Starting a new home baking business, need advice!

[EpicBakes]

Hello UK Business Forums,

Myself and my business partner are very interested in starting up a business, but neither of us have any sort of business experience. We plan to start out creating tray bakes, brownies in particular. We've chosen a target audience and age group, and have already spent a large amount of time getting feedback from others regarding the product. The general response is amazing, our brownies are very popular.

We've done a lot of research, but are still unsure of exactly what needs to be done. We know we'll obviously have to get certified, as we'll be selling fresh food. We've already gotten in touch with our local council regarding health and safety.

A few questions I can think of, from the top of my head;
- What other kind of organizations will we need to get in touch with with regards to being a legal company?
- Would it be wise to spend more time testing the market with our product by starting out small and building up, or to source somewhere to manufacture our product and aim big from the get go?
- If anyone else has experience in this field, what kind of costs would we be looking at to start this up?

Any more information or advice you may be able to give us would be appreciated immensely.

 

[Scalloway]

You must ensure you have the approriate hygeine approvals, both personal and for your premises.

To register as self employed you must register with HMRC. Link here

http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm

You say you are going into partnership. I would strongly advise getting a legal partnership agreement drawn up. It will save money and heartache if things don't work out.

Personally I would trial market first. You will get to know some potential customers and iron out some of the problrms.

Remember it will probably take twice as long to get going as you think, so don't beeasily disheartened.

 

[EpicBakes]

Thank you for your reply, Scalloway! Cannot express how much we appreciate your input.

My business partner as such is actually my mother, would you still recommend a legal partnership? We're very close, and have a strong passion to get this rolling. Sorry for my misleading choice of original words, felt the need to sound a little more professional.

One of the bits of advice we were given was to trade under the "sole trader" title until it can safely become a self sustaining business. Would you recommend this?

Again, thank you very much!

 

[Scalloway]

Family disputes can be more bitter than those between business partners! If you plan to have your mother playing a big part in your business your are better off having something in writing at the start.

Starting off as a sole trader/partnership makes life simpler. Apart from filing your annual tax return officialdom has little interest in your administrative arrangements. Becoming a limited company has tax advantages and you will not lose personal assets if the business fails. There is a thread in the Accounts and Finance forum about this.

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=60813

 

[ScotComp]

At the moment I'd strongly suggest staying clear of becoming a Ltd company and sticking to either a Sole Trader or a LLP for the time being, you can assess this as you go along and perhaps change at a later date if required.

With regards to start up costs, you really want to try and keep these as low as possible so that if you do fail you can bail out without too much costs. At the moment I'd start off small and work your way up, I actually have a few clients that run similar businesses (such as wedding cake makers) where we manage their websites/flyers etc. and most of them are very small but successful businesses.

Other things to look for are business insurance, any health requirements etc.

I'd be more than happy to help you with any of your questions, feel free to PM me if you need any further assistance on anything.

Business Link is a very good website for further information also :

http://www.businesslink.gov.uk/bdotg/action/layer?r.s=m&topicId=1073858805

 

[jhardy2008]

Perhaps the idea of being self-employed appeals to you, but you may be second guessing your ability to start a home business. Many people have found their niche in a home baking business, though. So, if you'd like to take your dream of owning a home business off the back burner, the time has come to learn how to start a home baking business.

1.Decide what kinds of baked goods you will supply. Choose whether your baking business will specialize in whole grain breads, or extend to pies and specialty cakes. Your decision may weigh upon the baking facilities available to you, your baking experience and the amount of time you have to dedicate to the business.

2.Check with your state attorney general's office to find out if you need a license to operate a baking business from your home kitchen. If you do, expect periodic inspections and regulations to be enforced by your state's Department of Agriculture.

3.Think of a name for your home baking business and register it with your county, often in the form of a DBA (Doing Business As). The cost of licensing is usually minimal and it will allow you to maintain a business bank account as well as take advantage of wholesale supply discounts.

4.Find your customers. Bring sample baked goods to local offices, civic clubs, delicatessens, restaurants and even catering firms. These are the types of accounts that result in consistent orders and high volume profits.

