A bakery can start small — from a home kitchen under cottage food laws, at farmers' markets, or wholesale to cafés — before committing to a storefront. Early mornings and production labour are the main operational challenges; ingredient cost and waste control decide margin.
1. Choose the model. Home-based cottage bakery, market stall, wholesale production, retail storefront, or a mix.
2. Check cottage food and health rules. Cottage food laws allow some home baking for direct sale; retail and wholesale need a licensed kitchen.
3. Develop and cost the product line. Cost each recipe per unit including packaging, and price accordingly.
4. Equipment and space. Ovens, mixers, proofers and refrigeration are the main purchases. Shared kitchens let you test before leasing.
5. Licences and insurance. Business licence, health permit, food handler certification and product liability insurance.
6. Build sales channels. Markets, local cafés, online pre-orders and custom cakes before or alongside a storefront.
7. Write the business plan. A plan models production capacity, channel mix and labour against sales.
Revenue comes from walk-in retail, custom orders (cakes, events), and wholesale to cafés, restaurants and grocers. Wholesale adds volume at lower margin per unit; custom orders carry the highest prices. Production labour starts hours before opening, so labour scheduling against demand is the key cost lever.
Can I start a bakery from home?
Often yes, under your state's cottage food law, within limits on products and sales channels.
Is wholesale or retail more profitable for a bakery?
Retail and custom orders carry higher margin per unit; wholesale brings volume and steadier orders.
Do I need a business plan for a bakery?
If you're leasing a space or financing equipment, yes.