Do you love baking? Is baking mouthwatering and gorgeous cupcakes your specialty? If yes, turn your hobby into a business by learning how to start a bakery business from home.
Baking is no longer a hobby but a skill that can be used to run an online bakery business. The future of the baking industry is brighter than it seems. Because it is expected to grow at a CAGR of 6.7% between 2023 and 2028.
It’s a good time to use your baking skills because bakeries aren’t limited to in-store experience anymore. Due to the high demand of the market and increasing use of the internet, many bakers have shifted their business online.
Due to a fast-paced lifestyle, customers don’t have enough time to visit physical bakeries to indulge in delectable desserts and satisfy their palette. Starting an online bakery will allow you to reach customers beyond your locality without making a significant investment in the business.
Running an online bakery business is exciting and overwhelming at the same time. In this guide, we will take you through a step-by-step process of how to start a bakery business from home in India and ace it. Read further to indulge in this sweet affair.
How to Start a Bakery Business from Home in India — 8 Simple Steps
1. Conduct a Thorough Market Research
Whether you are starting a new business or expanding the established one, conducting market research is essential. Because it helps you understand your target market and nurture your business growth.
It is important to understand the key demographics to identify who your customers are. For instance, before starting your online bakery, ask yourself the following questions:
Who will use my product?
What is the average age of my potential customers?
Are they salaried people or entrepreneurs?
What is their profession?
What is their monthly income, marital status, interests, and geographical location?
These questions will help you understand your target market better.
Once you have answers to all the questions, work on the STP model i.e, Segmentation, Targeting, and Positioning.
Market segmentation allows you to segment your target market into subgroups based on various factors like demographics, interests, location, and more.
For instance, let’s say you want to sell vegan and gluten-free cupcakes to your customers. You can segment your target group into two categories:
Segment A: People who are looking to indulge in vegan desserts and believe in a healthy lifestyle.
Segment B: Lactose-intolerant people looking for dairy-free alternatives in desserts.
Your brand tone and messaging can be altered by heeding these two segments. If you want to be more specific, you can further divide these segments into two groups.
Targeting - In this step, you need to decide whether your segments are worth targeting or not.
Consider factors like profitability, reachability, and benefits to choose your final targetable segments. You need to know if these customers will yield enough profits for your bakery business, are measurably different from the other segment, or they will be served better without any barriers.
Positioning - In this step, understand the pain points of the customers and communicate how your product can benefit them. Position your brand using the data and insights you gained at the segmentation and targeting stage.
It will help you communicate your product better to a particular segment.
2. Determine Costs
Understanding costs at an early stage is critical for informed business decisions. It can help businesses in determining the profitability of their operations and allow them to set product prices wisely.
An online bakery business may not need a physically rented place. But it will need important baking equipment, cookware or baking utensils, ingredients, miscellaneous supplies, compensation, insurance, licensing fee, and more.
List down all the expenses in a document. It will help you better understand the total investment you will require to start an online bakery.
3. Choose a Niche
Narrowing a niche is a critical step when you are learning how to start a bakery business from home. Reminisce about your favorite brand and ask yourself — What makes it special? Its unique products that other brands lack.
Just like any business, choosing a niche for your bakery business is important to set yourself apart from your competitors.
For this, you need to conduct primary and secondary market research. It will help you understand the potential of the market you wish to cater to. Good market research will give you insights into the needs of the target market and tell you if your bakery products can satisfy the audience or not.
Another way to understand this is by doing competitor analysis. List down all the bakeries in your locality and write down the products they are selling to their customers.
Once you curate the list, analyze their bakery business and consider the products they are not offering to their customers. For example, only a few brands cater to vegan cupcakes, cakes, croissants, and more. Thus, you can start a niche bakery that caters to vegan and healthy desserts.
In the first point, we spoke about dividing the audience into two segments: Segment A was the people who believe in a healthy lifestyle and want to indulge in vegan desserts. Whereas Segment B was the people who are lactose intolerant and are looking for vegan-friendly options.
Take advantage of this demand, showcase your offerings, and position your products & brand in terms of vegan desserts.
Starting an online bakery may be overwhelming. But once you niche down and identify your USP, it will be easier to create a market for yourself and reduce the competition.
But remember to choose a niche that strongly fits your needs and choices. Running a bakery and offering products that you don’t love can spoil your love for baking. Explore your passion, identify your strong point, find out a USP, and see how you can go beyond a normal bakery.
4. Obtain the Appropriate Licences
The very first thing to do after market research and niche selection is to get the appropriate licenses. After all, you don’t want to start an online bakery only to shut it down due to the unavailability of important certifications and licenses.
