Starting a Home-Based Baking Business in 2025

You’ve spent hours perfecting your cookies, cakes, and breads. Friends and family can’t stop raving about your treats, and they’ve probably told you more than once, “You should sell these!”

But where do you even start? Do you need a license? How do you price your baked goods? Is a home bakery even profitable?

I’ve got great news—you’re in the right place! 

Starting a home-based bakery is one of the most exciting (and rewarding) ways to turn your love of baking into real income, and I’m here to walk you through every step.

Whether you want a fun side hustle or a full-time bakery business, this guide will help you:

• Understand cottage food laws and make sure you’re selling legally.
• Learn how much money you can make from home baking.
• Set up pricing, marketing, and sales strategies that actually work.
• Find the best places to sell your baked goods (hint: beyond just social media!).

You don’t need fancy equipment or a big budget to get started—just a little planning, the right mindset, and a whole lot of excitement! Let’s dive in and turn your passion for baking into a thriving business.

What Is the Best Way to Sell Home-Baked Goods?

I know exactly what it’s like to start a home bakery from scratch—because I’ve done it myself. Back in 2005, I started my own cottage bakery from my home kitchen, just like you’re thinking about doing now. My business grew so fast that I moved into a commercial space, then opened my first retail bakery. That success led to four brick-and-mortar bakeries, each one bigger than the last.

After years of running and growing my bakeries, I hung up my apron to focus on helping other bakers do the same thing. Today, I teach home bakers just like you how to turn their passion into a profitable, sustainable business—without the guesswork.

So, where do you start?

The best way to begin is right here—by reading this full article to understand the key steps to launching a home bakery. I’ve broken down everything you need to know so you can start with confidence and avoid common mistakes.

Then, when you’re ready to take action, grab my start-up checklist—a simple step-by-step guide to go from baking for fun to making money doing what you love!

Owning a home bakery can be a fun side hustle or a full-time career—but success comes from planning, learning, and taking strategic steps forward. Let’s dive in!

Selling from Your Home Kitchen: Understanding Cottage Food Laws

Cottage foods are homemade food products that can be legally sold to the public under cottage food laws—a set of regulations that govern the sale of food made in a home kitchen.

Cottage Food Laws Vary by State

Each state has different regulations on:

• Where you can sell
• What ingredients you can use
• How you must label your products
• Potential earnings limits for home bakers

How to Find Your State’s Laws 

 The easiest way to check your specific cottage food laws is by visiting your state’s Department of Agriculture website or contacting your local health department. Some states also have dedicated cottage food association groups that provide up-to-date legal information. I've put together a state-by-state resource for cottage foods laws here.

Make Sure You Know Your Local Laws and Regulations

Every state and county has different rules when it comes to cottage food operations. Before you start selling, check with your local health department and state’s department of agriculture to make sure you’re following the right local regulations.

Some areas allow you to bake and sell directly from home, while others may require you to work from a commercial space. Knowing the specific requirements upfront will save you a lot of time and headaches later on!

Understanding Your State’s Hazardous Food List

Hazardous foods require temperature control to stay safe. Cottage bakers are generally not allowed to sell items that could pose a risk. Some common prohibited ingredients include:

• Meat – Most states don’t allow any meat-based baked goods.
• Dairy – Uncooked milk or cream in frosting may not be allowed.
• Cheese – Some states prohibit cheese-based bread or cream cheese frosting.
• Canned Goods – Items like homemade salsa or pickles are restricted due to pH levels.
• Custard-Filled Treats – Pumpkin pies and similar items may be off-limits.

If you love making cheesecakes or cream-filled pastries, you may need to adjust your recipes to fit cottage food laws. For example, some states allow cream cheese frosting if it meets specific sugar-to-fat ratios, while others prohibit it entirely. If you’re serious about owning a home bakery business, obtaining the right home bakery license is a must.

Do I Need a Business License to Start a Home-Based Bakery?

Some areas require a license to operate a cottage bakery, while others do not. Before making any other plans, research the home baking business requirements in your area.

Being a licensed, legal bakery helps you:

• Stand out from other bakers
• Ensure compliance with state laws
• Build a long-term, sustainable business

If you’re not ready to learn about licensing requirements, you should hold off on selling your baked goods. Instead, practice baking and give your treats away for feedback.

How Much Does It Cost to Start a Home Bakery?

