How to Start a Home Baking Business in the Philippines: A Step-by-Step Guide

So you’ve finally decided to act on those compliments and advice from your friends and family to take your baking hobby to a professional level? That’s great! Spoiler alert: we’ll teach you how to start a home baking business in the Philippines in this post. We’ll also include tips on how to start a bakery from home, including how to start an online bakery from home and how to make a home baking business plan.

Do you think most baking pros are prevented from turning their passion into a business because of the staggering running costs of a store? If you find yourself in a similar situation, you should consider opening a bakery business at home!

Once you catch the baking bug, it isn’t easy to stop. So, why not start your little bakery or baking business from home? The best part? The running costs are relatively low, and the process is much easier!

Let’s learn what it takes to start an online bakery from home so that you can deliver those scrumptious gooey cookies to hungry bellies!

Why Start a Home Baking Business in the Philippines

If you love baking and have the means to start a business, you already have great reasons to open a home baking business.

While those two are just icing on the cake, time has proven that baked goods are a hit in the country. In fact, baked goods sold in the Philippines amount to a whopping $2 billion (112,369,000,000 PHP) each year.

Additionally, Forbes projects that the global bakery products market will grow from $416.36 billion (23,389,023,000,000 PHP) in 2021 to $590.54 billion (33,173,584,500,000 PHP) by 2028.

This increased demand for baked goods comes from people’s preference for convenience and affordable prices. Because of urbanization, many people have hectic lives that leave them little to no time to make their own meals. As a result, they opt for ready-to-eat food like bread and other pastries.

As long as baked goods remain a huge part of the Filipino diet, starting a home baking business will always be a great idea.

Pros of Starting a Home Bakery Business

Before we jump to the hows and whats, let’s help you understand the perks of opening a home bakery business. Here’s why an online bakery from home is a profitable venture:

Filipinos’ Love for Baked Goods

Our love for bread is embedded in our culture, making a home baking business a great idea. Traditional Filipino bread and sweets, like the soft and fluffy ube cheese pandesal or the sweet and buttery ensaymada, are things most Filipinos can’t live without.

By selling these familiar favorites, you get to tap into a steady demand.

Demand for Unique, Homemade Treats

People are becoming more mindful of their health, which led many to choose homemade, healthy, or artisanal treats over their supermarket counterparts.

Social media platforms played a huge role in this through eye-catching, Instagrammable baked goods. By starting your baking business at home,  you can easily experiment with different recipes and presentation styles that cater to this demand. Doing this also sets your products apart from those sold in supermarkets and bakery chains.

Lower Startup and Operational Costs

Unlike opening a physical bakery, starting a home baking business requires lower capital and ongoing costs. For one, you don’t have to rent a commercial space or industrial baking tools and equipment. You can also focus your capital more on high-quality ingredients and effective marketing strategies.

Flexibility and Scalability

Running a baking business from home allows you to be your own boss. You can set your own schedule, work at your own pace, and call the important shots.

This setup also works well if you want to start small. You can first focus on a niche product or market and scale based on your customers’ demand and feedback. This lets you grow your business while reducing risks and costs.

Easier Marketing Through Digital Channels

The Philippines is the social media capital of the world and you can use this to your advantage. Digital marketing tools let you market your products without having to put up billboards or TV ads. Additionally, the ad targeting on social media platforms like Facebook and Instagram is so great you can quickly get eyeballs there. They’re also more cost-effective compared to traditional ads like print and TV.

A Supportive Community of Home Bakers

The community of home bakers is thriving in the Philippines, thanks to the brave souls who pursued their passion for baking. If you start a home baking business, you can easily find a supportive network of small business owners.

Joining these communities can give you valuable business insights, mentorship, and opportunities for collaboration. Whether it’s through social media groups, local business associations, or informal networks, you can easily connect with other entrepreneurs who can offer support and inspire you in the Philippines.

How to Start an Online Bakery From Home

Since you want to start an online bakery from home, we’re assuming that your love baking and do it well. If people often ask you to bring a dessert to dinner or supply desserts for an event, your baked treats are likely delicious, if not irresistible.

While baking skills matter, there’s so much more than goes into starting an online bakery from home. It calls for research, planning, marketing, and more. Here ar the steps in starting an online bakery from home:

1. Create a Home Baking Business Plan

Whether your home bakery business aims to fuel your passion or supplement your monthly income, it is always wise to develop a business plan. A proper home baking business plan can be a guidebook to steer your home bakery toward success. And don’t forget, it should be pandemic-proof.

