Best Way to Start a Baking Business


themusicaldemocrat

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If you were going to start trying to make money from baking, how would you do it? Anyone out there actually doing this now? What's the best way to keep cost down and how do you set a price point?
 
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MyDigitalpoint

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I have been struggling with this idea for sometime after discovering a place in my city where practically all the ingredients needed for a baking business or a food preparation business can be ought in retail but a wholesalers price.

No, this place has nothing to do with club stores like Sam's, which claim to offer low prices, but at this place, next to city's food distribution central, prices are the really cheap and guaranteed that you can profit from a food-related business.

So that, finding the place where ingredients are cheap is in the list of top of the hints list when it comes to start a baking business and keep costs down.

As per a chef's advice, he says that one needs to earn 300% upon the production cost. Hence if you bake cup cakes, need to determine what the individual average cost of each cup cake is and then triplicate it when sell to cover expenses such as electricity/gas and your working hours.
 

themusicaldemocrat

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Sounds good MyDigitalpoint! But 300% could be low in some areas. For instance, if you're talking about one jumbo cupcake with tons of icing and all the bells and whistles, you could get material costs down to maybe 30 cents each! I think a mistake mom and pop stores make is that they under-price their food. The bulk of the expense is in equipment and electricity costs. Not to mention rent or mortgage on a building.
 

bakeryoo

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Start working from home first and if business is good then think about a move to premises.
 

themusicaldemocrat

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Anyone have any ideas for packaging? I really don't want to just do the ziplock bag thing for mixes, etc.
 

MyDigitalpoint

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Sounds good MyDigitalpoint! But 300% could be low in some areas. For instance, if you're talking about one jumbo cupcake with tons of icing and all the bells and whistles, you could get material costs down to maybe 30 cents each! I think a mistake mom and pop stores make is that they under-price their food. The bulk of the expense is in equipment and electricity costs. Not to mention rent or mortgage on a building.
Yes, you are right! Many times we underestimate equipment and electricity costs even when we devote time to an online business, like in my case, but still impossible to carry out without having to pay these costs, which vary from region to region.

As for packaging, in this city food and beverage packaging supplies are sold nearby the wholesale food markets, but I have seen many others online. It would be matter to get some quotes from them to find the right solution.
 
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themusicaldemocrat

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Do you think word of mouth is the best advertising for a business like this or is it worth spending some money on advertising? Seems like when it comes to baked good, word of mouth travels like lightning.
 

Christine Mlinek

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depends on the state you live in, depends on the laws. California just passed a cottage law but the restrictions make it almost impossible to operate a business. :( Baking from home without a license is illegal however, many do it on a lower scale.... for example, charging for a birthday cake, or graduation cake, etc.
 

Lynn Mitchinson

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I would like to set up a Cake baking and Decorating business from home but have no idea on what to charge. I live in Gloucester. Please can someone give me guidelines
 
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Linus

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I used to sell the 7up cake. People would ask for them all the time. I don't remember why I stopped selling them. I didn't have a commercial mixer back then, now I do!!
 

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