Baking is a romantic pastime: showing love through food, boundless creativity and the ability to sell treats that a mainstream baker wouldn’t. Sounds like plenty of reason to start a bakery business.
You can put about as much imagination into your business model as you can into your bakes, so planning is essential. We’re here to help you get an idea of how to start up your bakery.
Read through for the full guide or go to your preferred section.
Why start a baking business?
Pros and cons
What skills, qualifications and insurance do I need?
Start-up costs for a bakery
Shaping your bakery
Start small
How do I market a baking business?
Why start a baking business?
Having a baking business can be incredibly liberating and rewarding. With the popularity of The Great British Bake Off and its various spin-offs, bakery businesses are booming, both on the supply and demand side.
“Baking is one of the few industries where passion and commercial opportunity genuinely overlap,” said Rachel Munro from allergen free bakery, The Rebel Baker. “Baking isn’t just about food, it’s about comfort, connection, culture and community. If you love creating, problem solving, and building something tangible, it can be incredibly rewarding.
“It’s also a space where niche markets (free-from, plant-based, functional foods, premium treats, ethical sourcing) allow small brands to compete with big players if they’re smart, focused and brave with their positioning.”
Munro was realistic about the business she was going to build: “I built The Rebel Baker by solving a real problem first, not by chasing a ‘nice idea’. I saw gaps in the free-from market, understood the operational challenges, and built the business backwards from scalability rather than aesthetics.
“It’s been self-funded, built through graft, risk, long days, resilience, and a lot of uncomfortable decisions. The brand, the product and the structure were designed to scale from day one.”
Starting a bakery doesn’t have to be about growth, it could be about being part of the community. “Running Bradwall Bakehouse has been one of the most rewarding journeys of my life,” said Fiona Barlow, co-founder of Bradwall Breadhouse. “At its heart, this business has always been about people. From our team to our customers, everything we do starts and ends with relationships. Seeing our bread bring people together, whether that’s families sharing a loaf at home or customers gathering in The Breadhouse, is incredibly special.”
Pros and cons
It’s easy to get caught up in the daydream of running a bakery business. That why we’re going to give you the reality through lived experience.
Pros
• Full creative control over product, brand and direction • Ability to move fast, pivot quickly and spot opportunities early • Strong customer loyalty when people connect with your story • High demand if you solve a real problem
“Starting a baking business is incredibly rewarding because you’re turning something joyful and nostalgic into a brand people genuinely love and desire,” said Kathryn Bricken, founder of cookie dough business, Doughlicious.
“You also have the opportunity to be creative every single day, whether it’s developing new flavours, formats, or collaborations. If you build the right product-market fit, the scalability can be huge, especially if you move beyond just baking and into packaged goods, retail, and/or food service. It’s one of the best feelings to see your products on shelf in a retailer.”
Cons
• Long hours and physical workload, especially in the early stages • Cash flow pressure • Compliance, regulation and admin can be heavy • Scaling production is expensive and operationally complex • Emotional resilience is essential; rejection and setbacks are constant
Bricken agrees that running a bakery is demanding. “It is hard work – physically (I’ve had two hand surgeries this year), mentally and financially. Margins can be tight, ingredients fluctuate in price, and production is time-consuming.
“Early on, you’re doing everything yourself: making the dough, selling, marketing, admin, logistics and the technical side, which is hardest. You need to make sure that all our dough that you’re selling is safe. The hours are long, and it can take time before the business grows, with lots of twists and turns along the way.”
Remember that challenges will arise as the business grows. “As the business has grown, have we felt commercial pressures? Of course, every small business does,” Barlow told Small Business. “Rising costs, increased demand, the temptation to speed things up, those pressures are real. But we’ve always believed that you have to stay true to the art of bread making. Our slow fermentation, our commitment to additive-free loaves, and our refusal to cut corners are non-negotiable. If you compromise on those, you lose the very thing that makes your bread worth buying.
“For us, it’s about keeping it simple, investing time as well as money, and staying focused on people and quality. That consistency has carried us from the beginning, and it continues to guide every loaf we bake.”
What skills, qualifications and insurance do I need?
Munro said that, at a minimum, you need:
• Food business registration with local authority • Food hygiene certification • SALSA, BRC or similar accreditation if supplying wholesalers/retail • Public liability and product liability insurance • Allergen compliance, labelling laws, traceability systems • HACCP and food safety management systems
“If you want to scale beyond local trade, compliance becomes non-negotiable and should be built in from day one, not bolted on later,” Munro told Small Business.
