So You’d Like to Start a Home-based Baking Business: Now What?
Martha Stewart famously entered the food service business with her basement-based catering company in the 1970s – but it takes hard work and lots of homework to make it that far. While a home-based baking business comes with many perks, like the flexibility of working from home and a lower-risk entry into the competitive food service space at your own pace, it’s important to understand the rules and regulations around the production of food for public consumption in an in-home environment before you get started.
While food production from your home is heavily regulated, it’s far from impossible. If your passion involves turning your baking skills into a home-based business, here’s what you need to know to succeed.
Laws, Permits, and Licenses
While there are several steps you need to take to ensure that your home-based baking business is considered legal, laws can vary from state to state, so be sure to do your homework regarding what is legal in your area.
First, what do you want to call your business? Will you go for something unique, or for a more generic name like “Sarah’s Bakery” or “Corner Café?” The later are generic enough that they aren’t protected, but that can be a double-edged sword – while another business with a generic name like yours cannot take legal action against you, it also means that your business isn’t protected if someone wants to use the same name. If you want to find out if a name is already registered, you can check the Trademark Electronic Search System. There is also information available on sba.gov about registering your DBA (doing business as) name and other helpful steps like obtaining a tax ID number and securing your permits and licenses.
Second, keep in mind that even if you’re starting your business from home, your business is still subject to license and permit laws. To get started, you can select your state from this list to find out which licenses and/or permits you will need, as well as the information to guide you through the application process. You’ll also want to visit your city or county government website to secure a general business license, which legally entitles you to operate your business and typically includes a small fee. Some city and county zoning and planning agencies also require home-based businesses to secure a home occupation permit. If a permit is not required in your city, the zoning office can tell you whether or not your neighborhood is zoned for a home-based baking business. (Click here for more helpful information on sba.gov about zoning laws for your home-based business.) You may also need to check with your homeowners association, as it may have rules that restrict the type of business activities you can conduct within your home.
Third, let’s talk taxes. If you sell your baked goods in a state that charges a sales tax, you may need to apply for a tax permit or otherwise register with the state revenue agency. If you need more info on sales taxes for small business owners, check out this blog post.
Health, Safety, and a Fully-equipped Kitchen
In addition to business licenses and permits, you may also need a permit or an inspection from a local fire department since your business will likely require the use of flammable materials. Some communities also monitor air and water pollution by businesses, so check with your state EPA to see if these rules apply to you.
Your county government is typically responsible for issuing your health department permit, especially because your baking business involves selling food to the public or to other businesses. Your state may require additional permits for food service or food preparation.
Once you’ve locked down the business side of things, there are health codes and regulations to consider regarding your kitchen space.
While this isn't necessarily your first step as a home-based baker, your kitchen is something you need to consider before you move forward with your new venture. If you already know what product(s) you intend to produce, check to ensure that you have the right equipment with which to adequately prepare, cook, store, and transport your baked goods.
If your kitchen/equipment situation isn’t what you need it to be, you may want to consider investing in a separate kitchen and/or additional equipment to scale your business. Also keep in mind that commercial kitchens and local restaurants may be available to help, especially if those businesses don’t hold extended hours, as you might be able to rent kitchen space during odd hours. It may seem like a larger investment, but baking in a kitchen that is already health department-approved will also save you time and money, and it gives you the flexibility to bake when your orders come in and stay home when there aren’t orders to fulfill.
Some states do forbid the use of residential kitchens for commercial food production, and some local governments also restrict at-home commercial food production, so be sure to check out local zoning laws and contact your local Public Health Department before getting started.
If you do your homework, you can absolutely succeed in what can be a very rewarding segment of the home-based business market. Happy baking!
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Streamline Your Small Business’s Sales Strategy
Developing strong sales and customer loyalty can be a difficult, time-consuming endeavor. Without an effective strategy, even a promising company can fail. The task need not be overwhelming though; practice and most importantly, passion, will help you close more deals. Here are some resources to make your sales process as smooth as possible.
Embrace your inner salesperson
Most of us are not born sales people, but once you become familiar with the techniques, selling will become a natural part of owning a business. In “Expert Tips for Sales and Customer Loyalty,” an interview with SCORE mentor Steve Engelhardt, he explains how small business owners should treat each sale as an opportunity to gain the next sale and earn a loyal customer.
If you believe in your product and respect people, customers will appreciate your sincerity, and they might reward you with more business. Keeping customers satisfied leads to more sales.
Find your customer
Before you can create loyal customers, you must first find them. Did you know 39% of sales still originate from outbound marketing, such as telemarketing? Keep in mind that sales calls demand time, and not all leads become sales:
- Every 30 dials leads to 1 conversation
- Every 3 conversations lead to 1 appointment
- Every 3 appointments lead to 1 opportunity
The key to success is consistency and persistence. See this month’s SCORE infographic “B2B Sales Calls” to learn more about reliable sales techniques.
