A market analysis for a home-based bakery defines what baked products you want to offer, outlines the competition and describes your market niche or customer base. The analysis may be done as part of a full-fledged business plan or completed on its own. A home-based bakery kitchen usually has to be inspected by the state or county health department before you can legally offer baked goods. It's a waste of time to do any marketing if you find out your kitchen doesn't pass the inspection. Get it up to code first.

Maximum Capacity

Calculate the maximum capacity of your kitchen. It doesn't pay to go after a wedding reception for 300 people if your kitchen can't handle the food preparation. Also consider the storage limits of your kitchen, the refrigerator and freezer capacity. Delivery is another function that may limit the types of customer you can handle.

Define the Products

Bakery items include an array of products such as highly decorated cakes, artisan breads, cupcakes, pies, rolls and cookies. One bakery, much less a small home-based bakery, can't offer every type of baked goods. Select the products you believe give you a competitive advantage -- your unusual creations, or those that fit consumer's current tastes such as gluten-free, sugar-free or organic.

Research the Competition

Your baked goods are up against those sold by grocery stores, gourmet markets, other bakeries and caterers. Make a list of the competitors, noting their advantages, pricing and marketing. Visit their stores and websites. Check out their social networking sites.

Define Ideal Customer

Determine who will buy your baked goods. The more information such as income, gender, lifestyle, hobbies and preferences you have about the ideal customer, the more targeted your marketing materials and message will be.

Find Customers

Research where that ideal customer is. For example if your customers are busy families who don't have the time to prepare special occasion cakes and cupcakes, upscale family neighborhoods are one place you'll find them. Or target food-related businesses that would prefer to have someone else focus on the breads, rolls, cookies, cakes and pies, such as caterers and restaurants. Find them through Internet, phone book and restaurant review websites.

Expand Your Net

Project how many of your baked goods will be sold to the customer base in the geographic area you've chosen. Expand that area if sales aren't enough to sustain your business. Contract the area if sales are too much for your kitchen to handle without expansion. Other options to increase sales include widening the market niche or customer base. For example, offer wedding cakes to caterers and special occasion cakes to families.