Starting a cupcake business from home can be super easy with this guide!
One of the most interesting and creative businesses to start from home is cupcake making. Everyone loves cupcakes! This is a fantastic small business to do right in the kitchen and is perfect for those who love baking.
If you love baking and cake decorating, keep reading and find out everything there is to know about how to start a cupcake making business from home.
Benefits of starting a business from home
When you start making cupcakes from home, it can have many advantages over working for another baker or trying to start a brick business. There are an incredible amount of creative and cost-effective benefits too.
Here are some of the biggest benefits you will discover when starting your own cupcake from home business.
1. You can stay at home with your children
Whether you have a family or younger kids, you don’t need to look for babysitting when you bake and decorate cupcakes from home. It also cuts down on your commuting to work (which also means less wear and tear on your car).
As your business grows, you might consider expanding your showcase with a professional kitchen. When you’re just starting out, it’s nice to do it right from home.
2. Set your clock
Another benefit of working from home is the ability to set the clock. You can bake the muffins early in the morning and then decorate them overnight, or vice versa. Do what works best with your schedule and lifestyle.
If your weekdays are filled with other things or responsibilities, you can work on weekends to catch up, which you can’t do when you’re working for someone else.
3. Grow at your own pace
When you work from home, you can set your own schedule and grow your business at your own pace. If you don’t have time to make wedding cupcakes, don’t take this job. Then, when you are ready to grow, you can control this trajectory.
You cannot beat the sense of control you have when you start your business.
4. More room for creativity
Of course, when you are your own boss, you have complete creative control. Starting a business away from home means you can choose from everything from logo to decoration techniques. This is one of the best benefits of starting your own business, especially if you are a creative person.
5. Less overhead
This advantage is pretty obvious, but it’s also one of the biggest. When you work away from home, your overhead costs are automatically reduced. You don’t need to pay for office rent, electricity in a second location, or insurance in another building. You can use these savings to invest more money in your business.
6. More tax breaks
Finally, doing business from home means you get more tax breaks as well. You can claim a home office deduction which other business owners cannot!
Vital Legal Steps to Starting a Home Business
Are you ready to start your cupcake making business? If dreams of frosting and splashing are dancing in your head, these are the steps you need to follow as they are vital and will help your business succeed.
1. Determine the structure of your business
First, you need to decide what your business structure will be!
You want to set it up like:
- Sole ownership
- Ltd
- partnership
- Corporation?
These decisions can be complex and confusing for anyone, so be sure to discuss all possible options with a tax professional or a lawyer familiar with business structures. This decision can also affect how you pay yourself, whether you have contractors or employees, and how you file taxes.
2. Get tax numbers
Once you decide which business structure you intend to follow, you need to obtain a federal employer identification number (EIN). You will use this when filing your tax return and providing information about your company.
If you are a sole proprietor (which most cupcake businesses are), you can use your EIN or your Social Security number.
3. Get all your licenses
The next step is to make sure you have all the necessary licenses so that you can legally sell baked goods from home. The best way to find this information is by talking to your city’s business development department. They will tell you about all the licensing requirements for your region.
You may need several different types of licenses:
- Bakery license
- Registered Business Certificate
- Trade license (if you sell goods that you do not manufacture)
4. Observe local zoning laws.
There are also local zoning laws that you must follow when opening a bakery in your home. Ask your local zoning office how many people you can have in your home before it needs to be zoned as a business. The rules for single family homes are different from those for small businesses.
If you’re just going to bake and decorate cupcakes at home and customers won’t shop or buy them there, talk to your zoning department.
5. Insure your business
Finally, you will also need to find insurance for your business. Talk to your local insurance agent and talk to him about the best types and amounts. You can choose between liability insurance and a business owner’s policy.
This step is optional. It happens, and insurance will save you from serious financial losses!
Starting a Business at Home: Understanding Business Taxes
Business taxes can be quite complex. When you start your new business, find a trusted accountant to guide you through these steps.
Here are some of my top home business tax tips!
