How to Start a Cake Business from Home
This is Marketing Food Online and we are going to go over the six steps on how to start a cake business from home. And we're gonna get to it right now. (upbeat music) All right, so this is Marketing Food Online. This is YouTube's premier food entrepreneur channel and we are super excited to bring you this video on how to start a cake business from home.
Cakes can be one of the most profitable things you can make from home, only if you are allowed to, of course. So, I'm gonna go over six steps and we're gonna talk about whether or not you can actually make them from home, and that's gonna fall under the Cottage Food Law, we're gonna get into that a little bit later. So, let's jump right to it and, as always, if you are not subscribed to my channel, please do subscribe. We have over 600 videos, absolutely free, to show you how to get your food business up and running or create a food product, or even starting a food truck or anything food related, that's what we do here at Marketing Food Online.
So, number one, we are gonna jump right into it, legalities, the legal side of having a business from your home. So, no matter actually what type of business you have but more specifically, a food business, you wanna make sure that you can actually have it out of your home. Now, you might be thinking to yourself, well, that's kind of odd, I know people bake, my friends bake stuff and they give it to their friends and they sell it, and. Well, under the Cottage Food Law, every state has an established set of rules and regulations that will allow you to create certain types of food products from home and sell them, okay?
And, of course, there's real specific steps as to what you can make, how you actually can transact it as far as selling the cake itself and delivering it. Some states don't allow you to sell through the internet, some do. So, here is what will fall on your shoulders for research, you need to find out specifically what your state allows. How do you do that, Damian? Well, go to Google, and if you're in Wisconsin, let's say, go to Google and type in Cottage Food Laws and your state's name. And the first couple, about one or two, three websites that'll pop up there on Google most of the time is actually the state's websites and those are the websites you wanna hit up because they'll have specific information. Or, you can also check in my library videos, I've got Cottage Food Law videos on almost every state, we have a few states left that we're gonna be posting. But you can also find some great links on our videos as well. So, the legality, make sure that you can have it.
If you can, then you need to get a business license. You need to also have food producer's insurance. If you're operating a food business from home, I highly recommend from a legality standpoint that you protect yourself, okay? Because creating an LLC or establishing an LLC without having insurance is not going to protect you 100%. You will still be liable for anyone that gets sick or any legal issues that pop up. So, having food producer's insurance, that insurance policy will protect your business and that'll allow you to kinda separate yourself personally from your business when you begin to do this. So, make sure that you check with your state.
Also, really quick side note, counties and cities can write laws and ordinances and regulations aside from the state's laws. What does that mean? Well, the Cottage Food Laws that are established by the state are one thing. Your city and county are a totally nother thing, okay? So, some cities and counties don't allow it or you'd have to rent a commercial kitchen in order to produce it. So, you wanna make sure you also follow up on a local level with your city and county as to whether or not you can have a cake business from home. Now, next up, you wanna create a plan. You wanna sit down and I know this may sound like doing homework, but you need to do this because it's gonna help you in a lot of ways and let me explain why. Having a business plan for your cake business from home is going to allow you the ability to kind of lay out and map out how you want to create your business, how do you want to grow your business?
And everything in between, okay? I have several videos here on my YouTube channel about food business plans. They are all pretty much the same as far as the layout. Now, the information and specifics within the business plan will be different. If you're starting a food truck, obviously, that's different than a cake business. But the actual layout, the information that you should put in there so you have a good understanding and direction as to where you wanna go with your business, the layout is the same, okay? So, create a business plan.
Have a vision, have an idea where you want it to go, be realistic. You know, in the first year you're open and you're starting to do cakes from home and you've got a handful of cake orders, you're probably not gonna do $1 million in sales, okay? And plus, you can't anyways because Cottage Food Laws limit the amount of money that you can sell from home. But it will give you a better understanding of where you are, what you need to do to get to, financial, as far as the financial investment or how much you wanna put into it. Marketing, everything else that you have going on as part of your business plan will give you a really better, solid understanding and then you can move forward with more confidence once you have a business plan.
Third, taxes and income. There's a lot people who subscribe to my channel that ask me this question all the time, "Hey, Damian, do I actually have to pay taxes "on the money I make from like a home business? "Or is it really actually a real business, "or how does that work?" Yes, of course you do. Whatever profits that you make, you have to pay taxes on because that would be considered income. Now, I am not giving you accounting advice, I am not an accountant or any type of legal accountant or anything of that sort but I have been in the food business for over a decade, I can tell you, my accountant has told me a lot of things.
