Create a Successful Home Bakery Business
Disclaimer: The contents of this post discuss matters regarding starting and operating a business. Much of the resources and information found on our site are based on research or anecdotal experience by our team here at NGL, and are in no way legal advice. Please consult a business attorney prior to starting or running any type of business.
Are you CONSTANTLY being complimented on your baking skills?
Or simply just LOVE to bake?
Well… maybe you should start a home bakery!
Seriously.
Here's 6 key considerations to think about BEFORE starting a successful home bakery business.
Please note, this post contains affiliate products. We receive a commission percentage for the sale of such products, which helps keep our website running. For more information on our affiliate programs and commissions:
I. Home Bakery Annual Income
Sprinkles Cupcakes
If you ever wondered who started the now iconic “red velvet” cupcake craze, look no further than Candace Nelson!
Cupcake baking tycoons, Candace and Charles Nelson, were just an ordinary couple living in California. But after losing her job back in 2005, Candace Nelson decided she was ready to take a risk. She delved into her savings account, drained the $200,000 they had spent years stashing away, and decided to start what is now considered to be the world's first luxury cupcake bakery.
But Candace's ingenuity didn't stop at just luxury cupcakes! She wanted to find a way to sell to customers 24/7 without extending store hours. It was then she decided to create a Cupcake vending machine outside their storefront. And people LOVED it!
Fast-forward and their business, “Sprinkles” Cupcakes, now has an annual revenue of $15.8 million a year. With 23 different stores and over 40 different cupcake vending machine locations across the U.S. "Sprinkles" is revered as THE major cupcake mongrel that started it all.
If you are interested in learning more about Candace and her “Sprinkles” cupcakes bakery business, see our links listed under our "References" section at the end of this post.
Starting a business can be an exciting and life-changing decision. But you'll want to ensure that it's a move that financially "pays off" before taking the leap of faith to open your own bakery business.
Now according to ZipRecruiter, the average commercial bakery owner’s annual salary (based on state) is anywhere between $51,511 - $84,950 per year. Or, for those of you trying to calculate, $24.70 - $40.84 per hour. Considering how saturated the market is, these numbers are actually pretty encouraging. But since these are only state averages, some states rank higher or lower on this tier. With many bakery owners making either above or below their state's average.
See our "References" section below to access state averages.
However, commercial bakeries are expensive to start. Making home bakeries a more attractive and more flexible alternative. According to data also pulled directly from ZipRecruiter, most U.S. home bakery owner’s annual salary is anywhere between $17,500 - $127,500 per year. With 50% of salaries specifically between $33,500 - $77,000. That’s an average of $16 - $37 per hour.
ZipRecruiter additionally noted that the average pay range varies greatly from owner to owner. As much as $836/week actually! Suggesting that this discrepancy is heavily influenced by skill level, location, and years of experience. Which is very encouraging for anyone wanting to start a successful home bakery business. As these factors, as well as your sheer determination, can be enough to help you standout & earn more money!
To access information from either of these ZipRecruiter findings, please visit our "References" section at the end of the post.
II. Home Bakery Cottage Food Laws
Many people innocently start businesses as a hobby or “side hustle” to their regular “9-to-5”. They spend 2-3 years taking orders, gaining regular customers, and watching the money flow before taking the leap to finally quit the corporate world and trade in their paycheck for “the great unknown”.
However, should you decide to open your own home bakery- please pay attention to your state’s cottage food laws! According to a survey conducted by “Better Baker Club” of over 600 home bakeries, a staggering 69% were operating from an unlicensed kitchen.
Now we understand that everyone starts SOMEWHERE. And many people may not be aware of food handling and safety laws for their state... But PLEASE do your homework! Some of the requirements may consist of a kitchen inspection as well as a food safety certification to operate.
We’ve provided a list of resources down below to help guide you along this journey of starting your own successful home bakery business. However, please note: the contents of this article are in no way legal advice. Regardless of what type of business you are starting, please consult local and state regulations as well as an attorney who specializes in business law prior to starting or running any type of business.
III. Customer Acquisition Tactics
It’s important to remember that everyone starts somewhere, and the fact of the matter is that MOST businesses start from home. There are 30.2 million small businesses in the U.S., and according to a Nerd Wallet website (Fundera), currently 60% of that are home-based businesses.
THAT COULD BE YOU!
In fact, it’s not uncommon to start a baking business specifically from home. Allyson Grant, for instance, successfully started her very own home bakery business nearly 20 years ago. Subsequently, Grant now dedicates part of her time to helping other people do the same through her website the Better Baker Club.
