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Sunday, August 2, 2009

Tips for Starting a Home-Baked Goods Business

Since I help people plan businesses on a weekly basis, from time to time I may impart some business tips for my readers. See how much I love you guys?

If you're starting a business that involves some baking, here are some tips you may find handy:

Start with a product that is not easily "boot-legged". You may think this is common sense but someone once came to see me about starting a company baking brownies. When I asked whether the idea came from a special family recipe or a special batch that everyone craved, they informed me that the brownies would be "regular" brownies that are made from store bought brownie mixes. Be certain that your friends, family, neighbors, co-workers, church family, school family, etc, all come to the consensus that your home baked goods taste good. Better yet, they should tell you that they've never tasted a brownie that good.
Stick to what you do best. Like any other business, you want to start with some knowledge of what you have to do. Do not attempt to start a business by baking brownies, cookies, cake, cupcakes, healthy pies, etc. Find one or two products that you excel at baking and stick with them to start. Don't worry, as you go along, your customers will then tell you what they would like to see you add to your list. By then, you will have figured out whether a product addition is feasible.
Learn how to calculate your cost of goods sold. A lot of people cringe at this process but it's not as difficult as it sounds. You first want to figure out the cost of baking one item or unit. For you, it may make sense to calculate this using a baking sheet as a unit. So the question becomes, what do you spend on baking mix materials in order to produce a cookie sheet of delicious cookies? This process is important because it helps you set your price high enough to cover your cost of goods sold and labor.
Buy smart. Find a warehouse, grocery store club or some similar store that sells all the items that you would need. Bulk pricing is cheaper and convenient because you don't have to shop around.
Create "fabulous packaging". A lot of small businesses tend to miss this step. This is an important step to ignore. Don't forget, first impression counts. Look around you: ever wonder why assorted chocolates are so pricey when they sometimes taste worse than cheaper chocolates. Their packaging for Valentines and holidays entice consumers. Tie a bow around your packaging. Design your packaging like you would decorate your house at Christmas. Pay special attention to detail because your customers will too. While you want them to talk about your baked goods and the taste, don't forget they also want to be proud to have your product delivered to a friend.
Free tasting equals free referrals and testimonials. Give free samples in order to attract new customers. Quit being stingy. Too many small business owners refuse to take this very crucial step. One way to make someone try your product is to give it to them. Learn from companies that came before you. Take Mrs. Fields Cookies, Inc. for example. Mrs. Fields opened her first store in 1977. On her first day, she hadn't sold any cookies. So she took a tray of cookies and walked around the shopping mall handing them to customers for free. Within an hour, customers were at her store placing orders.
Become the tele-mailing king or queen. Whether you sell cookies, cake or bread, try to establish some form of a mail order. Although customers may not purchase your items every month, they may become repeat customers if you make it easy for them to do so. Give them a way to get a fresh batch of bread automatically sent to them every other month. Or perhaps a tin of cookies sent on birthdays or Valentine's day. And what about family-size dessert for the yearly Christmas dinner? In order to accomplish this, you would have to keep a great customer database, call your customers once in a while, have frequent mailings, and take initiative.
Do you have any additions to this list that you think should be included? Or do you own a home-baked goods business and would like to list something that has worked for you? I would love to hear from you. Please leave a comment on this post.



Cheryl Isaac is a business start-up strategist to service businesses going online. She contributes to Forbes here and blogs about Making Business Personal here.  


6 comments:

iHello, been a while?
Aw you dey my dear?

Learnt a lot from this, enjoy your week...
xx

Great information! Keep the information coming please...

Also some form of instructional might help home baked goods businesses too.

letsbakecookies.com

I'm starting a bakery from home and this information will help a lot. Thanks!

FYI: My mom has been in the business for 15 yrs and one thing that she always does is send a small wrapped baked item for clients on their birthday.

Hi Sassy Trends, hope all is well in the banking world!

Sergie and Karen, Thanks for the additional tips.

It's great to see that you all find the information useful. Hope to see more of you guys! Thanks for the comments.

Interesting!

In the past, offline media was one of the major mediums to promote one’s business and brand awareness. However, with the increasing popularity of the online media and its positive results, more people are turning to online marketing techniques to build a strong business presence across the globe. The Internet provides great opportunities for entrepreneurs and small businesses, but doing business online presents unique challenges and requires new skills. Per my experience search engine optimization would be the best practice to improve your online business.

You're right, a website, SEO and social media strategies should be a part of promoting the business. Can't do without that right? Definitely not if we want to reach a broader audience.

There will be an upcoming post about online marketing for retail businesses. Stay tuned...

Thanks for the information.

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