Help Approaching A Kitchen For Rent
Business By momofjil Updated 30 Dec 2005 , 10:00pm by melodyscakes
I know that this type of question has been posted before but I need some ideas. I just found a resturant in our town that closes at 3pm everyday. YEAH! 
I want to approach them about possibly renting the kitchen when I do cakes. I haven't got a business really started because I haven't had a place to bake. If I can find a kitchen, we have a bridal show coming in January that I would love to set up at.
How have you approached kitchens? What has worked? Thanks! 
Great question! I'm going to bump it up, I'd like to know this too!
i have the same situation.. we have a cafe on the ground floor of our building.. everyone who has business in the building can eat lunch there.. they also cater events.. i already asked the owner if they have a cake supplier and he said no but wanted prices and pic's, but i cant really advertise cuz i bake in the home.. i'm not sure how to approach him about renting kitchen time with him and being available for any needs he might have...and if this didnt work how does one approach a situation like that? do you rent the space by time? do you give a % of profits???
tye- I know NOTHING on this subject but I saw it discussed on another thread and someone suggested approching the cafe with the idea that you would trade cakes for time in the kitchen. The cafe can sell them by the slice and make more from them that way. You could also put out a brochure on the counter, bringing in you some new business as well.
we have a business with a retail spot and had another company come and ask us to share space...they pay a flat rent to us (which we proportioned by using sqft rented by them/total sqft of leased space) and they pay the same ratio on utilities, security, etc.
I would try to work out something like that (a fixed rent) instead of a portion of profits...especially if you become successful, you don't want this to be a variable cost, but a fixed cost that becomes cheaper with increasing number of orders...does that make sense? With utilities I would do the same, # of hours you spend vs. they spend x total utilities to keep it somewhat fair.
you may want to do some research on getting your own liability insurance (general business) and have a "portfolio" of info. to the prospective "landlord." The more professional and prepared you look, the better your chances unless they just flat out don't want to deal. I would include 8x10 pics of your cakes, a sample list of flavors/types of cakes, cookies, etc you plan on doing....ie a basic business plan. If you plan on hiring additional help, show that you will have an incorporated business so that if there is slip-and-fall claims, it's your responsibility (i.e. liability insurance) and not theirs.
...these are some of the initial thoughts I have, having experienced it from the other side, even though ours is not in the food industry, so you may need to get some food industry info. as well (like health inspection permits/issues, how to address sharing those or do you need separate permit)...
I hope this helps.
I do this.. don't be shy just go ask. All they can say is no.. Also I agree get a set rate. Either by the day or the hour is usually how they charge and utilities are normally in cluded in that amount. The only stinky part is having to take your stuff back and forth each time you are there. 
Okay i did it!! i went into the cafe downstairs in our building to get a soda. The owners (husband and wife) were there joking around so i just came out and ask if the opportunity of renting kitchen space/time was a possibility.. the wife said anything was a possibility!! so we chatted a bit and her husband came over and we knocked around the idea.. he was very excited and said he was open to just about anything!! They've already seen the cakes i made for the corporate event i did with TCF BANk and tasted it first hand as they catered the event.. i gave them an idea i had for Valentines Day and making cakes that serve 2 to be delivered to that special someone and she went crazy with ideas... she said we'd talk more later about it.. so now what??? i have no idea what a fair price for time/space would be... at this point i wouldnt have much business... do i go and get a business license now??? my head is swimming and i'm not sure what the first step is..
Check Colorado.gov first, to see what you need to get started, so much paperwork, it'll give you headaches for weeks. Might need Hepatitis shots and who knows what else, since you'll be serving foods.
As for prices, I have no idea what kinds of prices, I'd imagine it depends on where in Colorado you are, as to what prices you pay.
Being in the midwest, it's probably a lot cheaper for me to do this, than it would be, say in Durango, or Denver. Colorado Springs or even Peyton would be lot's cheaper probably.
so now what??? i have no idea what a fair price for time/space would be... at this point i wouldnt have much business... do i go and get a business license now??? my head is swimming and i'm not sure what the first step is..
Here's what I would do and some questions I would ask myself, I HTH:
First, check with the local /state agencies to find out what you need...I would imagine most of this is already taken care of through the other couple, since they are the owners and their business is already established. So, make sure to concentrate your questions on the aspects of you, and what you personally need to do/have (shots, licences, certificates, insurance, etc, etc) Make it clear to the agencies that you talk to that you will be renting kitchen space from an established food businesss so that they understand the situation.
Second, find out going rates for commercial space rentals. You can call realators in your area asking if anything is available in the same vicinity of the complex. That should give you a good idea of the going rates. Some cities post their average per sq ft rent price for commercial properties, call your city or local business association and ask. Is there anyway you can find out (now) how much rent the couple pays each month? The previously posted advice about basing the amount you pay on sq ft was a good base to start with, then depending on your situation you can adjust it. It was a really good point to try to negotiate a fixed price. Also, how many hours a week will you be doing this? Will you be working somewhere else, too? Depending on your situation, it may be better to negotiate an hourly rate as opposed to a monthly rate if you will only be spending a few hours a month doing this. Be careful though, if your business is successful, this tactic may burn you. Perhaps you could negotiate a clause, after X amount of hours, you pay a monthly fee, under X amount of hours an hourly fee? (They did say nearly anything is possible, don't be afraid to ask! All they can do is say no. Just remember, no matter how nice they are, you need to look out for your best interests first.
Third, figure out your ingredient costs for the products you are currently making, or will be offering. You need to know how much each type of cake base will cost and how long it will take to produce so that you can figure how much cost and time you need to allot for each cake base. From there you can add decorating time. Then, when you meet with the couple, you will have base numbers in your head so you can say, "hmm, it takes $35 in deorating time, ingredients, and baking time to make 1 9in cake, plus I need to add the cost of rent/utilities they want to charge (proportioned), which means I would have to sell each cake for a minimum of $X...is that doable or do I need to negotiate more?" How many cakes would you then have to sell each month to break even? How many would you have to sell to realize a profit? Make sure you do these calculations, too. Don't forget to have a base figure of your extras, too, like insurance, transportation, etc, etc. All of these things need to be in the back of your mind so you can make an accurate evaluation. It may sound like a steal if they want to charge you $700 a month, but after you add in all of the other costs, you might be paying close to $1500. Could you sell enough cakes to stay in business?
I think this is really important, because if you underprice yourself, it will spell disaster for you, so right from the beginning you need to make sure you have your prices set correctly and factor in all of the variables.
I hope everything works out for you. How exciting!! Good luck!
congrats on your new oppertunity!!!!! very exciting!!! i cant wait to read what happens next.
so, do you have a name for your business yet?
good luck!!!
melody
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