All You Need to Know About Starting a Cake Business

It can be challenging to start a cake business from scratch but it is not impossible. Well, if you are a baker yourself or if you like the idea of baking cakes as a business, we are with you. While it may look easy, having a cake business takes a lot more than just baking. This guide will tell you all that you need to know about the technicalities of starting a cake business. So, if you are planning to have one, read now.

All You Need to Know About Starting a Cake Business

Create a Business Plan

Every business requires proper planning. A plan works as your guide to launch your business, and to take your start up through the main goals. When you have a proper business plan drafted, it helps you stay updated with your goals and progress. You can also present your business plan to potential partners and investors so that they can understand your start up and its vision in a better way. You plan should have a brief overview of your entire plan, vision, mission, ownership, and corporate goals. It should discuss your offerings, about your service, product, a market analysis by you, assessment of your competitors, promotional strategies, about your team, operations and financial plans, and any other important aspects that come to your mind.

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Brainstorm a Name

Your start up’s name becomes your business’s identity, and eventually becomes a brand later. People are often careless with the names of their businesses, while it should be one of the most important aspects of their business. Your business’s name reflects all that you offer, and most of the times when it is not well thought-out it becomes misleading. Well, there are TV shows such as Shark Tank that you can watch to understand this point, as it has happened a lot that contestants had perfect business plans but they were suggested to rebrand due to their misleading names. Having a cake business it might not be hard to come up with a name but if you plan on adding more variety of items in the future, you need to have a name that is not specific. Well, for a good business name we would suggest you to keep the name short, catchy, that is also easy to spell, is relevant to your services, and should also allow expansion as we discussed.

Register Your Business and Get Permits

When you have come up with a good business name and plan, it is time now to register your business and make it official. Well, in this case, your location matters in terms of taxes, legal requirements, and revenue, and if you plan on expanding to more than one states, try registering your business in a state that allows more perks in terms of cake businesses. After you have registered, you will also need to apply for license and permits from local state, and the federal governments. One of the approvals you will be needing is an FDA approval under which you get the permit for most of the things. Well, these legal procedures are not to be taken lightly.

Choose a Legal Structure

When it comes to legal structure of a business, you need to choose wisely because your personal liability, registration, and taxes somehow depend on it. Some of the main options for a legal structure are, sole proprietorship which is good for small business as there’s no distinction between company and the owner. Partnership is similar to proprietorship; there are just more than one owners. Limited Liability Company don’t require the owner/owners to not be personally liable for debts. Another type of legal structures are Corporation and S Corp. In Corporation, owners take profit through shareholders, and dividends, and both the corporation and dividends pay taxes, which why it is called double taxation, as the business is a distinct legal entity. An S Corp is different as it can be either a corporation, or an LLC, as the income is passed directly the shareholders, who pay taxes on their shares. Well, the best legal structure for start up owners is LLC as it protects liability, and pass-through taxation while being convenient at the same time. To learn more about it we suggest researching on LLC on the web. As a start up owner you will be needing good internet more than ever, and for that we suggest getting one of TDS internet packages, as they are affordable and the internet is fast and reliable.

Well, only after you have completed this step, you will be able to apply for taxes.

Fund Your Business

One of the most important things before starting your business is being able to finance it. If you have an investment of your own, it is the best option, but if not, you can get it from family and friends these are the two best options. Well, there are several other ways to be able to finance your start up, and some of which are, bank loans, SBA Guaranteed loans, government grants, Angel investors, and crowdfunding.4

Open a Business Bank Account

When your business is registered, and working, in order to keep your finances organized, it is important to have a separate business bank account. Most banks have different bank accounts tailored for specifically business owners, and when you are a sole owner of your business, it is important to have one in order to be able to track your finances, profit, pay taxes, and much more.

Get Insurance

Well, business insurance should not be overlooked, as bad times don’t come invited. Some of the common business insurances that you can choose are, general liability, business property, Equipment Breakdown Insurance, Worker’s Compensation, Property, Commercial auto, Professional liability, and Business Owner’s policy BOP. All of these are important at some level and you can have these depending on your current requirements.

Build Your Team

Now comes time for action. For a good cake business, the most important aspects of your business will be your chefs, sales people, marketing team, and a manager. If not initially you will need to build your entire team.


Well, after your little team is sorted, build your marketing plan, and market your launch. Before your launch, develop your website, menu, services, and start marketing.

Well, the guidelines mentioned above are all you need to know about starting and running your cake business. So, if you are planning to start your business, we hope this article was of help to you. Good luck!

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