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How to Make Money Selling Baked Goods From Home

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How to Make Money Selling Baked Goods From Home

Do people love your cupcakes? Is your pecan pie famous for miles around?

If so, it might be time to start a home baking business on the side. In today’s day and age, no one wants to buy a festive celebratory dessert from the grocery store — but no one has time to make it either. 

For home bakers, this is a golden opportunity to earn some extra cash. To help you get started with this side hustle, I asked two “bakerpreneurs” for the inside scoop.

How to Get Started Selling Baked Goods From Home

First off, make sure it’s legal in your state to sell home-baked goods. The regulations surrounding this industry are called cottage food laws, and they vary by state. Abide by any required regulations; you may have to apply for a permit or license. 

Although in many states you can sell your goods at holiday fairs or farmers markets, the home bakers we talked to exclusively did custom orders for individuals. Those have kept them busy enough that they haven’t had to sell outside their homes. 

Custom orders are particularly in demand around the holidays, as people are busy with other activities and don’t have time to bake, our bakers reported. Cheesecakes and cookies are among the most popular items. 

Here are a few more tips for getting your new side hustle off the ground:  

1. Share Photos on Social Media

When Danette Short started posting Facebook photos of what she was baking, her business “really started taking off.” She now has a thriving side business called Short-Cakes, which she runs in addition to raising and homeschooling her children. 

Visually-driven sites like Instagram and Pinterest offer a stage to present your prettiest creations — invest the time (and perhaps a few bucks) in quality photography with good lighting to give your creations a pro look.

2. Create a Signature Item

Tamara Boatman of The Lemon Tree Cottage Bakery got started by selling a pumpkin roll at a church bake sale. She said the customer (her children’s pediatrician) then “asked me if I could remake it for her for Thanksgiving. Others in the doctor’s office wanted one also, so I did and have been doing the same item now for several years.” 

Boatman explained that a signature item (especially if it’s holiday-themed) “will establish you in the minds of your customers… so they know in advance who to contact when they want that special something.”

3. Hand Out Business Cards

Even if your doors aren’t officially open yet, get some business cards printed up. 

Pro Tip

When creating business cards, include multiple ways for people to contact you (phone, email) as well as specifics that set your product apart (gluten free, themed cakes).

You can hand them out in person, but also remember to leave a few when you deliver the goods, so others can know where to find the person who baked those delicious treats.

4. Network With Other Bakers 

Know of any other home bakers in your area? Look at them as friends, not foes. 

A local Facebook group can provide you with contacts who know where to score the best deals on supplies. And if someone is too busy to take an order, they can give referrals to one another. 

5. Pass Out Samples 

One thing is clear: everyone loves free cake. So why not show off your baking skills by sharing free samples with potential customers? 

Boatman suggested dropping off samples at places you have contacts, such as your dentist’s and doctor’s offices, library, school, church, book club or knitting group. (And don’t forget to leave a card!) 

Just be sure to only visit places where you have a connection, as Short warned that dropping off samples at random offices “almost never results in orders.”

6. Get in the Right Mindset

If you’re just starting a business, there are bound to be a few burnt cookies in your future. Don’t let a setback squash your entrepreneurial spirit — instead, let it be a teaching experience.

“Be patient and learn the science behind your baking; you really need to understand your medium,” Short said. “Also remember that everything is fixable — working from that mindset is going to save you a lot of stress.”

How Much to Charge for Home-Baked Goods

When you start selling baked goods, figuring out how much to charge is going to be one of your biggest hurdles. 

The first step is to assess your target market. How much are other bakers charging? And for what types of products? Next, look at your own skill set. How much experience do you have? How quickly will you be able to complete the work? 

Pro Tip

As a rule of thumb, you should set aside around a third of your self-employment income for taxes. The IRS allows you to deduct certain business-related costs, so save your receipts.

Boatman determines her prices by adding all of her expenses (including packaging), then multiplying that number by three: one-third covers her ingredients, one-third covers her water and electricity and one-third is her profit. 

Most importantly, don’t get discouraged if people balk at your prices. 

“I rarely encourage moving the price down,” she said. “It has been my experience that I work myself to exhaustion and have less to show for it at the end when I price lower just to get more orders.”

As for how much you can earn, it depends on how much work you put into both the baking and the marketing. If you’re just taking special orders, the bakers estimated you can earn between $200 and $400 per month; if you’re working 20 hours per week, $800 to $1,200; and if you start baking lots of wedding cakes, much, much more. 

There’s one thing both of the home bakers I spoke with emphasized: the power of word-of-mouth. So be sure to bake delicious products, give excellent customer service and tell everyone you know that you’re now selling baked goods. 

Susan Shain is a freelance writer.

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