Need Advise With Financing Or A Career As A Cake Decorator.

Business By Ito Updated 24 May 2008 , 4:34am by Ito

Ito Posted 18 May 2008 , 6:52pm
post #1 of 22

How do you go about getting money to start a Custom Cake decotating business with not so good credit, and who do you find the money when you do not have anyone friends or family to financially assist you??

I am currently taking cake decorating classes in Canada but I might be moving back to the US, and I would like to hear from anyone in Canada and the US, (Vermont or Georgia), who has been in my position financially but has been able to start a successful business.

Also, I am very interested in working for anyone who looking is looking to hire a fulltime Cake Decorator either in Canada, Vermont or Georgia.

Please advise
Thank you.

21 replies
leah_s Posted 18 May 2008 , 7:03pm
post #2 of 22

In this market with super tight credit/lending policies even people with excellent credit are having a difficult time gettng loans. All business loans will require you to provide 20% financing yourself. There are some city backed loans in my area, but you still have to provide at least 10% of the funds yourself, and they prefer you to have 20% to look at you more seriously.

I'd counsel you to get a job as a decorator and start saving and repairing your credit rating.

Ito Posted 18 May 2008 , 7:16pm
post #3 of 22
Quote:
Originally Posted by leahs

In this market with super tight credit/lending policies even people with excellent credit are having a difficult time gettng loans. All business loans will require you to provide 20% financing yourself. There are some city backed loans in my area, but you still have to provide at least 10% of the funds yourself, and they prefer you to have 20% to look at you more seriously.

I'd counsel you to get a job as a decorator and start saving and repairing your credit rating.




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Thank you for your quick response Leahs. I really appreciate it. I guess you are right. I had no idea that even if I did get a loan that I would have to put up 20% for my own financing to begin with. With that in mind I guess I do need to find a job then and probable just bake part-ime from home to safe up.
Thank you once again.

leah_s Posted 18 May 2008 , 7:24pm
post #4 of 22

I am speaking from my own experience. You can certainly check around your area to see what financing options are. However, I don't think you will find, especially these days, 100% financing. That makes it too easy to walk away from the businnss and leave the bank holding it. The bank wants you to have enough invested that you have to make a go of it.

Ito Posted 18 May 2008 , 7:33pm
post #5 of 22
Quote:
Originally Posted by leahs

I am speaking from my own experience. You can certainly check around your area to see what financing options are. However, I don't think you will find, especially these days, 100% financing. That makes it too easy to walk away from the businnss and leave the bank holding it. The bank wants you to have enough invested that you have to make a go of it.




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It almost feels discouraging to start a business knowing that the lack of financing is the main obstacle I face, but I will do my best to press on and save some money before I contact the bank.


When you say the bank wants you to have enough invested, what exactly do you mean?


Please advise
Thank you.

leah_s Posted 18 May 2008 , 7:36pm
post #6 of 22

The bank wants you to invest your own money into your business (the 20%).

jewelykaye Posted 18 May 2008 , 7:47pm
post #7 of 22

Yes, I agree with Leahs about getting a job in the business first. This will also help you learn the business a little bit better before jumping in yourself. You can learn the do's and don'ts without wasting your money. I know it's the best thing I ever did! icon_biggrin.gif

Ito Posted 18 May 2008 , 7:51pm
post #8 of 22
Quote:
Originally Posted by leahs

The bank wants you to invest your own money into your business (the 20%).




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I see. I thought you meant something else besides the 20% investment.

chutzpah Posted 18 May 2008 , 7:53pm
post #9 of 22

Of course, 20% is just the figure that leah 's bank said to her. Different banks have different policies, and I'm sure it depends on your credit record, finances and if you have any collateral (house, car, boat etc).

Ito Posted 18 May 2008 , 8:04pm
post #10 of 22
Quote:
Originally Posted by jewelykaye

Yes, I agree with Leahs about getting a job in the business first. This will also help you learn the business a little bit better before jumping in yourself. You can learn the do's and don'ts without wasting your money. I know it's the best thing I ever did! icon_biggrin.gif




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Thank you jewelykaye.
I think that is what I will end up doing, and that is getting a job as a cake decorator and them move up from there.

