How to Start a Cake Business

How to Start a Cake Business

The question on your lips is how to start a cake business, and this is one we have heard of before. The profitability of a cake business is just too good to pass on, which is why many people like you are looking for how to start this business. The food industry is generally one of the most profitable out there. This is partly because we all eat hence an unending list of clients. The food market is also very diverse, which is another reason why we all love it. 

However, it is important to understand that these things will always be easier said than done.

There is so much that will be required from you if you are going to start a cake business.

Whether you are starting from scratch, at home or doing the business from a shop – it all stays the same.

Starting a business will never be the easiest task the world has offered you, but the reward is simply amazing.

Thankfully, this article is available, and for some reason, you are here reading it.

We will talk about all that it takes to start a cake business – Guiding you from where you are right now to own one of the best bakeries in your area.

That being said, we would like to review a few things with you first – just for reassurance.

You searched for how to start a cake business, but is it the right business for you?

To find that out, we will consider the advantage and disadvantages, and then we will consider the industry.

How to Start a Cake Business – Advantages

The first side of things we consider will be the advantages that come with the business.

We have to see how it is beneficial to you before we let you decide if you want to do it.

Some of the advantages here would include the following;

  • There is a constant flow of customers since it is in the food industry.
  • This business allows you to be impactful in the life of other people.
  • How and where you work is solely dependent on you – you could work from home or online.
  • The startup capital is dependent on how big you want to start.
  • It is easy to retain customers.
  • The probability of expanding the business is high here.

How to Start a Cake Business – Disadvantages

The next thing to consider is the disadvantages of the business.

Only when you have them both will you be able to consider which outweighs the other on your scale.

When considering the disadvantages, some of them here would include;

  • One of the most pressing challenges for a cake business will be the high level of competition here.
  • You have to follow many regulations and compliances since you are in the food industry.
  • The working hours can be unfriendly too when you have a large customer base.
  • The profit margin of the business is dependent on how big you start.

The Industry – How to Start a Cake Business

Now that we are done talking about the advantages and disadvantages, the industry is next to consider.

We have to just go through a few other things before going into how to start a cake business.

Since we are looking at a cake business, we must understand what is acceptable in the industry and what isn’t.

The very first thing we believe you already know is that this is a profitable business.

Under normal circumstances, it would take you 3 – 6 months to build this business from scratch to visible profit.

How to start a Cake Business – 9 Basic Steps

Now we are sure that this is what we want to do.

We will talk about many steps, but ultimately, no one has more importance to others.

They should all be considered diligently since we are looking for a successful cake business.

These steps include;

1. Background Research on the Business/Industry

Everything good starts with proper research, and a successful cake business is what we want here.

You will have to do your research on a lot of things before deciding the best for you.

The cake business is very flexible, and that could easily be a bad thing, even if it is good.

Without proper planning, you might end up picking a combo that does not work for you and your environment.

Firstly, you should consider your environment and how they see cakes or pastries.

In the food business, your first customers would usually be the people in your environment.

So, understand their preferences and how they prefer interacting with their bakeries.

This is also the point where you consider things like how many local bakeries you have in your location.

Each local competitor has to be considered independently and thoroughly if you want to stand out.

Do a SWOT analysis to understand everything about them, from strengths to weaknesses, opportunities and threats – you should do this for yourself and your business.

Furthermore, understand where the competition is getting it wrong and plan how you can capitalize on their shortcomings.

You should also consider their strengths and the things they are doing right with their business.

With this information, you can strategize on how to do these things even better than it is being done.

The next part of your research would involve you considering the cake industry in general.

What is applicable now that was not a thing before – trends sometimes help you win.

It could be cupcakes or using butter icing rather than sugar icing for your cakes.

2. Work on your Niche and Business Model

Just like we have already mentioned, the cake industry is filled with so many variables for you to choose from.

One of such variable is how you want your business to be run and what you want in your space.

This must be sorted out from the start so it does not cause any form of confusion as you go.

First of all, a cake business can be done from anywhere, but this ultimately depends on your customers.

This is why we suggested you focus on researching first before we get to selecting a niche for the business.

There are advantages to any option you decide to go with, but you could work from home or a physical location.

The business model for each of the models is quite different, so you choose which works better.

For working from home, you would rely heavily on delivery, and this pushes you to be more digital with marketing.

When it comes to a physical location, you can diversify the business even further as there are more options.

Your physical store could be set up to be a café shop, confectionary restaurant, driver’s throw, pick-up store, etc.

There are so many ways you can play out things when you have a physical store which makes it exciting.

Combining more than one option is also common when deciding the niche to go with.

Your business structure is another important aspect to consider when you are planning things out.

This will have to do with whether you are going to be taking partners or it will be a sole proprietorship.

3. Properly Document Things; How to Start a Cake Business

Another step on our agenda as we look at how to start a cake business is documentation.

You cannot navigate this business without documentation.

You will have to document everything about the business, as this will be your guide as you go.

Our advice is that you start documenting immediately after you start the process of researching the business.