Starting a home bakery is often more affordable than you might think! Unlike a traditional brick-and-mortar bakery, you don’t need to invest in a commercial space, hire staff, or purchase industrial equipment. Instead, you can start small, use what you already have, and scale as you grow.

That said, every successful home bakery requires a few upfront costs. Here are some of the most common startup expenses you should plan for:

Permits & Licenses

Depending on your state, you may need a cottage food license or a home bakery permit to legally sell your baked goods. Some states require an annual registration fee, while others allow home bakers to operate without one. Check with your state’s department of agriculture or local health department to understand what’s required in your area.

State-Required Courses

Some states require food safety training before you can start selling. These courses cover topics like proper ingredient storage, labeling laws, and food handling safety. Even if it’s not required, taking a basic food safety course is a smart investment that can help you build trust with customers.

Registration Fees

If you plan to register your business as a sole proprietorship, LLC, or another legal entity, you may have to pay a small registration fee with your state. If you choose to form an LLC (Limited Liability Company), you’ll have additional state filing fees, which vary depending on where you live.

Insurance (Optional in Some States)

While not always required, having business insurance can protect you from liability in case of a food-related issue or customer complaint. Many home bakers choose general liability insurance or home-based business insurance to cover potential risks.

Ingredient Storage

A well-organized kitchen makes running a home bakery much easier! You may need to invest in:

• Airtight containers for storing flour, sugar, and other bulk ingredients.
• Cooling racks and storage bins to keep baked goods fresh.
• Extra shelving or pantry space for packaging supplies and ingredients.

Baking Equipment & Supplies

Many home bakers can start with equipment they already own, but you may want to upgrade or purchase additional tools as your business grows. Some essential tools include:

• A stand mixer for larger batches.
• Multiple baking pans and trays for different products.
• Measuring cups, mixing bowls, and spatulas.
• Packaging materials (boxes, bags, labels, and ribbons).

If you plan to specialize in decorated cakes, artisan bread, or custom cookies, you may also need specialty tools like piping bags, proofing baskets, or decorating supplies.

Training, Courses, or Groups

Even if you’re already a skilled baker, investing in education can help you grow faster. Consider joining:

• Baking business courses that teach pricing, marketing, and sales.
• Local or online baking groups for support and networking.
• Workshops or masterclasses to refine your skills and learn new techniques.

For more help starting and growing a home bakery, click here.

How to Keep Startup Costs Low

If you’re worried about costs, don’t stress! You can start small, reinvest profits, and upgrade as you grow. Here are a few ways to save money when launching your home bakery:

• Use existing kitchen tools before buying new ones.
• Start with a small, streamlined menu to minimize ingredient costs.
• Purchase packaging and ingredients in bulk for better pricing.
• Look for used baking equipment at local sales or online marketplaces.

By keeping costs low and focusing on what truly matters, you can start your home bakery with minimal investment and grow at your own pace.

Why Every Home Bakery Needs a Business Plan

Starting a home bakery is exciting, but having a plan in place is what separates a hobby from a thriving business. A business plan isn’t just a document—it’s your roadmap to success, helping you stay organized, focused, and profitable from day one.

Why Write a Business Plan?

A well-thought-out plan helps you:

• Define your goals so you know exactly where you’re headed.
• Outline key steps for growth, from setup to sales.
• Make financial planning easier by estimating costs and pricing for profit.

There’s no wrong way to write a business plan. It doesn’t have to be complicated—just think about what your bakery will look like in the future and how you plan to get there.

What to Include in Your Business Plan

To keep it simple, your plan should cover:

• Your target customers – Who will buy your baked goods?
• Your menu & pricing – What will you sell, and how will you price it?
• Startup costs & expected profits – How much will it take to launch?
• Marketing strategy – How will you attract and keep customers?

Planning Now Leads to Success Later

Taking the time to create a solid business plan will save you time, money, and stress as you grow. It helps you stay on track, make smart decisions, and scale your bakery at the right pace.

The sooner you start planning, the sooner you can turn your passion into a profitable home bakery!

Understand Your Target Market and Do Market Research

Before you start baking, take time to understand who your customers are and what they want. Researching your target market will help you create a menu that sells and ensure you're pricing your baked goods for profit.

