How to start a cake business: 5 simple steps
Whether you have aspirations to be the next Lola’s Cupcakes or simply want to monetise a hobby, read our introductory guide to launching a cake business
Regardless of what or how many markets you choose to target, there is no arguing that a cake-making business could be a lucrative (if time-consuming) venture to start. So whether you’re planning on launching a cake empire or finally following the dream of turning your hobby into a small enterprise, we’ve put together a ‘bite-size’ guide to help any bakery-loving entrepreneur start a cake business Mary Berry would be proud of.
These are the steps for how to start a cake making business:
1. Make sure you stand out
Cake making is like any food business, competitive; and it’s important that you stand out from the rest of the market. You could do this by offering something unique, such as an exclusively free-from range or a variation on an old classic – like our 2014 top product business Love Cheescakes that make individual-sized flavoured cheesecakes. However, though innovation will get you noticed, quality will remain key to a sustainable business.
Regardless of natural talent, being an expert in all or certain areas will help you evolve from an enthusiast to a master pastry chef or skilled cake-decorator; therefore investing in training– even in just one of the many specialist areas – could be the game-changer in your business. Several qualifications are available in the different areas of cake creation, from a range of NVQs and City & Guilds qualifications such as cake decoration or sugarcraft to more time flexible online courses. The costs and timescales vary considerably so make sure you research the most appropriate option for you and your business..
You just have to take a look at the frenzy that develops around the Great British Bake Off every year to know that the UK is a nation of a dessert fans. Moreover, as the demand for elaborate and unusual cakes continues to increase, you can always count on weddings, anniversaries, birthday parties and other ‘cake-required’ occasions to keep you in business, alongside the steady rise in Britain’s café culture. But make sure you stand out!
2. Plan ahead
Whether you’re launching a cake-making business to create a sustainable full-time venture or as part-time additional income stream, a cake making business can mean sufficient overhead costs and a hectic schedule. You have to consider initial set-up costs such as necessary equipment, as well as material costs, delivery costs, sample costs and storage so having a business plan in order to monitor cashflow is vital (take a look at our business plan template)..
A plan will also help with developing a growth strategy as you can monitor your firm’s development and keep track of upcoming bookings. It’s important to know when to push for more business and when you’re in danger of overbooking and letting a customer down (which could be detrimental to your start-up).
It may be worth considering seeing if you can get a Start Up Loan (external partner site, link opens in a new tab) to help you with financing, and mentoring to start this business idea. You'll also need to think about registering your business, either as a sole trader or as a company - if a company, then Smarta Formations (external partner site, link opens in a new tab) are an organisation that can help you set up.
According to Allegra Strategies there were 16,501 coffee shops across the country by the end of 2013 and this has only expanded in 2014 as the UK witnessed a rise in quirky cafes – which means your cake-making business will have a plethora of potential suppliers available if you decide to branch out from a customer-direct model and expand your revenue streams.
3. Understand food safety
Whether you decide to run your cake enterprise from home or a fully equipped business premises, food safety and preparation regulations must be in place and followed.
Dairy, un-cooked and prepared products must be stored and transported at a certain temperature, it must also be correctly labelled and sell-by dates must be monitored. As well as ensuring that storage and transportation is up to scratch, a cake-making business must have a proper cleaning schedule in place to minimise the chances of cross contamination and food poisoning.
4. Register your premises
Another red tape measure that a cake-making business owner must meet is registering your premises with the local authority 28 days before the company begins trading – even if it’s from your home kitchen.
The premises must meet hygiene regulations, such as having pest control in place, adequate lighting and ventilation, hand washing, drinking water, separate storage and drainage facilities. The rules also require a separate sink in or near the kitchen for cleaning. Getting expert advice from your local authority may help, especially if the initial launch is going to be from home.
Once you have registered your premises, an environmental health officer has the right to make an unannounced visit. It’s up to you to have any information that may be required on your premises – this will include records that cover machinery maintenance, cleaning schedules, and the ingredients and origins of food. If you fail an inspection or an officer feels that you have prevented them from carrying out their inspection, you can be prosecuted and fined.
5. Be as creative online as you are in the kitchen
Selling your cakes or your cake-making services online can be a great way to reach a large audience. And whilst you can create a website inexpensively, the quality – especially the images on your site – will be essential to generating business. Social media will also be a great way to showcase your business, with image heavy social channels like Instagram and Pinterest offering a cake-making enterprise a great way to engage with potential audiences and find new customers.
Additionally adding videos of your business’ process from cake creation to delivery will help you to show customers how professional your company is and how great your products look – it will also help you develop relationships and word of mouth recommendations (especially if the customer you deliver to shares your video with their followers too). Even if you plan to have a physical location or feature at markets and pop-up events, an online presence can gear people towards your physical location and vice versa.
A cake-making business can be a great way to build a sustainable enterprise from a hobby you’re passionate about that you can start out relatively small scale and with little investment, to a fast-growing business with a generous profit..
Once you’re set up
Once your cake making business is up and running, you should look to grow. The options below can help you with this:
- Design a website – designing a website is the best way to launch your business to the world. Find new customers and advertise your services.
- iPad POS – get a versatile point of sale system to help your staff create payments for customers.
- Chip and pin machines – let your customers pay by card and add speed and efficiency to your payment processing.
- Outsource HR – outsource your human resource responsibilities to ensure your staff are taken care of probably.
- Payroll services – use a payroll service provider to ensure that staff salaries are handled easily and effectively.