When starting any business there are a lot of different costs involved, the way the startup cost can be reduced is by using existing equipment you already have. Later on this equipment can be upgraded to commercial or industrial versions. One of the businesses that fall into this category is a bakery business which can be started from a home kitchen using a home oven and can later be grown into having your own premises with commercial ovens.
The business is fairly simple to start outside of the oven and baking trays you will need the ingredients required to make whatever it is you want to bake and sell. That is where things require a bit more thought.
What to sell
You need to make things that will be profitable in modest amounts as a home oven can only take so many items at a time. You also need to sell something that will sell quickly.
But before you get to that you have to assess your skills. If you are very talented and have existing baking experience you can make and sell quality cakes for special occasions (birthdays, anniversaries, weddings) which has a higher profit margin but requires you to be able to make a quality product. If you don’t have any skills and are going to be using premix, the only other cake that will be worthwhile to make and sell is custom photo cakes, the reason being is that people could simply buy a cakes from a supermarket than a basic cake from you.
So you need to make something that will sell well and something that can be done at your skill level.
Let’s say you have limited baking experience your thought process will look something like this:
Muffins – Yes: a lot can be made in a small amount of time, has OK margins (muffins sell for R5+ each)
Rolls – No: margins are too small (sells for around R2 and less each), you will need to make more than twice the amount than you would for muffins and would need a commercial oven to make that in same time.
Now that you have factored in something that will sell as well as your skill level we need to move on to the most important part, and this might also dictate what will sell well:
Where to sell
Baking basics is not too difficult and ingredients are not too expensive but you need to sell enough of your product to make this a viable business. Not only because that is how business works but because you are dealing with an item that will most likely go stale in a day or two. You are going to need a place to sell it, whether you do this on your own or sell it to someone who already has a shop. You will basically need a “shop front” for your baking business.
Selling it yourself: If your house is on a busy road you could sell your cakes from your window, if you live close to an office park then you could sell to people there or if you live close to a school you can sell at the gate during interval. If you have a suitable vehicle you could go the food truck bakery route as well.
Selling to others: If you know someone with a tuck-shop in a place where there is lots of foot traffic such as office park, school, and hospital. You can then sell via them. You may have to sell it for slightly less than what you would when you will sell direct however it does not have to be for much as most things at those tuck-shops sell at a premium as there is no other shops close by.
This is a business you have to closely align the quantity you make with the quantity you sell on a daily basis to avoid wastage (and loss of profits) as the product will go stale. Best case will be if you can secure orders beforehand and make that quantity but this won’t always be the case.