Look at what other home bakeries, coffee shops, and grocery stores in your area are offering. What’s missing? What’s popular? By identifying gaps in the market, you can stand out and attract customers faster.

How Should I Price My Home-Baked Goods?

Don't guess your prices! Pricing is one of the most critical parts of running a profitable bakery.

Steps to pricing your baked goods:

1. Calculate ingredient costs (ingredients, packaging, labels)
2. Factor in labor costs (your time)
3. Include overhead expenses (farmers’ market fees, business software, delivery mileage)
4. Mark up prices for profit (most bakers use a 30–50% markup)

How to Calculate Ingredient Costs – To price correctly, break down each recipe by ingredient and calculate how much each batch costs. Don’t forget to include packaging, labels, and delivery expenses. Many bakers use pricing calculators to simplify this process.

Read more: How to Price Home-Baked Goods for Profit.

Profit Margins: Make Sure You’re Charging Enough

Pricing your baked goods correctly is key to making a profit. Many home bakers underprice their items because they don’t include all their costs.

Make sure your pricing includes:

• Ingredient costs (buying in bulk can save money!)
• Overhead expenses (packaging, electricity, marketing, and tools)
• Your time (don’t forget to pay yourself for your hard work!)

A healthy profit margin ensures that your home-based bakery business is sustainable and rewarding!

Where Can I Sell My Home-Baked Goods?

Common places to sell:

• Facebook – Personal profile, business page, groups, or Marketplace
• Instagram – Use local hashtags to attract buyers
• Farmer’s Markets – Find high-traffic locations
• Vendor Events – Seasonal markets around holidays
• Home Pop-Ups – Invite locals for a pick-up event
• Delivery Services – Expand your reach with delivery options

How Much Money Can I Make Selling Home-Baked Goods?

Home bakers typically make between $200–$1,500 per week.

• Part-time: Selling a few items weekly = around $200 per week
• Full-time: Regular customers & consistent baking = around $1,500 per week

Factors That Affect Your Earnings

Your income depends on your pricing, marketing, and menu selection. Offering specialty items (like gluten-free or custom cakes) can increase your profit, while selling in multiple places (online, markets, local businesses) helps boost sales.

It takes time to build a customer base, but finding a niche can help you increase sales faster.

Local Businesses Can Help You Grow Faster

A great way to expand your bakery is by partnering with local businesses. Many coffee shops, grocery stores, and food trucks love offering fresh baked goods from local bakers.

Consider reaching out to coffee shops to see if they’d like to stock your muffins or scones. You could also check with wholesale bakeries to see if they need specialty items like artisanal bread or cookie cakes.

Building these relationships can lead to consistent, repeat orders, giving your bakery a steady income stream.

How Do I Get More Customers for My Home Bakery?

Attracting customers is one of the most important parts of running a successful home bakery. You can bake the most delicious treats, but if people don’t know you exist, they can’t buy from you!

The good news? There are plenty of ways to find and connect with your ideal customers, both in person and online.

In-Person Events: Sell Where Your Customers Already Are

One of the fastest ways to gain exposure and build trust is by selling your baked goods face-to-face at local events. These opportunities allow customers to see, smell, and taste your treats before purchasing.

Here are some great in-person selling options:

Farmers’ Markets

Selling at a farmers’ market puts you in front of a steady stream of customers who already love supporting local businesses. To get started:

•  Research farmers’ markets in your area and check vendor requirements.
•  Start with a simple, focused menu (such as cookies, muffins, or bread) that’s easy to transport and serve.
•  Offer samples (if allowed) to attract more people to your booth.
• Have clear pricing, business cards, and a way to collect email signups for future orders.

Vendor Events & Craft Fairs

Seasonal vendor markets, craft fairs, and local holiday pop-ups are great opportunities to showcase your baked goods. These events attract highly engaged shoppers who are looking for unique, handmade products.

Festivals & Community Events

Large local events, such as town festivals, parades, and holiday celebrations, can bring hundreds or even thousands of potential customers your way. To make the most of these events:

•  Plan ahead—vendor spots fill up fast!
•  Ask about estimated attendance to forecast how much to bring.
•  Bring a portable sign with your bakery’s name and social media info.

