Make Extra Money Selling Baked Goods

by Nicki on February 3, 2010

in Saving Money

bread

I’ve mentioned several times that I used to sell homemade bread. You can read here why I gave it up. Each time I’ve mentioned it I’ve had someone ask for more information about it. I decided to write a post and give you an overview. I hope it helps those of you considering it. Feel free to post any follow-up questions in the comments.

Are you really, really good at baking something? If you’re good enough, people will pay a good price for things like bread, rolls, pies and pastries. There’s a lot of work to it though, so you have to have the time available to commit to it. I enjoyed a nice part-time income while I was selling my bread. Here’s what I did.

1. I mastered a few recipes.

You must have your recipes down pat so they come out exactly the same every single time. If you want people to continue to buy from you then you need to have a consistent product.

2. I made my recipes cost effective.

I was using about 40 pounds of flour per week when I was up and running with my business. Buying 5 pounds at a time at my local grocery store would have drastically cut my profit. You can make more money if you can get your ingredients to cost you less. Look into buying ingredients in bulk or whole sale. (Words of warning – don’t compromise the quality of your recipe for a lower cost ingredient)

Once you figure out how much it costs to make each of your products, then you need to price them. You may have to adjust your price later on but create a price list that makes you money.

3. I got a license.

I live in New Hampshire, so I can’t speak for other states (or countries) but I’ll tell you what I had to do here. I had to apply for a Homestead license, which gave me license to sell food baked from my home kitchen. It cost $25 and lasted for a year. A health inspector came to my home, inspected my kitchen and asked me a bunch of questions. I know it sounds intimidating but it isn’t as big of a deal as it sounds. I passed the inspection easily. The whole process took a month or two though, so start it before you want to sell.

Many people will want to skip this step and just sell it out of their home without a license. I don’t recommend it. If your business gets big enough that you want to sell it somewhere else then you’ll be stuck until you get the license.

4. I began drumming up interest.

I am SO not a salesperson. I really don’t like it. It makes me want to gag. I did it though. In the beginning I gave loaves away and started gaining some interest in my product. It worked. People liked it and talked about it to other people. Soon, they were asking me if they could buy it.

5. I created a logo.

I am also not a graphic artist. I am jealous of the people that can just whip these things up. However, you need to have a recognizable brand. People need to be able to immediately identify your product at a glance. Create something that will look nice and print up labels (from your home computer). If you’re not very good with graphic design I am SURE you have a son/daughter/grandchild who would LOVE the opportunity to help you out.

Also, it seems like there’s an allergy for everything out there. With that in mind, be sure to list the ingredients on your labels (and don’t cross-contaminate anything with nuts, etc.)

6. I found a place to sell.

Through a friend, I heard our local Farmers’ Market had an opening for a person to sell bread. It was perfect timing. I sold my bread every Saturday from June through October. I had to buy one of those easy-up shelters (it rained or was very hot some weeks) and a folding table. I sewed a pretty table cloth and made a sign to hang at my tent. I sold between 20-45 loaves of bread every week just by showing up (depending on weather and time of year).

By October, when the market closed, I had enough of a following that people wanted to continue to buy through the winter. At that point I created an email list of customers. Each week I sent an email to the list and told them what I was offering then they would email back their orders. I had a 4-hour window of time when they could pick up their orders each week from my home. Using email rather than phone calls was MUCH more time efficient for me and for my customers. If you aren’t big into email you could certainly just make phone calls. My orders went down for the winter (remember where I live – freezing) to 10-15 loaves per week. It was still worth my time though.

7. I kept track and paid taxes.

Don’t be silly and register with the state then NOT pay them taxes. If you are registered then they know you are making money :) Keep track of what you sell and keep the receipts for ALL supplies (don’t forget about the tent, the table, the license, etc.) to make it easy when tax time comes. I’m not a tax expert AT ALL but we (not we, my husband) still do our own taxes so it isn’t that complicated.

Selling homemade bread was a lot of work but it really helped us through some tough financial times. It was great for me because I could still be home while I baked during the week and I even brought my daughter with me to the market on Saturdays.

I hope this lays out the steps I took in a clear manner. I welcome any follow-up questions and will do my best to help you out. If anyone else has any further advice or experience on this topic I’d love it if you added to the conversation.

