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How to Transition from Home Baker to Small-Business Owner



How many times have you dusted the flour from your hands and thought, “Hey, I could do this for a living!” Maybe with every “You could really sell these!” you hear, or every crumb-freckled smile you see after each cookie gets devoured, you begin to wonder just what it would take to turn your home baking into something profitable, or at least larger in scale.

Fortunately, supporting small businesses and eating local is in vogue, and there’s never been a better time to branch out and become a small-business owner. While there may be more to it than mastering a meringue, turning your dreams into reality just begins with a product and a plan.

What Makes You So Special?

Let’s start with a bit of self-reflection. What is it about your baking that friends and family love? Think about your specialties, and zero in on what makes them great. Can you commodify it? Can you produce it in large batches? If you can find a way to rescale without losing any of that home-baked magic, you’re on the right track.

Create a Business Model

Are you planning to sell to local restaurants or coffee shops? Or maybe you’ll start with a table at the farmers’ market? Plan to expand vertically—still selling your same high-quality baked goods and offering your reliable services—but also think outside the box. When you’re competing against other local baking companies or big-box supermarkets or brands, thinking horizontally may be the best bet. To do this, brainstorm new products and services you can offer. Can you start a cookie delivery service? What about offering seasonal, limited-time-only items like dinner rolls or pies around the holidays? Once you’ve got a clear idea, you can begin planning your company name, logo and look.

Set Goals for Your Business

Now that you have an idea of your own brand and business model, set clear goals. Planning when you hope to reach each mile marker will help you determine the supplies, number of employees, and budget you’ll need to accomplish it all, each step of the way.

Stock Up on Supplies

When it comes to small businesses built on baking, the right equipment is essential. Sure, that standing mixer on your kitchen counter can whip up enough icing to cover cookies for the local bake sale, but is it large enough to fill your customers’ orders? Research the tools you’ll need for the menu you’re planning. Do you have enough sugar? (Tip: Order this, and spices, in bulk.) What about silpats? No item is too small to be factored into your budget, if you’ll really need it.

Be Frank About Finances

Depending on your business goals, it’s possible that you’ll need to find funding at some point. Hopefully your clear planning has led you to a ballpark sum—or better yet, an exact amount—you’ll require to get started, whether it’s to cover the cost of a space, new equipment, branded marketing materials or an extra helping hand. (And don’t forget to pay yourself when factoring in all expenses!

Sometimes landing a bank loan can be difficult for first-time business owners, and if you run into trouble on that front, or you’re not willing or able to put up your home or another asset up for collateral, there are still a number of options available to you. The U.S. Small Business Administration (SBA) is a government organization that’s been aiding small business owners and entrepreneurs since 1953, offering loans, grants and advice. In addition to SBA, be sure to research corporate credit card programs, which will often offer incentives and rewards programs for small businesses, and more importantly will help keep your business costs separate from your personal records—you’ll be happy you did this when it comes to tax season.

Speaking of which, should you register your business as an LLC? A C-corp? An S-corp? Each small-business model is different, so it’s advisable to reach out to a lawyer, even if only to consult on this one matter. Doing it early on in the process will save you headache later.

Follow the Codes

Where are you right now? Whatever your answer, it’s most likely that your city, town, village, state or county has a very specific set of health codes and regulations regarding home business and food safety. Sadly, building your home-baking business isn’t as simple as tossing a tray of tirggel in the oven, but it’s these health codes that keep the foods we all consume safe!

Nearly all municipalities require food businesses to operate out of a certified commercial kitchen; because this can vary depending on your location, it’s best to call city hall to determine what you’d need to change in your kitchen to get it certified, or where you can find a rental kitchen to work from. Your local health representatives should also be able to tell you exactly which food handlers’ certification you’ll need to start serving your goods to the masses. From there, if you can’t find local courses for these certificates, many classes and training sessions are available online.

Start Baking!

Now that you’re certified, funded and fully equipped, it’s time to officially start your business. Whether you’re setting up each weekend at the local farmers’ market, retailing in area grocery stores or delivering your goods straight to your customers’ smiling faces, you have a great foundation to get going and dish out those delicious baked goods.

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