Bricken says that you don’t necessarily need formal culinary training: “A lot of successful entrepreneurs are self-trained and extremely passionate.” However, she says that it’s helpful to have:
A deep understanding of baking and consistency – your product must be repeatable at scale
Basic business skills: pricing, margins, inventory and cash flow
Sales, marketing and communication skills
A willingness to learn fast and adapt
From a qualifications and compliance standpoint:
The proper licences and permits for your kitchen (commercial, shared kitchen or factory if you’re looking to scale)
Insurance is non-negotiable:
General liability insurance
Product liability insurance (especially if you’re selling packaged goods)
Employers’ liability insurance once you have employees
Start-up costs for a bakery
“It varies massively, but realistically you’re looking at anywhere from a few thousand pounds for a home-based micro set-up to six figures for a manufacturing operation,” said Munro.
Bricken says that start-up costs typically include:
Kitchen rental
Ingredients and packaging
Branding and design
Website and marketing assets
Insurance and legal fees
Initial production runs
“I always tell founders: ‘Whatever number you think you need, add more.’ There are always unexpected costs,” she said.
According to Mitchell Cooper, it can cost £500-£1,000 to cover any licences or business legalities.
Rent will vary massively depending on where you’re locating. If you’re in a big city, set your ambitions on a smaller premises.
Government grants and loans are available for extra support. Have a read over 150 UK small business grants to apply for right now to find out what’s available.
Cash payments are becoming less and less common nowadays, so it’s worth investing in a card reader if you’re doing the markets. It’s more convenient and will mean that you’re carrying less (or no) cash when you sell. Our article on 10 card payment machines ideal for small business is a brilliant place to get started on your search for a card reader.
As you’ve probably realised, a bakery is as much of a time commitment as it is a monetary one, as Barlow explains: “The start-up costs were considerable but more than just money, it’s the investment in time that people often underestimate. Proper bread making can’t be rushed, and neither can building a sustainable business. It takes patience, long hours, and a willingness to learn every day.”
Shaping your bakery
Like we’ve said, there are many directions you can take this idea in. That’s why it’s useful to research what else is in the area to see what gaps you could fill. As with any business, it helps to establish your USP. That could be seasonal baking, historical bakes, unique flavour combinations or something different entirely. Alternatively, you could provide a retail offering and go down the wholesale route.
The type of bakery you run would also have an effect on what you’re going to serve, such as coffee, which would require a decent quality coffee machine on the premises. Speaking of locations, it’s also worth thinking about public footfall and how suppliers are going to access you for deliveries.
Start small
Feeling overwhelmed? Then keep the above as medium-to-long-term goals. You might want to start with a home baking business, either sending baked goods by post or baking for a stall at your local farmer’s market. You’ve got fewer costs to consider and it takes up much less time. What’s more, it’s easier to get a sense of what the day-to-day involves, especially if you have no prior experience in the industry.
First, it’s important to get a sense of how much space you have. Your home bakery is likely to stretch beyond your kitchen. Be prepared for baking tins on the stairs and a stand mixer on the windowsill in the living room. Match that against what your output could reasonably look like.
A good example on YouTube is Cecilia Tolone, who lives in Sweden and runs ‘The Saturday Bakery’. She sells bakery boxes online in advance, bakes during the week and then distributes the boxes from a stall in the park on a Saturday. Check out her channel below for inspiration.
Even if you run a bakery from home, you need to register with your local authority at least 28 days before you start trading. It’s free and can be done via your local authority’s website. On top of that, you’ll need a level 2 food hygiene certificate and public liability insurance. The latter will cover you if the public is harmed by you and one of your products. On that note, be stringent with allergen labelling. Anything with gluten, eggs, peanuts, sesame or any of the 14 allergens should be labelled.
This comprehensive Safe Food Better Business (SFBB) guide will help you understand regulations for small business bakeries in England and Wales.
Though it’s fun to develop your own recipes and twists, it’s cookies, scones, cupcakes and focaccia squares that work particularly well at farmer’s markets. Think about what shoppers might like to eat as they’re walking around the stalls. That being said, granola and sandwich bread are good take-home options.
See also: What insurance do I need for a home baking business? – Whether you’re creating cakes for weddings, crafting cupcakes or perfecting the artisan doughnut, it’s important to be covered
How do I market a baking business?
“Marketing is everything!” says Bricken. “A great product alone is not enough.”
For Doughlicious, she focused on:
Brand storytelling: who we are, why we exist, and what makes us different
Social media: visually driven platforms like Instagram, TikTok, and working with influencers are huge for food
Sampling: once people try it, they buy it!
PR and partnerships: events, collaborations and media coverage give us the stamp of approval and build the buzz
Retail and shopping marketing: being in the right places builds credibility and distribution
“Most importantly, you need to build a brand, not just sell the goods. People don’t just buy food, they buy into a feeling, a memory, and an experience. Ultimately, it’s joy that what we want our customers to feel,” she said.
For more general advice, have a read of How to start a business and Checklist for going self-employed – a Small Business guide.
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