Why I do what I do ~ Chloe loves her bath time. She stays in the water until I pry her out or the water turns cold. We’re talking 30-minute bath times.

Me- “Chloe are you ready to get out?”

Her- “No.”

Me- “How about now?”

Her- “How about tomorrow?”Have you liked Domestic Cents on Facebook yet?

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Money Hackers Carnival #103 – Snowed In Edition
February 10, 2010 at 5:04 am

{ 29 comments… read them below or add one }

1 leslie February 3, 2010 at 7:42 am

This is the first time I have read about selling baked goods out of your home that makes it sound actually feasible.

I have researched this topic in general, not specifically for my state, and am always disappointed by hearing things like “the kitchen must have two entrances” and “in order to sell the goods you bake yourself you need to take several food prep/sanitation classes first,” and other such costly steps that discourage me from looking any further into the prospect.

So, since it is so easy to sell baked goods out of your home in NH, my question to you is who did you initially contact at the State to learn what you needed to do and get the application.

I would loooooooove to be able to do this and basically gave up on the idea because of all the discouraging hoops I thought I’d have to jump through to set it all up.
.-= leslie´s last blog ..Weekend: January 29-31, 2010 =-.

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2 Nicki February 4, 2010 at 4:05 pm

Leslie – I didn’t contact anyone. I went online. I just went to nh.gov and they had the form online to download and fill out. Here’s what the form for NH looks like. If you view the form, the type of establishment I chose was a “Class H Homestead Kitchen with annual sales less than $5,000.”

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3 David February 3, 2010 at 10:12 am

Well done on this super-informative post!! :)
.-= David´s last blog ..shearerd: RT @bflay: Canadian Burger has griddled canadian bacon, white cheddar, & maple mustard sauce. =-.

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4 Elisa | blissfulE February 3, 2010 at 6:44 pm

This is great. Wow!

Chloe cracks me up! I bet her cuteness was an asset at your market table, too. :)
.-= Elisa | blissfulE´s last blog ..Child Basic Resuscitation :: restart the heart =-.

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5 Andrea February 3, 2010 at 8:51 pm

Thanks for sharing! Not that I’m going into the bread baking business but I’ve always wondered how you went about that.
.-= Andrea´s last blog ..A little crafting help! =-.

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6 irina July 25, 2010 at 7:57 pm

Did u have to get a liability insurance?

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7 Nicki July 26, 2010 at 7:17 am

Irina, I didn’t get liability insurance at the time. That was a personal decision though. Please keep in mind that every state/country may have slightly different laws so be sure to consult those first.

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8 irina July 26, 2010 at 11:26 pm

Thanks you so much for your response! None of my friends really know about this subject so I m glad I can talk to some one. That is if you don’t mind talking to me . ( I have two little girls 6 and 8 so I know all too week about time management ) . I searched online and found out that only handful of states have a cottage food law meaning producing food for sale at home. In Indiana where I live The fee starts at $99.00 and with all the rules and regulations there is no way I will ever be able to run a legit bakery out my house. Two ideas came to mind. First if I could offer my services to the local restaurants
And bake my recipes for them twice a week at their kitchen, but How would I use my ingredients . Second if I could rent out a kitchen. The question is where to go because I don’t have a lot of money to spend on that. Do u have any ideas ?

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9 leslie July 27, 2010 at 9:02 am

irina, my friend uses a church’s kitchen that is inspected/licensed to make her baked goods then she sells them at farmer’s markets and the like.
leslie´s last blog post ..Furnish Your Dorm Room or College Apartment for Cheap

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10 Frances August 10, 2011 at 1:50 pm

Leslie, I was wondering what else your friend went through with the taxes, putting a name to her baked goods, etc. This is where I’m slightly confused. And if selling to a local shop/ restaurant what would you show as proof for a license?

Thank you!

11 irina July 27, 2010 at 1:01 pm

Thank u ! I’ll try that

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12 Darin September 11, 2010 at 6:21 pm

I just wanted to say thank you, for this post. I thought it was the most honest and sincere piece of information that i have read in a long time. I am doing some research on my own business and this post helped.

