Growing My Biz And A Little Nervous

Business By Crustymuffin Updated 6 Mar 2010 , 4:20am by littlecake

Crustymuffin Posted 11 Jan 2010 , 6:32pm
post #1 of 12

OK I incorporated and became permitted this past year. I have been renting space by the hour but it has become a hassle and volume is an issue. After talking with my county health Dept and accountant, I have proceeded with plans to add a 500 sf Commercial kitchen to my home property (legally).

The cost is 35K. I am very nervous about about spending that much money. I work full time and run my cake biz on the side. up to this point it has been minimum expenses and fun. In my business plan, I need to do more than 2K per week to stop my full time job. I've been focused on high end cakes with special effects. To make my quota I need to transition from 6-8 cakes per month to 4-6 cakes per week.

With a 35K investment decision on my plate, I just wanted to take the time to ask if and how others have handled their own transitions.

Thank you in advance!

11 replies
antonia74 Posted 11 Jan 2010 , 9:51pm
post #2 of 12

I just peaked at your cakes, you're good!! icon_smile.gif

If you're asking for everyone's 2 cents, I'll put mine in....

There's lots of excitement in recent years regarding high-end cakes and bakeries. There's been an explosion of interest due to the Food Network and celebrities that share our field like Duff & Buddy, as just two examples. Cake-decorating classes have popped like weeds up in every area of the community...from the local libraries, to the neighbourhood YMCA and to high schools/colleges and craft stores like Michael's. They are everywhere in all levels, from beginners to masters.

Such a widespread interest in cake decorating has been great in that it shows the average Joe the complexity of what we do, the fairness in our pricing and the creativity which we can bring to orders. (I find many, many of my clients are now well-versed in terms like "fondant" and "Mad Hatter"....where even a decade ago, they were oblivious.)

I myself left my job in 2005 and opened my own cake/cookie/cupcake business with a p/t partner for three years. It was HARD. Way harder than I'd thought it would be...and much more expensive too. I had great success, but it came at a cost of my social life, lack of sleep, constant paperwork, emails and customer communication. I spent about 16 hours a day working for myself. That wasn't worth it to me in the end. I now only do it p/t and I work for a gorgeous bakery that I don't own! lol

That said, there has also been a complete saturation of new "bakers" and "bakeries" in communities everywhere. How many cupcake shops did you have in your city 10 years ago, for example? (*sigh*) Take a class and learn a few skills and people think they are ready to open their own business. It's been frustrating to watch these new places open up with the same old designs and the same old flavour lists as everyone else. We even have a local cake designer who teaches endless classes that pump out students who open their own bakeries with clones of her work....same designs, same themes. All their photos of dummy cakes from their classes are plastered on their new websites. It's been a hot topic of many, many other bakers in the community.

That's not to say it's happening in your community...but I'd think really hard about a $35K reno myself. (I'm also about to buy my first home and I wonder how many people would get that $35K investment back? Just curious about that point. If I was to buy your place I'd probably be delighted it's there! lol)

The industry is hot, but there's so many new faces out there that it would make me nervous to have to rely on standing out anymore.

Crustymuffin Posted 12 Jan 2010 , 1:27pm
post #3 of 12

Thank you for your honesty. I had a friend in the biz that went through the same type of experience which is why I am pausing to ask these questions. I want to make sure I have the skill along with the determination to make it. I have a good job that supports my family but I just reached a point after 13 years that I am not inspired anymore. I stumbled on Baking and decorating by accident and it hooked me.

I am being as smart as I think I can with this adventure. The Kitchen we are building is being paid for with cash and from my personal account. It must stay with the owner of the property. The equipment and such is paid for by my biz. If the Biz fails the addition can become an additional living room/game room which benefits my property value. I am also building the space out for the same or slightly less that my current appraised square foot value. All of this keeps the over head very low and at least reduced the financial stress. If and when I out grow this space I will look at store front options.

Is it that much easier with a partner?

jillmakescakes Posted 12 Jan 2010 , 2:02pm
post #4 of 12

yes, yes, yes, a thousand times YES!!!!

That is, as long as you and your partner get along.

My mom is my partner and having her there allows me to be there to open the shop, then leave at 3:30 to get my oldest son off of the bus.

It also gives me someone in to bounce ideas off of (DH gets sick of hearing about it every day icon_lol.gif ), it also gives me someone to keep me going, confirm my thoughts if I need it, and most importantly, do part of the work.

Ask yourself how much fun you will have if/when you are really cutting it close on that 2K a week and your stressed that you might not have enough to pay your bills. Are you prepared for that feeling? Are you prepared to work extremely long hours just to make ends meet?

Not trying to make it sound like you shouldn't do it, just making points that need to be considered. That said, I love my job and would not go back to the corporate world.

kelleym Posted 12 Jan 2010 , 3:08pm
post #5 of 12

Also keep in mind that next year there will be another bill introduced in Texas to legalize sellling cakes from home.

www.texascottagefoodlaw.com

Crustymuffin Posted 13 Jan 2010 , 1:40am
post #6 of 12

Even if the Texas Law Changed I could not do the volume in my home kitchen. Besides my wife would flat out shoot meicon_smile.gif

antonia74 Posted 19 Jan 2010 , 2:47am
post #7 of 12
Quote:
Originally Posted by Crustymuffin

Is it that much easier with a partner?






Pros

: if one of us is ill or has spread themselves too thin in taking way too many orders, the other one can help out
: I can bounce ideas off her and vice versa
: we can fill twice the amount of orders and get our business name out there in the community twice as fast
: I can learn techniques from her as I work, she's open too
: I can trust 100% that the work she delivers tastes great (we use the same recipes) and is picture-perfect in quality
: we have completely different interpretations of order requests, which can be very interesting when we need to offer variations on a theme



Cons

: we have completely different interpretations of order requests (lol!)
: we have different speeds/methods of communicating with clients, suppliers and event co-ordinators
: sometimes we don't agree on pricing
: she has a full-time family & kids, less time to devote to the biz than a childless gal like me with less priorities
: if a client isn't happy, they turn to me next and I need to back my partner and her work 100%
: I have twice as much accounting to do, argh!




I guess those are some of the good and bad moments. icon_smile.gificon_smile.gif

Crustymuffin Posted 19 Jan 2010 , 4:10am
post #8 of 12

Well I am moving ahead full steam. My wife is my partner but I do most the decorating. I am developing stronger relationships with other pastry chefs in case we want to bring in a partner from outside.

cakesweetiecake Posted 5 Mar 2010 , 4:20pm
post #9 of 12
Quote:
Originally Posted by Crustymuffin

Well I am moving ahead full steam. My wife is my partner but I do most the decorating. I am developing stronger relationships with other pastry chefs in case we want to bring in a partner from outside.




Congrats. Let us know how things go!! Best wishes!

littlecake Posted 5 Mar 2010 , 10:48pm
post #10 of 12

go for it...thats exactly what i'm planning on doing in the next couple of years.

i've been renting my shop for going on 9 years now....life will be easier after getting my own place built.

Crustymuffin Posted 6 Mar 2010 , 3:00am
post #11 of 12

Well I couldn"t ask for more. I just placed 2nd in "that takes the cake" competition. And better than that I was asked by TLC, if I was interested in doing "the utimate cake off" show. I have my new shop 2/3rds done. Man I'm on cloud 9.

littlecake Posted 6 Mar 2010 , 4:20am
post #12 of 12

wow!!! after all that exposure i'm sure you won't have too much trouble paying for your build out.

congratulations! way to go!

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