By the way, how much do you think Cake Deocrators are paid on average, by working fulltime?

leah_s Posted 18 May 2008 , 8:15pm
post #11 of 22

And just for the record my credit rating is above 800, so I have to assume I was getting quoted (from multiple banks) a reasonably good deal. It was a year or so ago, however. I'm trying to resist, yet again, the urge to open a shop and stop baking at home. I've taken over the kitchen, basement and breakfast room. There's not a lot of expansion room left.

soygurl Posted 18 May 2008 , 8:29pm
post #12 of 22

The amount cake decorators make working full time varies a LOT! It can be as low as minimum wage, and as high as... well a lot! It varies according to skill level and location. I know that most cake decorators working in chain grocery store bakeries make just over minimum wage, and unless you can find a really nice, upscale bakery, and you have a TON of experience, you're probably not going to be making much. Right now, I make $10.50/hour doing wedding cakes, less for birthday/special occasion cakes. I don't work quite full time, but I can tell you it not nearly as much as I like to be making! And in my area I make more that most other cake decorators.

jewelykaye Posted 18 May 2008 , 8:32pm
post #13 of 22

I would say the average is between $6/hr to $15/hr. Depending on location and size of the business.

indydebi Posted 18 May 2008 , 10:45pm
post #14 of 22

we are also in an industry that has a nice Catch-22: You can't get a loan to open a food industry business until you've been in business for 3 years. (Dont' try to figure it out .... icon_confused.gif ).

My bank was impressed with the years experience I had in the business, the fact that I had a sales history and a sales growth history to show them.... they are looking for a track record to show that you know what you're doing. I went to three banks before I got my biz loan.

And when you do get to that point where you are ready to open the shop, remember that whatever you've estimated for costs will be too low. Construction never comes in on budget, and there are those little things that get overlooked ... what I call the "oh yeah!" list! My $1000 grease trap was one of those "oh yeah! I need one of those!" items. The fire extinguishers and installation wasn't budgeted (another $800). So just plan on things being more than you planned.

Ito Posted 20 May 2008 , 12:47am
post #15 of 22
Quote:
Originally Posted by leahs

And just for the record my credit rating is above 800, so I have to assume I was getting quoted (from multiple banks) a reasonably good deal. It was a year or so ago, however. I'm trying to resist, yet again, the urge to open a shop and stop baking at home. I've taken over the kitchen, basement and breakfast room. There's not a lot of expansion room left.




*************************************
Great credit score. Form your response, I assume you currently work from home then? If so how long have you been working from home and do you think you will prefer to work form home or open a shop?
Also, do you think it will be a good idea for me to do some cake decorating on a part time bases from home? Do I need a permit to do that??

Ito Posted 20 May 2008 , 12:56am
post #16 of 22
Quote:
Originally Posted by waterfallsoygurl

The amount cake decorators make working full time varies a LOT! It can be as low as minimum wage, and as high as... well a lot! It varies according to skill level and location. I know that most cake decorators working in chain grocery store bakeries make just over minimum wage, and unless you can find a really nice, upscale bakery, and you have a TON of experience, you're probably not going to be making much. Right now, I make $10.50/hour doing wedding cakes, less for birthday/special occasion cakes. I don't work quite full time, but I can tell you it not nearly as much as I like to be making! And in my area I make more that most other cake decorators.




************************************
Thank you waterfallsoygurl. I guess what I will have to do is find some other fulltime job that pays well, and then work as a cake decorator on a part-time basis at a chain grocery store or hopefully find something at a hight-end bakery which will be great. Who knows.

leah_s Posted 20 May 2008 , 2:40am
post #17 of 22

I do have a licensed home kitchen. If you do choose to work from home, get licensed and do it legally.

tonedna Posted 20 May 2008 , 2:53am
post #18 of 22
Quote:
Originally Posted by Ito

Quote:
Originally Posted by leahs

And just for the record my credit rating is above 800, so I have to assume I was getting quoted (from multiple banks) a reasonably good deal. It was a year or so ago, however. I'm trying to resist, yet again, the urge to open a shop and stop baking at home. I've taken over the kitchen, basement and breakfast room. There's not a lot of expansion room left.



