I think I want to start a [baking] business

It has been a dream of mine for a long time. I have always loved baking and have up until now only daydreamed about doing it professionally. But my husband and I have been trying to have a baby, and have talked about what sort of child care we would arrange. I can’t stand the idea of a day care center, especially for a baby. And we don’t have any relatives close by to rely on. And while I would love to stay home, it is totally out of the question from a financial point of view. So we started exploring other options, including starting a small at-home baking business. I know that the idea of working at home does not necessarily mean that I will be able to dedicate all of my time to our child. But I would be able to, at least to some extent, control how busy the business got. I would really like to be able to explore all of the ins and outs of it before we find out that I’m pregnant.

Does anyone have any experience with starting a business? It can be of any type, not necessarily a bakery or an at-home business. I’m excited about the possibility but a little wary of the potential amount of work necessary to get things started.

I run my own consulting company and it’s not that hard. I went to CPA (Certified Public Accountant), and he walked me through the paperwork, which varies from state to state. Then I bought QuickBooks to keep track of earnings and expenses. Every time I need to pay taxes, I send the QuickBook file to my CPA and he sends me the forms I need to sign and the amount I have to pay.

Works out nicely.

We do the exact same thing with our business.

As for the OP…the biggest thing I can think of for you is all of the health code stuff you’ll have to deal with with selling food. First thing to do would be to see if it’s even legal in your state to sell food prepared in your home (I’m sure it is) and how many rules you need to follow. Your startup costs might be huge.

Check out this extensive article about starting a catering business in Virginia. It has specific info on home-based bakery and lots of other good info.

Francesca runs a cookery business IIRC.

That was an interesting article. Thank you all for the info. So far I have learned that my county does not require a business license but that I may need one to open a business account at a bank. And according to the article, I can sell baked goods from my home that are made in the same kitchen, but I have to store ingredients separately from those my family uses. I have also learned that I would have to be a sole proprietorship, especially since I don’t intend to ever have to hire any employees. But the whole “solely liable” thing worries me. Can I get insurance or something in case someone ever tries to sue me, if they think my cake made them sick?

Moved to IMHO (with a stopover), and edited the thread title.

Thanks. Wasn’t sure where to put it.:slight_smile:

I run a web design business out of my home. It is just me running all of it, and there is a lot to consider. Some is probably common sense, but some isn’t.

  • Save up some money to get started. Obviously there will be initial start-up costs, but also there’s a business “warm up” period in which you’ll be making considerably less and working considerably harder than a full-time job. I had 6 months of savings when I quit my job about 6 months ago to do this full-time, and my saving is now just returning to the initial 6 months I had when I left.

  • You’ll spend half your day doing stuff you can’t bill for, so make sure that when you bill you bill sufficiently. I spend TONS of time every day looking for my next job, replying to emails, tweaking my site, invoicing clients, etc., that if I can bill for 4-5 hours a day I’m pretty thrilled.

  • Tax-wise, you’ll be a DBA and becoming incorporated or an LLC is really only beneficial when you have employees. Don’t think for 1 second that incorporating means you separate business debts and personal debts… if you’re a 1 person corporation, banks will STILL pursue you to the end of the earth even if your corporation dissolves. The best solution, obviously, is to not rack up a ton of debt at first. You shouldn’t need to for a bakery, I wouldn’t think…

  • Have a couple (notice I said couple) ideas on how to get clients and business. If you’ve only got 1 idea in mind for how to actually collect business and it doesn’t work, you’re screwed. If you’ve racked up 5-6 marketing/promotion ideas, you keep working down the line until something works.

The amount of work necessary in starting isn’t really that daunting… Just go to the bank and open a business account, and they’ll supply the paperwork necessary for DBA status. The process for me took about 20 minutes and I got a free $30 gift card! Sweet. Then you can officially start doing business under your business name.

Find an accountant. If you don’t know one or can’t get a referral to one, just open the phone book and find one. I would recommend against larger organizations. I like the accountants working out of their homes like I am, who can give me personal attention and know what my business is about.

Start baking!

There’s other things to think about of course… business cards, a website (I know a great designer!), maybe postcards for promotion. If your city has a Chamber of Commerce, look into joining. Mine was $200/year, but has already gotten me 2 jobs just from being listed in their directories and that paid for itself. They also supply networking events that help get you out of the house, which for me is priceless. After being stuck in the house all day every day, those networking events are fantastic.

It’s hard work, but working for yourself is really satisfying. In a way, ALL my clients are my bosses and I take orders from them every day. In another way, if my client is a pain in the ass I can tell 'em to hit the road (I’ve only had to do that once so far). I work crazy hours most of the time that a full-time business would never accommodate, and can take a long walk in the middle of the day if the weather is nice. My almost-fiance have discussed using me for cheap daycare ourselves, since my job does give me the opportunity to do that.

Hope some of this helped… I did this myself just about 6 months ago and have never been happier (or worked harder). Let me know if you need to know anything else, I’ll tell ya what I know.

