How To Start A Home Baking Business In The UK

Starting a home baking business in the UK is an exciting opportunity to turn your passion for baking into a profitable venture. However, it requires careful planning and adherence to food safety regulations to ensure success. Whether you're dreaming of selling delicious cakes, cookies, or artisanal bread, it's important to understand the key steps involved, from registering your business with the local council to ensuring your kitchen meets hygiene standards. The checklist and guide below provide a summary of what you need to know to launch your home baking business, from legal requirements, marketing strategies, to tips for building a loyal customer base.

1. Register Your Business

• You need to choose if you want to be a sole trader, partnership, or limited company.

• Register with HMRC: If you're a sole trader or in a partnership, you need to register with HMRC for self-assessment to pay taxes. Limited companies need to register with Companies House.

2. Understand Food Hygiene Regulations

• Register with Your Local Authority: You must register your food business with your local environmental health department at least 28 days before opening.

• Food Hygiene Rating: After registration, an environmental health officer will inspect your premises to give a hygiene rating.

• Food Hygiene Training: Obtain a Level 2 Food Safety and Hygiene for Catering certificate. While not legally required, it's strongly recommended to demonstrate compliance with food safety laws.

• HACCP: This is what the EHO’s are very particular about.  You have to make sure your paper work is up to date. 
  
  I’ve built a really good relationship with my EHO, when we were starting our Patisserie, any questions we had we spoke to our contact at the department, so when it was time for inspection we had no issues.  I did the same when I decided to do things again from home, any questions I have I contact the EHO.  It’s good to have a good working relationship with your EHO.
  
  I did my Level 2 hygiene certificate with a company called High Speed Training. 
  Allergen training is offered by most local councils for free.  Contact your local council to get all the information.

3. Set Up Your Kitchen

• Meet Hygiene Standards: Ensure your kitchen meets food hygiene standards, including cleanliness, pest control, and proper food storage.

• Separate Business and Personal Use: If possible, have separate utensils, equipment, and storage for your baking business.  Chopping boards you will need to get the coloured ones for example for cakes the white and the green are the ones I used for pastry.

4. Labelling and Packaging

• Comply with Food Labelling Laws: Your products must be correctly labelled with ingredients, allergens, shelf life, and your business name and address. You must also comply with Natasha's Law if you supply pre-packed foods.

• Allergen Information: Clearly list any allergens in your products. This is mandatory under UK law.

5. Insurance

• Public Liability Insurance: This covers you if a customer falls ill or has an accident because of your products.

• Product Liability Insurance: Covers any legal fees or compensation claims if your product harms a customer.

• Home Insurance: Check that your home insurance covers you for running a business from home. You may need to upgrade or adjust your policy.

6. Health and Safety

• Health and Safety Policy: While small businesses with fewer than five employees don’t need a written policy, you should still ensure that you follow health and safety laws to protect yourself and your customers.

• Risk Assessment: Conduct a risk assessment of your premises and baking process to identify potential hazards and mitigate them.
  This is if they are coming to you to collect the cakes.

7. Taxes

• Keep Accurate Financial Records: Track all income and expenses to manage your taxes effectively. You might consider using accounting software.

• VAT Registration: If your turnover exceeds £85,000 in a 12-month period, you must register for VAT.
  You will need to pen up a business bank account.

8. Marketing and Branding

• Create a Brand: Develop a unique brand identity, including a name, maybe a logo too.

• Social Media and Website: Build an online presence through social media and a professional website to attract customers and take orders.  Having a website with set priced cakes can make your life a lot easier.  Bespoke cakes can take a lot of back and forth.  I did that mistake when I started out.  I find having things priced and maybe not too bespoke - can make a transaction much faster and the customer places the order.  This all depends on what type of offering you will have.

9. Pricing and Menu Development

• Cost Analysis: this is so important - read my 5 Step Framework For Pricing Cakes & Desserts which is available for free on my Freebies page.  More often than not bakers undercharge and don’t end up making money.

• Develop a Menu: Create a range of products that highlight your strengths and cater to your target market.

10. Networking and Compliance

• 10 Simple Strategies To Help Cake Businesses Attract More Customers: Go to my Freebies page to download your copy.

• Stay Compliant: Regularly review and update your knowledge of food regulations, tax laws, and other legal requirements to ensure ongoing compliance.
  
  

  USEFUL LINKS:
  Please join my Facebook Group: https://www.facebook.com/groups/homebakingbusinessadvice
  It’s a group where home baking businesses can share information, ask questions and talk about anything baking related.
  Food Standards Agency: https://www.food.gov.uk/business-guidance/starting-a-food-business-from-your-home
  Companies House: Register your company. https://www.great.gov.uk/international/content/investment/how-we-can-help/register-a-company-in-the-uk/
  Business Type: Choosing the type of business you want to set up Sole Trader, Limited Company or Partnership. You can read all about the three different set ups here: https://www.gov.uk/set-up-business
  Selling Goods Online: https://www.gov.uk/online-and-distance-selling-for-businesses
  HMRC: https://www.gov.uk/government/organisations/hm-revenue-customs
  HACCP: https://www.food.gov.uk/business-guidance/hazard-analysis-and-critical-control-point-haccp