Update your sales methods
A growing trend of nontraditional sales techniques are hitting the streets. In the online workshop “Pavement-Pounding Strategies to Generate More Sales,” entrepreneur and SCORE Mentor P. Simon Mahler recommends going outside and meeting customers face to face. He offers unique ideas to stand out in today’s advertising-saturated world.
One approach uses the entire small business team not just a sales person. Employees wear shirts with the company logo and interact with neighbors. The shirts encourage brand recognition and team spirit. He suggests even handing out decals; you want to show how your small business is unique.
Mahler says no matter the method, your sales strategy should not revolve around closing the next deal but about nurturing and caring for those around you. Being helpful builds customer loyalty. Develop personal relationships, engage with the community, and sales will follow.
Each small business must determine the best sales plan based on their product or service and the size of their sales team. A SCORE mentor well-versed in your industry can help you strategize and ultimately gain more customers.
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Celebrate National Small Business Week with Us; Live-stream, In-Person and Online Using #DreamSmallBiz
There is no denying the positive influence small businesses have on our nation’s economy. During National Small Business Week we honor their hard work and contributions to our communities. We are kicking off the festivities with live events with SBA Administrator Maria Contreras-Sweet in five cities throughout the week. Can’t make it to an in-person event? You can watch the events live-streamed online at www.sba.gov/nsbw. While you watch, join the conversation and tweet in real-time using #DreamSmallBiz directly from the NSBW home page!
Additionally, we’re providing educational webinars to help your small business thrive. Webinars start this afternoon and run throughout the week. We’re kicking it off with our webinar on understanding the Fair Labor Standards Act (FLSA), which will not only help you learn to correctly classify employees as exempt, non-exempt, or as an independent contractor, but will also teach you how to know when and how you are required to pay employees – you can register for the webinar here. We also have a great webinar planned for this evening with Join Steve Strauss, USA Today Small Business columnist, and Jeff Biesman from YP, discussing the secrets to crafting a digital footprint.
There’s a lot going on this week, so we want to make sure you have all the key details! Visit www.sba.gov/nsbw today to explore the events taking place near you throughout the week. While you’re there, sign up with your email address and zip code to receive conference information and reminders.
We’ve also put together a handy social media guide to help your small business promote this week’s events and to join in on the ongoing conversation about National Small Business Week.
Small business owners and entrepreneurs are working every day to grow small businesses, create 21st century jobs, drive innovation, and increase America’s global competitiveness. We hope this week’s events and resources help your small business celebrate the contributions of America’s entrepreneurs and small businesses, and we hope you’ll help us spread the word about National Small Business Week!
To learn more about the United States Small Business Administration, please visit www.sba.gov.
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Whoever Said ‘Stick to the Plan’ Was Wrong
Making Plans and Sticking To Them — Or Not!
Come the start of the year, whether that's the traditional New Year's Day of January 1 or the anniversary of your business startup date, most of us want to make better plans — and stick to them. So what holds us back? Is it the plan itself? Do we lack the tools? Are we weak in discipline?
Or is NOT sticking to a plan, sometimes, the better answer?
Here's my take.
There is no value in sticking with a plan "just because."
There's great value in a careful business planning process that keeps your business alive, thriving, refreshing itself, and growing regularly. But not every plan meets those criteria. You can outgrow plans, whether they're for improving your life or enhancing your business.
If your plan doesn't take into account the volatile nature of the markets, finances, or other exterior factors, it may cause you to stagnate, or worse. You should be learning constantly; if you are, you'll be tweaking things constantly, too. Just remember a couple of keys to good planning as you go:
1. Good planning is measurable, concrete, and specific.
The old saying is, "The difference between a goal and a dream is a date." Specific, finite, measurable goals you can easily track make your progress easy to see, so don't hesitate to "drill down" when you need to. Big concepts are great, but they work better when they're reduced to solid numbers. You can't track a concept, but you CAN track pluses and minuses!
Make your plan big on trackable milestones: sales numbers, cash flow, appointments, prospects, products, patents … whatever you deal in, make sure you're dealing in reality.
And keep your plan lean. A lean business plan is just bullet points for strategy and tactics, plus concrete specific milestones and performance measurements, a list of assumptions, plus sales forecast, expense budget, and cash flow.
2. Good planning means frequent review and revise.
I worked for years with a plan-vs.-actual-reviews meeting on the third Thursday of every month, so we could close the books on the previous month. At every meeting, then, review your plan versus your actual results. Don't forget to challenge any assumptions that may be holding you back: when assumptions change, your plans need to change with them. If results are good, stay the course with minor tweaking. If results are bad, this is the time to analyze why and change your plan to correct problems.
