How to start a Cake Business from Home – Legal Home-based Cake Business
Start a cake business from home is a fun decision but also not an easy decision. Knowing what you need to do and where to find the right information is most important. In this post, I share with your how to start a legal home-based cake business by breaking it down into four sections, detailing every section so you can understand what it means and what to do.
Starting a cake business from home can be a tough decision. Probably one that will require you to sit down and calculate all the pros and cons of what you going to get your self into. This article how to start a cake business from home gives you a big scoop and insight into starting your own cake business. Read it carefully and use it as a guide where necessary.
Disclaimer – I am not a lawyer, professional consultant or legal personnel. So the information I give you here is not based on any legal background. It’s what I know based on the knowledge that I have accumulated over the past years starting my own legal home-based business.
What’s the difference between doing cake decorating as a hobby Vs starting a professional cake decorating business?
There is a reason why you are here in this post? Probably because you love cake decorating! You create lots of cakes for family and friends and everybody tells you; your talent is so good that you should do this for a living. Now you would love to do this as a business but not sure how? Guess what? Most of us started like this? It’s the passion for cake decorating that wants more from us. You know what – It’s a great idea! Let’s explore our passion, shall we?
Today I want to give you some information about starting a legal cake business from home. Notice I used the word legal. The legal stuff is not easy and it’s often not fun. But its one that has to be done.
There are many cake decorators out there that claim to be in the business without registering their business. And there are also those that call themselves ‘cake hobbyist’ but actually earn an income taking cake orders regularly. The truth? If you make money from cakes and want to make this a profession – you must register as a cake business.
So whether you are a novice who is just considering starting a cake business from home or are already doing cake decorating as a hobby and want to take it to the next level. You will find this post helpful.
It’s a bit long because I wanted to give you everything in details, so grab a cup of coffee, rest your legs, relax and read calmly. Often the best way to get thru a difficult subject is to read once then go back and read again. Usually, the second time on things starts to make more sense.
Starting a legal Home-based cake business (Save/Pin)
This is not an easy decision for most of us. Often because we have no clue how to go about it. We just cancel the idea or put this on hold for now. It’s the fear of not knowing what to expect. I have been thru some of this myself. It’s not as hard as it seems. Often it’s easier than you think.
For the purpose of simplicity; I’m going to break the whole post of How to start a Cake Business from home into four Parts.
- The Legal Stuff (permits, taxes, and regulations)
- The Business Plan
- Marketing & Social Plan
- Your Personal Plan
I – Starting your Cake Business from Home – The Legal Stuff
- Register your business with the Authorities
Go to your local City hall – ask them the Terms of starting a business from home.
- Contact the Local inspection office for the Kitchen and Hygiene Inspection – Get them to come and inspect your kitchen.
In some places, you need to contact the kitchen and hygiene inspection before you go to register your business as you need the certificate to register your business. But in some places, you need to register your business first then contact the kitchen and hygiene. Doesn’t matter as long as you call your local city hall they will tell you exactly what to do first.
- Contact the Tax Office/ state controller – You need to get your business set up for taxes.
Don’t worry they are not going to take your money. The tax system is usually quite fair, they want to encourage small businesses like us. There is a minimum amount that you need to earn before you start paying taxes.
II – How to start a Cake Business from Home – The Business Plan (Save/Pin)
Let’s do some business planning before we start our cake business from home. Yes!! It’s a cake business from home but It’s still a business and that’s the first thing to realize. Run it like a business even if it is from home.
What is a Business Plan? (in case you interested)
Quite simply a business plan is a written document that describes in detail how a new business is going to achieve its goals. From a marketing, financial and operational point of view.
Make it more simple? It’s basically; to take all what you need to do and how to do – put it on paper so it makes more sense to you and to those who want to join in business with you.
Now those you who did your MBA like me must have done a few of these project on Business Plan for your thesis. Quite similar but just for real in this time. A normal business plan usually will include – Company Description, SWOT Analysis, Marketing Plan, Operations Plan, Management Plan, Financial Plan, Business model, Value Proposition, Executive summary etc, etc.. (you get the point?)
When I wanted to start my business I honestly was not looking forward to getting this done. Guess what? Lucky me again. My husband does this for a living. Yep!
He’s an Entrepreneur and Consultant for start-up companies. Quite often he will head the company as a CEO – make their business plan, do all the legal stuff, often he will hire the right people like R&D and such. He will even help them get the first or first few investment opportunities before he hands over the company to its right partners and moves on to the next. Honestly quite a stressful job but he likes it.
Starting a legal home-based Cake Business – Business Plan
Remember this is for us, so keep it simple. Here are just a few of the many components you need to think and put down on paper for your home-based cake business planning. These are quite simple and self-explanatory.
- Business Idea / Business Type – what types of cake are you going to do? bakery style, novelty cakes, wedding cakes. Perhaps the high-end business that catered to customized orders or low-end making affordable everyday birthday cakes?
- Business Name – Are you going to be a brand in your own name or do you have a name that best suits your style? I started off as Veena’s Art of Cakes but over the years I decided that my customers preferred to refer me as cake artist -Veena Azmanov. Eventually, I renamed my business through my own brand Veena Azmanov.
- Your Target Market /Demographics – This is very similar to the first point business idea but not the same. For example – if you choose to make cakes for everyday birthdays then your target market is a lot different from if you choose to target the high-end wedding cake market. You can do both but you must understand and define it so you can then use strategies and pricing plans specific to these markets.
- Equipment – This is simple and self-explanatory. I chose to start out with as little as I could as tool and equipment as I went along. But you can also keep a starting budget for the tools you need when you start off.
