Would The Bank? Would You?

Business By Cakenicing4u Updated 24 Jun 2008 , 10:46pm by Cakenicing4u

Cakenicing4u Posted 23 Jun 2008 , 1:03am
post #1 of 11

icon_sad.gif Soo many things to think about, and one day, I'm going to try and the next I'm not. It's time for a CC support meeting.

My boss is shutting down her business to a great degree, and that includes laying me off. icon_cry.gif BUT, she is offering me her wholesale accounts and her over-flow business... icon_biggrin.gif

I don't have a kitchen to work out of in my house, and my house only has 17 ft of backyard, so there's no chance to build on my property (Unless I'm like that lady in NYC that works out of that tiny shop in her tiny apt... NOT)

With the wholesale accounts it's about $800 a month, give or take in income. Many times, much more and we turn down about 8-12 calls a week for cakes. We are doing 4-7 weddings a week $$$$$$, and she plans to back down to two a week, her discretion... so she can do three little ones or one massive one or two mediums. That leaves a lot of weddings for the pickings. We do about 20 other cakes a week, baby showers, graduations, birthdays, etc... and we've been turning tons of orders away already!

icon_lol.gif Now, she is feeling rotten for making this decision and affecting me that much, so I feel like she is sincere in her offer to pass me the business. It was her offer from the start. icon_wink.gif She's going to be a great mentor... after all, she helped me get some crazy skills on cakes! Should I line up the plans for my own shop and do consultations at hers to secure some bookings till I would open my doors? I'd be honest and tell them the plans before setting up the consult.....

thumbsdown.gif But, my personal finances are not that great. I have incredible credit, but a weird debt-income ratio that only balances out because I work two jobs and 70 hours a week. icon_rolleyes.gif That works in my favor for owning a shop, right? I already work 70-80 hours a week and commute about 10 hours a week. icon_confused.gif

Everyone I know says GO FOR IT. but I'm scared out of my wits.

Right now, I'm in the mind set to get a real job... but cake decorating is the only thing I know how to do, and I can't seem to find a bakery that's hiring in my area... about an hour away, yes, but not in my town. thumbsdown.gif
Which leads to my next problem.. I have no car. My car died this week, and I don't have another one yet. And I can't decide what kind of car to look for-- something to deliver cakes in, or something really really good on gas. icon_rolleyes.gif

I've been around long enough to know that you can't get a loan for a cake business without being in business.... BUT, icon_razz.gif What if you're going to buy part of an established business kinda like a franchise?? Would the bank even consider it? Or am I wasting time making a business plan when I should be looking for a real job? I've got some good connections, like suppliers, a real estate agent (who used to sell food service equip for 30 years and knows building codes... ) ((And has a storage unit filled with used equipment that he wants to unload)) thumbs_up.gif

I just don't know what to think or what to do. And, I called SCORE... they called me once and never called again, and I've called and emailed them again with no success! So what's next?

If you read it this far-- THANKS! You're now part of the support group!


10 replies
playingwithsugar Posted 23 Jun 2008 , 1:33am
post #2 of 11

If she is cutting back, won't she rent you her space which is not being used as extensively anymore? Or is she just cutting back enough to cover her time there during the week?

Theresa icon_smile.gif

Cakenicing4u Posted 23 Jun 2008 , 1:42am
post #3 of 11

Not really an option.. the shop is too small and our biggest problem is a lack of space. We run with two house size refrigerators and in commercial equip, one freezer and one fridge. When times get tight, we turn to the chest freezer and the 'beer' fridge in the garage.