Thanks again,
Darin

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13 joanna September 25, 2010 at 9:44 pm

Great Information, thanks so much!
I’m thinking of baking vegan items (cakes, cookies, etc) in the Seacoast, NH area. Really appreciate this!

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14 Karen September 29, 2010 at 8:18 pm

Great info. Unfortunately, after speaking with the Health Department in Manchester, NH, they do not allow selling baked goods from your home kitchen. There are other towns in NH that do allow it. I was pretty bummed out to learn that since I really wanted to bake some of my favorite items to sell since I lost my job.

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15 Nicki September 30, 2010 at 7:04 am

Karen- I don’t know what to say. It makes me SO SAD to hear that regulations are so stiff that you can’t bake in your own home. What are things coming to??? :(

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16 Carol November 13, 2010 at 5:31 pm

If you sell baked goods made at home can you use recipes that you get on-line or do you have to change them slightly first?

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17 Nicki November 14, 2010 at 7:06 pm

That’s a great question, Carol. As far as I know, you can use whatever recipe you want. Of course, I would stay away from anything that appears copyrighted. If you’re in the USA, then I’m sure the FDA has some guidelines.

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18 Lauren March 17, 2012 at 12:41 pm

Copyright laws cover the recipe not what is made from it. So basically you can’t sell the recipe to people but you could sell the product you make from it. You own it, it is yours. Same with clothing patterns. you can sell what you make from the pattern but the pattern itself is copyrighted.

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19 Sheila January 23, 2011 at 7:06 pm

You didn’t mention any fee for selling at the farmer’s market. Was that space free?

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20 Nicki January 23, 2011 at 9:24 pm

Sheila,
At the time I was doing it – almost 3 years ago – It cost me $5 per week. I still would have considered it worth my time if it cost $10-15.

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21 Beth January 26, 2011 at 1:20 pm

In step 3 of your post you state that you got a license and an inspector came to your home to inspect your kitchen. You passed the inspection just fine, but my question is what kitchen did the inspector look at? Your regular, residential kitchen where you make meals for your family in addition to your homestead baking? All the current DHHS website seems to say that you need to install a “commercial” kitchen (even if it is in your home) in order to be applicable for the Level 1 Homestead License. After much reading of the state website, it still isn’t clear what kind of kitchen I will need for my purposes — simple baking for sale at a local farmers market. Thanks for sharing your experience!

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22 Nicki January 27, 2011 at 7:58 am

Hi Beth,
The rules may have changed, but I did all of my business baking right out of my home kitchen and that’s the one she inspected. I hope everything works out for you!

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23 debbie March 28, 2011 at 8:47 pm

Nicki ,
Did your kithchen need two seperate entrances with no attachment to dinning and living room. with and a seperate refrigerator for your business, with no pets inside or out. How did you set that up.

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24 Deb October 6, 2011 at 1:11 pm

Can I make the product in a homestead kitchen in New Hampshire and sell at the market downtown Boston?

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25 Susan Milioto December 6, 2011 at 1:41 pm

Hi I was wondering what kind of questions were asked at your home inspection. I just got the call that my license was approved and an inspection needed to be scheduled and I’m excited and nervous – any help is appreciated!

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26 Nicki December 6, 2011 at 7:46 pm

Susan, Here’s what I can remember:

Temperature of refrigerator (41 degrees). They want you to have a thermometer inside to monitor it.
Ability to keep pets out of kitchen
Sanitizing procedures – does your dishwasher have a sanitizing function, if not then what do you do?
They also inspect the nearest bathroom and make sure there is a sink with hot water in the bathroom.

Those were the main questions. Hope that helps!

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27 Nathalie April 13, 2012 at 10:11 am

What if i’m selling privately ? do I still need a license? Do you do any experimenting with your recipies and did you have to have all your recipies listed out? Thank you so much.

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28 Katelynn April 26, 2012 at 9:37 pm

I was wondering how you figured out how much it was costing you to make your baked goods so that you could figure out how much to sell them for and still make a decent profit. This task alone is what has held me back from selling my own baked goods!

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29 Krissy July 15, 2012 at 9:06 am

Curious what town this was in? Also the link to the NH form is not working or page has moved.

Thanks for the incredibly useful information!

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