What you bake
Cake Business Requirements: 5 Checks Before You Sell
The five things to settle before you sell a cake, from state rules to the price that pays you.
On this page
Most of the cake business requirements you will read about are not about baking. They are about paperwork, labels, money, and records. Settle those first and the baking becomes the easy part.
What to remember
- Your state’s cottage food guide is the first thing to read.
- Labels and ingredient lists are a requirement, not an extra.
- A price that ignores your time is a discount, not a price.
- Keep one record of every order from the very first one.
Start with your state’s cottage food rules
Every state writes its own cottage food rules. They decide what you can bake and where you can sell it. The Illinois Department of Public Health publishes a cottage food guide that covers prohibited ingredients and additional requirements, which shows the kind of detail to look for. Find the matching guide from your own state health department before you take an order.
Read it twice. The first read tells you whether your cakes are allowed at all. The second read tells you what to change in your kitchen, your labels, and your record keeping. Write the answers on one sheet of paper and keep it where you bake. If your state asks about your kitchen setup, kitchen requirements for a home baking business walks through what to check.
The five requirements, in order
Work through these in order. Each one takes an afternoon at most, and none of them need a lawyer or an accountant.
Read your state's cottage food guide
Find the guide from your state health department. Look for prohibited ingredients and any additional requirements that apply to you.
Check your kitchen against the list
Work through every line in the guide that touches your kitchen. Write down what you need to change and do it before you take an order.
Build your label
Use the label list from your state guide. Decide whether you print stickers or write labels by hand, and keep a copy of each one.
Price one cake properly
Add ingredients, packaging, your hourly pay, and a share of your monthly costs. If the total is higher than your price, fix the price or the cake.
Set up payment and records
Choose how customers pay you and keep one record of every order from the first one. A notebook is enough to start.
Two of these five are about rules and three are about money. Most new sellers spend all their time on the baking and almost none on the other four.
What one cake has to earn
A price is only real if it covers four lines: ingredients, packaging, your time, and your share of monthly costs. Skip any one of them and you are paying to bake. The cake business guide shows the same four lines on a first paid order.
For example, a two layer cake uses $9 of ingredients and $3 of box, board, and label. Two hours of work at $15 an hour is $30. If you sell ten cakes a month, the $20 Brevl fee adds $2 a cake. That is $44 to make one cake. At $65 you keep $21, a margin of about 32 percent.
That $21 is what is left after ingredients, labor, and overhead. Ten cakes a month at that price leaves $210 on top of the $300 you already paid yourself for the hours. Drop the price to $50 and you keep $6 a cake, which is not worth two hours of work. The cake business is profitable page shows what that gap does over a month.
Mistakes that cost you money
The expensive mistakes are rarely about a fallen cake. They are about money you never charged and rules you found out about late. Both are avoidable with one hour of reading and one sheet of paper.
The next mistake is buying boxes, labels, or a logo before you have checked your business name. A name check costs nothing. A reprint does not. The third mistake is mixing cake money with household money, which makes it impossible to tell whether you made anything at all.
Late night orders are the other quiet cost. If a customer asks for a cake for tomorrow and you say yes, you have just paid yourself less per hour for the same work. A two day minimum protects your price and your sleep.
Keep the money side simple from day one
You do not need accounting software to start. You need one place where every order, every payment, and every supply receipt lives. A notebook works. A phone note works too, as long as you keep it up. The cake business management guide lists the five numbers worth tracking.
Set your prices once, then review them when your supply costs change. A dollar more on one bag of flour is small. The same rise across ten ingredients is not.
Brevl keeps recipes with real costing, ingredient inventory, and a weekly planner in one place, so the numbers you need for pricing are already there. It is one flat $20 a month with no cut of your sales. It works on a computer and on a phone, and a real person answers when you get stuck.
If you want the rest of the craft side of selling cakes, the craft guides hub collects them in one spot.
What to check before you commit
Before you spend money on supplies, boxes, or a logo, check three things. First, that your state allows the cakes you plan to sell. Second, that the name you want is free to use. Third, that your price covers ingredients, labor, and overhead. All three checks are free.
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Common questions
Do I need a license to sell cakes from home?
Your state decides this, so start with the cottage food guide from your state health department. That guide covers prohibited ingredients and any additional requirements that apply to you. Read it before you take an order, and follow what it says for the cakes you plan to sell.
What has to be on my cake label?
Your state guide lists what your label must show, so build the label from that list rather than from a template you found online. Keep a copy of every label you use, with the date you started using it. If the guide changes, you can see exactly what changed and when.
How do I price a cake so I actually make money?
Add four lines: ingredients, packaging, your hourly pay for the time you spend, and a share of your monthly costs. Divide your monthly costs by the number of cakes you sell to get that last line. If the price does not cover all four, change the cake or change the price.
What should I set up before my first paid order?
A way to take payment, a simple order record, and a label that matches your state's list. Brevl takes card payments through your own Stripe or Square account, plus Venmo, Cash App, Zelle, and cash. It costs one flat $20 a month and takes no cut of your sales.
Sources
General information, not legal or tax advice. Cottage food rules differ by state, so check your own state's guide before you sell.