Starting a home bakery.

[retired baker]

I thought I'd start a thread outlining some of the tips and pitfalls to getting off the ground.
Everyone feel free to add to the thread.

To get a start google "cottage foods" and your state.
Every location is different so I can't say exactly what anyone else needs to do.
Up here in Maine its easier than other places.
Maine food permit is $20.
If your state requires a licensing and permits to sell lemonaide on the corner, you have my sympathies. Some places are like that.

So you have a product (if you don't have a product we can get to that later) and don't know how to get the ball rolling, what I did was feed my neighbors and ask for opinions, that let me refine the products to suit the local mkt. Its more useful to ask what they don't like vs approval seeking.
Once I had my product line I made up samples to photograph and posted the pictures on our local facebook.
Response was more than I expected, I sold out .

Overhead, there isn't any. Not having to dole out several thousand dollars in commercial rent, the home bakeshop has a tremendous advantage.
Upgrade your packaging quality, you can ignore the rule of thumb for packaging cost, typically 3% max and now spend 6%,
amazon has very nice products in lower quantities (25 to 100).

 

[retired baker]

Lots of home bakers do food fairs, trade shows .
I don't do that, because I don't need to, but if I wanted I'd attend craft shows and farmers mkts, ask who is running it and get on the list. Its a good way to build a customer base and get started.

Wise sellers pre-package everything in bulk,
no individual cookies in fancy , expensive and time consuming packaging.
The clever ones are just selling boxes of 6 or 12.
People actually like that because you've already made the decision for them.
Use window boxes so they can see the product.

I'm going to expand on this because its bears saying, if you give customers what they want , the way they want it , they can put you out of business or make it so tedious for you baking will lose its appeal.. if you cater to whiners you will lose.
If they are coming out of the way to visit your stand, they ain't coming for 1 cookie. If I want to make a sandwich I can't buy 2 slices of bread, if I want a couple of cookies I can't go to the store and open a package and take 2.
This only makes sense if you don't make $5 cookies, $60 a dozen isn't going to sell, $1.50 cookies will.

Wholesale, its a tough game, it seems like a great way to get into volume sales , I did it but only in volume packaging, they all want individual packed and labeled products, they'll even ask for bar code labels, they are trying to shift that expense onto you, think carefully and price it out before leaping.

There is no account so lucrative that you cannot afford to walk away from.
I had a meeting with Neiman Marcus, it went ok until they said "Net 90".
They would have a $30K bill after 90 days and the payment wouldn't be $30K , it would only be one or 2 invoices. In effect they wanted me to loan them $30K interest free,
I walked.

Soon I'll build a bakery stand.
Its fairly common around here.
A greenhouse from amazon might be a quick way to get started.

 

[retired baker]

Signage,
Keep it simple, the nature of the business is more important than the name of the business. One word works best BAKERY. People driving past at 45 mph don't have time to read a tongue twister at a glance.

Branding, don't bother unless you DIY, if I want shopping bags with my name I'll buy a large stamp for $20 and make my own. WHen I opened my first bakery almost 50 yrs ago we ordered fancy white shopping bags with rope handles and our name printed in red, it was over $800, that was a lot of cash back then , when I sold the bakery 20 yrs later I took the 2 remaining cases of bags with me. Thats how long the money was tied up. Never again.

We made the same mistake with T shirts, although I wore most of those, it was easier than doing laundry.

Same goes for coffee mugs and pens. People might buy a mug but paying for a pen is like trying to charge customers for business cards.

There are salespeople just watching for new businesses to open, then they arrive with samples to suck you in, you'll end up with a basement full of stuff you can't make money with, save your money for equipment and inventory.
Their spiel is "you need other sources of income" , no you don't.
You started a bakery stand, so bake. !

 

[retired baker]

Equipment ,
lets say you have a few good recipes to start your stand, it will make your life easier if you commercialize the process, no hand mixing batter.
A kitchenaid 5 quart mixer is sufficient to get started. I see them on facebook used for $150 every day, no need to splash $400.

A speed rack is useful.
Spend the money and get a stack of half sheet pans.
Amazon sells half sheet baking parchment, don't go cheap, quilon treated parchment releases food easily, cheap parchment will stick.

