Earning from Baking: How Much Can a Home Baker Earn?

Bakers Brisk

Sept. 15, 2021

Earning from Baking: How Much Can a Home Baker Earn?

Home bakeries are not only about having a strong passion for baking but also about management and a lot of busy days. As a home baker, you not only have to run a business, but also manage leaky pipes, broken equipment, the occasional unsatisfied customer and of course, your family. Running a home bakery is certainly not an easy task. There is always the possibility that you could face a loss, or you may have to consider the possibility that your business might not even take off properly. However, after planning out your budget, having a business plan and diverting adequate attention to profit margins, you can earn quite a lot. Let us take a look at a very popular baker in Gurugram, Ila Prakash Singh and the understand how you can ensure the success of your home bakery.

                                                             

 

Truffle Tangles by Ila

Ila Prakash Singh is running an extremely successful home baking business named ‘Truffle Tangles by Ila’. Initially, she worked in the corporate sector with a monthly salary of Rs. 40,000 but soon left to set out her own home bakery. She now earns Rs. 10,000 to Rs. 12,000 per day which brings her monthly income to around 3 to 4 lakhs through baking. She offers more than 40 varieties of baked goods such as cakes, gluten free breads, cookies, etc.

It is certainly not an easy task to do so. Even if baking is your passion, it requires hard work, determination and gets stressful as well sometimes. Despite all the obstacles, Ila has shown us all that with certain qualities, success is achievable.

Ila holds frequent stall sales and food exhibitions. It takes her approximately 3 days to bake items for one stall. 

Her success could not have been possible without a proper business model, marketing plan and keeping aside a profit margin for herself. She had to figure out how to price her menu, the ingredients, equipment and even how to deliver orders to her customers.

Further on in this article, you will read about the average earning of a home baker, how to create a business model and marketing plan, and a few questions that can help you create your business plan.

 

How Much Can You Earn as a Home Baker?

You may certainly have more flexibility than an employee, but it is still not easy being a home baker in terms of income. However, your monthly income can increase drastically once your business gains popularity and recognition. 

Your income mainly depends upon the quality and variety of goods you offer. If customers find items they are unable to find in bakeries and retail stores or if other bakeries do not offer customizations and you do, then there is no doubt that you are going to rise through the ranks as a successful home bakery business. 

In the initial stages, it is possible for your monthly income to be as low as Rs. 5000. There is no reason to worry or think about considering a different business though. Your income can go up to Rs. 10,000 to Rs. 15,000 once you establish a name for yourself in the industry. It is even possible that you earn higher than this. 

Baking is something that never goes out of business. So, once you have a constant flow of customers, you are bound to not go out of business as long as you offer products of great quality and deliciousness. Similarly, the more skill you have, the more customers you will attract. 

It surely helps if your products not only please the customers’ taste buds, but also please their eyes. Visually pleasing items tend to sell rather easily. 

 

Business Plan and Model

A business plan allows you to carve the path for your business. It helps you see which areas need more focus and also to make sure that you have got all the basics cleared. Business plans are road maps for success as they make you look at your business from all angles. 

Managing Your Costs

It is essential that you start off small and do not take more startup costs than necessary. As a home baker, an initial investment of around Rs. 50,000 is quite sufficient. Finances are an essential part of your business plan as you need to keep a tight grip on what you are earning, what you are spending, and what you plan to earn. Also, since profits do not come in overnight, you need plan as to how you are going to manage while your business gradually spreads its wings.

Your startup costs include initial equipment, ingredients, packaging and marketing costs, miscellaneous costs, fixed and variable costs. Now one particularly important thing to consider is that these are the expenses you expect and plan for. But you also need to be prepared for any unexpected costs you may come across and it is recommended that you keep aside at least Rs. 10,000. 

Once you know what your startup cost is, you need to decide how many years you want to pay this off. Along with this, decide how much you want to pay off with each sale. This will help you figure out your profit margin, another important aspect of your business plan. 

Profit Margins

You need to reap a certain amount of profit with each sale. Whatever amount you choose should be reasonable and neither too high nor too low. You want your prices to be such that the customer feels like buying from you and you still have a good profit. 

