Earn from a Home Bakery in 2021
The pandemic has caused widespread loss of jobs or decreased work hours, drastically affecting the income of many. According to the Congressional Research Service, the unemployment rate in April 2020 reached 14.8 percent, a record high since 1948 when data collection began. By April 2021, the unemployment rate improved to 6.1 percent but was still higher than the February 2020 rate of 3.5 percent.
Those who are jobless or have reduced work hours need to find other ways to supplement their income. Putting up an affordable small business can be an alternative to employment.
Small Business Ventures Are Popping Up
Small businesses prop up the United States economy as they make up 99.9 percent or almost all enterprises in the country according to the World Economic Forum. Among the private labor force, almost half or 47.3 percent work in small businesses.
Data from the Forum show that in April 2021, 34 percent of small businesses across the country were still closed compared to January 2020. On the other hand, Kabbage’s Small Business Recovery Report that polled 550 small businesses shows that 57 percent of them were fully open as of February 2021. One-third of those that were operational were either fully or partly online. Their revenue sources rose to 57 percent from online sales as compared to 37 percent from online sales in pre-pandemic times.
Indeed, the American entrepreneurial spirit has come to the fore in the crisis. According to the U.S. Census Bureau’s Business Formation Statistics, the number of Employer Identification Number (EIN) applications rose to 551,657 in July 2020, a historic high from 2005. In April 2021, there were 487,939 applications, the third record high after January’s 489,487 applications. The highest number of applications in a month before the pandemic was 312,764 in December 2019.
If Baking Is Your Passion
When choosing what small business to set up, you must focus on your skill sets and interests. If you are skilled at baking and are passionate about it, you have found your business. It is very promising because according to Grand View Research, the worldwide dessert cake market size was at $42.94 billion in 2019 and its forecasted compound annual growth rate (CAGR) is 3.3 percent from 2020 to 2027. While dessert cakes dominate the market, sales of sponge cakes, cupcakes, and other bakery products are also forecasted to grow.
The most economical way to start a baking business is to bake from home, market online, and deliver. Your market will depend on how far you can deliver. If you will not do the deliveries yourself, check out delivery services.
The first thing you must do, however, is research the cottage food laws in your community. A good place to start is forager, which provides an overview per state. Verify with your local authorities regarding guidelines, inspections, licenses, and permits for your specific location. Check if you need a food safety certification and how to get it. This early, you must find out what bakery products are not allowed in your area.
When deciding what products to sell, focus on your specialty. There is a lot of competition out there and your product will stand out only if it offers something different or is superior in quality. You do not need to have many items when you start. Even one item with several variations can already draw in regular repeat buyers. This will also make it easier for you to prepare the products.
Equipment and Pricing
You must invest in equipment of good quality that will last as your business grows. Your basic need is an oven, and you can start with what you have but save up for a much bigger one when orders multiply. It saves time and effort to be able to bake more items at the same time.
You can use your existing mixer but prepare to scale up to an industrial-sized one. You will also need a separate refrigerator from the one you are using for your home food because you do not want smells to intermingle. Cooling racks will be necessary. Pay attention also to other baking needs such as a small liquid-filling apparatus to inject fillings into doughnuts or other pastries and to apply edible decorations on top of baked goods.
Check the market price of similar products in your location and compare this with your cost of production and packaging plus your cost of labor. You must be able to meet the current market price so as not to price yourself out. If your product is artisanal and of exceedingly superior quality, though, you can sell it a little higher than the market price and emphasize your unique selling point.
Bake up a Storm of Profit
Baking is a relaxing and satisfying activity for those who love doing it. Selling your baked products from home is an affordable and convenient way to start a small business. It can grow into a lucrative livelihood that can replace and even exceed the income you had from your job.