A home baking business plan should contain the following elements:

Company Description, Logo, & Mission

You need to finalize and plan a piece of detailed information about your online bakery from home. Once your business starts operating, you’ll need to mention the types of bakery products under your roof and a mission statement.

Will your home bakery business deal with fresh bakery products such as cakes and cupcakes, or only cookies, muffins, and other extended shelf-life products?

Before you start your operations, you should specify the scope of your online bakery from home to keep things simple and manageable. Additionally, designing your bakery logo is also a part of the process.

Business Name

The next critical thing is coming up with a business name. Choose a lively business name that reflects your mission and values. Moreover, the business name you choose should have a scope for expansion. We also suggest you start with a quirky and unique name if you need to trademark it in the future.

Regardless of whichever name you choose for your business, it should be clear that you deal with baked products. Lastly, the brand name should be short & sweet and easy to remember.

You can use several online brand name-generating tools to get excellent inspiration for your home bakery. Once you finalize the name, you’ll have to use it while registering your online bakery from home.

2. Set Up the Space

To get your home bakery business up and running, you’ll need the necessary baking equipment. It would help if you considered equipping your kitchen with a blast freezer, stand mixers, heavy-duty oven, and other professional-level baking tools based on your menu items.

Moreover, there are also small kitchen items that are mandatory for baking. For instance, you might need new cookie cutters, cake stands, and cake levelers. You might also have to invest in modifying and outfitting your kitchen. The existing kitchen might not have enough countertop space for prepping.

3. Do Market Research

Another essential aspect of your bakery business plan is your target market and population. You have to identify your niche and target customers with the best products! How will your home bakery better cater to customers compared to your rivals? What needs or wants are your bakery products fulfilling for your customers?

The location of your home bakery also affects your bakery sales. You should also monitor current trends in the world of baking. For example, people are currently obsessed with miniature cupcakes on social media.

Based on your market research, you might want to limit the products of your bakery or baking business at home to dream cakes, fancy birthday cakes, or celebration cakes.

4. Obtain Permits and Food Licenses

Depending on your geographic location, the permits and licenses will significantly vary. It would help if you relied on your local state laws to determine the food licensing and permit process. Many states make it mandatory for businesses of all sizes to comply with local health codes since it involves consumables.

If you are planning to open a home bakery business in the Philippines, these are the permits you might require:

• You’ll need to procure a Tax Identification Number (TIN) from the Bureau of Internal Revenue.
• Secure a Residence Certificate & Sanitary Permit or Mayor’s Permit from the local municipality of home bakery business address.
• BFAD Certificate from the Bureau of Food and Drugs (BFAD) or License to Operate (LTO) as a “food manufacturer.”
• You’ll also require business name registration in the Department of Trade and Industry (DTI) as you’ll be running the home bakery business on your own.

5. Define a Clear Business Structure

Most new home bakery business owners mistake not establishing a clear business structure. It is essential to finalize the type of business structure you require. The business structure will also determine how you pay your taxes.

Typically, most home bakers want to start as sole proprietors. A sole proprietorship is one of the typical business structures. But remember that if your home bakery business absorbs employees or new business partners, you’ll have to alter the business structure.

If you expand your home bakery business in the future, you also might need to move out and require a physical outlet for your bakery business.

6. Create Sales and Marketing Plans

Sales and marketing are two essential aspects of any business. You need to figure out ways to attract and retain your consumers. Do you plan to rely on referrals to get your home bakery business going? Also, do you know any local eateries that want to host your products?

One of the first aspects of your marketing plan should be to have a user-friendly website or point of communication. It is best to have a web designer look into the website development process. You’ll also require marketing materials such as business cards and engaging content to keep the customer flowing!

Here are some marketing routes for an online bakery from home:

• Social media and online marketing
• Word of mouth
• Bake sale day at local venues and events

7. Strategize and Finalize the Prices

You should think about the pricing of your menu items thoroughly. The rates you set at the beginning of your business will determine the first impression of your consumer. You don’t want to charge too high as it can deter many customers from picking your online bakery products. On the other hand, you don’t want to underprice and reduce your profit margin significantly.

Home bakers should also consider their efforts, time, and other resources to set up a home bakery. You can extend the benefits of reduced overhead costs to your customers. Remember, you can create your bakery’s USP in taste and variety instead of pricing.

You can consider the following figures while deciding the price of baked goods for your home bakery:

The yield of your recipes: How many cupcakes or cookies can one typically produce?

