When Lauren Cortesi launched her home-based bakery business in the early 2000s, she tried everything to market her business: PPC, newspaper ads, MySpace, and a bunch of other free and paid tools. At the end of the day, she saw no tangible results — besides, of course, losing money.
She shared her tips for business and marketing success at the national cottage food conference. Keep reading to get Lauren’s pricing, customer communication, and marketing tips for independent food artisans.
Marketing and Building a Website
“You need a website, it shows that you’re a legit business.”
Lauren advises that every home-based food entrepreneur set up their own website. Building a website doesn’t have to be expensive or time-consuming — at Castiron, we’ve made it super simple to create a customized website where you can sell your homemade food online.
If you like to write, turn that into a marketing opportunity for your business. Send an email to a popular website and ask if they accept guest blog posts. At worst, they’ll say no, but at best, you’ll be able to share your expertise and you might even be able to share a link back to your website.
In general, try to provide valuable information that helps your customers feel informed about why they should support your business. Once you’ve created content, like photo galleries or blog posts, link to it on your social media pages.
Lauren’s not-so-secret marketing tip? Solicit reviews from your customers. In exchange for a professional photo of a customer’s wedding cake and reviews on Google and Wedding Wire, Lauren gives her customers a free 6-inch cake on their wedding anniversary. “It works wonderfully to drive up my online profile and attract customers,” Lauren said.
Today, there are countless groups on Facebook and cottage food communities like the Kitchen, where you can go to research what others are doing, bounce ideas back and forth, and ask questions. Join them — they’re an endless source of inspiration and motivation for many cottage cooks.
Customers and Contracts
Once you’ve got your business in front of customers and they’ve placed their orders, make sure you have contracts and insurance, Lauren advises.
“Contracts are more important than almost everything else,” Lauren said. “What started as a half-page wedding contract is now a two-page contract that covers every issue I’ve ever experienced over the years.” Her contracts cover things like refunds, delivery, pick up, bounced checks, and more. Not only do contracts protect you, they also protect your customers by clarifying rules and taking the guesswork out of things. Every single customer of Lauren’s has to sign an order contract.
In addition to signing a contract, Lauren recommends that bakers and makers get paid upfront. She requires a non-refundable deposit up front, equivalent to 50% of the total cake cost, in order to reserve a date. She also requires that the final payment be made ahead of the event. “Customers know that they’re going to get their cake and I know I’m going to get paid.”
Rethink Your Pricing
“I was able to fund going to cake shows, a new car, great baking equipment like mixers and molds, but I needed to make more money,” Lauren said. Despite being able to afford larger purchases, Lauren knew she needed to do more, so she hired a business consultant.
“I realized that my customers don’t care about the cost — they care about the taste, the experience, the look, and their wedding. My consultant helped me price correctly,” Lauren said.
“Cost of goods times three is wrong. You are only paying people to take your goods if you’re only pricing at that level,” she said. “Pay yourself fairly, cover your ingredients, and cover overhead like gas, electric, trash, and phone. And then get an accountant to help manage taxes and figure out how to legally deduct expenses.”
In order to understand what you should truly be charging for your products, makers need to break down every recipe, price out every ingredient, and calculate the amount of time it takes to make, bake, and decorate. Lauren uses software to shoot out the correct price after breaking down the cost of her ingredients, measurements, supplies, packaging, labor and everything else.
“If you feel like people don’t want to pay that much for your product, take the item off your menu. Some things are too expensive to make,” Lauren said. “Think about what people are willing to pay for an item in your area. If you have things on your menu that are super great sellers that people are willing to pay for, keep them on your menu. If not, cut it off.”
Lauren provided a few examples of how improved pricing helped her to enjoy her job more. “Ingredients for an eight-inch cake cost about $5, and I was only charging $15 for the cake. I started to feel resentful and didn’t enjoy baking because it was simply not worth my time.” In addition to covering ingredient costs, Lauren adds a delivery fee to the orders that require cake delivery. “It’s a set fee plus mileage. If people don’t want to pay what I charge, they’re not my customer,” she said. “Prove your value by providing a wonderful product.”
When it comes to how to price decorated cookies, Lauren recommends that bakers do their research on what other artisans nearby are charging.
For Lauren’s business, decorated cookies start at $4 each and average around $6 per cookie. From start to finish — from making the dough, to rolling, to cutting, to baking, to decorating, to drying time — the time to create a decorated cookie is two days. With her current setup, Lauren averages 50 cookies every two days, which totals around $300 in two days for her higher-end cookies. She also knows that certain designs and types of decoration take longer, so she charges more for them.
Know Your Cottage Food Laws and Business Needs
“It’s really important to find out if it’s legal to sell in your state,” Lauren said. Once you find that out, look at your personal situation, outside of the business. Do you have kids you need to take care of? What time will you be able to cook? Do you need spending money, or is this a full-time gig?
“Think about your situation before getting started. It’s not cheap to start a baking business from home. Buying equipment and ingredients is expensive, so do the research first and understand how much it will cost to get started,” Lauren said.
Baking from home is a great way to contribute to your community, make money, and pursue your passion. Not only do you get to work for yourself, you get to profit while doing something that you love. Good luck in your home bakery endeavors!