Home office deduction
You will be able to deduct a portion of your home electricity bill and other things you use for your business. Keep track of how many miles you spend when shopping for cupcake items or delivering an order.
These are all deductions from your annual taxes!
Establish proper accounting from the start
When it comes to deductions, it’s best to track all potential deductions and receipts from day one. Also try to keep track of all your business expenses in a separate folder so that you can record taxes later.
Use reliable billing and accounting software such as Quickbooks or Freshbooks. This will help you keep track of your expenses and income.
Then, during tax time, you can easily print reports for your accountant.
Manage virtual assistants and employees
When it comes to small business taxes, you will need to find a way to keep track of how much you pay to your virtual assistants and whatever employees you have. You will also need to make sure you have all the required paperwork for them, such as the W-9.
Talk to your accountant about the forms you need.
Things to do before starting a cupcake from home business
So now you have the structure of your business and you know what the next legal steps you need to take. Are you ready to grow your business?
Start making cupcakes from home the right way! Let’s take a look at every step you need to take to make this dream a reality.
1. Prove your decorating skills
First, remember the old saying, “Practice leads to perfection!” Practice your cupcake decorating skills until they are nearly perfect. You want them to sell and word of mouth will always be the most effective marketing method. When people admire your cupcakes, they will tell their friends about it.
Don’t settle for “good enough.” Make your cupcakes stand out from the competition!
If you can, create a decorating technique or recipe that you won’t find anywhere else. This will make it easier to sell your cupcakes.
2. Select a company name for the cupcakes.
Next, you need to choose a name. This is the tricky part because the name of your cupcake business should be simple enough to be remembered, yet unique enough that it hasn’t been used yet.
Small Business Administration has tons of tips to help you choose a name. After you think you have a name, search the Trademark Office and see if another company already has that name.
3. Work on your brand
Once you’ve chosen a name, you’re ready to solidify your marketing, design your logo, and choose your business colors. Do you want your business to resemble a French bakery or farmhouse style?
All of these small design decisions will affect the way you design your website, social media feeds, and business cards. Everything in your marketing strategy needs to be interconnected.
4. Decide on the design and names of the cupcakes.
It’s time for the funnest! Once you’ve decided on your company’s name and brand, you can start creating designs and cupcake names. You can get creative or choose names that clearly describe the fragrances. The choice is yours.
Write down all your flavor pairing ideas in a spreadsheet. This way, you can offer several different varieties at the same time and switch between different flavors depending on the season.
This is also the perfect time to decide if you want to offer gluten-free or vegan options as it will take more effort.
5. Determine how you will advertise
When you’re ready to tell the world – or at least your city – about your cupcakes, decide how you’re going to advertise. Social media marketing is a fantastic and inexpensive option. Read our guide to paid and organic social media marketing to understand the difference and make smart decisions.
You can also set up booths and advertise your business at local events such as wedding shows and craft fairs.
Set an ad budget and stick to it!
6. Calculating and setting prices for muffins
Finally, decide how much you will pay for your cupcakes. These are all part of your business budget. There are many factors involved in this decision.
- How much do your consumables cost?
- How much are people willing to pay?
You want to make enough money to make a profit, but you also want to be competitive. Bluprint has a whole article on how to set prices for muffins. Highly recommend!
Starting a business from home: final thoughts
Taking the step to start a cupcake selling business from home has many benefits and is a very enjoyable idea.
This is something you can set up and run with your kids. A: By starting a business from home, you reduce overhead costs, which is money right in your pocket. I hope this guide helps you be a little more prepared when you start your new business.
Tanya Griffis is a freelance writer and blogger with experience in human resources, hiring and hiring. She has been featured on CNN as well as dozens of other blogs and online publications, allowing her to make good use of her journalism degree. She loves to use a combination of creativity and business savvy to help businesses succeed, including her own blog Run to Radiance, which details her home and craft adventures. She is also the mother of a beautiful girl who keeps both Tanya and her husband in suspense.
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