*************************************
Great credit score. Form your response, I assume you currently work from home then? If so how long have you been working from home and do you think you will prefer to work form home or open a shop?
Also, do you think it will be a good idea for me to do some cake decorating on a part time bases from home? Do I need a permit to do that??





You have to make sure that were you live is legal to bake from home. Were i live is not legal.. icon_sad.gif

littlecake Posted 20 May 2008 , 3:15am
post #19 of 22

there is a place i saw on the today show called prosper.com where individuals lend money...i looked into it a little, so i could go ahead and get a new roof on the shop.....but i decided just to save it up myself.

might be worth checking out.

good luck.

Ito Posted 20 May 2008 , 7:54pm
post #20 of 22
Quote:
Originally Posted by littlecake

there is a place i saw on the today show called prosper.com where individuals lend money...i looked into it a little, so i could go ahead and get a new roof on the shop.....but i decided just to save it up myself.

might be worth checking out.

good luck.




**************************
Thank you Littlecake! I will check out the website you menioned.

CelebrationsbyLori Posted 24 May 2008 , 3:28am
post #21 of 22

As someone who has had a storefront/licensed bakery for about 8 years, I can say this... you will never be prepared for what's ahead. Love of cake decorating is important, but decorating is pretty much the bottom of the list of things I do. I am an Accountant, Marketing Executive, Inventory Control Specialist, Stocker, Customer Service Specialist, Complaint Department, Payroll Clerk, Human Resources Manager, Account Payable/Recievable Manager, Maintence person, Ordering clerk, then if there's time... Baker, Cake Decorator and the entire Art Department! I worked by myself completely for 5 years before I could justify/pay a full-time employee. There were countless 15-18 days, nights of wondering how I was going to pay the bills. It is a lot to think about especially if you have a family. Our business runs on the weekends, so there won't be anymore school functions and ballgames for you, you'll be delivering wedding cakes or trying to stay ahead of the Graduation rush! Don't get me wrong, I love it and wouldn't change a thing, but I have a husband who is also a workaholic and we don't have children, so my life is my business! My best advice is research, research, research! Talk to as many people you can that are self-employed in any business and listen to their advice!
Sorry so long!
Lori

Ito Posted 24 May 2008 , 4:34am
post #22 of 22

[quote="CelebrationsbyLori"]As someone who has had a storefront/licensed bakery for about 8 years, I can say this... you will never be prepared for what's ahead. Love of cake decorating is important, but decorating is pretty much the bottom of the list of things I do. I am an Accountant, Marketing Executive, Inventory Control Specialist, Stocker, Customer Service Specialist, Complaint Department, Payroll Clerk, Human Resources Manager, Account Payable/Recievable Manager, Maintence person, Ordering clerk, then if there's time... Baker, Cake Decorator and the entire Art Department! I worked by myself completely for 5 years before I could justify/pay a full-time employee. There were countless 15-18 days, nights of wondering how I was going to pay the bills. It is a lot to think about especially if you have a family. Our business runs on the weekends, so there won't be anymore school functions and ballgames for you, you'll be delivering wedding cakes or trying to stay ahead of the Graduation rush! Don't get me wrong, I love it and wouldn't change a thing, but I have a husband who is also a workaholic and we don't have children, so my life is my business! My best advice is research, research, research! Talk to as many people you can that are self-employed in any business and listen to their advice!
Sorry so long!
Lori

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Thanks Lori for your advise. I do have a love for Cake Decorating and even though I am just beginning I think I will have to practise a whole lot more before I get to your level. I guess that is how it all begins. I will also keep gathering more information as you have suggested.
Thank you so much.
Ito

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