How to Start a Cake Business

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start cake business

If you love baking, the prospect of starting a cake business could seem like a distant dream. But, with a little determination, passion and creativity, it could be your reality. It is true that there will be stressful days, when you’re rushing to please a number of customers in a short time scale, but the chance to manage your own timetable, work from home and impress friends, family and customers with your delicious bakes should mean that the positives significantly outweigh the negatives.

Let’s assume you’ve decided you’d like to start a cake business. What next?

1. Sort your tax. When you run your own business, it’s vital that you provide HMRC with details of the company in order to avoid getting into trouble with the government. So, first of all, you should inform HMRC that you’re self-employed – even if you’re only running your business part-time while you continue with another part-time job. Once you’ve done this, they’ll know that you’ve got to pay your tax through the self-assessment system.

2. Think about the type of business you’d like to create. Is there a particular demographic you will target? There are a lot of bakery businesses out there, so make sure you come up with a business that is distinguishable from its competitors. You could consider specialising in a particular area, such as wedding cakes, children’s birthday cakes, three-tier cakes or vegan cakes, for example.

3. Work out whether you will run your business from home or from business premises. Running it from home will save you a large amount of money in the initial stages, as you won’t have to fork out for a deposit or rental charges. However, if you do decide to work from business premises, your business is likely to gain customers just by being in a busy location. When choosing your site, make sure it’s in an area your potential customers will be able to find and visit; for example, if it’s not in a busy city centre, make sure it has parking spaces so customers can drive there.

4. Create your business plan. You will need this if you are to secure a business loan. Outline any business goals and how you intend to achieve them. Develop a financial forecast and calculate your break-even point.

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5. Get funding – if you need it. Meet with banks and other lenders to discuss the possibilities.

6. Think about how you will present your business. If you have business premises, you’ll need to decorate it with décor that is in keeping with your brand identity. This should be reflected in the premises’ signage, any menu boards, flyers and promotional material.

7. Develop a website and social media pages. Again, make sure your business is recognisable through its branding. You should aim to interact with similar businesses on social media, so be sure to like and comment on others’ posts.

8. Get business insurance, public liability insurance and product liability insurance. This will protect you in the future.

9. Get your name out there. Make a name for yourself in your community by attending local events, fetes and food markets. Offer free samples and flyers to get people interested in your business.

Starting a Cake Business from Home

Starting a cake business from home involves many of the same steps. However, you’ll also need to make sure your kitchen is hygienic enough. To make sure, register with your local authority’s environmental health service at least 28 days before you plan to start trading. Once you’ve done this, a representative will visit your home and check your kitchen and storage areas.

Bakery Franchises

Starting your own cake business from scratch is risky, but franchising can offer you a stable business model. Take a look below at some of the best bakery franchises available at the moment.


Cinnabon has been selling delicious cinnamon rolls since 1985. The business was founded in Seattle but now has a presence in 50 countries across the world. It serves a selection of pastries, as well as a wide range of drinks, including lemonades, hot and iced coffees, hot chocolates and blended, frozen ‘chillattas’.

The franchise is offering investors the chance to become a master franchisee and manage multiple franchise locations. To join Cinnabon, you’ll need to invest between £140,000 and £250,000. In return, you’ll receive training in business operations, marketing and PR, as well as ongoing support and regular check-up visits to ensure the franchise maintains efficiency.

Dunkin’ Donuts

On average, this hugely successful US brand sells over 30 cups of coffee per second. It operates more than 11,000 stores in 31 countries and serves more than five million customers every single day. It was established in Massachusetts in 1950, which means it has almost 70 years of experience in the food and drink industry and a combined total of almost 120 years of franchising experience.

Despite the success of the business, Dunkin’ Donuts is still dedicated to rapid expansion. That’s why it is on the lookout for franchisees that are prepared to invest in at least 20 Dunkin’ Donuts stores in a set time period. Because of the business’ significant brand awareness and positive reputation, it will cost at least £3 million to develop a franchise agreement with Dunkin’ Donuts. Also, entrepreneurs that take the brand up on its offer must have extensive industry experience and the self-motivation to drive profitability.

However, once on board, Dunkin’ Donuts franchisees will gain access to the business’ wealth of world-class tools and resources, which will help them to establish and run highly efficient businesses that will continue to generate impressive revenues in years to come.

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