That being said, Grant seems to periodically conduct polls of her baking audience. She then uses this information to help people successfully transition into the "home-based" bakery industry today. Check out her data under our "References" below!
Now, according to a recent 2022 online survey of over 600 home-based “baking enthusiasts”, the Better Baker Club was able to yield some pretty interesting results! Grant polled her audience about various methods for baking and selling from home. As well as what their profit numbers and business goals were moving forward. In this section, we'll cover the data she gathered specifically on customer acquisition.
Better Baker Club Customer Acquisition Data
I. Home bakery customer composition: The majority of customers that home bakers were selling to were people who directly knew or were influenced by the baker themselves. According to Grant's survey, 49% of baked goods were sold directly to friends, family, and repeat customers. The next most popular clientele group, were neighbors and social media followers. which made up 32%. While only 2% sold to wholesale accounts. The remaining 17% of bakers hadn't made any sales.
Most Popular Selling Method
To access more results from the Better Baker Club survey, please visit our "Reference" section below
II. Home Bakery Selling Methods: Selling methods seemed to consist of two primary options. 51% of bakers relied on preordered deliveries as their primary method of selling. While 22% of bakers sold at local Farmer's Markets. However, the other 18% of surveyors had yet to complete any sales at the time of the survey. (See Image)
Side Note: Some of Grant's surveyors hadn't made any sales yet- but this is good! As it verifies that she is sampling from a well-rounded group of people with varying levels of experience.
All of this data can be very reassuring for anyone wanting to sell baked goods from home. Because it just goes to show that you can start with the people you know and are the most comfortable with. From there, you can solicit more clients and begin processing more orders and deliveries. And afterwards, if you decide you are ready to expand your business, it’s encouraging to know that “breaking into a local farmer’s market” is something of feasible achievement.
Pro Tip: Displaying QR coded menus & payment options at Farmer's Markets is great for cutting printing costs! Plus customer retention rates also improve once they've already visited your QR's website or social handle.
QR coded menus are also great for catering events! They're easily updated. And allow curious guests & future clients to casually look through your menu.
See "Marketing & Branding Continuity" section below for QR coded menus & payment forms
While it did still leave a few lingering questions, Grant’s survey did an excellent job shedding insight on which tactics are currently in use by modern-day home bakers. However, in addition to some of the methods she surveyed, it should be noted that many people have also found success in expanding their home bakery into the exhilarating world of catering!
IV. Catering Events
In addition to the Better Baker Club Survey tactics, catering events are another great way to improve customer acquisition rates. Amateur and novelty chefs alike have sailed the fortuitous winds of the fast-paced world of event catering. And based on your location, there might be a sizeable opportunity to profit from it. Especially for anyone wanting to up the professionalism of their home-based baking boutique.
Birthday parties, banquets, garden parties & luxury picnics, weddings, baby & bridal showers, etc. can be a large payout for anyone wanting to enter the world of home-based baking. Particularly for event catering.
Depending on your area, catering these events can be equally profitable - if not more - than some of the aforementioned selling methods. From maybe a couple hundred dollars in profit to a couple thousand, catering events can be quite lucrative! Of course, however, this depends on the size of the event, and type & quantity of orders needing to be filled. And while in some areas, it might be over-hyped and highly-saturated. But with the right determination, perseverance, and planning, you can break into even the most competitive of markets!
When navigating a busy catering schedule- things can QUICKLY get a little too hectic. You need to be organized. At the very least, you need a reliable planner. Here are a few options to get you started.
Home Bakery & Catering Business Planners
If you are interested in seeing more business & personal planner options:
Coordinating a busy catering schedule can be tricky- but certainly not impossible! If your plan is to run standard orders and maybe work a Farmer's Market circuit in addition to catering, then it might take some time before you will have the skill and coordination to run such an operation. Maybe even an additional staff member or two to assist you. But if concurrently combined with either of these options, your home bakery could prove to be a serious cash cow.
And as you solidify your menu and build your client portfolio, oftentimes, the advertising takes care of itself. With each successful shindig, people will be much more likely to refer you to a friend. Or even for a guest at the event to request future services directly. Of course, this presumes that you service your soirees to perfection!
Pro Tip: To improve customer retention rates in competitive markets, it's always a GREAT idea to offer a loyalty reward program to your customers. This gets clients in the habit of ordering EXCLUSIVELY from you, and shows them that you appreciate their business!
See "Marketing & Branding Continuity" section below for customizable loyalty cards for your business
For anyone wanting to up the professionalism of their home based baking boutique, event catering is a serious consideration. Although challenging, it can prove to be a real game changer for bakers hoping to operate a successful home bakery business.
