Advice On Partnering With Another Decorator

Business By vickster Updated 16 May 2010 , 3:13pm by tonedna

vickster Posted 12 May 2010 , 12:21am
post #1 of 14

I am starting to have more business than I can manage by myself. I had a visit from a gal who has good skills. I am thinking about offering her the cake decorating customers and focus myself on the walk in items, cupcakes, brownies, ice cream cakes, etc. Anybody have any thoughts on what an appropriate percentage would be fore me to keep from her sales? I was thinking about 20% or 25% and she purchases all of her ingredients. It would be a lot easier to charge her a larger percentage and not have to keep separate supplies.

13 replies
leah_s Posted 12 May 2010 , 12:38am
post #2 of 14

Why don't you just hire her? Way easier.

indydebi Posted 12 May 2010 , 1:04am
post #3 of 14

agree with leah. Just hire her on an hourly basis and schedule her hours as needed.

"Partnering" implies she will be investing (a lot of) money into the business. Is that the plan?

vickster Posted 12 May 2010 , 1:49am
post #4 of 14

I'm not making enough money to hire her. If I hire her I have to do the payroll taxes in addition to wages. I've got a couple of kids working for me who wash dishes, mix buttercream They work just five or six hours a week for cash.
I'm kind of at a turning point. I started out doing cakes, but the gal that runs the down town promotion begged me to do a sandwich lunch. So I started with that since at the time the cakes were eratic. Then I started keeping cupcakes and other ready to buys. And recently added an ice cream dipping cabinet (we have the only premium ice cream factory in our state about a block from my shop). I feel that if I could really focus my attention on the bakery/ice cream, it is forming into a decent business. The problem is, it is exhausting to do both. The walk in business is a regular five days a week, every day steady. The cakes are all piled up on Friday and Saturday. By the time it gets to Friday, I'm mentally and physically spent from working on the walk in business.
The decorating business, (except for graduation weekend and a few other crazy times) is pretty much a one person endeavor right now. A really slow week is a couple hundred dollars worth of cakes, a good week five or six hundred. If someone put time into it, I think it could double. Problem is, I just can't run the weekday stuff and do the marketing that needs to be done to grow the decorating side. I'm either going to have to find a partner who's willing to invest some energy, or close down one or the other aspect of the business.

vickster Posted 12 May 2010 , 1:54am
post #5 of 14

And, no, I wasn't expecting her to invest. The shop is all set up. I was thinking more of taking a "cut" off of what she sells through my shop in return for use of the space and equipment. Plus I'm assuming I would be booking some of the orders for her since I'm there every day.

indydebi Posted 12 May 2010 , 1:57am
post #6 of 14

Sounds like you're on that bubble ..... too much work to do by yourself and not enough to hire add'l help.

When you're at that point, you really need to hire add'l help.

You'll always stay where you always are if you keep doing things the way you've always done them.

How much will it cost you? Probably the kids working for cash are costing you more than a "legit" employee would because you're unable to deduct their payroll as an expense since it's under the table.

Assume you pay this person $8/hour. Assume they work 10 hours a week (2 hours a day). That's $80/week. If they enable you to sell just one more $500 wedding cake, they have more than paid for their expense. And they could cover the dishwashing and BC making, too.

It's hard being on that bubble. Believe me, I know. But when you're at this point, you can't continue to try to do it all yourself. You'll burn out in more ways than one. And THAT is what you really can't afford.

vickster Posted 12 May 2010 , 2:13am
post #7 of 14

I'm not going under the table. I'll do 10-99s if they exceed $600 or whatever the limit is now. I use them in a way similar to hiring someone to come cut your grass. They come in and do one task. For example, one kid comes in and cleans the floor.

I seriously doubt she'd work for 8 bucks an hour. Her skills, from her photo album, are competitive with mine. Whether she is able to pace herself in a way that turns a profit, I wouldn't know.

I understand what you're saying. If you're washing dishes, you're not turning out the product that makes you money. That was my last bubble, hiring these kids. I'm a big believer in sharing the wealth, share the grunts.

Five hundred dollar wedding cakes are the exception here. More like 150 to 300. Weddings are pretty small. Not much interest in fillings or even fondant work.

I guess I'm thinking with a partner, I can walk out on Friday at closing time and be more or less done with my week. I feel that simply hiring help, I'd still have to be there "overseeing", especially 8 dollar an hour help.

indydebi Posted 12 May 2010 , 2:42am
post #8 of 14
Originally Posted by vickster

I'm not going under the table. I'll do 10-99s if they exceed $600 or whatever the limit is now. I use them in a way similar to hiring someone to come cut your grass. They come in and do one task. For example, one kid comes in and cleans the floor.

Are you treating them like independent contractors? There are strict stipulations on what constitutes an indp contractor. I would suggest checking with your accountant to make sure you're ok and in compliance with that plan. I'm not a CPA and don't pretend to be but my understanding is that you can't just NOT pay payroll taxes.

I don't care if I used a person just one time for one event and only paid them $80 .... I still had to have them fill out paperwork and have the accountant issue a payroll check, complete with all taxes withheld and paid.

vickster Posted 12 May 2010 , 3:48am
post #9 of 14

You can use cleaning services on 10-99s,
I have high school seniors. They work fall term in one year, spring term in the next. Generally about 5 hrs a week. They won't exceed the cut off which I think is 600.

vickster Posted 12 May 2010 , 4:03am
post #10 of 14

I think the reason you don't often see restaurants subcontract cleaning is because they have their waitresses and other employees "clean as they go". I have a couple of kids who come in at the end of the day and do floors, tables, and a few dishes. But nearly every business around me uses cleaning services and writes them off as an expense. I can't think of any legitimate reason it would be illegal for a bakery not to use a cleaning service.

johnson6ofus Posted 12 May 2010 , 4:13am
post #11 of 14

Maybe someone with "less" skill would be cheaper--- you are just thinking in that direction now. More hands helps save you from burning out...

Also, the candidate may be willing to do some part time/ side work only. It is "better than nothing", more than she has now, and may be great for both of you. Just think of it as sub-contracting. As long as you are happy with her quality reflecting well on your business....

Good luck!

peg818 Posted 12 May 2010 , 11:19am
post #12 of 14

I work with a local shop and what i have done is give her a price list of what i would charge for a cake, then she marks up from there. I use her equipment but purchase the ingredients. It works for both of us, cause i'm slow and what she would pay me an hour just wouldn't be worth it for her. But as i gain speed i will make more $$, the business is still hers and she is getting credit for the cakes, i am allowed to take pictures of everything i do. I give her a copy and i keep a copy for my portfolio.

minicuppie Posted 16 May 2010 , 2:57pm
post #13 of 14

Remember that the custom cakes are going to have a larger profit margin. You are giving the most (potentially) profitable part of your hard won business away. Are you going to be able to "be happy" for your new "partner" when she works half the hours you do (per dollar) and makes the same amt or more money? I agree with the the tastings, design the cake, bake, fill and crumb coat it (or as much as you can). Let your EMPLOYEE do the decorating, then you can deliver and set up. Bite the bullet for a few months, I believe you will be happy you did.

tonedna Posted 16 May 2010 , 3:13pm
post #14 of 14
Originally Posted by leah_s

Why don't you just hire her? Way easier.

I agree with this. Why you want to give her a percentage of your earnings when you can hire? It's still would be under your control, the quality of the work and your name. I think it's less hazzle for you to hire.
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