I Can't Work For Free?

Business By lhayes1976 Updated 21 Feb 2009 , 5:15pm by drowsyrn

lhayes1976 Posted 20 Feb 2009 , 12:56pm
post #1 of 11

I know I'm jumping the gun because I haven't even had my home kitchen legalized yet, but my real dream is a shop of my own. I'm about ten years from retirement, but my daughter has expressed that she would like to be a partner in this dream.

With that said, she could run the shop during the day while I'm at my "real" job. But I couldn't expect her time for free. Is it possible to start payroll at the beginning. I remember a show on cable t.v. years ago where individuals were persuing their dreams and not being able to pay themself and living off their savings. I could go without pay, but I would have to pay my daughter for her time during the day.

Running a businss is very new to me. I know you guys have to be comensating yourself, I just don't understand the ins and outs of this business.

10 replies
pinklesley1 Posted 20 Feb 2009 , 1:04pm
post #2 of 11

well all that i can tell you is to make sure that you have enough in savings to last about 6 months without an order.

i am talking about 6 months of mortgage, and all other utilities...
also pay off all your credit cards, so that if in a pintch you can use them to buy supplies... but then pay them off asap

i have had 2 businesses in the past (non cake realted) and we have always had enough that if we didnt have enough when it came to sales we could rely on what we had saved.

i want to open my own shop... ask your daughter what she needs as a minimum and go from there...

enoid Posted 20 Feb 2009 , 1:09pm
post #3 of 11

Most community colleges have courses on opening a small business. They go into funding, taxes, payroll etc. HTH

littlecake Posted 20 Feb 2009 , 2:25pm
post #4 of 11

i paid cash for everything, so i didn't have any debt except the rent and supplies, and all the other business related expenses...

i was in the black right away....i had to be, because i'd spent up most of savings on the shop.....i was making a living in about 3 months.

i do volume as opposed to a few really expensive cakes a week....not that theres anything wrong with the few expensive cakes a week...i'd like to change over to that some day, but right now this is what has been working for me for the past 7 years.

you will be dodging a big expense, not having to pay rent.....

i'd think about having your daughter work at another bakery to hone her skills, and build up some speed....you can't pay someone by the hour , if they are inexperianced and slow, well you can, but you'll be losing money.....if it were me i'd want to hit the ground running.

say you get an order for a 100 dollar cake, you pay her 10 bucks an hour, and it takes her 7 hours to do it...see my point?....when you first get started it takes a lot longer to get them done.

lhayes1976 Posted 20 Feb 2009 , 3:11pm
post #5 of 11

We will not be doing cakes, only cookies, cupcakes, and other little sweets. I would like to push the cupcakes and start doing weddings, birthday, and corporate events. So there shouldn't be a time factor.

littlecake Posted 20 Feb 2009 , 4:22pm
post #6 of 11

sounds like you're set then.....you can make a lot of lil sweets really fast with a com. oven and a nice big mixer...good luck!

-K8memphis Posted 20 Feb 2009 , 4:40pm
post #7 of 11
Quote:
Originally Posted by lhayes1976

We will not be doing cakes, only cookies, cupcakes, and other little sweets. I would like to push the cupcakes and start doing weddings, birthday, and corporate events. So there shouldn't be a time factor.




There's always a time factor.

You need a marketing plan where the marketing experts tell you what you can expect from your market area in terms of which kind of sales will work.

There's a girl down in the high rent district here in Elvistown and her largest cake is nine inches or something--light decor--she does cookies and cuppies and I have no earthly idea how she's stayed open this long. They are scratch recipes and I've heard that some of her stuff is dry and expensive.

She does however have some food going too, like lunch & sandwiches maybe some soup I don't know.

You and she need some wholesale accounts. You will need masses of people to come by and purchase to make it work--like in a mall--see what I mean. Maybe your big ticket item will be cookie bouquets. But the overhead for a retail shop often is paid by a side line of a lunch counter or something. Which is why so many of us want to bake from home--the overhead is crushing.