 Home Pop-Up Shops

If permitted in your area, you can host a pop-up sale from home or collaborate with another local business (such as a boutique or coffee shop) to set up a temporary selling space. These work well for:

• Holiday specials (Thanksgiving pies, Christmas cookies, etc.)
• Flash sales (limited-time offers that create urgency)
• Seasonal flavors and exclusive items

Online Marketing: Reach More Customers Without Leaving Your Kitchen

In today’s digital world, having an online presence is just as important as selling in person. With the right online marketing strategy, you can attract new customers, increase pre-orders, and grow a loyal following.

Facebook & Instagram: Use Social Media to Build a Following

Your social media accounts should act as your digital storefront, showcasing your baked goods and making it easy for customers to place orders.

Here’s how to use social media effectively:

1. Post regularly – Share pictures of your baked goods, behind-the-scenes videos, and customer testimonials.
2. Use local hashtags – Example: #HomeBakeryDallas, #ChicagoBakes, #LocalTreats
3. Engage with followers – Reply to comments, answer questions, and build relationships.
4. Run promotions & giveaways – Encourage customers to tag friends and share your page.!

How to Get More Customers (Even Faster!)

• Offer Discounts for First-Time Customers – A small discount can encourage new buyers to give your bakery a try.
• Start a Referral Program – Give customers an incentive to refer their friends (e.g., “Refer a friend and get 10% off your next order!”).
• Collect Emails & Build a Customer List – Send special offers, seasonal menus, and reminders about upcoming events.
• Ask for Reviews & Testimonials – Word-of-mouth marketing is powerful—encourage happy customers to leave a review!

The more visibility you have—both online and in person—the faster your home bakery will grow!

Your Social Media Presence Matters More Than You Think

If you’re not using social media platforms like Instagram and Facebook to promote your bakery, you’re missing out on free marketing!

Start by setting up social media accounts for your business. Share behind-the-scenes photos, customer reviews, and special promotions. The more you post, the easier it is for people to find you through search engines and local hashtags.

If you’re feeling stuck, start small! Just one post a day can build brand awareness and attract new customers over time.

Content Ideas for Bakers – Not sure what to post? Try sharing:

• Behind-the-scenes clips of baking prep.
• Customer testimonials and before/after cake photos.
• Quick baking tips that make life easier.
• Holiday or seasonal specials to encourage pre-orders.

How Should I Accept Payments?

Choosing the right payment methods is essential for making the buying process easy and convenient for your customers. The more options you offer, the smoother the transaction process will be—leading to more sales and repeat customers.

Here are the most common payment methods for home bakeries:

Payment Options:

• Cash – Always a great option because there are no transaction fees and it’s simple to track. Keep small bills and a cash box handy for in-person sales.
•  Digital Payments – Apps like Venmo, PayPal, and CashApp allow customers to pay quickly from their phones. These services often charge small transaction fees, but they’re convenient and widely used.
• Credit Cards – Accepting credit and debit card payments makes purchasing easier for customers who don’t carry cash. You’ll need a merchant account or a mobile payment processor like Square or Stripe to handle transactions. These services charge a small fee per transaction but are worth it for higher sales potential.

Example Payment Methods Based on How You Sell:

In-Person Sales – Cash, credit card (using a mobile reader like Square), and digital payments (Venmo, PayPal).

Custom Orders – Use invoicing apps like Baksey or Square to send professional invoices and track payments.

Pre-Orders Online – Set up a simple online ordering system using Hotplate or Baksey for digital checkout.

💡 Pro Tip: Always have a clear refund and cancellation policy in place, and make sure customers know how and when to pay to keep transactions smooth and stress-free!

Offering Samples Can Attract More Customers

Thinking about offering free samples at local events or markets? It’s a great way to introduce your products to potential customers!

Here’s how to do it the right way:

• Offer bite-sized samples so you don’t waste too much product.
• Hand out business cards so people can find you later.
• Pair samples with a special discount or a free guide to encourage purchases.

Letting people taste your baking builds trust and often leads to future orders!

 Why Now Is the Perfect Time to Start a Home Bakery

There has never been a better time to start your own baking business!

• Low start-up costs
• Flexibility—part-time or full-time
• Endless ways to sell and grow your business

Take the time to:

• Learn your state’s cottage food laws
• Obtain the necessary licenses
• Price your baked goods for profit
• Find a niche that customers love
• Market yourself both in-person & online

The best part? You get to be your own boss and do what you love!

What baked goods are you planning to sell in your home bakery? Drop a comment below!