5.Keep up with needed supplies. You'll likely want to replenish perishables weekly and staples monthly, preferably through a food co-op or a wholesale baking supply vendor.

6.Keep good track of the "bread" coming in as income and how much you'll need to give to Uncle Sam. This process also includes tracking the cost of supplies to do business, advertising fees and operating expenses that you may be able to deduct at tax time to reduce your tax liability. Without adequate records at the time such expenses are incurred, you won't be able to make these claims later on.

Source: http://www.ehow.com/how_2056888_start-home-baking-business.html

 

[scentedserendipity]

Hello UK Business Forums,

Myself and my business partner are very interested in starting up a business, but neither of us have any sort of business experience. We plan to start out creating tray bakes, brownies in particular. We've chosen a target audience and age group, and have already spent a large amount of time getting feedback from others regarding the product. The general response is amazing, our brownies are very popular.

We've done a lot of research, but are still unsure of exactly what needs to be done. We know we'll obviously have to get certified, as we'll be selling fresh food. We've already gotten in touch with our local council regarding health and safety.

A few questions I can think of, from the top of my head;
- What other kind of organizations will we need to get in touch with with regards to being a legal company?
- Would it be wise to spend more time testing the market with our product by starting out small and building up, or to source somewhere to manufacture our product and aim big from the get go?
- If anyone else has experience in this field, what kind of costs would we be looking at to start this up?

Any more information or advice you may be able to give us would be appreciated immensely.

sounds like fun! good luck!!

 

[deniser]

Everything is straightforward about this business apart from selling your products.

You don't mention sales at all in your original post.

Where are you going to sell your cakes? How much are you going to sell them for? Bearing in mind the short shelf life, how much profit are you going to make?

 

[vvaannmmaann]

http://www.cakebaker.co.uk/starting-your-own-cake-baking-business.html

 

[Simply Business]

Hello EpicBakes,

Firstly I wanted to start by saying that the post from "jhardy2008" has some brilliant bits of guidance. I work for a business insurance broker and I have spoken with several people over the last few months that are starting baking business's. From what I have been told - the toughest part is getting your product in front of your customers.

A number of people mentioned attending events such as farmers markets, local fairs and school days. They are relatively low cost and can offer good exposure.

When attending these types of events you may be asked for public liability - which covers against things like your stall collapsing on someone's foot. Also as you are selling a product you would also benefit from having product liability - this kicks in if anyone becomes unwell after eating your tasty brownies!

If you have any queries or questions about business insurance please feel free to get in touch via http://www.simplybusiness.co.uk/social/online-customer-support
Kind Regards

Tim

 

[marshallcatering]

If you require any catering equipment or information you can give us a call/email anytime.

It’s important to manage your overheads and reduce them as much as possible to maximise your profits!

 

[KateCB]

Jhardy has some great afvice, but appears to be bsaed in USA from the terminology - it applies here too, health and safety, Food Hygiene etc - the local council and colleges will be able to point you in the right direction.

HMRC registration is important, don't want to get fined for not telling them you are working for yourself - and the family thing - it is hard working with family, even when you are close and things can get horribly complicated - perhaps do your research and set your sale etc, and then have a partnership agreement done - don't think that just because you register as a partnership that things are automatic, you and your Mum will have to agree who does what/when/gets what etc and have it written and signed - it seems harsh, but sadly, business is!

 

[EpicBakes]

Wow. We're completely blown away by the responses you guys are giving and can't express how much we appreciate your help!

In regards to the advice for registering a legal partnership, thank you to everyone that's suggested it. We're going to plan it out and choose what will be best for the business.

You don't mention sales at all in your original post.
Where are you going to sell your cakes? How much are you going to sell them for? Bearing in mind the short shelf life, how much profit are you going to make?

This is something we're still trying to decide ourselves. We both work in a very well known retail supermarket, and the management are very interested in promoting our product (when ready) to be considered for supplying. We know this is merely a "foot in the door" chance, and are planning multiple plans in case this is a red herring.
In regards to price and profit, this is something that is still very much unknown to us until we can start to source ingredients and packaging. This venture is still in its infancy stages.

Again, thank you to everyone for the advice. Thank you, thank you, a thousand times, thank you.