It's stressful, and besides, she doesn't want to feel guilty every time she looks out and sees the lights on, knowing that i'm working and she's not. The whole idea for her anyway, is to get her life back and have some time with her family... Ya, we've talked about it, but how to keep everything seperate and figure out utilities and phone calls, etc... too much work for her.

wgoat5 Posted 23 Jun 2008 , 2:55am
post #4 of 11

I really have no advise.. I'm sorry.. but I did want to tell you that your work is great.. and anybody in their right mind should hire you.. I think it would be an awesome opportunity for you if you could find someone to help you start up icon_smile.gif

Mike1394 Posted 23 Jun 2008 , 12:19pm
post #5 of 11
Originally Posted by playingwithsugar

If she is cutting back, won't she rent you her space which is not being used as extensively anymore? Or is she just cutting back enough to cover her time there during the week?

Theresa icon_smile.gif

That was my response till I read your post. Do you have a garage, and can you convert it over? If you already have built in customers I would try to find something.


Susan123 Posted 23 Jun 2008 , 12:35pm
post #6 of 11

It would seem that she could charge you a flat use rate for utilities, phone, etc. I may be naive, but it also seems that keeping the money separate regarding orders would be an easy task, even if they're rung up on the same register.

step0nmi Posted 23 Jun 2008 , 12:47pm
post #7 of 11

the only thing I have to say is DON'T purchase a car if you are going to take out a loan though...try and do it out of pocket or something...my mom always told me to not do that right before you buy a house or want to take out a large loan...a car purchase can screw everything up.

I am sorry for your dilemma though...it seems like you may need to write some things down of what you really want to come out of this and then go from there. IF you really want to start the cake business maybe you could talk to who you're working with now and see if you can rent from her since she is going to be taking less customers out of her place.
IF she is cutting back does that mean she eventually wants to get rid of the place? maybe you could take over the place? if she wants to not own it anymore and just decorate cakes! then that way you would own the business and you could just pay her for the work she can accomplish...with the amount of orders you two are not taking in it sounds like you could use another employee! even if that employee was just to fill and crumb coat cakes!

anything is worth a shot! you just have to write things down and make sure you know what you really want.

Cakenicing4u Posted 23 Jun 2008 , 2:54pm
post #8 of 11

Thanks everyone... but ya, I live in a row home in the city, so no garage to use.

Her shop is just too small. It's hard enough for the two of us to work there together that working there in seperate businesses would not work. The shop is only 20x20 that's about the size of a living room.

She talked about hiring another person and just came to the realization that her family means more to her. So where I want to grow the business, take on debt to move to a bigger shop, enter competitions and end up famous.... She wants to slow down and take care of her family while the kids are still at home.

In the end, i's just not an option to work out of her shop for many reasons that we have already discussed at length.

I guess I'm wondering if the bank would even consider me for a business loan if I take the time to finish a business plan. I just wanted to give some background info because it helps to fill in the pieces of my conundrum.

step0nmi Posted 23 Jun 2008 , 3:18pm
post #9 of 11

well, the thing about the business loan and the bank is all of your factors that you are putting into the business. How much your place is going to cost, the cost of equipment in there, your projected sales measured up with your rent, your area..etc. there is a lot to a business loan and it is better to get a lawyer's help if I'm not mistaken...acutally, Indydebi is the one to talk to about business plans...but I think it depends on the bank whether they give you the loan or not.

snarkybaker Posted 24 Jun 2008 , 5:43pm
post #10 of 11

I ca't imagine a bank giving a loan to a company with only $800/ a month in income. When I worked with banks, the minimum for even a car loan was $1500 a month in income, and business loans are considered to be much riskier than car loans. We do about $50,000 a month and still had to use our house to secure our loan, because our business is less than 5 years old.

Maybe you should see if you could find a kitchen co-op etc, since it seems like she's coming up with some kinda flimsy excuses. It sounds like she doesn't WANT you in her kitchen as anything other than an employee.

Cakenicing4u Posted 24 Jun 2008 , 10:46pm
post #11 of 11

It's not just 800 a month-- that's just from secure wholesale accounts. With weddings and other orders, she is able to pay me 40 hrs a week at 12.00/ hour and still pay the taxes, the insurance, buy ingredients and pay the bills and herself. So ya, there's business there-- But I don't know if it's enough for the bank to consider it.

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