Starting a High Quality Baking Business

One of the questions I am asked most often is this: "How do I start my own 'homemade' baking business?"

First of all, I would say that it's not easy. If you are making a quality product, many people will be comparing your prices with items that are made in other local shops, and that are made from mixes, or bought frozen and "baked off." These products, while inferior, are also cheap to produce. Those shops work on a high profit margin.  So you have to make sure you can price your products profitably, which will be higher than that type of competition, and that you will have a customer base that will be willing to pay the higher price.

That being said, in most areas, your margins may need to be smaller than your competitors who sell a poorer quality. So you have to be on top of your costs to ensure that you are profitable. If you are lucky, you will be in an area with clients that appreciate the difference in quality and are willing to pay for it.

When you locate a space for your shop that is in an appropriate area, call your local health department and ask if someone will look at the space with you and advise you about any problems the space has in meeting the health specifications for a bakery. You don't want any surprises that may end up costing you a small fortune before you even open your doors.

Measure the space and make a floor plan to be sure you can fit all of the equipment and display cases that you will need to make and sell your products.

Before you sign a lease, write up a business plan. Decide who your target customer will be and how you intend to get their attention. Include all of the costs of setting up shop, including small and large equipment, utensils, work tables, linen service, ingredient prices, utilities, rent, insurance, local business taxes and license fees, any improvements you need to make to the space before you open your shop (don't forget electrical and plumbing costs) and if you are going to have employees, what the payroll cost will be. (Local payroll taxes may vary, so your best bet is to consult a bookkeeper or accountant for this information.)

There is an enormous amount of used baking and restaurant equipment out there, and it is a good way to keep your initial costs down. Make a list of what baked products you anticipate selling, and what kinds of equipment you will need to make them, and look for it on the internet or find local restaurant equipment stores that sell what you are looking for. Get measurements for the equipment and draw them into the floor plan you have made to see if the space and the equipment will work.

Hire a good public relations person to make sure people know you are there. The money you spend on PR goes much farther than what you would spend on advertising, and PR personnel are treasure troves of ideas for promoting your business.

Most important, make a quality product, and make certain it is always the same quality. If you receive special orders, be sure you have them ready when promised.

Have any questions? Post a comment.