Setting Up A Cake Business

So you can bake, you’re pretty handy with a piping bag and you’ve been told that you should think about selling your makes. If you’re looking for more information about setting up a cake business then continue reading this post which is full of information, advice and personal experience – I used to bake and sell.

Setting Up A Cake Business: The Feedback

If you’re reading this then it’s most probably because you’ve been told by friends and family that you bake phenomenal cakes, so good you should sell them. The thing is, they might think they’re great but how often do you charge them for the pleasure? Before you even think about going in to business you need proper feedback from people who aren’t going to be biased. The best way is to set up something like a tasting session – local parenting groups, coffee mornings etc never say no to free cake. You can then ask them for feedback such as if they enjoyed it, how much they’d be willing to pay and so on. If you do this as an anonymous form then you’re likely to get true feedback.

Setting Up A Cake Business: The Research

So you have the approval of your friends, family and a bunch of complete strangers – great. Now it is time to do some research in to your local competition. Facebook is a great way to do this. Join a local selling page and in the search bar type “cake” and see how many results come up. Not only does this give you a good idea of many people in your area are selling cakes, you can also look at what they sell and their prices. This is something I didn’t do, I checked the Yellow Pages and Google Maps which showed only a couple of cake sellers locally to me but I didn’t check Facebook which showed more than 30 people in the area.

Setting Up A Cake Business: The Legal Stuff

It’s not quite as simple as bake a cake, sell a cake and make money – there are a few hoops you need to jump through first.

  • Get a copy of Safer Food Better Business – this is your new bible. Read it over, learn it and get familiar with it using it every day – yes EVERY DAY! Even on days when you don’t bake you need to keep records.
  • Check with your mortgage company and home insurance or your landlord before you go any further. Some companies have a “no working from home” policy which you’ll either need to get them to change or check. If something were to happy to your property due to your business then you might find that you or your landlord isn’t covered for it.
  • Contact your local Environmental Health Officer – firstly have a chat, talk to them about what they will be looking for and will expect to see from your kitchen (whether from home or at a specified place). Not every EHO will expect the same things. You can then put the requirements in to place before they inspect your work area.
  • Food Hygiene and Safety – again, ask your EHO if they require this. Most of the time it’s a best practice tool and you can do an online course for around £10.
  • Insurance – cake maker’s insurance is usually around the £50/year mark. Direct Line do a pretty good cover and often have cashback available making it cheaper.
  • Register as self-employed – this needs to be done within three months of trading, even if you don’t make much in the way of profit. Keep records of all your income and expense ready for your self assessment each year.

Setting Up A Cake Business: Advertising

Getting your name out there is a must if you want to succeed. Facebook is a great, free tool to advertise with. Set up a page for your business and get sharing it EVERYWHERE. Facebook isn’t an easy advertise though – you have to work at your page daily if you want to see results.

Business cards can be a pricey necessity, finding the right balance between quality and price can be hard so take a look around before you buy. Designing your own will take time but they’re cheaper than someone else designing them. Using templates from print companies such as MOO can be cost effective and quick.

Websites are also great as they allow customers to find you through Google, showcase your work and contact you without the constant effort of trying to engage on Facebook. There are many paths which you can take with a website. Free ones are cheap but they also look it and are prone to serious downtime – they can also be limiting in what you can do. I personally think the self-hosting route is always better, similar to my blog. I use SiteGround for all my online hosting, their customer service is fantastic and they have a range of packages to suit every budget and requirement.

Setting up a cake business

Setting Up A Cake Business: Pricing

This is the big question, how much should I charge? At the end of the day you need to sit down and properly work it out. All the ingredients, the decorations, the non-edibles (cases, boxes) and then factor in your time – especially for larger cakes as they take forever. Other things like your insurances, courses and tax should also be considered when pricing because they need to be covered by your income. Take a look around at what others are charging and compare them to your estimated prices.

Note that there will always be people cheaper than you – chances are they’re not doing it legitimately, using cheap/poor quality ingredients or aren’t bothered about actually making an income.

Setting Up A Cake Business: Other Things To Consider

Things I didn’t think about when I set up my business included:

  • Having a 3 year old running around the house while I was trying to work. He used to love poking his fingers in to freshly rolled icing or pulling the decorations off cupcakes.
  • Getting it right for someone who isn’t you or your family is a stressful job. I cried, I tantrum-ed and I swore until I was blue in the face on many occasions.
  • It can take time away from your family. I lost count of how many times I was working until 9-10pm because I also did it around a day job. It made the whole family miserable because I wasn’t around to spend time with them; especially if I was preparing for a stall (they’d take me 2-3 days to prepare for).
  • The summer months are HELL! Buttercream melts, icing gets sticky and nothing sets. That is a warning should you decide to do wedding cakes.

Frequently Asked Questions

Q: I’m only making less than £100 a month in profit – do I really need to register as self-employed?

A: YES! Even if you’re making 10p profit you need to let the guys at HMRC know and your need to declare it annually.

Q: I work full-time, what do I do about the self-employed aspect?

A: There is a section on your self assessment about income from employed work, you just fill that in along with your self-employed income. If you have any problems give HMRC a ring, they’re normally really good.

Q: I don’t want to make profit from my bakes, can I just sell the cakes to people at cost?

A: If you don’t want to register as self-employed and only sell at cost then that is fine. You can only include the actual ingredients in your cost – so you can’t charge for ribbons, cases, boxes, gas, electricity etc

Is It Worth Setting Up A Cake Business?

Only time can really tell. I loved baking so thought it would be great for me. I ended up coming away hating it for a while and didn’t make any profit, I probably just broke even. I’ve seen friends start their journey and flourish, I’ve seen others earning but it was never enough. It’s not an easy way to make money from home and it certainly isn’t a quick thing. Lots of time and dedication are needed to succeed so if you want to give it a go then try. Give it your all for a year and you’ll soon see if it’s for you or not.

Are you thinking about setting up a cake business? If so then here is some important information and advice you should consider before getting started.

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