Create a Budget

Check out part two of a series of articles by entrepreneur expert Sylvia Scott. She's telling BSG fans how to start a holiday baking business for fun—and a little extra money!

Read part one: Start a Business

Question: Okay, so in part one, you showed us how to take the first steps by setting up a calendar, doing some "market research," and identifying the supplies we would need. Now, what do I do about MONEY?

Sylvia Scott: Next to fun, money is very important when starting this holiday baking business. You want to make sure that you buy your supplies and sell your cookies at the right price. If you budget your money (meaning, put it to good use!), you can make a profit to keep or to donate to charity. Here's how to budget your money.

Start-up Expenses: Use the market research you conducted to decide how many cookies you want to sell. Keep in mind that you might mess up a batch or two (it's a learning process!), so increase the number you want to sell by 10 percent to make up for the mess-ups.

Now, look at your cookie recipes and figure out how much of each ingredient you will need to bake all the cookies that you want to sell (plus that 10 percent). This is where your knowledge of fractions and decimals will come in handy!

Make a list of the amount of each ingredient you will need and figure out the cost of each ingredient. Add that sum to the cost of supplies such as cookie cutters, baking sheets, and the papers, boxes, or containers that you want to put the finished product in before selling. The total price of ingredients and supplies is called your "start-up" expenses.

Pricing Your Cookies: This is where your math will come in handy again! Take the total number of start-up expenses (ingredients plus supplies) and divide it by the number of cookies you plan to sell. The number you end up with will tell you how much to charge for each cookie in order to cover all your expenses. If you want to make a profit (have money left over after covering start-up costs), slightly increase the price of each cookie.

Shopping for Ingredients and Supplies: Hit craft stores and grocery stores for pretty decorating items and cookie cutters as well as basic ingredients. Try to buy items that are on sale whenever possible, and if you REALLY want some extra decorating items, you will need to decide if you have enough money to buy them and still make a profit.

Bake and Decorate! Now, you're finally ready to bake! While baking your goodies, think about fun ways to decorate them for the specific holiday. Thanksgiving is a perfect time to experiment with cookies to like a turkey, pumpkin, Pilgrim, Native American, even a log cabin or teepee. You might want to create a group of cookie characters to sell as a package.

Remember to keep aside a few of your goodies for you and your family to sample. You don’t want to leave them out of enjoying your new creations.

You’ve made your budget and bought your ingredients and supplies. You’ve started baking and decorating them. Next time, I'll tell you how to sell them!

Read part three: Make Your Money Work for You