Baking at home is more popular today than it’s been in the last 60+ years, with millions of people in the US (and millions more around the world) diving headfirst in the world of becoming a home baker for the first time.
Most are doing this as a hobby, following traditional recipes or tinkering with new twists on old classics. But some are bitten by the home bakery bug and want to turn their passion into profit – starting up a business baking their favorite treats.
A lot of these home bakers are discovering that the rules and regulations about cooking food for sale at home are a lot more stringent and strict than they expected, too. And, the rules are very different based on where you live. Visit Pick Your Own to see what the laws are in your area.
As a legal home baker, you may never need or want a commercial kitchen and can produce the volume of products you want in your current situation. Maybe you want to expand, and a larger professional kitchen is a good option. Perhaps based on your cottage laws, you can’t sell anything you bake in your home kitchen, and a commercial kitchen is your next choice.
It’s important to determine your business goals so you can judge if renting a commercial kitchen makes sense. Once you do your research, be sure to run your numbers to know the complete financial picture before you potentially sign that lease.
In the rest of this detailed guide, we’ll cover (almost) everything you need to know to rent a commercial kitchen. We go over the benefits these kitchens offer, the basic process you need to follow to find the right kitchen, pricing details, and so much more.
By the time you’re done inside information below, you’ll be ready to hit the ground running with your new baking business, graduating from a home baker to a professional baker with as little headache and hassle as possible.
Let’s dig right in!
Why Rent a Commercial Kitchen in the First Place?
As highlighted above, most states across the country have “cottage food laws” on the books that allow you to sell different food products that you have prepared in a residential kitchen instead of food made in a commercial kitchen.
Cottage food laws vary across the board, though, with states – like Alaska – is a lot less restrictive with their laws than Massachusetts (which is very strict, comparatively).
You must understand your state’s cottage food laws before you open up your home bakery operation, especially if you will be selling your baked goods. The last thing you want to do is get shut down by the health inspector or slapped with fines for operating an “illegal” business. Check out my post, How to Start a Legal Home Business, for a good overview for launching a home bakery.
One way to deal with cottage food law issues, though, is to rent a commercial kitchen.
Not only will you be able to avoid legal problems by using a fully state certified commercial kitchen (letting you sell anything you make in there without any issue), but you’ll also be able to:
- Use commercial kitchen space and appliances you don’t have to purchase yourself.
- Leverage larger mixers and ovens that dramatically improve your output.
- Enjoy a separate space to practice baking rather than having to dedicate your whole home kitchen to your new business.
And that’s just the tip of the iceberg!
Best of all, you’ll be able almost always to be able to rent a commercial kitchen by the hour.
That’s something we dig a little deeper into just a moment, but the fact that you can still leverage tens of thousands of dollars of commercial cooking equipment and lots of kitchen space on an hourly basis is a benefit you can’t overlook.
If you aren’t sure you have enough business to warrant a commercial kitchen, be sure to read my post on How To Sell Your Baked Good to Coffee Shops. I also have a post on How to Sell Baked Good at Farmers Markets. Hate to sound like a broken record, but you need to know the local laws to pursue these options.
How Much Do Commercial Kitchen Rentals Cost?
Obviously, there’s no “set in stone” commercial kitchen rental price structure to go off on across the country.
Just like homes or apartments, you’ll find different prices in different locations – usually paying more in big cities and a lot less in suburban and rural areas that may not have all the amenities you want.
As a general rule, though, these kinds of kitchens rent out monthly leases providing you hourly access to the commercial kitchen itself.
The monthly lease secures your timeslot (Monday through Friday, 6 AM through 9 AM, for example), and then you will be asked to pay an hourly fee. The monthly leases run anywhere between $300 a month to upwards of several thousand dollars a month. On the other hand, the hourly fees usually range between $15 and $30 per hour. (Source: Peerspace)
Consider spaces like restaurants, churches, and bagel shops as just a few examples, where their commercial kitchens are unused for a large amount of time. Spaces like that may require you to rent the kitchen at off-hours, which could be in the middle of the night.
Luckily, you’ll be able to deduct almost all of this rental expense if you’re using the space to operate your home bakery or baking business, though!
Do I Need to Bring My Kitchen Equipment?
One of the most significant advantages of working out of a commercial kitchen for your baking business (especially as a home baker) is the easy access to tens of thousands of dollars worth of commercial kitchen equipment.
This equipment isn’t just incredibly expensive, but it’s also big, bulky, and anything but designed to fit into your traditional residential home kitchen. You’ll be able to use ALL of the equipment in the kitchen itself as part of your rental agreement.
At the same time, the odds are pretty good that you have some specialized equipment for small appliances you’ll need to bring to your rental, too. Some rental kitchens offer storage space for your appliances and ingredients so that you don’t have to lug everything back and forth every time – but not all of them do.
That’s something you’re going to want to confirm before you sign on the dotted line and agree to any long-term leases.
Can I Run a Baking Business Out of a Kitchen I Rent and Don’t Own?
Absolutely!
Like we mentioned earlier, the significant advantage of using a rental kitchen is that you don’t have to spend tens of thousands of dollars to outfit a space entirely to run your own baking business.
Instead, you’re able to use the already existing appliances and infrastructure to get your home bakery up and running, using the commercial equipment (and the commercial kitchen license) to make and sell your goods.
It’s critically important that you find commercial kitchens regularly inspected by local and state officials and abide by the cottage food laws. You want to know that these kitchens are 100% certified for commercial use and that the license can be used by you to sell your home baker goods, too.
How Do I Find a Commercial Kitchen in My Area?
Start with your network of family, friends, and colleagues by sharing what you need. You never know where opportunities will come from. Of course, Google is a valuable research option too. Finally, websites like The Kitchen Door specialize in connecting commercial, licensed kitchens with chefs, bakers, and food truck owners who need a professional space. They even have a handy tool where you enter your zip code to find available local kitchens. The Kitchen Door provides the nation’s most comprehensive and up-to-date set of local listings in the United States.
Do I Feel Safe in This Kitchen?
Often, as a small business owner, you may be baking alone, so personal safety is a critical factor. What time of day will you be in the kitchen? You could be coming and going during unusual hours. Where would you park? Will anyone else be around? These are practical concerns that should be addressed, so you don’t find yourself in uncomfortable or scary situations.
Closing Thoughts
You’re able to keep your initial capital investment low while using commercial equipment and a commercial license to build and grow your business. And, you don’t have to worry about long-term lease agreements that would lock you in regardless of how your new baking business does.
Do your research and due diligence. Speak to local bakers to get a feel for the kitchens they use to run their baking business, not necessarily to see if space is available there (though that wouldn’t be a bad idea) and better understand what you should be looking for specifically.
Double confirm that any commercial kitchen you’re going to be renting has been health inspected, certified for foodservice businesses, and has the kind of appliances you’ll need to make the baked goods you want to sell.
Choose a short-term lease when just getting started with your home bakery business, too. That’ll give you the flexibility if the kitchen doesn’t end up being an ideal fit! It’s always a good idea to get professional advice before you sign any lease.
When you get right down to it, there are many advantages of getting a commercial kitchen rental – if you have run the numbers on your new baking business and it makes sense practically and financially.
Have you gotten my Essential 5 P’s for Perfect Product Pricing pdf yet? I created this freebie to take the guesswork out of determining how much to charge. Sign up for my email list, and your very first email has the pdf.
Check out my blog archive for more helpful articles. Follow me on Instagram at @whiskwarrior, where I post weekly tips, resources, and personal experiences operating a home bakery and retail bakeshop.
