When To Start A Business?

Business By jalie Updated 8 Mar 2010 , 6:35pm by SHYLERScakes

jalie Posted 8 Mar 2010 , 3:21am
post #1 of 10

I've only been decorating for 8 or 9 mo. and still have a ton to learn but I am starting to get several requests for cakes. The last few months I've been doing a few cakes a month for friends. Now friends of friends are starting to ask. I love doing cakes for my friends and family but if I'm going to start doing them for other people I would like to get paid for it. I've been looking into getting licensed and renting time in a commercial kitchen. I have a full time job and am not in any position to give up my day job. I would be perfectly happy to just bring in enough money to support my habit. I'm not sure I have the skills yet to charge anyone for my cakes and I would love to hear from other people that rent time in a commercial kitchen to see how that works for them. Any advice you could give would be much appreciated. Thanks!

9 replies
noahsmummy Posted 8 Mar 2010 , 3:42am
post #2 of 10

im also interested in renting a kitchen sometime in the future.. dont feel my skills are upto par as yet though..lol does anyone know how to go about renting a commercial kitchen? i had never heard of anything like this before cc.. do you just go to a bakery and ask if you can rent time there? as far as i know there arnt kitchen syou can just rent out here.

Also jalie, alot of people ask me for cakes, i ask for them to pay ingredients as i can afford to be making free cakes all the time, but alot of the time people dont even give me enough to cover ingredients. it would be a good idea to first ask around and see if people will be willing to pay the proper amount for your cakes first... especially because friends and even friends of friends will probably expect a discount because you know them or your friends with their friend.. if that makes sense? lol

aundrea Posted 8 Mar 2010 , 3:56am
post #3 of 10

hi jalie-
your cakes are really good! i dont know about laws in your state, but you should check into a rental.
im sure alot of people here will give you more directed advice.
just wanted to wish you luck!

jillmakescakes Posted 8 Mar 2010 , 12:46pm
post #4 of 10

This is going to be blunt, and I hope you don't take this the wrong way, but the "friends of friends" are starting to ask less because of the skill involved and more because you aren't charging them. icon_wink.gif

This is not attacking YOUR decorating skills specifically, just stating that the word spreads fast when someone can do a cute cake for free.

My suggestion would be to take it slow, build up your skill set on one or two cakes a month for friends. Any more than that and you'll start to get resentful of not being paid.

If your state has cottage food laws, then you might be in luck. Otherwise, it can be hard to do enough cakes to cover overhead on a part-time basis...it can be done, but can be very hard.

jalie Posted 8 Mar 2010 , 3:24pm
post #5 of 10

I have no problem with being blunticon_wink.gif I am concerned about being able to make enough cake part time to make it worth it. Like Noahsmummy, I have been asking my friends to cover the cost of supplies and they usually throw in some extra. I have asked my friends not to let anyone know what they paid so people don't expect a free cake. Whether or not people will be willing to pay what they should is a whole other question. Seems like most people have no idea what a cake would cost. I have been doing 4-6 cakes a month for the past few months. Has anyone been able to make a part time gig work at that volume?

FullHouse Posted 8 Mar 2010 , 3:28pm
post #6 of 10

I completely agree with Jill. Your cakes are great, but.... many people love the idea of you selling cakes because they don't realize what a fair price is for those cakes. Most expect that if they know you enough to say "hi" when they pass you at the grocery store that you'd LOVE to make a custom cake for them and they'd love to "help" you out by giving their $30 to you instead of Super Target. Cake is cake to them, they just don't understand the time put into a custom cake. When they find out what the 3D cake they want for their 4 year old's birthday, 8 times out of 10, you will hear a deflated response that they want the cake but can't justify spending that $ on a kids birthday cake.

leah_s Posted 8 Mar 2010 , 3:56pm
post #7 of 10

When's the right time to start a business? When, after writing a detailed business plan, you can cover the investment, and make a living at it.

I'm a licensed and insured home biz. I've looked at moving out of the house twice. Wrote the biz plans, looked at the proforma financials and said, nope, not now. I've been at this 11 years.

jillmakescakes Posted 8 Mar 2010 , 4:55pm
post #8 of 10

As usual, Leah_s is spot on. Write up the financials. Work the numbers. Find out how many cakes you would need to do to cover your expenses. THEN calculate how long each of those cakes will take you to see if you can really do it part time.

And don't think that 'cause you get home at 5:30 and go to be at 11 that you have 5 1/2 hours each night to work on a cake. you've to figure in dinner, buying supplies, cleaning before starting working, cleaning after you're done working etc.

Doing all of these calculations will really help you know if you have the drive needed for this business. being your own boss is just as hard as it is rewarding.

indydebi Posted 8 Mar 2010 , 6:10pm
post #9 of 10

And even just renting a kitchen, you have to have a certain level of volume to make it work. If you pay just a lousy $10/hour for the use of the kitchen, then with mixing and baking (assume one hour there); cooling, leveling, crumb coating, icing (assume at least another hour); decorating (anywhere from 1 to 4 hours depending on detail); then clean up and put away time (round to another hour).

Worst case scenario? 6 hours in the kitchen = $60 in rent. How much are you charging for that 8" round birthday cake that serves 24? Even if you charge $3/serving, that's only about $75 and $60 of that is for rent. We havent' even gotten to supplies yet.

But if you have the volume, you can bake 4 or 6 cakes in that same hour, thus cutting down your per-unit overhead costs.

This is why leahs advice is spot-on.....run the numbers.

SHYLERScakes Posted 8 Mar 2010 , 6:35pm
post #10 of 10

I've been decorating cakes for less than a year and started to get requests for cakes right after the holidays. So I figured why not? Registered my business, got my GE tax license, EIN # and all that fun stuff and found a commercial kitchen that charges by the day. Mind you, I do live in a really tiny town (population 3,500), so I pay a really small fee for the kitchen and my numbers work out (thank you Jesus!). My advice to you: don't EVER become the FREE or CHEAP cake lady! Listen to leah_s & indydebi...they know their stuff!

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