So, I recommend that you double check with an accountant, specifically your accountant, and you let them know that you're gonna start a cake business from home, and how much do I have to pay for taxes if I make, you know, sell a cake for $100 and it costs me $50 to make? You made $50 in income, you need to figure out how much of taxation you fall under for your business, okay? And make sure you follow it to a T and keep your receipts, keep your sales slips, keep the cost of everything from your packaging to ingredients, to your labor, if you have some help from friends or a family member that you're paying or whatever, keep track of all of that because that's part of running a business. What's so wonderful and so exciting about having Cottage Food businesses is that it gives people an opportunity to kinda get a taste for running a business from home.
That's why it's so cool because it really does give you a great opportunity to kinda get an idea of what it's like. So, when you're ordering, you have invoices from materials and ingredients and such and packaging and you're dealing with a vendor here and a supplier there, and then you wanna step out into the real world where you begin to actually expand and get into a commercial facility, maybe sell online or get into retail stores, you have a really good footing and an understanding of how food businesses work. Okay, number four. This is a, not every state does it kind of a thing. Now, what do I mean by that? Okay, Food Safety Licensing or Food Safety Certification that you may have to take, take a course. Now, the reason why I say you may is because not every state requires it, okay?
And some cities and counties require it but then some states don't. So, again, do a little bit of homework, find out, do I need to take any food safety courses? Is there a Food Handler's Card that I need to take? Is there anything related to that type of certification that I need to have in order for me to sell cakes from home? Again, please, for your own sake, follow the rules of what they have established because that way, you can't get in trouble, you can't get the questions, nobody's gonna come back. So, make sure that you are on with every single type of certification or permit that you may possibly need, okay? Number five.
Promoting and networking your business. So, Damian, I wanna start my cake business from home, but how do I actually get the word out? Like, I'm not really a marketing genius, I don't do advertising. You don't have to be. Start locally, tell your friends, tell your coworkers. If there's someone at work whose friend or cousin or sister or brother's getting married, say, "Hey, you know what? "I do wedding cakes, I'd love to have the opportunity "to do that wedding for you." Go to a local business, "Hey, by the way, "I've got a fantastic portfolio put together "of some samples of cakes I do. "You guys have a corporate event? "I would love to supply you guys with a cake. "Can you give me an opportunity to do that?" Get out there and you gotta hustle it, okay? But you need to also make sure you have a business card.
Create a business card, it doesn't have to have an entire 700 bits of information about who you are, what you do. Contact information and a website. That's also another thing you need to have, a website. Now, again, if you're working from a cottage food standpoint from home, you can't make sales and transactions through the internet. But you can definitely have a website that's informative and tells about your cake business and tells about your variety of cakes available, gives the people prices and all that kinda thing.
That's super, ultra important. So, any type of social media as well. Create a Facebook page dedicated to your cake business. Create a Twitter account, a LinkedIn account, okay? Literally every type of social media that's out there, you need to have some type of, Instagram is a great one for wedding cakes and for cakes in general. If you're doing a cake business from home, Instagram is a phenomenal platform for you to get exposure.
Why? Because it's so, it's driven visually by just imagery, images or video. You know, if you can do a short video and you can post it on there, even better. But videos and images are fantastic and that is where you want, on Instagram is where you wanna be with those types of content, okay? So, once you've got that promoting and start networking, that's fantastic. So, number six. Just start. That is probably the most important bits of information I'm giving you on this video right now. So many people have so much excitement when they start talking and thinking about doing a business. But talking and thinking doesn't make a business happen, you need to take action and you need to just start.
I'm gonna tell you right now, when I started my business from scratch, I knew nothing, I just knew that I wanted to have a business. It was a learning process and I've learned over the years that it is going be continually a learning process. Entrepreneurs are constantly learning and evolving and changing. This is not something that you set it and forget it. Like, you create a business and then hope that everyone comes to you and then you're gonna make all the right decisions and then all that gibberish. That's not reality, not at all. Just start.
As you go, ask questions. As you make decisions, you'll make good ones and you'll make ones that, yeah, maybe they didn't turn out so well. Learn from the ones that didn't turn out so well and enjoy the ones that you made, the great decisions you made that were right. But keep on going. But just start, don't procrastinate, don't wait. Someone's not gonna do it for you. No one's gonna be there to hold your hand. Just get it going and as you go, you learn. So, be open to learning. So, number six, the most important, just start, okay? So, here are some, really quick video, six tips to get you started. I'm not gonna drag it on much more than it needs to be. Those are super important six tips. Get them started, do your homework, make some calls, ask some questions, and get your cake business from home up and running.