3. What you do stick to is the planning process
Former president and military strategist Dwight Eisenhower had it right: “The plan is useless; but planning is essential.”
There's a difference between fluidity and a plan that seems to "slip through your fingers." Numbers, dates, deadlines, and real black-and-white data will help you avoid that slippage. Don’t stick to the plan, but do stick to a lean plan with regular review and revision as part of the process.
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4 Tips for Coming Up With New Product and Service Ideas
Innovation is what keeps our businesses refreshing and growing. By thinking up new products and/or services to offer, we can:
- Stay in step with evolving market demands and trends
- Keep pace with or get ahead of the competition
- Acquire new customers
- Sell more to existing customers by offering them new products they may need
Business ideas don’t necessarily just come to you like magic. However, there are things you can do to make the process more focused and deliberate.
On the other hand, if you are too rigid or too structured when it comes to developing new products, it may suppress your creative juices.
Instead, think of the process as “harnessing” your creativity.
Here are four tips for how to harness your creativity to come up with new products and services:
Apply The 15% Rule To An Old Idea
Some entrepreneurs feel that innovation means they must almost literally reinvent the wheel.
You don’t really need a completely new idea, though.
Instead, pick an existing idea and apply the 15% rule to it. The 15% rule simply means to set out to improve on something by 15%. Make an existing technology 15% smarter. Make your service 15% more customer friendly. Make a product 15% more efficient, or 15% less expensive with 15% more value. You get the idea.
And you don’t necessarily need to make it a thousand times better right out of the gate. Just strive to improve a modest amount on an existing idea, and then you can build on it over time. It just has to be different enough to seem like an improvement to buyers.
Amazon.com, for example, isn’t a grand idea; it’s an ecommerce store. However, the speed and efficiency with which it operates makes it a top retail outlet in the world. The breadth of selection and the intelligence that its technology brings to offering product selections are impressive. Amazon improved upon the retail model. It didn’t offer all of innovation in the beginning that it offers today -- it started out modestly. But it continued to improve over the course of years. Can you do the same?
Travel to Gain Ideas
Travel is one of the biggest self-teaching endeavors you can ever take. Leaving places you know well for completely different ones opens up your senses. It gets you paying attention to things around you. It makes you be more mindful because you are seeing, smelling, and hearing new things.
By experiencing new things and new places, you may come up with ideas you wouldn’t have thought of.
Now take those ideas and build on them. If you experience new foods and new tastes, does it give you ideas for new offerings in your restaurant or food business? If you see buildings of different styles or colors, could it trigger ideas for new clothing styles in your fashion or interior design business?
Whether you are a once-a-year tourist or a veteran traveler, chances are you’ll come back home with your head brimming with ideas.
Solve Your Own Needs
I can’t tell you how many entrepreneurs I’ve interviewed who said that they came up with the idea for their business because “we solved a need we had in our own business (or in my own life).”
As you go about your day, think about how to solve a nagging problem in your life or business. Then solve it.
That solution just might become your next product.
Use Group Brainstorming
Brainstorming is a technique whereby a group gets together and quickly comes up with many new ideas -- no matter how impractical or wacky they may seem. The goal is to encourage quantity -- not quality -- of ideas at first.
It’s important not to criticize an idea or point out all the flaws at first -- just get the ideas out there. The idea is to give free reign to your creativity for a period of time, long enough to develop a pool of ideas.
Then once you have some ideas on the table, you and your team can evaluate them and sort them out. The vast majority of ideas you come up with will be discarded. But you only need one for a successful new product.
Sometimes the mot amazing product breakthroughs come from the wackiest, most impractical ideas.
Of course, it takes more than ideas alone for a successful business or new product. But ideas are the starting point.
Ideas sometimes happen when you aren’t looking. Hopeful and ambitious entrepreneurs are always looking, though.
What new product or service idea will you think of now?
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Why You Should Hit The Pause Button Before You Buy That Franchise
If you’re seriously contemplating the purchase of a franchise, there may come a time in the process when you’ll need to consider stepping back for a bit.
I’ve found that sometimes (especially when making major life decisions) it’s wise to put things on pause.
That’s because you are too close to whatever it is you may be about to do. Being too close to a situation involving something big (like the purchase of a franchise business) may cause your decision-making skills to be affected in a negative way.
You are too close
Of course you’re “too close.” You’re probably so hyper focused on the franchise opportunity you’re investigating that you may be missing a few things that could be pretty obvious to an outsider, but not that obvious to you.
That’s why (at some point) it’s important to bounce your ideas off of people that you know and trust.
Tip: Don’t share your ideas – like on what franchise or franchises you’re looking at too early in the process because you don’t know enough about the franchises you’re interested in to ask for opinions or advice. It’s too easy to be deterred by wellmeaning friends, family members and “advisors” to begin with. Wait for the right time, like when you have a lot of facts and figures in front of you.
