A guest blog by Helen Bowman from Mrs BeeBakes
I’ve been asked by The Craft Company to write a short series of blogs about setting up and running a cake business from home and I can’t wait to get started. Here’s my first blog about getting started – the business and regulations stuff, and I’m hoping to write some more posts about planning and tips for promoting your business too.
As someone who has always loved baking, running my own baking business from home was always in the back of my mind as a possibility. Back in 2011, when my first born was crawling around my office as I tried to write blog posts and web copy for my clients, I realised that particular business might have to go on the back burner for a while.
That was when I realised that baking and decorating cakes and cupcakes from home and selling them to friends, family and a slowly increasing number of new customers might just be the answer I needed to find balance.
It’s a familiar story isn’t it? And I’m sure it resonates with so many avid bakers out there. But just where on earth to start when it comes to setting up a business?
With so many things to think about to stay on the right side of the law, I’ve laid out the legal and business steps you’ll need to take before you start selling your cakes for actual money.
Let’s make a start, shall we?
Even if you’re not planning to take over the world with your new business, it’s crucial to register with HMRC as self-employed. Whether you make enough money to pay tax or not, you still need to let the taxman know that you’re working for yourself, even if you have another job alongside this business. You’ll need to submit a self-assessment tax return every year.
If you’re simply setting up as a sole trader, this is as much as you need to do to register your business. If you’re setting up as a limited business, you’ll need to seek further advice.
This means earning all the certificates, informing the relevant authorities and generally taking your business seriously.
First up, take a food hygiene certificate. It’s easily done online and shouldn’t cost too much money to do. The level 2 course is perfect for home baking businesses. Not only will this make sure your local Environmental Health Officer (EHO) is happy with you, but you’ll also pick up some helpful tips for safety, food storage and the rules you need to follow.
In general, you’ll be viewed as a low-risk business, but your EHO will still want to visit your premises, inspect your kitchen and ask you a few questions about your set up, processes and cleaning regimes.
And finally, make sure you’re up to speed on food labelling regulations when it comes to giving allergen information. Talk to your EHO about this but I was advised that simple allergen alert labels (found online) are sufficient for the baking business. I simply tick the boxes relating to the products I’ve baked, stick it on the box and the jobs a good’un.
This sounds WAY scarier than it actually is. Simply contact your local authority’s Environmental Health department and let them know you’re setting up a home-based baking business. It’s free and they’ll let you know the next steps. As a low-risk business, you’ll be able to start trading as soon as they say yes and they’ll arrange for an officer to visit your premises as soon possible.
As I have two businesses running from home, I added my baking business on to my original business insurance with very little bother.
But if you’re starting from scratch it’s worth talking to an insurance broker or specialist about the insurance you need. I’m covered as a home-baking business and my policy is fairly inexpensive (between £50-£100 annual payment).
Keeping your personal and business finances separate is really helpful to keep track of spending and income. Most business accounts charge a set fee per month so do your research and find the best value business account for your business.
And that’s the set up side of things covered. It’s not fun and exciting like covering your first cake with sugar paste or achieving your first perfect drip with ganache. But it’s necessary for a successful business.
In my next post I’ll be talking about the next steps for starting up a business from designing your business cards to spreading the word about your business.
If there’s anything I’ve missed, please comment below and I’ll do my best to point you in the right direction.
Until next time, stay sweet
**This blog is based on experience and is for information. It is not legal advice. Always seek professional advice if you’re unsure of anything and contact the relevant institutions and organisations for the most up to date information and guidance.**