Cakes can be one of the most profitable things you can make from home, only if you are allowed to, of course. So, I'm gonna go over six steps and we're gonna talk about whether or not you can actually make them from home, and that's gonna fall under the Cottage Food Law, we're gonna get into that a little bit later. So, let's jump right to it and, as always, if you are not subscribed to my channel, please do subscribe. We have over 600 videos, absolutely free, to show you how to get your food business up and running or create a food product, or even starting a food truck or anything food related, that's what we do here at Marketing Food Online.
How to Start a Cake Business from Home
So, number one, we are gonna jump right into it, legalities, the legal side of having a business from your home. So, no matter actually what type of business you have but more specifically, a food business, you wanna make sure that you can actually have it out of your home. Now, you might be thinking to yourself, well, that's kind of odd, I know people bake, my friends bake stuff and they give it to their friends and they sell it, and. Well, under the Cottage Food Law, every state has an established set of rules and regulations that will allow you to create certain types of food products from home and sell them, okay?
And, of course, there's real specific steps as to what you can make, how you actually can transact it as far as selling the cake itself and delivering it. Some states don't allow you to sell through the internet, some do. So, here is what will fall on your shoulders for research, you need to find out specifically what your state allows. How do you do that, Damian? Well, go to Google, and if you're in Wisconsin, let's say, go to Google and type in Cottage Food Laws and your state's name. And the first couple, about one or two, three websites that'll pop up there on Google most of the time is actually the state's websites and those are the websites you wanna hit up because they'll have specific information. Or, you can also check in my library videos, I've got Cottage Food Law videos on almost every state, we have a few states left that we're gonna be posting. But you can also find some great links on our videos as well. So, the legality, make sure that you can have it.
If you can, then you need to get a business license. You need to also have food producer's insurance. If you're operating a food business from home, I highly recommend from a legality standpoint that you protect yourself, okay? Because creating an LLC or establishing an LLC without having insurance is not going to protect you 100%. You will still be liable for anyone that gets sick or any legal issues that pop up. So, having food producer's insurance, that insurance policy will protect your business and that'll allow you to kinda separate yourself personally from your business when you begin to do this. So, make sure that you check with your state.
Also, really quick side note, counties and cities can write laws and ordinances and regulations aside from the state's laws. What does that mean? Well, the Cottage Food Laws that are established by the state are one thing. Your city and county are a totally nother thing, okay? So, some cities and counties don't allow it or you'd have to rent a commercial kitchen in order to produce it. So, you wanna make sure you also follow up on a local level with your city and county as to whether or not you can have a cake business from home. Now, next up, you wanna create a plan. You wanna sit down and I know this may sound like doing homework, but you need to do this because it's gonna help you in a lot of ways and let me explain why. Having a business plan for your cake business from home is going to allow you the ability to kind of lay out and map out how you want to create your business, how do you want to grow your business?
And everything in between, okay? I have several videos here on my YouTube channel about food business plans. They are all pretty much the same as far as the layout. Now, the information and specifics within the business plan will be different. If you're starting a food truck, obviously, that's different than a cake business. But the actual layout, the information that you should put in there so you have a good understanding and direction as to where you wanna go with your business, the layout is the same, okay? So, create a business plan.
Have a vision, have an idea where you want it to go, be realistic. You know, in the first year you're open and you're starting to do cakes from home and you've got a handful of cake orders, you're probably not gonna do $1 million in sales, okay? And plus, you can't anyways because Cottage Food Laws limit the amount of money that you can sell from home. But it will give you a better understanding of where you are, what you need to do to get to, financial, as far as the financial investment or how much you wanna put into it. Marketing, everything else that you have going on as part of your business plan will give you a really better, solid understanding and then you can move forward with more confidence once you have a business plan.
Third, taxes and income. There's a lot people who subscribe to my channel that ask me this question all the time, "Hey, Damian, do I actually have to pay taxes "on the money I make from like a home business? "Or is it really actually a real business, "or how does that work?" Yes, of course you do. Whatever profits that you make, you have to pay taxes on because that would be considered income. Now, I am not giving you accounting advice, I am not an accountant or any type of legal accountant or anything of that sort but I have been in the food business for over a decade, I can tell you, my accountant has told me a lot of things.
