Can a Home Bakery Be Profitable? My Experience

Last updated on July 31st, 2023 at 03:01 pm

Welcome to my series on my personal experiences in earning side income! Here I share details of my own stories in order to bring to light honest reflections. It should be noted that these are tales of my home bakery experiences and not everyone will have the same outcomes.

What started as a love and personal compulsion for sharing my baked treats with my community lead me down a harder-than-expected path to creating a cottage bakery out of my own kitchen. I’ll share my story, how I got started whipping together butter and sugar and flour into towering white wedding cakes, how I sold $20 of my chocolate chip cookies in front of a Subway restaurant, and whether it was all worth it in the end.

My cottage bakery began with passion

I learned to cook and bake at an age young enough to need my stepping stool. One of my favorite childhood books was called “Alpha-Bakery Children’s Cookbook,” which included a recipe and fun illustration for each letter of the alphabet. With the help of my mother, I mastered recipes like the Honey Bee Cookies (H) and the Xtra-Special Celebration Cake (X).

In college, far from home, baking up a familiar dish basked me in warm memories of home. I baked throughout my college years and enjoyed sharing whatever I made with friends. When I was a copy editor for our campus newspaper, I brought in a loaf of homemade Irish soda bread with butter to the newsroom, and one of the reporters wrote me a memorable thank-you note praising the dish.

When I got married, we received Joanna Gaines’ first Magnolia Table cookbook as a wedding gift. (My husband and I were on a Fixer Upper kick, so I was ecstatic to further commit to all things Magnolia!) I read through that book cover to cover, amazing and somewhat terrifying my husband. Of course, I wanted to know the stories behind all of these heirloom recipes! Geez.

For my father’s birthday that summer, I decided to attempt Joanna’s recipe for Black Forest cake as his gift. The startlingly stunning photographs that accompanied the instructions were too much for me to resist– I had to try to make this rich chocolate cake dripping with fresh red cherries and frilled with light homemade whipped cream.

The result was just fine– the Black Forest cake’s taste was good, and I had warmed to the skill of stacking, frosting and decorating the sweet and soft layers together.

Floating on buttercream dreams

My hohum version of the Black Forest cake headed off my subsequent obsessive journey with layer cakes. For the last half of 2021, I scouted and planned and experimented with new layer cake recipes each weekend, on a mission to capture certain flavors, master techniques (like making curds, jams, meringues and different buttercreams) and learn simple but elegant decorating styles.

I like baking all kinds of things, (and I consider it a thrilling personal challenge to do so) but layer cakes emerged as the clear favorite. Cake is a wonderfully balanced and filling dessert, with a moist crumb portion and numerous frosting options to balance and add creaminess to the dry, buttercreams ranging from fudgey to light and fluffy. The beauty of a layer cake perched prettily on a cakestand is a timeless wonder to behold. Whether standing in its tall, frosted tower on a kitchen table or cafe counter, the layer cake commands attention.

I acquired and worked my way through two cookbooks solely dedicated to cake, naturally dying a Red Velvet cake a deep maroon with roasted beets thanks to Ann Byrn’s historic recipe collection “American Cake” and even whipping up homemade ricotta and the smoothest-ever lemon-tinged mascarpone frosting for one of the decadent recipes in “CAKE by Courtney” by Courtney Rich.

How I went from obsessive home baker to (kind of) a business

Immersed in my happy cloud of cake experimentation, I documented much of it on social media. I was so captivated by this endeavor that I could hardly keep my digits from snapping and sharing it all on my Instagram account.

From how-to stories to very experimental photos of food from all angles to incoherent streams of baking monologues, I was oversharing about cake.

This release of unbridled passion resulted in many positive responses from my friends and acquaintances. At this point, I was so buzzed about baking that I felt a compulsion to share things I made. I was basically magnetically drawn to setting up shop– there would be nothing (not even an inflation of egg prices) to stop me!

That Magnetic Baking Force drove me to test my goods out in the world. One fall morning, with the gracious help and support of my husband, I held a popup baked goods stand in our carport.

Sharing my treats through bake stands and social media

Though the cost of a physical storefront or market stand was eliminated because of our home-based location, the bake stand still wasn’t a money maker.

It could possibly have been that I spent days in the kitchen baking up some of my greatest hits in varieties of flavors that can be attributed to the expenses. Not to mention the ingredients and the gathering of the ingredients.

A few wonderful, supportive friends showed up and purchased items, and a singular stranger, an elderly man I had noticed before in our neighborhood, patronized the bake stand. This small turnout did not deter me and my KitchenAid mixer, however.

The following spring, I paid $20 for a spot in a local craft festival. I’d have to bring my own table and supplies, and I’d have to set it all up right in front of a Subway sandwich shop, but I was ecstatic that that measure of sidewalk was mine for the day.

