Banana Bread Business Plan, With a 12-Month Projection

A banana bread business plan sets out what you'll bake and who buys it, what a loaf costs and sells for, the rules for baking at home, and the first year month by month. Banana bread is one of the simplest baked goods to start with: it keeps for days at room temperature, it's the kind of food cottage food laws were written for, and its main ingredient is the banana nobody wants once it's spotty, which grocers sometimes sell off cheap. In the example below, a home baker in North Dakota sells loaves at markets, chocolate chip loaves, whole loaves to cafés and muffins, makes a profit from the first month, and ends the year about $13,100 ahead on $38,200 of sales, after paying $20 an hour for the baking. Below is a description example, each part of the plan, the cottage food question, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: what you bake, where you sell, the kitchen, the goals.
• Cost a loaf with your time in it; at 12 loaves a bake, the time is the biggest line.
• Buy overripe bananas cheaply; they're what makes the bread good.
• Price markets, cafés and muffins separately.
• Banana bread keeps at room temperature, so cottage food rules usually cover it, though not always sales to cafés.
• The startup is small: a mixer, pans, a market setup and a permit.
• TaroStack costs every bake from what it used and dates every loaf. More below.

Part 1: the business description

Prairie Rose Bakery, a made-up home bakery in Fargo, North Dakota, I use in these examples, writes:

Prairie Rose Bakery bakes banana bread, chocolate chip banana loaves and banana nut muffins in a home kitchen under the state's cottage food rules, sold at two farmers markets and by order, with whole loaves for local cafés. Every loaf carries its bake date. In our first year we plan to sell about 400 loaves a month by fall.

Part 2: what a loaf costs

Three overripe bananas from a grocer's discount rack cost about 45 cents against 75 at full price; at 380 loaves a month, that's about $114. The baking time is 1¾ hours of hands-on work for a bake of 12 loaves. How to put that time into a cost is in how to compute labor cost in baking.

Part 3: customers and prices

A café loaf leaves $3.63, two-thirds of a market loaf, but a café that slices it and sells it by the piece every morning is 120 loaves a month with no market stall. How to set a price a café will accept is in how to price baked goods for wholesale.

Part 4: the cottage food question

Banana bread keeps at room temperature, which is what cottage food laws are generally written around, so in many states it can be baked at home and sold direct, with a permit or registration, a label and sometimes a food handler class. The catch is the café: some states allow cottage food only to be sold directly to the person who eats it, so selling loaves to a café may need a licensed kitchen. Check your state's rules before the first café order; how cottage food works is in how to start a cottage food business. Wheat, eggs and milk are the allergens to declare, plus tree nuts in the walnut muffins.

Part 5: the first year, month by month

Fixed costs are $330 a month: the cottage food permit averaged over the year ($15), market fees ($160), insurance ($40), the website ($30), software and card fees ($35), and marketing ($50). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $38,216 and the profit $13,070, on top of $20 an hour for the baking, about 68 hours a month at full speed.

Part 6: the startup budget

Get the template

Download the banana bread business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Four hundred loaves a month, three cafés with standing orders, and a bake schedule built around when the bananas are ripe: the cost of a loaf moves with butter and banana prices, the café loaves need dates, and the bananas that were perfect on Tuesday are compost by Friday.

How TaroStack does it

TaroStack costs every bake and dates every loaf.

Bakes at what they used. Each loaf is a recipe, and units convert: flour bought by the 25-pound bag, used by the cup. Recording a bake takes the ingredients off stock at what you paid, so the cost of a loaf follows the price of butter and bananas, and margins are reported by product and by customer.

Dated loaves. Each bake goes into a lot with its date, picking takes the oldest first, and lots close to their date show in your alerts. Café standing orders are sales orders for their delivery day.

And the bananas. Bananas that go past use go off as adjustments with their reason, and the reorder list works in days of cover, so the bananas and butter are there for the Thursday bake.

Recipes, batches, lots and margins by product and customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Can I sell banana bread from home?

In many states, yes, under cottage food rules: banana bread keeps at room temperature. Some states limit cottage food to direct sales, so selling to cafés may need a licensed kitchen. Check your state's rules.

How much should I sell banana bread for?

Cost a loaf with your time, then price each channel. In the example, a 1-pound loaf costing $6.43 sells for $12 at a market and $10 to a café.

How much does it cost to make a loaf of banana bread?

In the example, $2.40 of ingredients and $6.43 in all, with packaging, 8¾ minutes of baking time, overhead and the card fee. Overripe bananas from a discount rack keep the ingredients down.

Is a banana bread business profitable?

It can be. In the example, a home baker selling at markets, to cafés and by order ends the first year about $13,100 ahead on $38,200 of sales, with $20 an hour paid for the baking.