Running an online bakery will require you to finish a lot of paperwork before you officially begin your business. Some common areas which often require licenses or certifications are:
Health and Safety
Food hygiene standards
Catering and more
The most important step in how to start a home baking business in India is to obtain an FSSAI license that can be acquired through the website where an online application for Food License can be made. Other than this, you will require GST License, Trade License, Local Municipal Corporation Health License, Fire License, and others if applicable.
Out of these, FSSAI, GST, and Local Municipal Corporation Health License are must to have before starting an online bakery. A fire License or a license for a police eating establishment can be obtained after starting the operations of a bakery.
Additionally, make sure you adhere to every local or regional law, regulation, or health standard for the smooth operations of your business. Before you apply for licenses or certifications, make sure to check the website of your state’s Department of Health to understand what is permitted under the ‘’cottage food laws.’’
A cottage food law means you can prepare and package any non-hazardous food in your home kitchen for direct sale to the customers; however, terms and conditions under cottage food laws may vary from different states. Thus, make sure to know what is allowed under the cottage food laws in your state.
Once you have acquired all the important licenses and certifications, you are all set to start your online bakery business. Obtaining the right license is one of the important steps in how to start a home baking business, make sure you do it the right way.
5. Build Your Brand
Building a unique online bakery brand is critical in this competitive space. While your offerings are the heart and soul of your company, creating a brand can influence audience perception, drive sales, and differentiate you from your competitors.
Because your business should not just focus on selling products but providing important values to customers. Dig deeper and think — What is the specialty of your brand? What values does your business believe in? How can your products satisfy your customers?
Giving a human touch to your brand will help in distinguishing your brand identity and set you apart from your competitors. Today, building a brand is much more than product offerings and creating a name. Customers tend to stay loyal to your business for a longer time if they can connect with you on a personal level. This happens when you showcase your business values that evoke the right emotions.
Designing an eye catchy logo, memorable tagline, and brand name can help your audience to recognize your business easily. Make sure the logo, tagline, and brand name reflect your brand values and personality.
These elements will leave a long-lasting impression on your customers. Make them unique and personalized to your brand for easy identification of your business.
Follow the step-by-step process to create a unique online bakery business:
Identify your target audience
Create a brand positioning
Write a brand story
Decide the brand name
Design a logo
Create a tagline
And tada, you are ready to steal the spotlight from your competitors.
6. Create an Online Store
The next step in how to start a bakery business from home is creating an online store. An online store allows you to sell your baked goods globally. Unlike big eCommerce giants like Amazon and Alibaba, an online store will let you run your bakery business independently. Because you don’t need to adhere to strict rules and guidelines.
Creating an eCommerce store is critical to run an online business successfully.
Many eCommerce platforms help you create and design an online store. But Windo is the most affordable and effective of all the eCommerce platforms.
It has two pricing plans: The Sprout Plan and The Blossom Plan. The former is a forever-free plan with features like unlimited orders, unlimited products, seamless online payments, and customer support. Whereas, the latter starts at $12 per month. It has all the features of the Sprout Plan along with a custom domain, 0% transaction fee, and priority customer support.
You can customize your online bakery store without any hassle and create a unique brand identity. It also offers various advanced features like live chat and WhatsApp integration, customized themes, shipping, payment gateways, and more.
However, you can explore other eCommerce platform options. Compare all the features and make a decision wisely. But if you are choosing an eCommerce platform to create an online store: Make sure you choose the one without any learning curve or prior coding knowledge like Windo.
The opportunity of online stores has helped several businesses to boost their growth and reach greater heights. There are many benefits of an online store. Some of them are as follows:
The quick and seamless buying process
Opportunity to sell unlimited products
Reach an audience beyond your geographical area
Insights into customer data
Increased brand awareness
Improved brand loyalty and more
Selling through third-party channels can increase your expenses. But selling through your online store can help you attract more customers without costing you much.
Thus, make sure you create an online store to run your online bakery business effectively.
7. Write Product Descriptions
Is it important to align product descriptions in your business strategy? Yes!
A good product description allows you to describe the details of your product accurately. For instance, if you are selling vegan cupcakes, you can talk about the benefits and ingredients of the cupcake. Furthermore, you can even speak about its health benefits and how it can satisfy customers’ taste buds.
Product descriptions show the true value of the product to the customers. It influences their purchase decisions and acts as a solution to their problem.
Since you are selling baked goods, make sure you list down all the critical information such as ingredients, allergy advice, and manufacturing & expiry dates.
The more accurate the information, the better. Because it will help in building the trust of customers and increase brand credibility.
8. Photograph Your Products
Creating an online store and writing product descriptions isn’t enough. People often buy products after seeing the first look at them. Thus, your baked goods should be visually appealing. For this, you need to have quality photographs.
If you have a good budget, hire a professional food photographer. He/she can help you take photographs from different angles and tell your brand story.
