How To Start Your Own Baking Business From Home – Confused about how to start a home baking business? You’re about to embark on an exciting journey – our 10-step guide will get you going.
From dealing with home baking regulations in the UK to selling your cakes from home, here’s what you need to know.
How To Start Your Own Baking Business From Home
When you are starting your home baking business you must tell HMRC that you are self-employed so they know that you have to pay tax through the Self Assessment system. You will need to do this even if you will run your home baking business as a side hustle, part time or if you have another job.
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To set up as a sole trader – the simplest business structure – speaking to HMRC is all you need to do to register your business. If you want to set up as a limited liability company, the process is quite complicated. See our step-by-step guide to setting up a limited company for more information.
Butterwick Bakery, a confectionery business based in the Midlands, shares its story of starting a bakery business in this video:
First, you should think about getting a food hygiene certificate, which is a Level 2 hygiene certificate if you are new to working with food. This is a great way to understand the rules you need to follow.
Home businesses are also subject to food hygiene inspections, where you will be given a cleanliness rating from one to five. Your local authority will arrange to visit your home once you have registered your business.
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As an example, your kitchen and premises should be clean and kept in good condition. You must follow good food hygiene practices in the kitchen, including cleaning and protection against contamination and pest control. However, your home baking business will not be measured by the same standards as a large commercial building such as a restaurant.
Ideally you need a separate fridge for your personal food, but if this is not possible you must be clear about which food is for your business and make sure there is no cross contamination.
Pets should be kept away from kitchens and food preparation areas. Children should not be left in the kitchen while food is being prepared.
Finally, make sure you are up to date on food labeling regulations and Natasha’s Law when it comes to providing allergen information.
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The Food Standards Agency has many resources you can use for your home baking business, including Safe food packaging, a better business pack, which is based on the principles of hazard analysis and critical control points (HACCP).
We also have a health and safety guide for restaurants, catering and hospitality businesses, which may be useful for your cake business.
Another regulation when starting your snack business is that you must register your premises with the local authority environmental health service at least 28 days before you start trading. It costs you nothing and your registration cannot be denied. Someone comes to your home and inspects your food preparation area. To get contact details for your local authority, use the food business registration tool.
Remember that the regulations we have listed in this article are a guide. It is best to ask for advice from your local environmental health authority if there is anything you are not sure about.
How To Start Your Own Cake Business
It is important to think about business insurance when you set up your baking business. General liability insurance and product liability insurance (usually sold together) can cover you if you are sued by a member of the public for injury or damage.
For example, you could have a claim against you if someone gets sick after eating one of your cakes, or if you knock over an expensive vase when you deliver a cake to a customer’s home.
There is also stock insurance and equipment insurance, and employer’s liability insurance if your home baking business has employees. Go to our home baker insurance page to get started.
If your house is rented, you need to get permission from the landlord to run your business. However, the law says that your landlord can not unreasonably withhold or delay their permission. If you own your home, you may need to get permission from your mortgage lender to run a baking business in your home.
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There are a large number of baking businesses out there, so you need to think about how you will differentiate yourself. You can specialize in vegan or gluten-free baking, for example, or concentrate on children’s party cupcakes or wedding cakes.
As cakes are difficult to transport, you must have a good sense of your local market, because most of your customers must be close enough for delivery or collection in person.
Your website should include important details such as what you do, where you are based, and how people can place orders, and add lots of interesting photos.
A Google Business Profile is an essential part of any local advertising strategy. This means your business will show up in Google search and Google Maps when people search for food businesses in their local area. If customers can’t visit your home to buy your cakes, you can hide your home address in your listing and still appear in the local area as a delivery business.
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Set up a Twitter account, Facebook page, and Instagram account for your business, and stay updated with posts and photos.
It’s important to interact with other people on social media, so spend a few minutes a day liking and commenting on other people’s posts, and following relevant accounts.
Another idea is to record videos with baking tips and publish them on YouTube or TikTok. Or why not publish your recipe as a cookbook and promote it on Instagram? This is a great way to establish yourself as a baking authority while also creating a new revenue channel for your business.
Even if you set up your baking business from home, it is a good idea to go out and tell people about your business and develop a local reputation.
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Consider applying for a booth at local events, including food markets and festivals. You can offer people free samples, sell cakes, and give out flyers and brochures to promote your cake business.
Since you are running your own business, you need to keep track of your business income and expenses so that you can include this information when you complete your tax returns.
Our guide to tax-deductible expenses should help you understand which expenses you can deduct. Remember that you should keep your receipts as HMRC may ask you to produce proof of your expenditure.
You should also use a budget calculator and choose the best business bank account, so you can separate your personal finances.
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People want to find your beautiful cakes, so it is important to think about the marketing strategy. Besides going to local events with your cakes and using social media to reach potential customers, think of other ways.
If you are specializing in wedding cakes, you may be able to post flyers in wedding dress shops, or develop relationships with local wedding venues, for example.
If you’re making vegan cakes, maybe you can get permission to put up a flyer at a local vegetarian restaurant, or write a guest post for a popular vegan blog.
You can also try Google Pay Per Click (PPC) ads or Facebook ads, though remember to narrow down your audience to your local area so that the ads only appear to people in your delivery area.
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Download our free business plan template to map out everything from your initial idea and financial investment to your marketing strategy and growth plan.
Harpreet Kaur is the owner of the dessert business, Oh Jadi Yum, and shares her tips for growing your business.
If you are not ready to start a cake business, there are many more creative business ideas that you can start from home. Why not think about:
Do you have more questions about setting up your home baking business? Ask them in the comments below.
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As the UK’s largest business insurance provider, we protect more businesses than anyone else. Why not take a look now and build a fast and suitable home baking insurance policy?
We created this content for general information purposes and should not be considered advice. Always take professional advice. Read our full Disclaimer
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How To Start Your Own Cake Business
© Copyright 2023 Kantun Usaha. All rights reserved. Simply Business is a trading name of Xbridge Limited which is authorized and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th floor, 99 Gresham Street, London, EC2V 7NG. The baker in you wants to spend your days making chewy cookies and decadent cakes. The entrepreneur in you wants to be your own boss and call the shots. But the realist in you knows that you may not have the resources or time to start your own retail bakery.
This type of small business allows you to spend to your heart’s content, no matter what