Profit margins usually depend on the industry and what your particular field of work is. As mentioned above, your profit margin must be comfortable for both the customer and you. It is ok to start off with lower prices and then gradually increase them, but it is not recommended that you begin with absurdly high prices only to lower them later. This may turn out to be heavy on your pocket and be dangerous for you economically.

A 20% margin supposedly the best. Many people take 5% as their margin but that is considered to be low. However, if you want to aim for somewhere in the middle, a profit margin of 10% is considered average. 

Menu and Pricing

When you formulate your menu, try making it as diverse as you can. The more options your menu will have, the more customers you will attract. However, your menu should not be so long that it overwhelms the customer. 

When we talk about the pricing of your items, never price your goods based on a competitor’s prices. Your competitor and you could essentially be selling the same item but the ingredients, the packaging and the baking process could be completely different. Hence, the prices would also be different. Your prices should be such that you do not over or under charge. 

Eventually, there is a chance that you will realize that your prices are too high in order to meet your profit margin. There are certain steps you can take to make your prices more comfortable for customers while ensuring that you have a good profit margin. One way is to use cheaper ingredients. This will reduce your overall expenses and also help maintain your profit margin.

While pricing your items, always value your time and skill. Being a home baker is not an easy task, quite contrary to what some might think. At times, you may feel stressed but that is alright. With a strong business plan on your side, you will do wonderfully with your home bakery.

 

Marketing Plan

To maximize your reach and earnings, you need to develop a strong marketing plan. A strong marketing plan is one of the best things you can do for your bakery. Here are a few ways to market your business effectively. 

Word of Mouth

Most startups depend heavily on word of mouth. If you provide customers with items of great quality and taste, it is automatically more likely that the customer will recommend you to their friends and family. 

Setting up frequent stalls in your locality, doing fund-raisers and other community functions can do wonders for increasing your reach with the help of only people’s word of mouth. 

Build a friendly and healthy relationship with your customers, especially the ones who purchase from you more frequently. If they are satisfied, they will make sure to recommend you to a lot of people.

Social Media

 

Allow your customers and potential customers to reach you on various social media handles. Social media is considered the most efficient way to increase you reach.

Create an account on Instagram, Facebook, Pinterest, and Twitter. Make sure that you use the same username on all platforms to make it easier for people to find you. If you cannot find the same name, at least try to have a similar username instead of opting for one totally different from the actual name of your home bakery. 

Develop your feed by posting frequently and having interactive sessions on various platforms. You can choose an aesthetic for your account to make it more visually pleasing. Also, you can host various workshops online. These workshops could be about baking equipment, tips, baking hacks and so much more. Engage with your followers and customers as much as possible. But do not forget to pay just as much attention to the actual baking part of your business. 

Website

Book a domain name and email id. It is recommended that you use a separate email id for your business as it is easier for you to have a fine line between your work life and your personal life, and also seems more professional to your customers as well as your competitors. After all, you would not want to be deemed lower than your competitors, would you?

A proper and well-planned website gives you maximum reach. Make sure that your website is not a jumbled-up mess. It should be easy to use, and everything should be at the maximum ease of access for your customers. They should not be confused on how to operate your website.

 

Tips to Help You Create a Business Plan

When you formulate your business and your marketing plan, there are a few things that you should take into consideration for maximum earnings as well as maximum reach. 

Here are the two main things you should consider while creating your business and marketing plans to ensure maximum earning and reach:

What more do you have to offer?

Is there something special that you are offering your customers that sets you apart from your competitors? Do you offer something that no one else in the area sells? It could be anything. It could be the traditional dessert of a far-off country or your grandma’s secret recipe that melts the toughest of people. The point is, is there something special about your business, something that no one else thought of?

It is in no way necessary that you need to have something completely different on your menu apart from the regular cakes and breads. For example, if you live in a neighbourhood where none of the bakeries sell customized cakes for children but you have noticed that there are quite a lot of daycares and schools in your locality. You could always add custom cakes for children onto your menu. 

Targeting Your Customers

One of the best ways to target customers is to figure out the best ways to attract people in your locality. You do not need to have an extravagant display for this. 

For example, you may learn that there are a lot of people living in your locality who are originally from another country or some far-off place. You may then realize that no restaurants or bakeries around you offer items from where they belong. You could then add a few of their traditional recipes to your menu and hence, attract more customers. Not only would your targeted customers order, but certainly others would as well. People are always willing to try something new!