cake shop business plan

How to Start Cake Shop Business from Home with Little Money

Do you want to start a cake shop business? If YES, find here a detailed cake retailing business plan sample checklist for your ready reference. Additionally, this article will help you in starting, managing, and growing the business.

Starting a cake shop is a lucrative food retail business. The business is easy to start and manage. Additionally, the cake retailing business is perfect for women entrepreneurs. If you enjoy baking and are passionate about baking cakes of different flavors and tastes, then this business is just perfect for you.

Here are the 10 Steps to Start a Cake Baking Business

Starting a cake baking business from home is an ideal business for anyone who wants to earn money in the time of staying at home. Also, it is a great business for women, housewives, and also students.

A home-based cake-making business offers several advantages. It eliminates the cost of having a commercial space, keeping employees, and other expenses. So you can start and operate the business with a small startup investment. Only you will need to procure the ingredients for making cakes. You can use the oven and mixer in your kitchen.

1. Select Your Cake Shop Business Model

Generally, there are five different ways you can start a cake retailing business. According to your investment capacity and local market demand, you will need to choose the right business model.

a) Online Cake Shop

In this option, you don’t need a storefront. You can start online. With a small eCommerce site, images of your product, and options to place an order, you can run it from your home.

b) Specialty Cake Shop

Generally, this type of shop sells specialty cakes. Such as birthday cakes, cupcakes, wedding cakes, eggless cakes, etc. However, you can run the business both from the home or retail space.

c) Mobile Cake Shop

As a mobile food truck, you can start a mobile cake shop business with other ready-to-eat items. The list may include biscuits, cookies, cupcakes, soft drinks, fruit juices, etc. In this model, you will need to obtain a vehicle for selling the cakes on a mobile basis.

d) Cake Shop with Sitting Arrangements

This is one of the best options in the cake retailing business. Here you will sell the cakes on the sit-down and dine option. It’s a growing trend in the bakery industry right now. In this model, you will need to acquire a good retail location with enough space for both counter sell and dine options.

e) Counter Service Cake Shop

With a small commercial space, you can start this type of cake retailing store. Here, customers can walk in and pick up baked goods from an employee-managed counter. This is one of the easiest options for starting a cake retailing business.

2. Create a Business Plan

After selecting the right business model, you will need to craft the business plan. A business plan helps to define your business, set goals, find ways to generate revenue, list expenses, etc. Additionally, it helps to identify your customer base and examine your competition.

In crafting the cake shop business plan, the most crucial aspect is calculating the startup cost. You will need to craft a list of essential commodities. The list may include ovens, refrigerators, furniture, utensils, etc. And after calculating the startup cost, you will need to calculate the break-even and expected ROI.

3. Find Out a Good Retail Location

Apart from the home operation, you will need to secure a retail space for the cake shop operation. According to your business model, you will need to determine the area of the shop. Additionally, determine whether you will establish the kitchen inside the store or not.

As with any retail business, the location plays an important role in this business also. Moreover, you will need to select a location with a high population density.

4. Franchise or Own Brand

Generally, there are several franchise business opportunities you can find for a cake shop business. If you are an absolute beginner in the baking industry, then it is better to start as a franchise partner of a reputed cake shop brand. And in that case, you will need to acquire the space according to the franchise norms of that company.

In the USA, some of the major bakery franchise opportunities are Dunkin’ Donuts, Cinnabon, Shipley Do-Nuts, Great American Cookies, Breadsmith, etc.

5. Register your Business

It is essential to register your cake shop for running a hassle-free and legally compliant business. There are various types of organizational structures under which you will be running the company as per the size of the business. Some of the popular business structures one can adopt are sole proprietorship, partnership, and private limited company.

6. Name your Cake Shop

The success of a cake shop business also depends a lot on the name of the company. It is advised to find a catchy and attractive name for your cake shop.

7. Secure Licenses & Permissions

Before opening the store, check the licensing and permission issues. Generally, it varies from state to state. Check, if they’re any type of permission required for shop operation and kitchen operations.

8. Price Your Products

This is another important aspect you need to consider very carefully. In the franchise operation, you don’t need to think that much. Because the franchiser determines the price.

However, if you want to open your brand, then you will need to calculate the cost carefully first. In that case, you will need to calculate the raw material cost, time hour, and packaging expenses. And then you will need to put the profit percentage. Additionally, you must check the price of your competitors in your area.

9. Promote Your Business

Defining a clear marketing strategy is the most crucial aspect of the cake shop business. You can’t be a carbon copy of your competitors. Therefore, identify your USP first. Be the best, the first, or the only one baking the kind of treats you make. You must have at least one core item that is only available in your shop.

Being a great baker doesn’t guarantee success. So, apart from baking delicious cakes, have some time and money for promoting your business. You must find out some effective ways of promoting your business. Additionally, you must explore both offline and online advertising options.

Also, promote the business on various social media platforms. Finally, create a website with the right domain name. You can also consider writing some blog posts there. Generally, informative blog posts help to enhance the authority in your domain.

10. Identify the Delivery Model

Nowadays, a certain percentage of consumers prefer to have the products at their doorsteps. Hence, you must consider the right delivery model for your valued patrons. Your customers are your key to success. And happy customers become repeat customers. So, put your efforts to make each customer experience memorable.

You can tie up with a courier company for prompt delivery. Additionally, you can take orders from your website. Also, you can consider keeping your delivery boy for covering short distances.

Generally, this type of business demands constant creative marketing. So, you must try new marketing tactics for getting long-term success in the cake shop business.