So, you’re here because you’re wondering how to start a cake business? I’m so pleased you decided to join me as whilst there is alot of cake businesses out there, so many of them aren’t set up in the right way- legally and professionally. 

Right now, you might be a hobby baker and wondering whether you could turn your passion into a profitable business, or you might be what I like to call a grey area baker! A grey area baker is someone who whether intentionally or not has started slipping into the realms of business, but are not yet set up as a cake business. 

 You might be feeling open to the possibility of starting a business, and want to make sure what you get it right first time. Or maybe you’re still undecided and just want to find out more. Wherever you are right now, that is absolutely fine, I will meet you right there. 

Through my work with budding cake business owners, I see a lot of common traits. Quite often, I work with people who love baking and are really good at it, their friends and family keep telling them that they should go for it but they aren’t convinved, they lack confidence, and have no idea where to start. I understand that the idea of starting a business can feel a little overwhelming to say the least, but, it doesn’t have to be this way. 

I want to equip you with everything you need and help you to get your business off to a flying start. I’m here to make sure that you don’t drown in a sea of overwhelm, and you don’t get it wrong. I’ve been where you are – I’ve known that I absolutely loved making cake, and that I didn’t see myself continuing in the career that I was in but at the same time not know if or how I could make a career out of cake.  I decided to go for it and start my cake business along side what at the time was a full time job. I started from scratch and spent hours and hours trying to find out every little thing I needed to do to get started, and to make sure I did it all properly. My background is in law, so I was very concerned about getting my business set up legally.  Putting all that time and effort into starting my own cake business, has meant that I can now take all of the time and effort out of it for you. At the time, I really wished that there had been someone there to take me by the hand and show me exactly what I needed to do as this would have saved me a lot of time, and probably money in making mistakes along the way.

How To Start A Cake Business

So where do you even start?

There is alot of information out there on the internet and on social media. Unfortunately, not all of the information you might read will be correct and that can make it very difficult for you to know whether you are going the right way about starting your cake business.

Before you even start to set up your brand new cake business, you will need to obtain permission from your landlord/mortgager provider to run a business from your home address. 

Lets talk renting first of all….
You should check your tenancy agreement – does it prohibit the running of a business from the property? Whether it does or not, I highly recommend contacting your landlord/letting agent to ask permission. If the permission is granted, ensure you obtain the permission in writing.
Please don’t shy away from asking for permission as failure to do so could leave you in breach of your tenancy agreement which could have dire consequences in terms of your future living arrangements. The good news is that the law is on your side! A landlord cannot unreasonably deny permission. HOWEVER, they can deny permission if:
  1. The running of the business would cause damage to the property
  2. The running of the business would disturb the neighbours
  3. The running of the business would take over too much of the house for it to be considered a residential property
If your landlord expresses concerns over you wanting to run a business from home, try and reach a compromise that can work for both parties.
Now lets talk owning your own home….
Whether your property is mortgage free or not, check whether there are any restrictive covenants in the title deeds to the property preventing you from running a business from home.
Mortgage providers vary on their stance regarding running of a business from home. Some have a maximum % of the property that can be used for business, whilst others do not allow it at all. If you have an existing mortgage then check your agreement and also contact your mortgage provider to request permission. If you are taking out a new mortgage, you will need to check the criteria of individual lenders to see what they will allow. Mortgage providers tend to be concerned over how the running of the business will affect the building, and its value once it is resold.
Similarly, you will also need to speak to your home insurer about the fact that you intend to run a business from the property.
Once you’ve nailed this, you’re good to go in looking at starting up your own cake business!

What are you going to sell when you start your cake business?

I imagine that if you’re like me when I first started out, you have got a massive passion for baking. 

But chances are, and correct me if I’m wrong… chances are you haven’t actually thought about what you want to sell. Do you want to make celebration cakes? Do you want to make wedding cakes? Do you want to make brownies? Do you want to make cookies? Do you want to specialise in tray bakes? Perhaps you want to specialise in treat boxes, or cupcakes, or cake pops. There is so much, and obviously you don’t have to just pick one of those. You might want to pick several, but it’s a really good idea to think about what you want to sell. When considering this, good questions to ask yourself are: 

1. What do you enjoy baking the most?

2. What do your friends and family rave about the most?

3. What have people said to you, “Oh, it would be really good if you could make…”?

Also, do some research into other bakers in your area and the types of products they sell, then consider how you could do something different. Nothing needs to be set in stone, its just to get your ideas flowing.

Now, it’s really easy to think, “Oh I make this, oh I can make that,” and want to do a little bit of everything. Whilst it is great that you have lots of ideas,  be really careful that you aren’t just going to spread yourself too thin. It is far better to really, really perfect one or two things and run with it, than to try and do lots and lots of different things and not make the best of what you’re doing.

What about all the other cake businesses out there?

One thing that I know stresses bakers and cake makers out a lot, and causes a big worry for them, is how they can stand out when there are so many other bakers and cake makers popping up all the time.

The key is to be different and to show your customers why they should be ordering from you.

Being set up legally and professionally will really make you stand out from the crowd. Just because there are bakers popping up all the time, that doesn’t necessarily mean that they’re legitimate baking businesses. There is a lot of bakers and cake makers that crop up that aren’t registered, don’t have insurance, and don’t price their work properly. Ultimately, their business will not last.

It is important to make sure that people and customers know that they can order from you with confidence. So once you’re set up legally and professionally, shout about that from the rooftops so that everybody knows that they can have confidence in you and your business.

It doesn’t matter what your competitors are doing. You just do you. It’s so easy to make comparisons, particularly on social media, but really try not to. Everybody’s on a different journey. Everybody has different skillsets. Everyone has different commitments. So you just concentrate on what you’re doing and you aren’t going to go far wrong. And lastly, never be so busy working in your business with orders that you forget to work on your business. The end of the day, this is your business. How much work you take on is entirely up to you, but if you go through spells where you want to take a few less orders on so that you can spend more time growing your business and working on your business rather than working on orders for other people, then there is absolutely nothing wrong in doing that.

So, what are the steps to starting a cake business?

Many people assume (wrongly!) that if you are good at baking and cake decorating, you can just start selling your cakes. Unfortunately this isn’t the case. As a food business, there are certain obligations that you must fulfill. 

Today, I want to give you just 5 key ingredients that you need to start your cake business legally. Obviously there is so much more to starting a cake business, but I feel that its important to start with the bare minimum required of you before jumping into all of the extras. 

So here goes…in order to start your cake business legally and professionally, as a bare minimum you will need to: 

  1. Obtain your Level 2 Food Hygiene Certificate  
  2. Register with your Local Authority and undergo inspection
  3. Obtain Public and Product Liability Insurance for your business 
  4. Register with HMRC
  5. Keep records of all of your income and expenses 

Once you have taken these 5 steps, then you can start to work on all of the other elements starting your business.

What next?

There are plenty of other things to consider, and implement before you can run a successful cake business.

In no particular order, here is a breakdown of other areas, you will need to work on:

  1. Decide a business name
  2. Deciding what products you are going to sell
  3. Pricing your products
  4. Familiarising yourself with the 14 major allergens, and be able to provide allergy information with every order
  5. Decide how best to package your products
  6. Advise customers how best to store their order, its shelf life, and if making big cakes, how to cut them up
  7. Submit a self assessment tax return at the end of each financial year
  8. Create social media
  9. Advertise
  10. Start Taking Orders!

I have popped together a free e-book to dive deeper into each of these key ingredients to starting your cake business.

If you want to guarantee that you are starting out legally and professionally, in a cake business that will have longevity, you can download my free Bake It Happen E-Book here