§1What this business is
Ingredients are weighed and mixed into batter, deposited into greased trays, baked at 182–218°C, de-panned and cooled, then sliced into layers. Whipped cream and fruit are layered on an icing and decorating machine, finished by hand and kept in a display refrigerator until sold. The report packs cakes in 1 kg units. Cakes are bought for birthdays, anniversaries and weddings.
Capacity: 50 kg an hour, 400 kg a day on an 8-hour shift; 1,14,000 kg a year after 5% wastage at full capacity; 60% in year 1.
§2Is it right for you?
Who it is for
A baker or confectioner with retail outlets or tie-ups with cake shops and cafés.
Who it is not for
Someone without a ready sales channel; fresh cakes cannot wait for buyers.
Advantages
- Cakes are bought for every celebration
- Small space (1,000–1,500 sq ft) and low power
- Fast turnover; cakes sell within days
- Can add pastries and custom orders
Drawbacks
- Very thin margin in the report (under 1% in year 1)
- Raw material is about 82% of sales
- Short shelf life; unsold cakes are a loss
- Needs cold storage and strict hygiene
Skills you need
- Baking and cake decoration
- Food hygiene and cold-chain handling
- Costing to protect thin margins
- Retail and online order management
Why difficulty 3/5: Easy to start but hard to make money: thin margins and perishable stock.
§3Market
Who buys
- Families buying for birthdays and anniversaries
- Wedding and event caterers
- Offices and institutions ordering for functions
How it sells
- Own outlet or bakery counter
- Cake shops and cafés
- Online food-delivery and order apps
Good to know
- The report's market section quotes the Indian bread market at $640.73 million in 2017, projected to reach $1,024.54 million by 2024.
- Packaging alone is ₹20.82 lakh in year 1 of the report — a big cost for cakes.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Weighing scale | — | — |
| Batter mixing machine | — | — |
| Cake depositor machine | — | — |
| Baking oven | — | — |
| Cake icing and decorating machine | — | — |
| Display refrigerator | — | — |
| All machinery and equipment (excluding GST and transport) | — | ₹12.27 lakh |
From: PMEGP sample project report — Cake Making Unit (prepared by Udyami/Samadhan)
- All-purpose flour (maida), castor sugar, eggs, oil and corn starchcake base
- Baking powder and vanilla essenceleavening and flavour
- Whipping cream and icing sugarfor icing
- Pineapple juice, canned pineapple and cherries (optional)for soaking and decoration
- Packing materialpackaging ₹20.82 lakh in year 1; raw material ₹226.80 lakh in year 1
From: PMEGP sample project report — Cake Making Unit (prepared by Udyami/Samadhan)
In our raw material database
§5Licences & registration
- FSSAI licence
- Udyam registration
- GST
- Trade licence from the local body
- Fire NOC if required locally
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- PMFMECentralUnclear35% subsidy, up to ₹10 lakh
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
The report is a PMEGP sample. Bakery units can also fit PMFME; MUDRA and CGTMSE can back the loan.
§7Money
How the investment is worked out: Plant & machinery ₹12.27 lakh (excluding GST and transport) + other assets ₹1.20 lakh + working capital ₹7.25 lakh = ₹20.72 lakh. Premises rented.
Working capital: Working capital ₹7.25 lakh, of which a bank limit of ₹6.52 lakh; only 5 days' credit to buyers.
Year not printed on the report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: APEDA
- Fresh cream cakes do not travel; only long-shelf-life cakes are exported.
§9Risks — where people fail
- Wastage of unsold stock
- Ingredient price rise (cream, eggs, sugar)
- Food-safety complaints
- Power cuts spoiling cream cakes
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working cake making unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (FSSAI licence, Udyam registration), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Cake Making Unit?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.