Running a home baking business is so exciting, to finally be able to make money doing something you love. However, it is a business and it wouldn’t be a business without money. Now, how do we ensure that we track the money coming in? What is the best way to take payments to ensure the best possible success for our business? We got into this business because we love to bake and love the joy that our baked goods bring people. But we are not just bakers; we are business owners. It is so important that we master this aspect of our business to ensure optimal financial health. Here are the practices I suggest when taking payment in a home baking business.
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Have a strong record system in your home bakery
Before you start taking any orders, you need to make sure you have a process for managing your money. If you're not watching your money, you are not going to have any idea if you are profitable or not.
Get a business bank account
Get a business bank account and make sure that you have only business-related charges coming in and out of this account. It is going to be a lot easier to keep track of how much you are spending when you don’t have personal Amazon orders and business orders coming out of the same account.
System to track your profit and loss
There are so many automatic trackers now, such as:
QuickBooks – Helps track expenses, manage invoices, and generate financial reports.
Wave – Offers expense tracking, invoicing, and receipt scanning.
FreshBooks – Provides expense tracking, time tracking, and invoicing features.
BUT!! Now, this may be old school. Although it may be a little time-consuming at first, I find that doing it manually is the best way to see exactly how much you are spending and where. I do this for our family spending as well. I use ROCKET MONEY (application pending) as an automatic tracker, it lets me know when subscriptions are coming up, if the price changes, automatic savings account etc.
But I notice when I am going through everything manually, I really see how much I am spending or wasting to be honest. When I typed in Starbucks over 20 times, I realized yea, that’s enough of that. It has a much larger impact than just seeing a number.
You don’t need to do this forever. But it is great to do this in the beginning and then periodically do a refresh.
My favorite way to do this is using Google Sheets. They make it easy to use with the template Monthly Budget.
Payment platforms for your home baking business
You want to make sure that you offer a few different methods of payment.
Here are the ones I would recommend. Some of these I’m sure we all know, so I will outline the fees connected to using them as a business.
Venmo: For each payment Venmo charges a standard seller transaction fee of 1.9% plus $0.10.
For instant transfers to your bank account, Venmo charges a 1.75% fee, with a minimum fee of $0.25 and a maximum fee of $25.
PayPal Payments: ACH Transfer 3.49% + $0.49 per transaction. Credit and Debit Card Payments are 2.99% + $0.49 per transaction.
Zelle: No fees except for if you use Truist bank, double check your bank to make sure that your bank does not charge any fees
Cash: No fees whohoo!! Downside is that it is harder to keep track of. When you are taking cash payments, make sure you are still sticking to your policies. If you don’t have your policies outlined, make sure to read this post next.
You still need to take a deposit before starting to make the order. I have had people drop off the deposit, but the most common situation is they send the first payment electronically and then bring the rest in cash at the time of pick up. I would not recommend taking cash payments at drop off for a wedding or large event, however.
Honeybook: I do like to use Honeybook the most. I have talked all about Honeybook here. I would not start using it until you are getting multiple orders a week or large orders like weddings. There are many reasons I like to use Honeybook, but here are the benefits when it comes to payments.
Create invoices
Take card payments or ACH transfer
Creates a professional atmosphere
Clients can set up auto pay
If the client doesn’t pay on time, it will send you and them both reminders. You don’t need to keep track of who paid and who didn’t.
I love that it connects to my calendar so that I can see what days I have money coming in as well.
If a customer pays in cash, venmo, etc, you can still update the invoice through Honeybook to show that the order is paid for.
Fees for Honeybook:
Processing fee 1.5% for ACH payments, 2.9% for credit/debit card payments.
Instant deposit fee 1% or a minimum of $5
Membership fee $36 a month or $59 a month and it includes QuickBooks. Both packages offer $10 per month when you are billed annually.
Your website: I love using Wix for my websites. This is a Wix site! But I have not used it much for baking order payments. It is possible but I personally have not dived into it too much. The times I have used it is for bulk orders like Christmas orders where there is little to no customization.
Customers can pay with their card. But WIX is also integrated with 80 external payment platforms like Apple Pay, Google Pay Paypal, Stripe, and Square. You can also set up platforms where you can pay monthly like Afterpay.
2.9% processing fee
Invoices do not automatically link to your calendar like Honeybook does.
Taking payments effectively is a key part of running a successful home baking business. By offering multiple payment options, ensuring secure transactions, and keeping track of all your expenses, you can create a seamless experience for both you and your customers. Implement these best practices to boost customer trust, increase sales, and grow your home bakery into a thriving business! If you have any questions about running your own home baking business make sur to leave a comment!
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