Not being a downer--just shooting straight. But you gotta crunch the numbers first to find enough people to buy buy buy tons of goodies week after week, month after month.

There's a perfect location here that was formerly a dog bakery-- kid you not--one thousand seven hundred and fifty dollars a month before you ever turn on one light bulb, twelve grueling times a month, then twelve more next year. Because for what you seem to be proposing you will rely on impulse shoppers so you need the great location and believe me, that's a very reasonable rent for a great location.

Lots to thing about and absorb. Consider a marketing plan.

Deb_ Posted 20 Feb 2009 , 9:29pm
post #8 of 11
Quote:
Originally Posted by lhayes1976

I know I'm jumping the gun because I haven't even had my home kitchen legalized yet, but my real dream is a shop of my own. I'm about ten years from retirement, but my daughter has expressed that she would like to be a partner in this dream.

With that said, she could run the shop during the day while I'm at my "real" job. But I couldn't expect her time for free. Is it possible to start payroll at the beginning. I remember a show on cable t.v. years ago where individuals were persuing their dreams and not being able to pay themself and living off their savings. I could go without pay, but I would have to pay my daughter for her time during the day.

Running a businss is very new to me. I know you guys have to be comensating yourself, I just don't understand the ins and outs of this business.




You mentioned that your daughter is interested in being a partner in your dream. Will she be putting up any capital for this venture? or Does she mean she'd like to work for you?

There's a big difference. Please don't go into this without educating yourselves on the ins and outs of running a small business. The bills still need to be paid each month, whether or not the money is coming in. As "partners" you will be the last to be paid. KWIM?

I would recommend that you first get your home kitchen legalized. You can then work on building up a clientele out of your home so that you get a feel for the amount of product you'll be selling. If that's successful expand from there. At least this way you're not putting out as much money as you would by opening a shop. In this economy, I wouldn't recommend taking on any extra debt unless you're sure the customers will be there.

ThatsHowTcakesRolls Posted 20 Feb 2009 , 9:46pm
post #9 of 11

It really does depend on your location. I pay only $600/month for my lease which sounds great but once you factor in the utilities, insurance, supplies & ingredients my overheard averages about $5000/month and I do NOT get a paycheck yet. Granted, I am able to pay my car insurance & car payment with this as well but I consider that my "paycheck".

I'm in a downtown location so I do have a lot of Walk-In traffic but not as much in the Winter - it's been really cold & icy this year so I think it's been a lot worse than in past winters. At this point - I am breaking even so I can't complain considering I have only had my shop open since August. When I was at home though - loads of money. I spent all that money to open my shop though so I am looking forward to building it back up once April/May come around and the Wedding Cake money starts coming in full force.

I really think that if the right opportunity comes along you will know and it will work out. Somehow - it always does! Good Luck to you and you should definitely follow the advice of others to crunch numbers and consider your market. And, dkelly is right - find out whether your daughter is truly realizing what it means to be a partner - you put up money to be a partner, otherwise, she's just an employee! icon_biggrin.gif

Tammi

lhayes1976 Posted 20 Feb 2009 , 10:37pm
post #10 of 11

I'm definitely going to get my home based kitchen legalized first. I'm anxious to see what happens when I can actually advertise. My plan is to sell cupcakes at the local famer's markets this summer. There is already a girl that sells at one of the markets, and she usually sells out before the end of the day. We have several markets that run April-Oct.

My ultimate plan is to have a "cupcake truck/van" that will travel to corporate events, parties, etc. I have already registered two domain names,(Go-go Cupcakes and Cupcakes-A-Go-Go). They are just parked right now. Just dreaming big for right now.

Getting my basement kitchen finished is my first priority.

drowsyrn Posted 21 Feb 2009 , 5:15pm
post #11 of 11

I keep in close contact with the tax commission person in my county. She told me once I made over a $400 dollar profit in a month, I have to start paying myself and claiming it. She also told me if my son (your children) was under 18, he can work for free. Check with your county tax commissioner.

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