So, I recommend that you double check with an accountant, specifically your accountant, and you let them know that you're gonna start a cake business from home, and how much do I have to pay for taxes if I make, you know, sell a cake for $100 and it costs me $50 to make? You made $50 in income, you need to figure out how much of taxation you fall under for your business, okay? And make sure you follow it to a T and keep your receipts, keep your sales slips, keep the cost of everything from your packaging to ingredients, to your labor, if you have some help from friends or a family member that you're paying or whatever, keep track of all of that because that's part of running a business. What's so wonderful and so exciting about having Cottage Food businesses is that it gives people an opportunity to kinda get a taste for running a business from home.
That's why it's so cool because it really does give you a great opportunity to kinda get an idea of what it's like. So, when you're ordering, you have invoices from materials and ingredients and such and packaging and you're dealing with a vendor here and a supplier there, and then you wanna step out into the real world where you begin to actually expand and get into a commercial facility, maybe sell online or get into retail stores, you have a really good footing and an understanding of how food businesses work. Okay, number four. This is a, not every state does it kind of a thing. Now, what do I mean by that? Okay, Food Safety Licensing or Food Safety Certification that you may have to take, take a course. Now, the reason why I say you may is because not every state requires it, okay?
And some cities and counties require it but then some states don't. So, again, do a little bit of homework, find out, do I need to take any food safety courses? Is there a Food Handler's Card that I need to take? Is there anything related to that type of certification that I need to have in order for me to sell cakes from home? Again, please, for your own sake, follow the rules of what they have established because that way, you can't get in trouble, you can't get the questions, nobody's gonna come back. So, make sure that you are on with every single type of certification or permit that you may possibly need, okay? Number five.
Promoting and networking your business. So, Damian, I wanna start my cake business from home, but how do I actually get the word out? Like, I'm not really a marketing genius, I don't do advertising. You don't have to be. Start locally, tell your friends, tell your coworkers. If there's someone at work whose friend or cousin or sister or brother's getting married, say, "Hey, you know what? "I do wedding cakes, I'd love to have the opportunity "to do that wedding for you." Go to a local business, "Hey, by the way, "I've got a fantastic portfolio put together "of some samples of cakes I do. "You guys have a corporate event? "I would love to supply you guys with a cake. "Can you give me an opportunity to do that?" Get out there and you gotta hustle it, okay? But you need to also make sure you have a business card.
Create a business card, it doesn't have to have an entire 700 bits of information about who you are, what you do. Contact information and a website. That's also another thing you need to have, a website. Now, again, if you're working from a cottage food standpoint from home, you can't make sales and transactions through the internet. But you can definitely have a website that's informative and tells about your cake business and tells about your variety of cakes available, gives the people prices and all that kinda thing.
That's super, ultra important. So, any type of social media as well. Create a Facebook page dedicated to your cake business. Create a Twitter account, a LinkedIn account, okay? Literally every type of social media that's out there, you need to have some type of, Instagram is a great one for wedding cakes and for cakes in general. If you're doing a cake business from home, Instagram is a phenomenal platform for you to get exposure.
Why? Because it's so, it's driven visually by just imagery, images or video. You know, if you can do a short video and you can post it on there, even better. But videos and images are fantastic and that is where you want, on Instagram is where you wanna be with those types of content, okay? So, once you've got that promoting and start networking, that's fantastic. So, number six. Just start. That is probably the most important bits of information I'm giving you on this video right now. So many people have so much excitement when they start talking and thinking about doing a business. But talking and thinking doesn't make a business happen, you need to take action and you need to just start.
I'm gonna tell you right now, when I started my business from scratch, I knew nothing, I just knew that I wanted to have a business. It was a learning process and I've learned over the years that it is going be continually a learning process. Entrepreneurs are constantly learning and evolving and changing. This is not something that you set it and forget it. Like, you create a business and then hope that everyone comes to you and then you're gonna make all the right decisions and then all that gibberish. That's not reality, not at all. Just start.
As you go, ask questions. As you make decisions, you'll make good ones and you'll make ones that, yeah, maybe they didn't turn out so well. Learn from the ones that didn't turn out so well and enjoy the ones that you made, the great decisions you made that were right. But keep on going. But just start, don't procrastinate, don't wait. Someone's not gonna do it for you. No one's gonna be there to hold your hand. Just get it going and as you go, you learn. So, be open to learning. So, number six, the most important, just start, okay? So, here are some, really quick video, six tips to get you started. I'm not gonna drag it on much more than it needs to be. Those are super important six tips. Get them started, do your homework, make some calls, ask some questions, and get your cake business from home up and running.
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