How to start the baking business?

Baking business is a good choice for the housewives

2/2/2016

Many women especially house wives think of starting a business which can take off from home itself. The baking business is one of them as it requires minimal investment and it can be started off easily from home. Also, it one of the most common preferences of the housewives because most of them are generally expert in making delicious baked food items like cakes, biscuits, pastries etc.

If you are one of those who is desirous of becoming a woman entrepreneur and want to convert your passion into profitable home based business then this article is for you. Well, it is true that you are passionate and excited to take off your business, but before starting it you need to design a good business plan that illustrates every aspect of the business, that will keep you on a right track and will help in running your business smoothly.

(1) Give a legal shape to your business

First of all, it is very important to give a legal shape to your business. It not only makes you serious about the profession but adds credibility to the business in the eyes of the customers. A legal business entity means that you comply with the rules and the regulations set up by the food authority and the local government authorities. Therefore, choose a good and attractive name for your business and get it registered as sole proprietorship firm (as most of you are going to start as a lone entrepreneur, therefore it is better to register your business as a sole proprietorship firm). You need to have a license from Food safety and Standards authority of India in order to start your baking business. It has launched an online system Food Licensing & Registration system (FLRS) to apply online for the license. As you will be engaged in a selling of baked goods and these goods are taxed under VAT (value added tax). Therefore, your business should have VAT number or TIN number issued by the local sales tax authorities.

(2) Decide the product and arrange the equipment needed

You need to decide the number of products and their quantity that you are going to sell to your customers. Initially, you can try with the single product like a cake, pastry or a cookie and make according to the order you receive from the customers. However, later on, as your business grows, you can diversify into other baked products. If you are planning to start with a single product then most of the equipment are already available in your kitchen. However, the following are the basic equipment that you need to start your baking business:

Baking oven: Most of us have a baking oven in our kitchens, it is used to bake cookies and cakes at the temperature set by you. It is one of the most basic prerequisites of the baking business.
Spoons, cups and bowls for measuring: You cannot make a good cake, pastry or a cookie unless you have mixed the ingredients in the right quantity and to so you must have right measuring tools like spoons, bowls and the cups of different sizes so that you can prepare any quantity of food.
Baking Pan: A pan is required to put baking goods in the oven so that it can be cooked in a right way and the right shape. There are different shapes and the sizes of the baking pan available in the market like square pan, rectangular pans, and circular pans. Please choose the pans according to your choice and the requirement.
Spatulas: It has different uses like to scrape the pan or bowls, to fold the delicate ingredients, and to stir. They come in a variety of sizes and you can choose as per your requirement. Their handles are usually made of plastic or wood to insulate them from heat. A right variety of spatulas can help you in giving accurate finishing to the product.
Mixer: When the demand is less then you can mix the ingredients by hand but as it increases you need to have an electric mixer, it will not only mix in uniformity but also saves lot of time.
Rolling pin (Belan): It is a cylindrical shape with small handles at the both ends.
Cookie cutter: It is kind of biscuit cutter which cuts your cookie in the desired & different shapes like heart, star, hexagon, circle, square, rectangle, half moon and much more. You can make your cookie attracted and customized according to the occasion.
Pastry blender: It is used to mix a hard fat into flour for making pastries. It is made of metal strips attached to the wooden handle and the mixture can be mixed by pressing down blender on it.
Pastry crimping wheel: It is generally used to fix the sides & boundaries of the food items which have filling inside and the dough outside.
Whisk, Pastry brush, Wax paper

(3) Calculate the capital expenditure required to take off the business

Every business requires some amount of capital expenditure in one form or other, therefore, it is very important to calculate and assess the expenditure you are going to make in your business. A high set up cost in the initial phase of the business can put you under pressure and may affect the performance of the business. Therefore, it is always advisable to increase your set up cost in phases as your business grows and the income increases. However, the following costs are important before launching any kind of business:

Evaluate the cost of the equipment like mixer, cutter, oven etc which you are going to purchase for making baked products.
Cost involved in obtaining food license and the VAT registration
Cost incurred in purchasing the raw material for the baking like if you are baking cookies then you need flour, sugar, eggs, water and butter etc.
Marketing expenses like having a website, visiting cards etc.
Other daily expenses in running the business like meeting the customers, purchasing the raw material for the product.

