What Is It Worth?

Business By sarahpierce Updated 10 Sep 2008 , 2:27pm by Jasmine33

sarahpierce Posted 10 Sep 2008 , 12:04pm
post #1 of 3

So, a well known bakery in my area has closed the doors (the owner retired). They are auctioning everything off, rumor is even her recipes. She is famous for her frosting, and everyone I know absolutely loves it. I would love to own this recipe. But, what is it worth? I bake from home on the side, maybe a couple orders a month. But, I would love to have my own bakery. Keep in mind I am working class, and my husband is disabled. So, the only income we have is mine. Now, a few questions:
1. If I bought it would I have exclusive rights to it, or am I just buying a piece of paper?
2. If I walk into a bank saying I have this famous recipe, would I be more likely to get a loan?
3. If word gets out that I have this I would definetely get more orders, but then would I risk the health department?
4. How much competition will I have at the auction? You as business owners, does this sort of thing interest you? Would you even want someone elses recipe?
5. Is a whole pay check worth it? Or what limit should I set? Or should I just get my own recipes?

I am torn and I would really appreciate any advice, and how business owners feel about this. By the way I would definetely name the frosting after the creator. Sorry so long. Thanks for reading. icon_biggrin.gif

2 replies
playingwithsugar Posted 10 Sep 2008 , 1:36pm
post #2 of 3

My suggestion is to go to the auction and see how many people show up. I have been to bakery auctions where there were dozens of people, and I have been to 1 bakery auction where almost nobody showed up.

There was a bakery in a town very near me, who baked great cakes, but was more known for their icing. It was a great day for me when I cracked the recipe, on my own. It is now my signature icing, a recipe which I would have to refuse to share. It has brought me great recognition through my circle of friends, and has gotten me offers to buy my cakes (I do not sell - I am not licensed and would not risk it).

If you can afford to buy the recipes, buy them. Even if you cannot use them at the present time, because of your personal situation, as time goes on, opportunity might knock, and then you will regret buying them.

As far as exclusivity, that's contractual, an sometimes requires a copyright. It would be unethical for them to sell you the recipes and then later sell them to someone else, but without an agreement, there's nothing to stop them from writing a baking book later on.

You will have to inquire at your bank as to whether the recipes would increase your chance of getting a business loan. What is defined as collateral differs from state to state.

Depending upon your neighbors, or the set-up of your neighborhood, yes, you would probably be putting yourself at greater risk of getting caught by the health department.

The value of these documents is going to be entirely up to you. Stockbrokers are not allowed to invest more than the client is able to risk, and maybe that is the way you should look at it. Is spending an entire paycheck going to cause you to be in deeper debt for a couple of months, before you get back on your feet, or is that much risk available to you without getting yourself into a financial jam?

What you might consider, should you bid and win these recipes, is to get the names and contact information of the other bidders. That way, if things don't work out as you would like, you can offer to sell them to the other bidders, and try to recoup the money you spent.

Theresa icon_smile.gif

Jasmine33 Posted 10 Sep 2008 , 2:27pm
post #3 of 3

So, a well known bakery in my area has closed the doors (the owner retired). They are auctioning everything off, rumor is even her recipes. She is famous for her frosting, and everyone I know absolutely loves it. I would love to own this recipe. But, what is it worth? I bake from home on the side, maybe a couple orders a month. But, I would love to have my own bakery. Keep in mind I am working class, and my husband is disabled. So, the only income we have is mine. Now, a few questions:
1. If I bought it would I have exclusive rights to it, or am I just buying a piece of paper? Dito what she said
2. If I walk into a bank saying I have this famous recipe, would I be more likely to get a loan? I don't think so. I am sure banks want to see YOUR sales history and info. They probably want to see a few years of alot of sales. If you are doing 3-4 cakes a month, I don't think that is enough.
3. If word gets out that I have this I would definetely get more orders, but then would I risk the health department? Whether you have 1 order or 100 there is always a risk.
4. How much competition will I have at the auction? You as business owners, does this sort of thing interest you? Would you even want someone elses recipe?
5. Is a whole pay check worth it? Or what limit should I set? Or should I just get my own recipes?

I would start a thread asking what is everyones best recipe and ask why they feel its the best. Or try to find out how much her recipe is and see if it is worth it. Definately go to the auction.

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