Document things when you decide on the business model, niche and business structure you want to go it.

The goal is to write everything about the business, so you do not forget.

Another advantage of documentation is the fact that it will allow you to make informed decisions every time.

For example, documenting your plans for scaling up and scaling down from the start helps you when that time comes.

Rather than acting on impulse, especially when it is impromptu, you can simply turn to your document.

A business plan will be one of the most important aspects of documentation as you start the planning stage.

It is basically a collection of everything you will be doing, from starting to running and maintaining the business.

Some of the parts of a business plan you must have in yours include;

  • Business Overview
  • Market analysis
  • Product and services
  • Sales and marketing
  • Competitive analysis
  • Operations plan
  • Management team
  • Financial plan
  • Executive summary
  • Appendix

4. Learn and Get Certifications/Licenses

Further, understanding that business in the food industry involves skill is the first step towards success in it.

Therefore, you should find a way to learn or improve your baking skills.

Since we are operating in the food industry, trust and competency are sometimes even more important than skill.

Your potential customers need to trust that you will make their food in the best and most hygienic way possible before buying.

Certification helps breed this trust, so when learning, also try to get certified.

There are so many culinary schools all around, and you just have to go for the one that fits you.

Another way to breed customer trust and loyalty is by getting the necessary licenses needed to work.

The licenses that you will need to operate will depend on where you find yourself in the country.

Meanwhile, there are federal regulations and licenses you should have to operate the business, but there are also local ones.

With licenses, you cannot get some and ignore some, as the regulatory bodies do not joke around.

The food industry is one that is monitored since it has to do with the health and well-being of the general public.

The occupational safety and health administration (OSHA) will issue you some of the permits you will need.

Since you are in the cake business, you will need to go through the FDA to get approval for this.

5. Brand Your Business to Stand Out

Branding is one of the most important aspects of starting any kind of business, as it gives your business identity.

Your branding includes everything your customers get to interact with when they see your business or products.

So it is basically going to be different depending on the niche and business model you have chosen.

However, some things stay the same – one of which would be getting a brand name for the business.

A lot of time should be put into this; your brand name might just be the reason you are chosen over other brands.

You can go to other things when you have figured out what the brand should be called.

This will include things like your brand colours, logo, packaging and tone for copywriting.

If you are going to have a physical location, then how your place looks also falls under branding.

As such, you may hire a branding expert to help you when you get to this stage.

6. Do all the Necessary Registrations; How to Start a Cake Business

Getting to the stage of registration only means that you are getting closer and closer to implementation.

You cannot afford to forget some and focus on some here – as long as you want to succeed.

In terms of registration, the business name comes first; you have to own the name you are using.

After registering our business name and the business, you can use that to process legal and financial documents.

One of the legal documents or properties your business should have would be the employer identification number.

You can easily file for your EIN via fax/mail or online by visiting the website of the IRS.

This number is what you would use to apply for and pay your taxes which is mandatory for businesses in the US.

If you are a newbie to these things, you should seek the help of a financial or/and legal expert here.

You should open a bank account for your business as it makes things more official.

Insurance is part of the many other things you should register for during the early stages.

7. Implement all From the Planning Stage

The journey has always led to one destination: starting a successful cake business.

When considering how to start a cake business, you will have to plan, but at the same time, execution is key.

You would need to implement everything from the planning stage to be able to run the business.

The first part with things is the financial aspect of the business – this involves how the business is funded.

So, it depends on your plan from the start; if it is a loan, you should apply at this stage.

On the other hand, if you are self-funding things, you should move the money to your business account.

Your location is the next thing to do since the finances for the business is now readily available.

Even if you are working from home, you must make arrangements to get the place in order.

After location getting your location, you should also consider getting the needed equipment and employing staff.

This will solely depend on how big or how small you want to start things with the business.

8. Strategize to Market Your Business

The last part of the whole process remains one of the most important parts for all of us.

Since marketing is the bedrock of starting any business, this becomes very important to our whole conversation.

When you are strategizing for marketing, considering both traditional and digital is the key to succeeding in the food industry.

People will need to feel your impact physically when they find you in their faces when they go online.

The best way to do this is to launch the business properly if you have a physical location.

Before the launch, you can find a way to be impactful in the community as this registers your business in their mind.

You will need essential accounting tools to help you track your business when the time comes.

Online marketing would see the combination of social media with some of the other available tools.

While looking at the marketing strategy at the start, it is important to consider customer retention.

Having customers is one part of the business, but keeping them loyal and converting them into brand ambassadors is another part.

Conclusion for How to Start a Cake Business

The question was how to start a cake business, and we provided the 8 important steps for you.

However, there is no step more important than the other.

As long as you are looking for maximal outcomes in your business, doing everything with diligence and patience is important.

You also need to understand the concept of scaling and starting at your own pace.

We hope that you will run the best cake business in your area, and we know you now have what it takes.

We will keep our eyes glued to the comment session in hopes of getting feedback from you.

Until then, you can check our website for more amazing articles.