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Quick answer: A home bakery costs ₹30,000 to ₹2.6 lakh to start, mostly for an oven, a mixer and tools. You need FSSAI Basic Registration to sell legally from home. A 1 kg cake costs about ₹350 to ₹500 to make and sells for ₹900 to ₹1,500, so 40 cakes a month can earn ₹25,000 to ₹45,000 after costs.
Custom cakes, brownies, cookies and breads are bought for birthdays, festivals and office parties, so demand is steady and orders come in advance. You bake to order, which keeps wastage low. The two things that decide your profit are pricing per kilo correctly and getting repeat customers.
Prices below are approximate 2026 market ranges. Check current prices before you buy.
Investment breakdown
| Item | Low (₹) | High (₹) |
|---|---|---|
| Oven (OTG for a start, convection or deck oven to scale) | 8,000 | 1,20,000 |
| Stand or hand mixer | 2,500 | 40,000 |
| Tins, trays, turntable, piping set, cooling racks | 4,000 | 15,000 |
| Digital scale, thermometer, measuring tools | 1,500 | 4,000 |
| Refrigerator space (use home fridge, or a second one) | 0 | 25,000 |
| Packaging (cake boxes, boards, jars) first stock | 3,000 | 12,000 |
| Ingredients first stock | 5,000 | 15,000 |
| FSSAI registration and labels | 500 | 3,000 |
| Photos, Instagram and Google profile setup | 0 | 10,000 |
| Working capital | 5,000 | 20,000 |
| Total | ≈ 29,500 | ≈ 2,64,000 |
Start with an OTG and a hand mixer. Upgrade the oven only when you’re turning away orders.
Step-by-step setup
- Pick a narrow menu
Three or four products you bake perfectly every time, for example chocolate truffle cake, brownies and cookies.
- Test-bake and cost each recipe
Weigh every ingredient, note the yield and work out the cost per kg or per piece.
- Get FSSAI Basic Registration
Apply online with your home address. It’s needed even for selling from home.
- Set your prices
Price per kg for cakes, per box for cookies and brownies, plus a design charge for custom work.
- Build a small photo menu
Natural-light photos of 10 to 15 bakes on Instagram, WhatsApp Business and a Google Business Profile.
- Start with your circle
Friends, neighbours, housing society groups and office colleagues. Ask every happy customer for a review.
Licences and registration
- FSSAI Basic Registration: ₹100 a year, for turnover up to ₹1.5 crore a year (FSSAI raised this limit from ₹12 lakh on 1 April 2026). Above that you need a State Licence. Display the registration number on your labels and invoices. See the FSSAI registration guide.
- Labels on packed products: packed items like cookies, brownies or bread sold in boxes or jars need a label with the product name, ingredients, net weight, a use-by or expiry date, the veg or non-veg mark, the FSSAI logo with your registration number, your name and address, and allergen information (for example, contains wheat, milk, nuts).
- GST: selling cakes and bakes is a supply of goods, so registration is needed once turnover crosses ₹40 lakh a year (₹20 lakh in some smaller states). Cakes, pastries and biscuits are taxed at 5% since 22 September 2025. More in our GST guide.
- Local rules: some housing societies or city bodies have rules about running a business from home. Check yours before you advertise widely.
Costing and profit example
Cost per cake
- Flour, sugar, cocoa, eggs or curd
- ₹110.00
- Butter and oil
- ₹70.00
- Dark chocolate and cream (ganache)
- ₹120.00
- Decoration
- ₹30.00
- Box and cake board
- ₹40.00
- Electricity and gas share
- ₹25.00
Selling at ₹1,100 a kg gives a food cost of about 36%. Custom designs (fondant, photo prints, tiers) should carry an extra design charge on top. Our menu pricing guide shows how to add wastage and your own time.
| Per month | |
|---|---|
| 40 cakes × ₹1,100 | ₹44,000 |
| 30 boxes of brownies/cookies × ₹450 | ₹13,500 |
| Ingredients and packaging | ₹22,500 |
| Delivery (part paid by customers) | ₹2,500 |
| Electricity, gas, marketing | ₹3,000 |
| Profit | ≈ ₹29,500 |
That profit pays for your time. Festival months (Diwali, Christmas, Raksha Bandhan) can double the orders, so plan stock and gift boxes in advance.
Money tip
Recommended equipment
- OTG oven, 40 to 60 litre for cakes and cookies
- Hand mixer or stand mixer
- Digital kitchen scale (1 g accuracy)
- Aluminium cake tins set and turntable
- Cake boxes and boards, bulk pack
FAQ
Do I need a licence to sell cakes from home in India? Yes. FSSAI Basic Registration is needed even for a home kitchen. It’s an online application on the FoSCoS portal and costs ₹100 a year.
How much should I charge for a homemade cake? Add up your ingredient, packaging and fuel cost per kg, then aim for a food cost of about 30 to 40% of the price. For most cakes that means ₹900 to ₹1,500 a kg, plus a design charge for custom work.
Is a home bakery profitable? Yes, if you price correctly and get repeat orders. Costs are low because you bake to order and use your home kitchen.
OTG or convection microwave for a home bakery? An OTG bakes more evenly and is cheaper for a start. Move to a larger convection or deck oven when you regularly bake more than three or four cakes a day.
Can I sell my bakes on Swiggy and Zomato? Yes, but the apps usually ask for FSSAI registration, GST and a fixed pickup address, and they charge a commission. Many home bakers start on WhatsApp and Instagram, then add the apps later. Our tiffin service guide covers getting home-food customers.
Related: How to start a tiffin service · How to price your menu · FSSAI registration guide
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