One more thing: Don’t ask for opinions and/or advice too late in the process. Because, if you’re at the point of no return-which is when you’ve convinced yourself without the shadow of a doubt that whatever opportunity you’re looking at is perfect for you, no one will be able to convince you otherwise.
Hitting the pause button
It’s when you hit the pause button…when you step back and take a little breather, that good things can happen. Things like possibly getting a better perspective about what you may be about to do from people who will give you honest feedback.
Now, you don’t have to try to find people that will shoot your ideas down. That’s not what I mean by finding people who will give you honest feedback. Feedback doesn’t automatically have to be negative. But, you do need to find people who may not tell you what you want to hear. It’s honest feedback you want.
Besides talking with friends and family members about your idea, I encourage you to find others, like people in the small business community who can give you valuable feedback. There may even be a few in your backyard.
Small Business Development Centers (SBDCs) have business counselors on staff who assist would-be small business owners with things like business planning, financial packaging and lending assistance. These centers are funded in part by the U.S. Small Business Administration. Go here to see the list of SBDC’s and contact one today. Their services are free.
Do you know any small business owners? If so, ask a couple of them to look at your idea.
Do you have any old college friends that are in financial services or the legal profession? They could end up becoming great resources for you to share your plans with.
Taking a step back – hitting the pause button before you buy that franchise you’ve been investigating could turn out to be one of the wisest business decisions you ever make.
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Small Business Development Centers – Get Help Starting and Growing Your Business from Your Local SBDC
Need help getting your business off the ground? Baffled by the steps involved? Looking to break into new markets or take advantage of the latest in social, web and mobile marketing? Look no further than your local Small Business Development Center.
Small Business Development Centers (SBDCs) have been around for 35 years. With nearly 1,000 locations across the country, each provides small businesses and entrepreneurs with access to the essential resources to start and grow. From in-person consulting and training to a mobile app webinar series that can help budding entrepreneurs plan their escape from the nine to five – during their commute!
For small businesses that seek out the services of their local SBDC, the payoff is significant:
- SBDC clients generate $100,000 in sales every four minutes and create a new job every 7 minutes!
- Over 58 percent of pre-venture SBDC clients start new businesses (that’s a new business every 33 minutes)!
So if you thought you knew everything about what your local SBDC has to offer, think again! Here’s a glimpse of the valuable services they provide:
FREE face-to-face business consulting
Small business owners and aspiring entrepreneurs can go to their local SBDCs for FREE face-to-face business consulting and at-cost training on topics including:
- Writing business plans
- Accessing capital
- Managing your taxes
- Regulatory compliance
- Federal contracting
- Technology development
- International trade
Start your dream business – mobile apps make learning a breeze
If you’re looking to start your own business but are tied down by your current job, SBDCs are making it easier to make the transition to entrepreneurship with a business-on-demand mobile app webinar series! Developed by Pennsylvania SBDC, but available to anyone, the First Step: Starting a Business webinar series walks aspiring entrepreneurs through the process of starting a new business venture and can be viewed on all mobile devices. Each webinar lasts about 15 minutes and covers topics such as how to legally structure your business, writing a business plan, funding options, and selling advice. Other SBDCs around the country are also offering similar type mobile-app-ready entrepreneur training.
Just imagine, one day you could literally go into work and tell your boss you quit, because you’ve got your business started while you’ve been commuting back and forth!
Get help with your next web or IT project
Starting any new IT or web project is a costly and complex endeavor. To help small businesses get the best return on their investment, Delaware SBDC has established Web-IT-Match-Coach program called Digital Compass. The program provides comprehensive guidance to small business clients on their next web or IT project. Advisors work with the business to identify and diagnose the business problems, and then help identify and interview solution providers to get the best match. They also coach both the business and the Web/IT provider during the course of the project to achieve the best solution to grow the business.
Optimize your web marketing
In addition to one-off training sessions, some SBDCs are recognizing the need for more in-depth programs that help small businesses harness the potential of technology to boost sales.
The Georgia SBDC, for example, runs a Digital Marketing Boot Camp designed for small business owners who want to learn how to integrate technology and marketing with tactics like search engine optimization, social media, mobile marketing, paid online advertising and content marketing.
Access PCs, software and more
Some SBDCs also provide access to business software and other resources. Loudoun SBDC in Virginia, for example, features an Entrepreneurial Resource Center featuring computer and printer access so that clients can conduct market research, create business plans, manage their finances and more. Business guides, videos, books and publications are also freely available and counselors are available to assist.
Find your local SBDC
Want to know more? Find out what your local Small Business Development Center can do for you. Here’s a complete list of SBDCs by state.
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