However, if you don’t have the budget for the same, you can do product photography with your phone camera. Explore competitor brands and other food photography examples to get different ideas for your bakery business.
Photographs are the best way to showcase your products and win customers.
9. Price Your Products
Pricing is the key aspect of your business. Charging too high will take your customers away from you. If you are charged lower than the market price, it will be difficult for you to earn profits and recover the cost you have spent on starting your online bakery business.
You should consider various elements to price your baked goods. Consider the prices of utensils, equipment, ingredients, storage fees, baking and cleaning-up time, packaging, shipping, marketing, and more.
Time is the biggest investment you make in your online business. Make sure you don’t miss out on this.
Furthermore, don’t price your products similarly to your competitors. Your target audience is most likely to purchase from them because they are in the business for a longer time. Often customers trust established brands more than new brands.
It can be different from your competitors because there is a difference in your offerings and other expenses incurred by your business. Focus on your USP and get a basic idea of the market price to understand the pricing in your industry.
High pricing is not advisable. And so is low pricing. It is important to price your baked goods fairly to keep your customers loyal to your business.
You are giving time, effort, and energy into baking goods. Make sure you charge accordingly.
10. Focus on Packaging
Packaging can make or break your brand. Many businesses think that packaging isn’t important compared to other parts of the business. But it is one of the key elements of a successful business.
Good packaging attracts many eyeballs and persuades customers to purchase from you. Imagine you have hundreds of customers ordering from your bakery. But what if they receive their baked goods in poor packaging, running the food? It will damage your brand reputation and make you lose your customers altogether.
Like brand building, packaging also requires an equal amount of brainstorming, time, and effort to stand out from your competitors.
You can customize your packaging by adding social media handles to the same. Make sure to focus on the detailing and aesthetics of the packaging. Quality and design play a key role. It even allows you to put labels including ingredients, nutritional details, licenses, and more about the product.
It increases the authenticity of a bakery business and builds brand credibility. Make sure to have a designer who has an eye for detail and excellent design skills. Because the first impression is the last impression.
11. Market Your Business
Once you have created your online store and completed all the procedures, it’s time to market your online bakery store. Marketing is a critical step in your business. If you don’t market, people won’t know about your business.
Today, marketing is important for every business for continuous growth. Leverage social media, SEO, paid ads, and influencer marketing to get the most out of your marketing.
It will help you generate excellent results and achieve your goals in a specific time frame.
Whether you want to learn how to start a cake business from home in India or a general bakery business, these tips will help you get things right.
To Wrap Up…
We hope this guide helps you understand the basics of how to start a bakery business from home. It is a great way to reach a wider audience and increase your brand awareness.
People love indulging in baked goods on different occasions like wedding parties, birthdays, anniversaries, and other events. Thus, the market for baked goods is constantly rising and becoming a new trend. Because today, almost every house has a home baker.
Can I start a baking business from home?
Yes, anyone can start a baking business from home. It may sound overwhelming in the beginning. But it will be a comparatively seamless process if you know how to start a bakery business from home. Follow this ultimate guide to get a clear idea.
How do I start baking at home?
If you want to know how to start a cake business from home in India or a baking business in general, follow the tips we have mentioned in this article. It includes determining your costs, building a brand, finding a niche or USP, excellent packaging, marketing your business, and more.
Is home baking profitable?
Yes, the home baking business is profitable if you execute your learnings properly. A miss in either of the steps in the article may create hurdles in your business. Find your niche and USP, create an online store, and get started with your bakery business.
Can I bake it at home and sell it?
Yes, anyone can bake at home and sell. You need to create a unique offering and design your online store to start your bakery business. Creating an online store will give your business a global reach and increase your brand awareness.
Do home bakers need a license in India?
Yes, whether you have a physical bakery store or an online bakery business, it is important to obtain a license. Some licenses that home bakers need to acquire are FSSAI License, GST Registration, Trade License, Local Municipal Corporation Health License, Fire License, and more. Obtain these licenses before starting your bakery business to avoid any legal issues on businesses.
How do online bakeries get customers?
Online bakeries get more customer reach compared to physical bakery stores. Because they get access to customers beyond their geographical area. Many times, they find it difficult to travel far to buy their favorite baked goods. An online store is a great way to get new customers and deliver their desired delicacies to their doorstep.
How much is required to open a bakery online?
The expense of starting a bakery depends on various factors: Equipment, utensils, ingredients, packaging, shipping costs, and more. List down all the expenses beforehand to understand the total cost of your business. It will give you a brief idea of the cost that will be required to start an online bakery business.
Does a bakery need a website?
Yes. If not a website, you can easily create an online bakery store through Windo to sell your offerings to your customers. But creating an online store is critical to run your online bakery business successfully.