So, you’re thinking of starting a cookie business from home but what does it cost to start?
Registration and Insurance
One of the biggest up-front costs can be the registration and insurance side of things and it depends on where you’re located so it’s challenging to give you an accurate figure. It could be $400 over a few years, or up to $1000. Some councils are really strict on the fit-out of your home kitchen so you may need to make modifications.
In Australia, each council has different rules and regulations and thus, different pricing structures so it’s always a good idea to do your research first to make sure you know how much it’s going to be. Where to start? Contact your local council. This may sound daunting but give them a call, see what they say and just go from there.
Another cost to consider is the training to get your Basic Food Handling and Food Satefy Supervisor Certificates. This can be done online through nationally recognised training providers and locally, but again it’s a good question to ask your council if they have a preference and they may have a preferred trainer.
There is also the cost of public and product liability insurance. If you’re in Australia, you can get discounted insurance with Red Star by being a member of the Australian Cake Decorating Network (ACDN) which also gives you access to a range of supplier discounts, and a really supportive Facebook community and many more benefits.
In Australia if you are operating a business under a name that isn’t your own name, you must also register that with ASIC. It is $36 per year or $85 for 3 years (last updated March 2020).
Tools and Equipment
If you’ve started as a hobby baker, you already likely have a lot of amazing tools and equipment; cutters, embossers, rolling pins, food colouring, piping tips, sprinkles and more. It’s challenging again to give an accurate figure because it will differ greatly, but you can start with just the basics and build from there. Even just a set of round cookie cutters and basic shapes is all you need to get going!
Keep in mind that you can’t claim purchases as an expense for your business until you have your ABN so make sure you’ve got that sorted first (and it’s free!) and keep a record of those receipts.
Ingredients and Packaging
Once you get started you will of course need to source ingredients and packaging and take into account the cost of these as a basis for your pricing (before you add in your time and other costs). If you’re a business and have an ABN you can get wholesale prices for bulk ingredients and packaging. Again, being a member of something like the ACDN gives you access to discounts to stores like The Cake Pod and Caker’s Warehouse.
TOP TIP: Make sure you also incorporate the cost of any postage to get your ingredients and packaging supplies.
Start-up costs can vary a lot depending on location, what you want to invest in and where you shop to buy supplies. It always costs something to start and it’s very normal for a business not to make money for the first year. You may find you are putting everything you earn back into your business. But you don’t need to buy absolutely everything; and you can keep it simple to start. Invest in the basics, shop around to look at wholesale prices and HAVE FUN. Having a baking business is so rewarding and once you get going you’ll be so happy you did!