legal status in France, the UK and the US! 

Food Safety and Equipment for a Cake Business 

Food Safety 

When it comes to baking and above all selling food, there are strict rules you’ll need to follow if you don’t want to risk food poisoning a customer and having your cake business shut down. 

First of all, you need to store your baking ingredients and your baked cakes at a certain temperature, even when you are transporting them. Everything needs to be correctly labelled and, of course, you need to keep track of your sale deadlines (or sell-by dates) so you don’t sell inedible or expired products. It’s even more valid for cakes because most of the recipes includes eggs and/or dairy products that can be dangerous if out of date! 

After your ingredients, it’s your workspace that needs to be taken care of. This part of the setting up is tricky and you need to be careful when you do it. Why, you ask? Simply because you’ll have to register this workspace. Once this is done, you can be inspected at random by a health officer and if you fail the inspection, be fined or even prosecuted. Below we’ve listed the hygiene regulations, but they can vary depending on your country, so make sure you don’t forget anything by checking the ongoing laws on this subject where you live. 

To meet hygiene regulations for your cake business, you must: 

  • Have pest control in place 
  • Adequate lighting 
  • Ventilation 
  • Hand washing 
  • Drinking water 
  • Separate storage and drainage facilities 
  • Separate sinks for cleaning and cooking 
  • In case of health inspection, you can be asked to show these records: machinery maintenance, cleaning schedules, ingredients and origin of food… 

As you see, your home kitchen may need some adjustments to meet those regulations before you can launch your cake business safely. Also note that you may need to register your premises a certain number of days before you start your business activity. Don’t forget to include that in your budget and planning! 

Equipment 

It can seem obvious, but it still is worth checking if you have everything you need to bake professional-looking cakes because baking supplies can be expensive. Here is a list of the essentials you will need in order to start a cake baking business so you can check if you have all of them. 

  • Bowls 
  • Measuring cups and spoons 
  • Electric mixer 
  • Cake pans 
  • Parchment paper 
  • Kitchen scissors 
  • Pastry brush 
  • Cake stands 
  • Pastry bags 
  • Toothpick 
  • Paring knife 
  • Oven thermometer 
  • Food scale 
  • Baking mats 
  • Cookie scoops 
  • Sifter 
  • Cooling racks 
  • Rolling pin 
  • Rimmed baking sheets 
  • Pastry blender 
  • Spatulas and whisks 

Other expenses 

We’ve seen the main expenses to think of when starting a cake business, but there a re a few others that you don’t want to forget about. 

  • Insurance: regardless of the legal status you will choose for your cake business, a business insurance will be mandatory. You will need to insure you, but also your products in case of anything that might happen on your way to make a delivery, for example. If you want, you can also insure your tools and stock. And if you have any employees, they will need to be insured too. With cooking and delivering, there are a lot of possible issues that can come up, so this part also requires careful consideration!
  • Marketing and communications: competition is fierce in the cake business these days. Chances are that you’ll need to advertise your products if you want to stand out. And standing out can be expensive, for example if you need a website or a designed packaging. 

Business Plan for Your Cake Business 

Once you’ve got all this information sorted out, it’s time to gather it all in order to create your very own cake business plan. This document is essential if you want your business to operate smoothly and to take the fewest risks possible. 

To learn more about business plans and download our free Excel financial and business plan template, follow this link! 

We hope this was helpful, don’t hesitate to post comments if you have other questions.

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