• Cost of ingredients: How much do you spend buying flour, eggs, cocoa, sugar, and others?
• Cooking time and expertise level: You should not waste your pro-like baking skills for minimal costs! Make sure to consider your baking expertise and dedicated cooking time and divide it with the recipe yield to find the labor cost per piece.
• Cost per serving: You can find the cost per serving by dividing the price of ingredients by the yield per recipe.

8. Promote Your Home Baking Business

Having products to sell is a great start. But with some marketing, you can get more people excited about your products.

For one, you can sell on Instagram. Instagram is a visual social media platform where you can easily post and share pictures of your beautiful cupcake designs, minimalist cakes, and more.

You can also do special promos to encourage people to share your images and videos. You can also incentivize people to engage with your brand through a special giveaway. TikTok is another platform where you can share your behind-the-scenes process.

You can also go old-school and hand out brochures to people. Then, you can give a loyalty card to people who already bought from you to encourage them to buy again. For example, you can use a “buy one get one free” offer. Plus, some free samples never hurt. Just think about it, when people taste how incredible your baked treats are, they’ll likely buy more.

To get your online bakery from home off the ground, your target market has to know that it’s open. Here are some ways to market your online home baking business.

Word of Mouth

Being active in your community doesn’t just let you market your products. It lets you build relationships with potential customers as well. If these people buy your products and love them, they’ll return for sure. They’ll even be your marketing soldiers and spread the word about your amazing products.

Social Media

Thanks to the digital era we live in, you can easily create a Facebook, Instagram, and TikTok page for your home baking business. You can post about upcoming products and other promos to encourage people to follow you. Once you gain followers, make sure to post consistently so people don’t forget about you.

Local Markets

Seasonal local markets are a hotspot for home baking business owners. For a few days, you can sell at local markets to encourage more people to try your products. You can even give free samples to entice people to visit your stall. And don’t forget to display your page handles and contact information so people can contact you once the fair’s over.

Recipes For Baked Goods You Can Sell From Home

Want some easy-to-follow recipes for products that sell easily? Check out the recipes we made for you below:

Ensaymada

Imagine a soft, fluffy bread topped with butter, sugar, and grated cheese. Looks so delicious, right? Now open your eyes and let us tell you more about this treat.

Ensaymada is a perfect blend of sweet and savory. It’s an easy sell because it offers people a nice texture and amazing taste. Ensaymadas also appeal to those who want a taste of Filipino tradition.

Check out our ensaymada recipe here

Chocolate Chip Cookies

These classic, gooey cookies studded with melt-in-your-mouth chocolate chips are another hit in the Philippines. After all, who doesn’t love a good old chocolate chip cookie?

Plus, they appeal to all ages, which increases your chance of selling more. Their popularity and the nostalgia they bring make them a surefire hit in home bakeries.

Check out our chocolate chip cookie recipe here.

Bavarian Donut

Do you want a fluffy donut filled with a smooth, creamy custard and dusted with powdered sugar? Chances are, your customers do, too.

Bavarian donuts are an easy sell because they’re a luxurious treat that offers a satisfying texture and rich flavor. Despite this, they’re affordable, making them perfect for those who want to indulge in something special without breaking the bank.

Check out our Bavarian donut recipe here.

Ube Cheese Pandesal

A modern twist on the traditional Filipino pandesal, this baked good is filled with vibrant purple yam (ube) and creamy cheese. Ube cheese pandesal works well for an online bakery from home because of its unique flavor and eye-catching color. They also appeal to fun eaters and fans of Filipino cuisine.

Check out our ube cheese pandesal recipe here.

Leche Flan

Filipinos love anything smooth and creamy. Enter the leche flan. This smooth, silky, creamy dessert will wow any dessert lover. In addition, leche flan is a dessert staple in the Philippines known for its nice texture and sweet, caramelized topping, making it an incredible crowd-pleaser.

Check out our leche flan recipe here.

Egg Pie

We’re not done with the custard-based desserts yet. The egg pire is a classic Filipino dessert with a smooth, custard filling on a buttery, flaky crust. It’s a great option for a home baking business because of its comforting, homemade appeal. People also love this nostalgic treat because it reminds them of nice moments during childhood.

Check out our egg pie recipe here.

Puto With Cheese

Steamed rice cakes that are light, fluffy, and topped with a slice of salty cheese, puto is another item worth adding to your home bakery lineup. People love puto with cheese because it gives them a unique taste experience, blending sweet, savory, and cheesy flavors. Puto also appeals to those who want a gluten-free, traditional Filipino snack.

