Starting a home baking business is a great way to earn financial freedom and be your own boss. It is also a great first step to a bakery or manufacturing production if that is your goal.
So many national brands started out of their kitchen homes- like Baked By Melissa and Tate's Bake Shop. Most states don't require you to bake out of a home kitchen, but we'll go over what's required of each state further down in this post.
Feeling inspired now? This post is intended to help you get started with your home baking business. Whether it's macarons, hot cocoa bombs, cupcakes, or cakes you're trying to sell, arm yourself with the knowledge before you start selling.
First things first- know the law!
It might surprise some to know that you can't just up and sell your baked goodies. You need to check your state's Cottage Food Laws first.
What Are Cottage Food Laws?
States allow the selling of certain things made in-home. What you can sell varies state-by-state. Some states are very stringent, others are more lax. Some states, like Texas, require a Texas Food Handler’s Certification. It's not expensive, but you must have it if you want to sell.
Some states also have a Sales Limit, which you need to be sure to abide by.
Lastly, Cottage Food Laws require specific labeling of baked goods. Again, what is required on the label varies from state to state, so it's important to look up your specific region.
What is my state's Cottage Food Law?
Decide what you want to sell out of your home baking business. Now, check the guidelines below to make sure you can actually sell those products. Some states forbid certain things, such as anything with butter, to be sold by cottage law. This means some baked goods that call for buttercream, like cupcakes and cakes, are completely off the table. We recommend checking your state's laws before you get started.
You can look up your state's laws from the list below:
What if I can't sell my product because my state prohibits it?
Don't be discouraged! Chances are, you can rent a kitchen and do your business out of there. Churches, established bakeries, and shared kitchens are all great places to ask around and see if they'll let you use their kitchen after-hours. Chances are they'd love an occupant to help pay the rent!
What do I need to get started?
You're armed with knowledge, you're ready to go! Maybe you've been baking for years, maybe you're trying your hand newly at this whole baking business. No problem- varying levels of experience are welcome!
First, make sure you have all your supplies. Do you have a reliable mixer? Do you have all your ingredients? Have you planned all your flavors out? Have you considered a second fridge to store your goods in? Prepare to succeed. Sure, you've only sold at the school bake sale, but what if everyone loves your product? What if you get a hundred orders overnight?
Prepare to be successful, we say. You might not need that second fridge quite yet, but start eyeing where you could fit one.
Where do I sell?
Farmers markets are a great place to sell! Apply to several in your area, since you might not meet requirements for some. Markets won't accept a new vendor that is too similar to existing vendors, so check out the list of vendors online before you apply.
Facebook is another great place to sell. Facebook Marketplace might be challenging if you're not well known in your are, but creating a FB Business Page is a great place for your customers to like, order from, and follow your business for news.
Other bake shops. Some states prohibit selling your product to businesses-you can only sell directly to consumers. But if you're allowed, selling your goods wholesale to local gift shops or other bakeries that don't specialize in what you do is a great way to earn publicity and a client base. Next they'll order directly from you!
Where can I advertise?
So many places!
Local community groups like NextDoor
Signs up for school bake sales!
Giving free samples is great! Bring your treats to parties, gift them at birthdays- word of mouth is the most sincere recommendation, and a great way to ear trust and build a solid customer base.
Remember, people are more likely to buy if they're already tasted your goodies.
How do I Take Payment?
There are a number of ways: Cash, Card, Paypal.
We personally LOVE Square. To receive free processing on up to $1,000 in sales use our referral bonus code:
The great thing about Square is they offer a FREE Square reader to get you started. If you want to upgrade, their Contactless Reader also accepts contactless payment like Apple Pay, which has been a convenient and safe way to get paid during the pandemic.
If you're taking custom orders, we recommend taking payment at time of order. It's up to you if you want a deposit or payment in full, depending on if this is a new or existing customer. Recognize that you're about to put a lot of work into this, and you don't want them bailing. Put yourself first and make sure you're getting paid.
Label making- Etsy! Some stores have pre-made labels, others will simply print your design so you can take control of the creative aspect.
Accounting Software- It's never too early to anticipate success! We love waveapps.com for keeping track of our expenses. You can always use more professional tools like Quickbooks, but we like that Wave is free.