Two thoughts.

  1. You may want to get some books on bakeries, either from the library or from a bookseller. Here are ones that I found were helpful:

[ul]
[li]How to Open a Financially Successful Bakery by Sharon Fullen and Douglas R. Brown[/li][li]Baking for Profit: Starting a Small Bakery by George Bathie[/li][li]Start A Cake Business Today by Paula Spencer [/li][/ul]

  1. There is a specific forum on the net that has a considerable amount of information about starting a cake or other type of bakery. It’s frequented by professional bakers who check in and answer questions.

Cake Central Business Forum. The Cake Central site is a popular site for amateur and pro bakers to share techniques and business advice. I’ve found them to be very supportive and helpful.

Specific problems for home-based bakeries is the problem of health department regulations. It appears that VA allows for home kitchens but you may have to get certified by the state board or health (not sure).

I have a four-month old. It seems like part of your overall plan involves you having lots of time to spend with the baby while you still have time to make money with the baking business. But that’s just not going to be the case, at least for the first few months (unless you figure out a way to not have to sleep any more). Stated another way–babies take lots of time, and new businesses take lots of time, so where are you going to suddenly get all this time?

There are other ways to not use a babysitter (get a relative to move in with you, drastically reduce your expenses so you don’t have to work, etc.).

I don’t mean to poopoo your dreams or anything, just wanted to pipe up to encourage broader thought about the bigger issue.

Just a thought but consider going around to area restaurants and scout them out as potential customers. A lot of restaurants like the idea of having locally based cakes and pies available. It would be good to have an established base of regular customers to start out with.

You would need to start by making it a Limited Liability Corporation. Maybe talk to a lawyer before you talk to an insurance agent.

A friend of mine has a blog that addresses a lot of the topics raised here: Melissa Barton Consulting. It’s worth a skim for the general, and her background is as a CPA, so she’s good at keeping one straight and on task goal/financial-headingwise --especially since I remember getting so annoyed when I started my business and took a local community college business class and everything was so…
well, awful. Mostly out of date photocopies and a lot of information on franchising, which dovetails into the whole looking ahead and creating the perfect business model thing but at the time felt very cart before the horse.

Anyway, I like Melissa’s blog because she does cover what will come up, even starting as a home-based business in a relationship, the dynamics side of it and whatnot and definitely more relevant and accessible than the business courses I’ve taken. Even if I still cringe over the whole business plan thing. Blech.

Get this book http://www.amazon.com/E-Myth-Most-Businesses-Dont-About/dp/0887300405/ref=sr_1_9?ie=UTF8&s=books&qid=1237043943&sr=1-9 . Most libraries have a copy. The softcover version is available used for a couple bucks. The author has spun this one excellent idea in to a *I’m so smart *cult following, website, fan club, videos, etc. All of that is crap, but the original book is superb.

The punch line, which **wasson **alluded to above, is that running a small business is about 90% business and 10% doing whatever skill (in your case baking). If you want to bake, get a job as a baker. If you want to run a business, start a business.

The vast majority of the business owner’s tasks are the same regardless of whether the business is baking or garbage collecting. And as the owner, those owner tasks are the ones you can’t delegate. You can always hire bakers; you can’t hire owners. And until you’re a lot larger than 5-10 people, you can’t hire managers either; there’s just not enough margin to both pay a manager and yourself.
A business that’s truly intended to be just a single-person business forever is in a slightly different boat. But not much. As **wasson **said, a good day is one where 4 hours is spent doing the part which pays.

I’ve done single person business where getting and managing the customers & vendors averaged 6 hours a day. I had to have a pretty insane hourly rate to make the other 2 hours earn enough to feed me. More realistically, the average workday was 10 hours so I could get 4 billed after the 6 of unbillable.

This is not to say you can’t succeed, so don’t even try. I urge you to get as smart as you can, then make a clear-eyed decision to leap or not. If you leap, you’ll have a lot of fun & it’ll be a real personal growth experience. What it probably won’t be is easy. And you, like the rest of us who’ve taken the plunge, will be frustrated that so much time is spent on non-baking.

Thank you for your input, but I really just want advice about how to run a very small business at home. There is a good chance that we won’t even be able to have a child, but I would still be interested in baking at home.

Thanks for the advice everyone. I will definitely look into some of those books. It had not occurred to me to find books about running a bakery, rather than just baking itself. I know a few people who cater as a sort of side business and I am not sure what the legal implications of that sort of thing are, but it is definitely something to spend time looking into. If anyone else has experience as an entrepreneur, feel free to share your input.
:slight_smile:

I think a lot of people will be looking at home based businesses these days. Your plan sounds interesting and doable and you can work out of your own kitchen!

In Michigan, the state does not allow one to use their own kitchen. The regs say you must have a completely separate facility subject to inspections etc etc. Too bad, there goes my idea for wrapping up a wholesale wonton and eggroll operation.

Another idea is to look for a npo micro business enterprise that would host food businesses such as yours.