V. Product Selection Standards
As far as presentation is concerned, there are two major components to consider. One of which being your branding continuity, which we'll discuss in the next section. But the other, and arguably the most important, is your menu selection. Which luckily we have data for as well.
Of the 600 responses gathered by the Better Baker Club survey, the data also confirmed the types of goods home bakers would provide and sell most often. The responses were overwhelming in 2 particular categories.
Better Baker Club Product Selection Data
37% of bakers reported that “cookies, brownies, and bars” were the items that sold the most in their home bakery operations. Closely following that, 32% reported they sold more “cakes and cupcakes”. Particularly carrot cake! Following those two categories, 10% of bakers reported “yeasted baked goods” (such as cinnamon rolls, soft pretzels, and bread) were their top selling items. Another 8.5% reported that “breakfast pastries” (i.e. scones and muffins) were their top selling items. Leaving the final 12% of people to report top successes in a variety of "other items".
Most Popular Baked Goods
(Based on Sell Rate)
Now these results are incredibly helpful for anyone wanting to start a successful home bakery business. And especially reassuring for those who excel at or are aiming to make some of these items. Particularly wedding cakes! Although difficult and quite tedious, they can fetch for quite A LOT of money.
However, don’t be discouraged if some of the items you wish to sell weren’t mentioned or didn’t perform as well on the survey. Every competitive market needs a wide variety of niches. And the world of baking is no exception! If you are serious about opening a successful home bakery business- the sky is the limit as far as menu options are concerned.
Which is relieving. As it means you can bake what YOU want to bake. What YOU are passionate about. And still find a client who will buy it (more than likely!). And if it is more selective- such as “dog treats”, “raspberry tarts”, and “keto bars”- you can still perform well and maybe even have a higher likelihood of cornering that niche in your local market. You might, however, need to develop a stronger marketing plan though...
VI. Marketing & Branding
Continuity
If you are serious about running a successful home bakery business, then you will want your products and merchandise to appear polished and appropriately reflect your business' interests. And this means EVERYTHING. From packaging to menus to business cards... The more professional you appear, the more seriously people will take you and your business.
When it comes to business marketing: presentation is key and continuity is king!
Oftentimes when starting a home based business - especially something like a bakery - the last thing a lot of people want to do is try to set aside time to design a logo. Yet it is VERY important. Of course you can pay a graphic designer to produce a more specialized design and distribute it on a variety of products. But this of course can be quite expensive.
You can also take the time to design your own business logo. But just know that you will then need to find a supplier to print your graphic, and the integrity of your design might not be as well-maintained should you choose to go that direction.
To save some time and money branding, check out the matching merchandise sets shown below. Choose from a variety of different designs for your small business and then personalize it with your business information! Each design set is available on a wide selection of products, such as: business cards & advertising options, aprons, menus, office decor, etc.
Shop the Logo Selection
Rose Gold Glitter Cupcake: Customizable Logo
Pink Marble Glitter Cupcake: Customizable Logo
- Serving Tray
- Office Poster
- Mouse Pad
- Notebook
- IPad Cover
- Clipboard
- Retractable Catering Banner
- Table Pedestal Menu
- QR Payment Pedestal
- QR Business Cards
- QR Code Stickers
- General Product Stickers
- Car Advertising Panel
- License Plate Frame
- Advertising Magnet
- Light Switch Cover
- Electronics Bag
- Acrylic Desk Tray
Gold Glitter Cupcake: Customizable Logo
A well refined look says a lot, and a lack thereof says even more. If you are determined to own a successful home bakery business, then put serious consideration into your establishment's branding. This is especially important for bakeries looking to go into catering, working at Farmers Markets, or for those who are simply wanting to expand their delivery services beyond friends and family. At the very least, a set uniform and business cards are a MUST for the more serious services.
With that, you're now ready to spice up your space and get the word out about your new bakery! All while maintaining consistency and polished professionalism in the process.
Conclusion
Many people spend their years dreaming of breaking out of the "rat race", but very few actually take the leap of faith to do it. Starting a business is never an easy feat. It takes an immense amount of bravery, determination, and organization.
But if that's you, then congratulations! Decisively making a plan is always the first step before any successful journey. For those first few years, it won't be easy. Arduous even. But keep pushing through and eventually you'll find the risk was worth the reward!
For anyone specifically endeavoring to start their own successful home bakery business, hopefully the contents of this post have helped you. Feel free to glance at our "References" below should you have any interest in any of the facts, findings, stories, and statistics outlined in the post above. Otherwise...
Welcome to your brave New World, Gypsy Soul!
Love Always,
Your Natural Gypsy Living Support Team
