I finally found a licensed commercial kitchen to rent and start up a cake biz...but once I add up insurance ($42/ month) and rent $250/month plus $10/hour...I don't know if I'm getting in over my head.
I don't know how many cakes I can pull in until I start advertising, which I can't do until I'm legal. Does the rent sound reasonable to those of you who rent? How many cakes do you do per month to make it worth your time? My concern is that I will only have enough business to pay the bills and not make any profit.
How did you all make this monumentous decision?
How long would you be locked into a contract with this place? Can you use the kitchen whenever you want or is it going to be inconvienent for you? How much do you plan to charge for cakes?
This would be on a month-to-month basis. For buttercream, I'm planning $3.50/serving as a base price and $4.50/serving for a base price on fondant cakes. (More $ for more detailed design).
My concern is the additional $10/hour. Would I ever turn a profit? I don't want to do all this work and stress if I won't make any money...
She is going to rent to several people and have a sign up sheet for hours each month. I don't know how difficult it will be to get the hours I want...
I'd really like to give this business a try, and I can't find any other kitchens to rent...
If she's charging you $250 a month, I don't know why she's charging an additional $10/hour. That sounds funny to me. The $250 a month should be for either unlimited use or for 'x' hours a month, then anything over those 'x' hours charged at $10 an hour.
Unless she's charging that $10/hour thing to everyone who rents in order to keep one person from monopolizing the kitchen all month???
I think the hourly is to regulate the time, so there's only 2 "cooks in the kitchen" at a time. I think I can handle the $250/month, but the hourly sounds too steep. You all know how time consuming decorating can be, if I have to pay her $10/hour, that's going to DRASTICALLY reduce my hourly compensation. I can't just pass all of that onto the cake price in the beginning, they'd be too expensive!
I don't know if you could make it work or not, but I guess if you can afford to try it out for a month or two, it might be worth your while. It would be a relatively small investment to try your hand at it. If you don't turn a profit, but at least pay for your time, a lesson learned.
I understand where you are coming from though. I thought about the idea of renting a place, but for me it just didnt seem like I could turn a profit either. Plus I didnt want to lug my stuff around and have to work around other people's shedule. The risk was too great for me to open a shop, so I decided on putting in a separate kitchen in the basement.
Realistically, how many cakes can a PT business do in a week? Could I pull in one wedding a month? Two celebration cakes each week? According to my calculations, I would need 3 celebration cakes per month to cover my costs, then still pay the additional $10/hour for any cakes above and beyond that.
My concern is that I will only have enough business to pay the bills and not make any profit.
Welcome to the business world!
I just started looking into this as well and just some additional items to make sure you check into/have on a list:
Contact your county health dept and find out the annual fee for inspection (in santa Clara county where I live its almost 800). Also you will need to be food certified. In my county it will cost 160 for the all day class and certification exam. I am going to call the city next and find out what fees they require for licensing and taxes.
i think it depends how fast you are...
i have a storefront, and i'm only there 3 1/2 days a week....on the days i am there, i can really whoop em out.
if you get organized you'd be amazed how much you can do.
in this biz it's all about friday and saturday anyway.
so, littlecake, how many cakes do you do in a week? Are they mostly celebration cakes? How many weddings do you do? If all I get are celebration cakes, it's a sinking ship, I'm afraid. Especially if I have to pay $10/hour on top of $250/month