Possible Business Opportunity-Need Some Advice

Business By littlelucy30 Updated 14 Dec 2009 , 5:11pm by littlelucy30

littlelucy30 Posted 1 Dec 2009 , 12:43pm
post #1 of 10

I have always dreamed of owning my own bakery and I am now one step closer to that dream.
My husband's boss has a rental property (house) that has been sitting empty for years and I approached him last week to see if he would consider fixing it up and renting it to me. He agreed and is now pricing some new appliances. I am working on a business plan and rental agreement.
I have a very small customer base at this point and will not need the property for more than 10 hours per week in the beginning. I plan to offer him $100 per month for rent plus utilities. Does this sound reasonable?
Also, at what point do I need to have the kitchen inspected and apply for a business license? I am in NC and allowed to have a home based bakery.
Thanks in advance for any advice!

9 replies
leah_s Posted 1 Dec 2009 , 1:56pm
post #2 of 10

Well, it sounds like you need to be inspected and licensed before you sell the first cake. And don't be surprised that if you're not living in the house it might not qualify as a "home based bakery." Not sayin' it will or it won't, just sayin' don't be surprised.

It sounds like you're converting a former residence into a retail biz, so you'd also better check the zoning.

-K8memphis Posted 1 Dec 2009 , 2:23pm
post #3 of 10
Originally Posted by littlelucy30

I plan to offer him $100 per month for rent plus utilities. Does this sound reasonable?

If I was the caker, $100/month to me would be more than a dream come true. Seriously, I'd be dreaming to find someone willing to improve the property for me and only cough up $100/mo.

If I was the property owner no I would not think it's reasonable. I don't know I mean I live in Tennessee, $100 a month would not even touch property tax.

But I mean go for it --see what happens.

TexasSugar Posted 1 Dec 2009 , 3:24pm
post #4 of 10

I'm curious on others opinion on this one. I'm not a business owner, but for $100 a month I'd rent anywhere for the few cakes I do do.

I know you said that you only plan to use the property less than 10 hours a week, but if he is going to the expense to fix it up for you then I'm thinking $100 a month is very low. Maybe $100 a week. To me this isn't like renting someone's kitchen while they aren't using it (meaning they are making extra money when it would be sitting empty). This is a property that he could rent other wise for someone to live (even if he hasn't been) and make money off of.

-K8memphis Posted 1 Dec 2009 , 3:36pm
post #5 of 10

So just depends on how much of a friendship type hand up type offer this is from the husband's boss. Maybe he is doing this as a big hearted friend so but as far as the real world goes yeah no ain't happening.

I do not intend to be a downer. But clearly this information is straightforward, no frills.

But keep going--I'm just one jaded little ole' opinion. icon_biggrin.gif

andlydle Posted 1 Dec 2009 , 3:49pm
post #6 of 10

i would say that it doesn't really matter how many hours a week/day you are going to use it unless you plan on paying him on a per hour basis (so you pay him more when you spend more time) I think that if you want to offer $100 that's fine, but you should get the appliances and fix it up not him. If he's buying new stuff for you, you need to make that up to him.
If it were me, I would ask him how much he would charge you to rent it out and go from there (if it's too high, then see if he'd lower it if you fixed it up) I also think that you should pay the utilities (whatever they may be) separately because you're the one using them.
I hope this doesn't sound mean, but you need to do right by both you and your husband's boss.

As far as being inspected and licensed, i would think you'd need to do that before opening those doors for business, because it's not where you live.

littlelucy30 Posted 1 Dec 2009 , 7:45pm
post #7 of 10

Thanks for the reponses. I was wondering about the whole "home bakery" thing when it's not really my primary residence. I'll have to look into that.
As for the appliances and fixing up the house, he came right out and offered to do it. He is that generous and is excited to help me. My husband has worked for this company for 20 years and is a very valued member. Honestly, I think the boss wil accept the $100 for monthly rent.
Right, now I've got some homework to do. I'll let you know what I find out.

Texas_Rose Posted 1 Dec 2009 , 9:19pm
post #8 of 10

I think you should see how much he asks for rent before you offer him $100. Remember, even if you're only using it ten hours a week, it can't be used by anyone else, so from a landlord's point of view, you're using it 100 percent of the time. Since you approached him, he may be thinking that you're talking to him as one business to another, not asking a favor as a friend, and he may be thinking of a much higher monthly rent.

Also, since you live in a state that licenses home bakeries, wouldn't it be more convenient for you to bake in your house?

littlelucy30 Posted 2 Dec 2009 , 6:27pm
post #9 of 10

Also, since you live in a state that licenses home bakeries, wouldn't it be more convenient for you to bake in your house?[quote]

I have pets at home so can't bake from my kitchen.

littlelucy30 Posted 14 Dec 2009 , 5:11pm
post #10 of 10

I wanted to update this thread so if you guys had any more advice, feel free to share!
I proposed an offer of $15 per hour plus utilities for the house. I felt like that's a fair price for rental and he is not now nor does he plan to rent out the house again in the near future.
He called me yesterday and accepted my offer along with a generous waiver of rent for the first 60 days. All I would pay is the utilities for the first 2 months. He's also going to have the fridge delivered this week or next week. This is great!

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