Check out our puto with cheese recipe here.

Red Velvet Cupcakes  

As its name suggests, red velvet cupcakes are red, velvety cupcakes with a slight cocoa flavor, topped with luscious cream cheese frosting. People love them for their nice appearance and luxurious taste. They’re also perfect for special occasions or as treats to brighten anyone’s day.

Check out our red velvet cupcake recipe here.

Cassava Cake

You may be fooled by the name, but this one isn’t chiffon-based. It’s just as delicious though.

Cassava cake is a hearty and moist cake made from grated cassava (yucca root), coconut milk, and sugar. Cooks often top it with a custardy layer. It’s another great sell because of its soft, sticky texture and sweet, creamy taste.

Check out our cassava cake recipe here.

Japanese Cheesecake

Known for its light, fluffy texture that melts in your mouth, the Japanese cheesecake is another easy sell for home bakers. People love this subtly sweet and incredibly soft cheesecake, thanks to its airy texture and refined flavor profile. Those who love lighter, less dense dessert options also love this treat.

Check out our Japanese cheesecake recipe here.

Investments for Starting a Home Bakery

It is a wide belief that you can start a home bakery with minimal investments, such as buying an oven and ingredients, but there’s more to it. Even with a home bakery, there are several costs involved in starting a bakery or baking business at home. Here’s a breakdown of home bakery business investments:

• Space: If you are 100% sure that your kitchen can handle the heat of your online bakery from home, you’re good to go. Apart from the kitchen, you also require space for arranging and storing your raw materials and baked items. So, if you need additional space for storage, stocking, or preparation, you’ll have to account for those costs as well.
• Licenses: The licensing part depends on your local government rules and regulation. The Philippines requires many documents and permits, which we have already discussed above.
• Equipment: Based on your daily sales expectations, you’ll need to determine the size of ovens, refrigerators, and equipment such as mixing bowls, spatulas, baking tins. Once again, the tools will depend on your menu items. You’ll have to consider the variety of baking products and accordingly purchase baking equipment.
• Ingredients: You’ll need to make a monthly shopping list for ingredients depending on your menu items. Some baking ingredients are cheap and readily available. However, it might be costly and challenging to source unique baking ingredients.
• Marketing: You need logo designs, business cards, letterheads, and more such marketing materials. Though most of these are highly affordable, the marketing costs will grow as the business expands.
• Packaging: Food packaging is one of the most significant parts of the bakery business. Whether you are delivering doorstep or takeaways, the packaging should be impressive. Packaging involves paper carry bags, cake boxes, liners, muffin boxes. For starters, you might need to invest money to maintain a stock of at least 100 pieces of each packaging material.
• Miscellaneous Costs: Various costs such as transportation are tricky to factor in as they depend from individual to individual. The miscellaneous costs also account for varying prices of monthly materials.

FAQs

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Final Words

We all know that rice is a staple in every Filipino household—but one can also argue that so is bread. Pinoys enjoy having pandesal for breakfast, ensaymada for merienda, and a whole box of warm buko pie for pasalubong.

If you feel passionate about baking (or just really consider baked goods as an indispensable part of your diet) and need a profitable small business idea that you can turn into a building block for your business empire, a bakery may just be the right match. The universe may be sending you a signal to finally take a slice of the pie and claim a share of this thriving market.

Read on to learn how to start a bakery business, why you should go for it in the first place, and what fundamental actions you need to take to bump up your success rate.

One of the significant perks of opening a home bakery business is that you don’t need to go through the hassle of finding and setting up a store. If the kitchen in your home is big enough, you can operate from there. Also, some rules and regulations home business owners have to follow.

Check with the local government for the licensing and permit requirements. Once the legal part is over, you have to invest some efforts into market research and building your brand. With our guide, you’ll have assistance in every leg of your journey to start a bakery or baking business at home.

Just in case you need help in creating your cake contract, read this article: Cake Contract Terms and Conditions.

Good luck with your new venture!

About HICAPS

Over the years, HICAPS has helped bakers and businesses make delicious products by offering ingredients like ChiffonAide Cake Oil, Magic Whizk Instant Whipping Cream, Red Velvet Emulco Flavor and Color, Ube Yam Emulco Flavor and Color, and HICAPS Buttercream Prime Butter Blend.

HICAPS also provides tools and resources to valued partners such as the FREE Marketing Strategy For Bakery Business E-book and dealer locator that helps look for baking supplies stores near me.

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