- Business Management – You are a cake decorator, but who is going to manage your own business? Sometimes, it’s a one-man operation until you need to start hiring and sometimes you can outsource some jobs that you are unable to do yourself.
- Insurance – this does involve cost but often it’s worth in terms of risk and stress.
- Logo – I did not have a logo for my business for the first two years. I would only have my business name on all my cake pictures. However, I strongly advise getting a logo done in the beginning as it looks professional.
- Business Cards – This is the first thing I did as soon as my business was registered. Why? with every cake, I sent a few cards so my customers could distribute them. Today my business name has changed but I still keep seeing business leads coming from those cards. Often people take these so they can use it in the future. They will go looking for that one business card they saved a few years back.
- Website – This is a second thing I did after I started my own cake business. This is a great way to get people to find you as well as to send potential customers to see your work, to write and read reviews, to know what you have to offer. It means a lot less work for you when you don’t have to give them all the information on the phone or email. I even had my price list on the website – which helped filter those that could not afford my cakes.
- Social Media – This is the next thing I did as soon as I started taking orders. It’s a great place to showcase your work as well as to keep in touch with customers you once served. Every time they see a cake you did for someone else they will remember the cake and service you provided them. This will keep you in their mind when they or anyone they know needs a cake. I have discussed more this below in social marketing.
- Inventory – How are you going to keep track of inventory? supplies that you need to buy or use? There are software’s that can help keep track of these.
- Accountant – You need to take care of taxes and often you can do this your self but I personally would recommend an accountant. This is usually a yearly cost but it’s worth the investment so you can be sure that your taxes are filed correctly and online. Often the account will know where he can make adjustments so you get the best deal.
III – Start a Cake Business from Home – The Marketing and Social Plan (Save/Pin)
Next, we need to think of some marketing strategies to help get our home-based cake business out. Let people know we exist!!
Here are some ideas that you might like to consider. Note that these are just ideas. Not all will work for you. Every business works under different circumstances so understanding your market will help you pick the right strategy for you.
Here are just a few simple, easy and popularly known Marketing strategies.
- Build a portfolio – This is catch 22!! You need a good portfolio to get business but you also need business to build your portfolio. I have a few ideas which I plan to share on another post to keep this already lengthy post within the limit.
- Most commonly used – You could give your business a jump start by offering some free sample so people can taste your cakes.
- Have the budget? If you don’t mind spending on advertising you could advertise
- Send out flyers or Brouchers that will help spread the word
- Contact local event places, offer them a taste of your cake and ask them if you can give them your business cards for references. Places, where they organize kids birthday parties and such, are a great way to start.
- Find out about local home business network meet-ups.
- Contact event management companies or free lancers.
Social Network for our home-based cake business.
Why do we need a social network?
So people know we exist, and we can stay on peoples minds even when they do not need our services. If they see our product in their feed once in a while it will keep us in mind when they need a cake or recommend us to their friends. Get your business out on social networks. Create a Facebook Page, Instagram and Twitter account. Share your goodies so people can see your work.
Website or Blog
Why do you need a Website or Blog for your cake business from home? I know there are some of you that think having your social networks such as Facebook and Instagram is all you need to attract customers. True and yet not completely true. I spoke more about this in this post – What if Facebook didn’t exist? Would your business still survive?
Now getting a website – can be done in two ways. You can hire a professional web designer or you could do it yourself (DIY) Unfortunately, I could not afford it at the time so I had to go the DIY route. It’s really easy and this step by step method with progress pictures will help you start your blog efficiently and effortlessly.
IV – Start a Cake Business from Home – Personal Planning (Save/Pin)
To me, this is by far the most important of all and you will see why soon.
Ask your self a few personal questions?
- Do I really want to do this as a hobby or as a profession? – Maybe you like cake decorating as a hobby but what if you had to do it every day for the rest of your life. Would you still enjoy it? If the answer is yes, then you know what to do – go right ahead and enjoy every bit of it. If not, consider why and what about cake decorating you really like. Decide if you want to continue to do it as a hobby.
- Will you be able to give your self the time this profession needs? We discuss Time Management of a Cake decorator before as well – perhaps it’s a good time to read that post too. Cake decorating is not difficult but it is time-consuming. Often people look at a finished cake and never realize that it took over 30 hours of work.
- What about family support? It’s not easy if you have to run a cake business from home that does not have the rest of the members support on board. Especially, your spouse or your other half. There are going to be times when things will not go as planned and you may need help. Often the most critical help we need is emotional support.
- For most people going to work is a usual routine. Their life is sectioned in a way – when they go to work and they concentrate on office work. When at home they can give their family some quality time (at least that’s how it use to be). Now, working from home is a whole other thing!! Right? I mean think about it, you at home with the kids all the time and you can do work from home which means you should be able to give your kids the attention they need. But, often with cake work, it’s not always possible Is it?
Don’t forget to save this tutorial on Pinterest for later.
You can find a collection of my tutorials and recipes here on Pinterest.
If you are serious about starting a cake business from home
I highly recommend a few resources here that might help you.
Craftsy has a few online courses that would work as great starting courses for anyone just venturing into cake decorating. One is this class by Michele How to grow your own cake business, another is Chrisy on Small cake big business and this by Carrie on Building your business with Beautiful cake photography.
- If you are in the US
Every state in the US has their own rules and regulations for cottage laws. You can visit this website – and Cottage Food laws by state to see the rules/regulations concerning your own state.
- If you are in Australia.
I do not know about laws in Australia but I can recommend someone that does. I think very highly about her courses and I wrote about it in this post – Online Cake Business School. Rebekah has extensive knowledge of what you need in Australia and you can find her here at Angelfoods.net
- If you are in the UK
There is a cake decorating schools that have lots of cake business related posts – Paul Bradford Sugarcraft School.