Watch your local facebook marketplace for used commercial equipment,
especially rolling speedracks and sheetpans... or buy new.

Regency 20 Pan End Load Bun / Sheet Pan Rack with Non-Marking Casters - Unassembled

If you're looking for a durable end load bun pan rack at an outstanding price, this Regency rack is the perfect solution for any foodservice application. This rack has a curved top design and heavy-duty aluminum, with six cross supports, for added stability and durability. Its end loading...

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A proper worktable with backsplash makes things easier ,

Regency 24" x 48" 16-Gauge Stainless Steel Commercial Work Table with 4" Backsplash and Undershelf

This Regency 24" x 48" stainless steel commercial work table with backsplash and undershelf is a great addition to busy commercial kitchens. Constructed from durable, easy-to-clean 16-gauge, 304-series stainless steel, this work table offers superior corrosion resistance and durability compared...

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[retired baker]

Costing,
heres where many go astray, food cost has nothing to do with how much you think your time is worth, I see many home bakers start with "my time is worth $25hr so...." and they factor that into their food cost.
Can you walk into a bakery and demand $25 ?, if no, then don't believe it.
Your time will be worth whatever is left after bills are paid, it might be $40 hr or maybe $10.

Its useful to look around at any bakestands in your area, it tells you what the local mkt is already paying. They're not your competition , theres so much demand that more generates more.

Anyway, if it works out that you are only making $10, you can raise prices, I suggest increasing efficiency at the same time, thats where these forums pay off, there are years of hard earned experience available free.

As a rule of thumb, if your food cost is 25% and you're not making money, the money is being lost somewhere else, your prices are fine. It might be perfectionism or impractical methods. Perfectionism kills efficiency.
Think progress, not perfection.

Highly decorated cookies, with flow icing don't fit the cookie category, prices are calculated same as wedding cakes, its time cost rather than food cost.

All this costing talk has centered around typical bakestand products, it obviously doesn't apply to wedding cakes or highly decorated cakes, the sky's the limit on that sector of the mkt. A $1000 wedding cake probably has less than $50 ingredients.

 

[retired baker]

Paid startup assistance.
There are several farmstands offering startup programs which offer assistance, they will hold your hand every step of the way, as long as you have a credit card in your hand.
If you feel you'd benefit from that level of support then it might be worth your peace of mind. But be forewarned,

There is one particular online microbakery "school" I noticed and I found the owner so syrupy and fake I decided to write my own guide and give it away free.

Today I came across a video that exposes her scam, she really doesn't have a microbakery, has only been baking a few months and is running a pyramid scheme. In essence, for a mere $495 she teaches you how to scam others.
Watch and learn. A snake sheds its skin to become a bigger snake.

Questions will arise such as how much should I bake, how can I build a stand etc.
I found the easiest way to find out how receptive people are is just put a blurb on your local facebook page,
Start with one or two items, take photos and post.

 

[Lynn]

I am new to having a cottage baking gig in Illinois, nothing fancy, friends, neighbors… etc.., I having been practicing different icing decorating styles, technique's… to improve my skills…. So I can extend myself to a self-owned business. My question to you is did you feel the need to get an LLC to protect yourself…

 

[retired baker]

I am new to having a cottage baking gig in Illinois, nothing fancy, friends, neighbors… etc.., I having been practicing different icing decorating styles, technique's… to improve my skills…. So I can extend myself to a self-owned business. My question to you is did you feel the need to get an LLC to protect yourself…

no, I'm judgement proof .
I get threatened by lawyers on a regular basis, I'm medically bankrupt so theres nothing they can go after, the house is not in my name.

When I had my brick and mortar locations I was incorporated sub chapter S.
If you have anything you can lose then an LLC is a very good option, it doesn't cost much to file.

If you have a mortgage the bank might not allow commercial activity, we bought our house cash 4 yrs ago, we're in northern maine. Houses here are the same as 3 yrs rent for an apt in Boston so it was a no brainer.
Its also possible the bank would allow a bake stand but require liability insurance or an LLC to protect the house, you'd have to find out.

 

[Amy S]

Thank you @retired baker - so helpful. I'm just getting started outside of LA - I appreciate the time you took to write these posts for us.

