Looking for some opinions. I really want to sell my cakes + gourmet cupcakes. The issue is that I need a commercial kitchen to work out of, and most often they rent by the month. I have two very young children at home, and I don't want to work full time on cakes right now, as they are still my priority. Later, when they are school aged, I'd love to launch full time.
That said, I set out to see what I could find for hourly rentals in my area. I had known of one too far north of me, but they were quite booked with caterers and bakers already and pretty expensive, as well as requiring you to purchase in blocks of 4 hours. So, after some calling around, I've found two possible options.
One is at a senior center and is the best deal: $50 flat fee for each evening I use it...but they aren't sure if they can always guarantee a Friday night because they also hold weddings there. The other is the catering kitchen my cake teacher used before she moved just a few weeks ago. They decided they'd be ok with me doing hourly (cake teacher did monthly) for $20 an hour on an as need basis. I still have one more promising option to hunt down - health department told me to go find the bread makers at our farmer's market as they just finished approval on a new bakery they are using only 2 days a week, so I'm going to see if they'd let me do something as needed, too.
Does this seem like a reasonable business option? I'd be starting small, looking to do a few cakes per month. When I don't have any cakes, I'm not paying any rent. When I do, the kitchen is mine to use. The main other fee is the health department license, which is something like $600 (depending which location, as I'm on the border of two counties) per year.
Would you do it?
$600 is a lot of money to lay out for a license if you will not be able to recover that money in a resonable amount of time. How long is the license good before you have to renew?
The flat fee of $50 sounds really good. Maybe if you can't always get it on a friday night, you could use it on Thursday evenings and plan well.
What types of places have you contacted for this type of partnership? I would like to do something identical to what you are endeavoring. I can't seem to think of where to begin to even find rental kitchen space.
The $600 a yearly licensing fee. Split up over 12 months, if you think of it like that, it's not that bad. It's actually like $850 to start, though, because you pay them to inspect your site the first time, too.
My issue with the $50 flat rate one is that I can't do any cupcakes, then, because you really have to bake them the night before if not the day of for them to say super fresh. But if I have no other options, it's still a good deal.
As far as places I've looked into, I searched all the nearby community centers + senior centers online and found ones that kitchens. Most have over the top charges as if I were an event, like $50 an hour or more. That one flat rate place was a community center that has 2 kitchen, one of which is commercial. The other place, with the $20/hr rate is a catering business and I found it because my old cake teacher did her business there and has just moved away.
I think I'd probably recoup the licensing/permit/investment after a handful of good sized cake orders... I also think I could probably get part of that money as "birthday and xmas gifts" from my family, as we often gift each other early and with money towards something we need.
That is what I do. Those are necessary business expenses and allow for a lot more opportunity. For one, I market like crazy now and no one can say anything because I have a permit in hand. Am I baking all of the time? No, but I am fine with that because I can operate as a part time business.
I just don't understand how this works. How can you make any money basically adding $50 to any cake you make. By the time you add in supplies, just a basic little cake would be $80+.
I have a friend who owns a restaurant (not an option for me to use, it's tiny). She knows someone who would be open to renting kitchen space. I haven't even followed up to get the particulars because it just seems impossible.
I'm so frustrated and discouraged and sick of hearing "you should start a business!" when I know full I'd never hear from those people again if I started charging them what I should much less that plus what I need to cover expenses if I were legit.
Well, yes, it is figured in the price of the cake. Where I live, I see cakes go from anywhere between $3/slice to $8/slice or more (usually all organic at that base price). I plan to price at $5/slice, with extra if there is gumpaste figures or flowers or extremely intricate designs. $20 an hour of kitchen rental, plus ingredients and supplies, plus gas driving there and back, plus labor sits just about right at $5/slice for me. Also, I'm toying with the idea of a $100 minimum like many people here have. I can't see the worth in driving out to the kitchen, turning on the oven for one 8" cake when I could be baking a whole 3 tier cake in the same amount of time, but still paying the hourly rate for it.
The best advice I've seen on here is not to assume people won't pay for your cakes.... there is a market for every price bracket, and I realize I am marketing to a higher end crowd, and that's fine with me.
Maybe I'm being dumb, but I'm gonna take advice on here and run with it - I'm going to charge what I believe to be a fair rate and not apologize for it. I'm not going to charge less just because I'm new, or just because *I* personally couldn't afford my cakes.
Yes, you have to charge more....when you are operating as a business...not just dabbling here are there by taking orders, every dollar counts and you price accordingly.
My rates are high, and I know it....but there are people that charge way higher than I do and the are leaders in my area. It will take me a while to get to that point...but it won't happen by charging what the customer feels like paying that is for sure. People spend on $5-8 dollars on fancy coffee and $3 for a slice of mass produced "coffee cake or pound cake".
I have a minimum so I'm making good use of time/space when renting. If you do party cakes, you'll have to try hard to get them booked around the same time. I'm pay as I go, so I rent only wen I get orders.
Also, it is a REALLY good feeling turning away a cake b/c it's not profitable and time consuming, versus doing the cake and feeling like crap because I know I should have charged more it. This is why I won't do cakes for friends unless they pay regular rates.
I was just curious about something for those of you who rent a kitchen. Do you have to take all your supplies with you or can you store your stuff there?
My location has storage, but I just pack my stuff and take it back home since I am not there all of the time.
CakeForte - just curious, what is your minimum price? I am in the process of looking around for spaces to rent. I have no idea what the rates are around here, but I will soon find out. If I move forward with it, I want to make it worth my time.