(4) Decide the location of the sales

The location is very important from any business point of view. Here you need to decide where you are going to sell your product?

Will it be a school, college, hotel, restaurant, office or your nearby location?
Can you figure out any location or area which is untapped by your competitors? If yes, then tap that area and serve the customers.

(5) Discover the price of the product

Do you know that a right price discovery can increase your sales and can make your business a success? Yes, with right pricing you can attract more customers. Try to figure out the price of the similar products which your competitors are selling in the market. Offering your product at slightly lower price than the price offered by others is one of the effective ways of increasing your customer base.

(6) Project your business income

After calculating the capital expenditure and the discovering the price of the product, it is time to project the income from your business. Here, use your intelligence, experience, and the gut feeling as how much amount of cookies, cakes or pastries you could sell in a week’s or month’s time?
An approximate figure can give you the projected income and you can easily calculate the payback period. For example, my capital expenditure on baking business in Rs. 20,000 and I decide to bake cake for my customers. Initially, I am expecting 1 cake order per day which is priced by me at Rs. 200. Now, I can easily calculate the payback of my business by using these two figures, it is as follows:
Payback period = Rs. 20,000/200 = 100 days
Interesting article: A small business idea: How to start a solar lantern business?

(7) Clear your long term goals

Your long term goals must be clear before starting any business, like whether you will stick to one product or diversify into different baking products, how much staff you will be needed in the coming future? What will be the number of customers that you are planning to serve in future?
A large customer base with small baking equipment or few customers with large baking equipment shows a lack of clarity in the goals. Therefore, above are the few basic questions that need to be answered in order to clear your long term goals.

(8) Do the market research

Before launching your product, it is important to do some market research about the bakery products in your nearby area.

Inquire about the taste and the preferences of people.
Check what your competitors are offering to the customers and at what price?
What is their mode of payment and mode of delivery of the product?
Which type of the baked product is most liked by the customers?
What they prefer, a home delivery or self-service?
Inquire about the number and the types of the bakeries in your locality.

This preliminary information will help you in designing your product with right pricing.

(9) Market your product

Marketing is one of the important aspects of any business; a right marketing strategy can boost your sales and increase your profits. Therefore, you need to spend a good amount of time to market your product. The following are the effective and cheapest ways to market your product:

Use the power of social media: In order to promote your product you need to let others know about your expertise. Social media like face book is very powerful in promoting the business. You can create an account in the Facebook free of cost and start selling and promoting your products. You can invite your friends to join you and you can anytime upload the photographs of the baked products in your Facebook account. This strategy will attract customers and you can grow your business. The other social platforms are Twitter, Pinterest, LinkedIn.
Give a professional outlook to your business by designing a website: Don’t worry; you don’t need to be an expert in designing & maintaining the websites except you should know to run a computer and the internet. You can very easily design the website by your own through Weebly.
You can visit the local schools, restaurants, colleges and inform them about your business and the product.

(10) Focus on the quality

Once you get your first order then try to give the good quality product to your first customer. The basis of your business is a good quality product and any bad quality product can give a big jerk in this journey. Therefore, choose the right and good quality ingredients to make your product.

(11) Timely product delivery is a challenge

Although you are keeping track on the quality of the product, making attracting cookies, cup cakes or cakes for your clients but any delay in the delivery of these products can put a bad name about your business. The delivery of the product can be a tough task for the lone entrepreneurs, therefore, tap those areas which are nearby to your house and where you feel confident that you can deliver the products fresh and in time. You can expand your reach and recruit new staff as your business grows.

Conclusion

I have tried to furnish the relevant information which can be beneficial for the woman entrepreneur to start the home based business and realize her dream. The level and the amount of success in this business depends upon the amount of efforts you put in and it is different for different people. You will face hardships when you start it but with continuous efforts and perseverance you can overcome them with time. Therefore, don’t wait, just follow your passion, take small steps, go ahead and finally you will emerge out as a winner. That’s enough from my side, please let me know your views and queries about your baking passion. All the best!