 

[retired baker]

Thank you @retired baker - so helpful. I'm just getting started outside of LA - I appreciate the time you took to write these posts for us.

feel free to describe your own journey as it all adds to the bakeshop hive mind , 'pass it forward' as they say.

"a worry shared is a worry halved"

 

[retired baker]

A lot of people like to bake and bake well, they're the ones opening bakestands and most are doing very well. It gets very dicey when they decide to open a commercial retail bakery, its a different game altogether, If you stay small you are inherently nimble, changes can be made without fighting the inertia of a larger established legacy business.

I went to plumbing school, I'm not a plumber because I couldn't find a plumber to apprentice with, I can talk all about plumbing but i can't plumb professionally and I see no purpose to delude myself.

I taught myself to weld so I could fix the rather expensive exhaust on my car, that doesn't make a me a weldor. Yes I can weld but to call myself a pro would be laughable.

I'm a baker because I apprenticed with a pastry chef from Paris for 5 years and stayed with him for 15 yrs. Its not possible to learn the trade by watching a baker, they have to show you what you're doing wrong, the experience has to be transmitted from master to novice. The wiser reason to bake bread is to make and sell sandwiches.
80% of all bakeries are selling sandwiches, they got smart.
Point is, you don't have to be a trained baker, just be very wary of well intentioned friends who say "you should open a bakery", well no you shouldn't.
Staying right sized for your level of training or ability ensures success.

SO lets get down to brass tacks,there was a woman who visited my sisters workplace, a corp office in AZ. Located in a large office complex.
She brought in a large basket of sandwiches , she sold sandwiches and went to the next office .

Do the math, if she managed 3 or 4 businesses in the office park at $150 each x 5 days its serious cash. By 2pm she was probably on her way to costco.

At one time I was selling milk bread rolls for .50, the cafe who bought it only had to split it open and fill it and they could charge $8. Quite a mark up and I was doing the lions share of the work. I quit wholesaling bread and started making sandwiches myself retail, after a while I stopped selling bread , sandwiches only.

I followed the money, it led away from selling bread.

 

[retired baker]

If you're starting out with no recipes, watch youtube videos for simple cookies, get a scale and find the recipes that are given in weight for accuracy.

I'll give some generalities about recipes, there are no secret recipes.

You can find anything with google, use it.

Items with extended shelf life are your freind, cookies and biscotti yes, bread and cupcakes err...not so much unless its pre-ordered.
If you have a stand and can reasonably expect a certain traffic flow then muffins and scones will always sell. If you wonder how bakeries get that large head, they always work with chilled batter, fresh batter will run all over the oven. And frozen fruit is preferable to fresh.

 

[retired baker]

Danish,

very simple and easy to put together, with practice speed increases.
The dough takes less than 15 minutes to assemble from start to end.
I made some last nite , the dough per portion for indiduals weighs under 3 oz, cost is .18cents ea. Add a blob of jam, lemon curd or pie filling and you're around .30 cost.
You can retail them at $1.25 and be at 25% cost, thats excellent retail markup and considering you have no real overhead its very profitable. They could also be sold for $3.50 each, I prefer the lower price because I want volume sales, huge margins are useless without sufficent volume.
I don't feel theres any right or wrong to it, thats my preference.
Some people enjoy bagging 100 cookies in plastic bags, add a ribbon and place a sticker, I'd rather pack 10 boxes of 10, the difference is 1 hour vs 5 minutes.
If business is good it could be 500 cookies, now its 5 hours to bag them up and cost $50 for quality stickers. I want to spend my day doing that. You decide.

Sorry for the sidetrack, heres how to whip a batch of danish up.
The recipe I use is very similar to the genuine Nordic version, they're all pretty much the same. Read the nordic recipe, then go on to the video, its a lot easier to see it done than to visualize.

Recipe for Danish Pastry Dough (The Base Recipe) - Easy picture guide!

Best recipe for Danish Pastry dough. Used to make traditional Danish pastry like A Danish. The best and traditional recipe you can find from a Nordic Blog.

nordicfoodliving.com

Rolling out and making them up, at this point you can proof , fill and bake or freeze them.