I spent the week baking up a variety of items, handheld desserts like cookies and whoopie pies being an obvious choice for the event. But I also couldn’t resist testing my layer cakes among the populace. I lovingly poured myself into making a refreshingly dark mint chocolate chip cake, a nostalgic and sweet chocolate chip cookie cake (not a cookie cake, but a cake embellished and flavored with cookies), and a fluffy and fruity cake I dubbed the strawberry milkshake cake. These were attractively arranged on stands and sold by the slice.

Due to some fluke, half the vendors didn’t show up to the fair, which may have prevented some customers approaching as they spied the sparse plaza. Despite this, we had a fairly steady customer stream, though I couldn’t be sure for my very first craft fair event. One man kept my hopes and morale aflutter by purchasing $20 worth of my chocolate chip cookies and raving about them (that was one of the most hope-giving, ego-stroking monologues that I definitely needed in that vulnerable moment).

Weddings, birthdays and baby showers, oh my!

In addition to the bake stands, I got requests from friends to do cakes for their weddings and baby showers.

Though I’d never done a wedding cake, I fumbled through learning how to stack and decorate one for such an event. I’m embarrassed looking back at the photo, because it wasn’t perfect. But I received many compliments on it. I ended up baking two wedding cakes and three baby shower cakes purely from unsolicited requests from friends.

My baking skills had been validated by the gracious patrons at my booths and from the compliments and inquiries from friends. There was a demand for my products– but did that mean I had any business making it a full-fledged business?

Was my home bakery profitable?

I have no idea whether the home bakery made a profit. Beyond the cost of ingredients, there were the invisible expenses in the form of my time: marketing my products, shopping for ingredients, baking itself (which also includes the cost of power and equipment), and communicating with and delivering to customers. Not to mention all of the time I spent learning how to run a home bakery business, in particular the laws surrounding cottage food operations. In my understanding of my state’s laws, I provided a printed list of all of the ingredients in each food items, highlighting the possible allergens.

Here are some less-considered home bakery costs I encountered:

• Packaging
• Accounting time and software
• Market location (if doing popups)
• Overhead costs of the home kitchen

The prices I set were random– I couldn’t justify the time it would take to price out even a single item completely.

Take my go-to chocolate cake recipe, for example. I have it memorized. To get just the ingredient cost of this one cake, I’d first have to find the cost for each ingredient (there are 12) and then somehow (this was the trickiest part) divide that cost of the package by the actual amount required for the cake. Because I’m not going to use a whole bag of flour for one cake.

Just sitting down trying to calculate the actual ingredient cost of a single item on my menu made my head spin.

I suppose I could have set an hourly wage for myself and paid myself for the blocks of time it would take to develop a pricing model, market the products, communicate, shop and bake, and somehow reflect that in my prices… but who would buy these three-figure cakes?

Were my home bakery efforts worth it?

There are multiple ways I’ll answer this question. Was the home bakery worth it?

Learning experience: Yes

Passion project fulfillment: Yes

Time and money: No

I learned that established bakeries have methods to scale their goods so that they’re actually making a profit. But my one-woman-show hardly made cents (sense! ha!).

I found that time was the greatest resource in this operation: time to plan, shop, bake, package and sell. When my daughter was born, time increased in value to be a precious, fleeting resource. I couldn’t adequately stretch the limited time I had to make baking and selling work.

This experience has also made me aware of many others with passion and talent who try to share their creations– there are dozens of obstacles. I have definitely developed an affinity and appreciation for makers, hobbyists, and crafters facing giants on the path to entrepreneurship.

Do I still operate a home bakery business?

I still love to share my baked goods with people– if you’ve had a slice of cake forced upon you, I’m kind of sorry, but know it is the lovechild of my frenzied passion.

I’m not taking orders, so in a way, the business is nonexistent.

The last two springs, I’ve donated a homebaked cake to a school fundraiser auction. Together, the cakes have pulled in $1,500 for the school. I really love that I can help a cause dear to me with my baking– that seems worthwhile to me.

My baking now mainly consists of firing up the oven for my family or friends, with the occasional donation to worthwhile fundraisers. This appeases my sugar-sharing urge while keeping things managable for me among my other duties.

So to anyone who mentions to me, You should start a business! I have this long explanation I can show them. In short: I have, and it was a good run while it lasted.

So can a home bakery be profitable, though?

Though I didn’t achieve any meaningful profits from my home bakery, that doesn’t mean it’s impossible! I’ve heard successful stories online of various bakers making some pretty serious coin in their ventures. If you’re thinking about it, I’m cheering you on! I share my experience to expose an honest reality that might not otherwise be revealed.

My personal suggestions for creating a profitable home bakery would be to get a realistic look at all of the costs involved, especially the less obvious. Pricing may be a challenge, and there are resources online that can help you calculate your prices. Weddings seem to have the highest earning potential, but be sure your skills are up to par and you can be prepared for a high-stakes/high-stress situation. Markets and popups can also be great not only to sell product but to get your name out there. Best of luck!

Here’s what I’ve written about other side hustles I’ve tried:

My Experience with House Cleaning as Side Job

Is Starting a TPT Shop Worth It? My Experience

My Side Hustle as a Substitute Teacher

Babysitting for Extra Cash