Each month I'm lucky to make ends meet! I 've been in business for less than a year. How was your first year & did your profit increase in the following years?
My first year will be up on April 15th. So far I see a loss unless Easter specials save me. It was to be expected though. For a while there I kinda lived up to my username.
No, there's no profit in your first year. Ditto the second year. Not if you're counting ALL your expenses.
Zero profit here my first year - I used money from sales to put back into the business. I don't expect a profit for the first 3 years at least.
Do you make enough to pay yourself a salary?
I have assisted people in starting up a variety of businesses in my 9-5 job for years. It is normal to see losses for the first 1-3 years depending on the business. As we start out most of the money earned is spent back into the business. Also your name is just being built so it takes time to get a good referral base of clients to bring in income.
While I did not profit the 1st 3 yrs of my business I did steadily increase; however, like others the money would go back in to the business. In my 4th year I chose to go to culinary school & in my 5th yr I took the ICES CMSA test...this set me back with my client base... the next thing you know we got orders to move (in my 6th yr) & once again I have to start over. Of course it can be depressing but I look at all the experience I am building in various aspects of this business... I continue to bake my heart out, wait pateintly for my 2 teenagers to graduate from HS (2 more yrs!!) & DSH to retire so that we may settle down (only God knows this one) & I can finaly profit!!! (I am in the 8th yr of my business currently) :0)
Keep your chin up. It is hard to turn a profit, the first couple of years. I am in my third year and I am finally making some money. It does take alot of work, but if you are determined to make it work, it will. Good Luck!
I just finished 2 years and no profit yet but losses are much less (no more cake toys for me so hopefully next year will be profitable)
Most businesses take several years to turn a profit.
Do you all just do cakes, or do you have a shop where the public can buy caking bits and bobs, i.e., tools, cutters, nozzles, colours, boards, etc, etc, as I am looking to go that route as well when I start up as the area I live is extremely lacking in places to buy those kind of things so I believe their is a good market for that.
Being a miliitary wife I have an in home baking busness, fully licensed & legal... no chance for a shop yet :0)
You're supposed to make a profit?! In the six months we've been open, my part-time business has grown steadily with more customers and bigger cakes. But, like so many others, everything goes back into the business - buying additional equipment and supplies, and advertising takes quite a chunk. I expect it will take a couple of years.
I am in month 6 and I do make a 'profit' on every job - it's just that I spend it on new equipment for the business rather than paying myself anything. My turnover fluctuates wildly as I am currently only doing bespoke cakes and these are like buses - nothing for weeks then three come along all together! I hope to be drawing some money for me by the end of my second year.
I think the key to profitability is to get some good 'bread and butter' jobs - regular orders that you know will be coming in every week/month. I have no idea how to do this though!
every one of the resources I have checked out states the smae thing.... 1-3 yrs... expect no profit... takes time like it was said above... but keep going and before you know it.... things will turn around for you.... keep yourself informed... join your towns chamber of commerce, etc... find ways to promote your studio without much espense.... like contests... referrals incentives, etc...
I am in year 2 with still no profit. Everything I do make goes back into new equipment, tools. Like stated before, my losses are less then they were last year so that part is showing improvement!
I'm curious too as to how you would pay yourself a salary, especially when your profits just go right back into running the business.
Obviously we all have home expenses - how do you decide how much you can take home to stay afloat on both ends? Hubby and I agree that we can't afford to lose half our income.
I'm not yet able to pursue this dream full-time (can't afford to leave my military job), but am trying to prepare for that giant, expensive leap into entrepreneurship in the future.
All advice appreciated!
your salary is an expense, so it comes out before you figure profit. For example, if I sell a $1 million dollar cake, my expenses include ingredients, utilites, supplies, and labor (my salary). Anything left is profit. Now,in my first year or so, I will use that profit to grow my business by buying new/better equipment or on advertising.
Just completed my fourth year, second year of it being full time, and my accountant said to me "You did good this year, this is no longer a hobby" so I made a small profit.
I am pissed about this "self employment" tax thing. For WHAT???