Thinking of starting a baking business from home? Here are Britt Box's top five things you need to know before you get started...
“You should do this as a business!”, “You could make money from these cakes you know!”, “Can I pay you to make a cake for me?” It didn’t take long after I started baking for me to hear these comments on a regular basis. Working as an admin assistant in an office and baking in my spare time was going well, but the longer it went on the more I asked myself; ‘Could I do it? Could I turn my hobby into a business?’ I didn’t have the first clue about what to do and I had a thousand questions. If this sounds like you, or like something you may have thought about, I’m here to help. I ran a successful, award-winning cake business from home for many years and over that time I learnt so much. Based on my experiences, here are the top five things I think you should know about starting a cake business from home...
Starting a baking business
1. Setting up your kitchen
You can’t just put a ‘cakes for sale’ sign on your front door and start a cake business. When you are dealing with food, there are certain safety aspects you need to be aware of, and this starts with your kitchen. You don’t have to have the perfect, big show home kitchen. I started my business in a very small galley kitchen in a one-bedroom flat. It had so little space I had to buy a cupboard for the living room just to house my cake tools. Size doesn’t matter, but a kitchen being used for a food business does have to reach a certain standard. One of the most important things you should do before embarking on your new career is to get your kitchen registered with, and checked by, your local council. This isn’t anything to be scared of, they aren’t there to trip you up, quite the opposite in fact. There are lots of different things to be aware of, some of which may not even be relevant to your business (meat temperatures and the like) and a few hoops to jump through such as printing and filling out a manual and getting your NVQ level 2 in food health and hygiene, but once you’ve done that and your kitchen is checked and you get your rating, customers will be more confident in buying from you. You will be listed publicly as having a council checked kitchen on your local authority website and you get a fancy window sticker to display your rating. It also, most importantly, ensures the safety of your future customers.
2. Becoming self-employed
The laws around becoming self-employed and who does/doesn’t need to register with the tax man are ever changing. However, as of July 2020 the following information is correct. I know from conversations I’ve had with hobby bakers that many bake just for the cost of the ingredients. If this is done occasionally, then it is classed as a ‘hobby’ in the eyes of the law. But! If this is done regularly and even a small profit is made, you are considered a trading business and need to follow the laws and guidelines surrounding this. Specifically, registering as self-employed and declaring your income. Registering yourself as a sole trader means part or all of your income is coming from work you are doing for yourself. By registering, it sets a few things in motion. For example, if you are on any income support or benefits, they may need to be recalculated. If you work full time, the tax may need to be altered and, most importantly, you will need to complete a tax return at the end of the financial year. Although, please be aware there is a threshold, under which you will not need to pay any additional tax. Currently it sits at £12,500, but this does seem to change annually. Even if, in the first few months of starting your career as a cake decorator, you only bake two cakes and make a grand total of £12.76 profit, you must declare your income.
3. Pricing up your cakes
This is a big one. It is certainly something I am asked a lot and I often receive pictures of cakes from people asking me ‘how much would you charge for this?’, but I’m afraid the answer isn't as simple as me dreaming up a figure. There are a few things you need to take into account: How much will the ingredients cost you? How much are you spending on the equipment, such as the cake board, boxes, dowels and so on? How long will it take you? Is there a lot of detailed decoration? How much is your time worth? Do you need a new cake tin to fulfil the order? Don’t forget the cost of the electricity to bake the cake in the first place too! Most cake businesses aren’t charging enough for their cakes when they first start out. For example, you make a 20cm (8in) birthday cake and it takes you 10 hours to buy the ingredients, bake the cake, make the cake toppers and ice and decorate the cake. You charge £20 for the pleasure but, once you take out the cost of the ingredients (let’s say they cost £10 in total), you would be working for a grand total of £1 an hour. That is not a sustainable business. That’s barely a sustainable hobby. It may be sugar and flour, but you need to treat it with the same respect as you do any other business. It’s a fun hobby for sure, but when it comes to turning it into a career, there’s so much more you need to think about than just the price of sprinkles!
4. Dealing with customers
How are your customer service skills? I always thought mine were quite good. I had worked in retail for a really long time and dealt with customers on the phone, so I thought I’d be able to handle them when it came to my business. But as soon as it became mine, it became personal. At the start, I second guessed all of my decisions. When you start to calculate how much you want to charge, it won’t be in everyone’s budget – and that’s ok. But, something which used to upset me and the statement I know a lot of my fellow bakers get, is ‘But it’s just a cake?!’ I think you and I both know, it’s never just a cake. There will be people that compare your hours of work to a supermarket purchase, but you cannot take it to heart. I know it’s hard because you may feel it’s a reflection on you and your work, but I promise it isn’t. There will be customers who ask you to make a three-tiered cake with handmade models for tomorrow and unless you are actually superhuman, you’re going to have to let them down and say no. Saying no was a big thing for me, I ended up making myself ill one month because I took on too much and I didn’t want to let anyone down. You have to put yourself and your family first.
5. Living life as a cake maker
I think the most important thing to know before starting a cake business from home, is that when you do, I personally believe you will have one of the best jobs in the world. You are part of so many special occasions, you make so many people smile, your art and talent will bring joy to so many families and that is really something to be proud of. There will be long days and longer nights, you will need to buy in extra storage space for tins, moulds and cutters, etc, and you won’t be able to simply walk past a cake shop without ‘popping in’. But it really is an awesome job that is so much more than just cake. Even my worst day as a cake decorator and running my own business was better than the best day in any previous job I had. Happy baking! Britt xxx