I am getting so discouraged with my 'cake business' I haven't had an order since June and that was for a dozen cupcakes! I just had a cake canceled, they decided to get one from the grocery store instead. I know that times are tough, jobs are scarce and our little part of Idaho is really suffering economically...when do you just throw in the towel? My goal had been able to have enough orders that I could quit my regular job and do what I really love. Now I see all the money I have put out for equipment, supplies, etc. and nothing coming in. Sometimes I feel if I sold everything at least I'd get some of my money back. I realize that because I do work full time (luckily) that I don't invest as much time as I should into the baking, I guess I just need to vent...thanks for listening. 
Well, i'm in the same boat. DON"T get rid of your stuff, things will pick back up. I look at this as a hobby, one day i would like to be able to make a living at it, but i know that won't be for a long time coming.
I, too, am very fortunate that i have a full time job, and don't have to depend on cakes to put food on the table. Some days its hard to remember to be thankful for that, but i am.
It can certainly be tough for small businesses to maintain steady business, especially if you're not in a densely populated metro area. You may want to reach out to community organizations, companies, and event venues to see if you can get your foot in the door with at least some basic cakes for events. Also talk to grocery stores in your area to see if they are interested in highlighting local vendors, you might get some wholesale business this way. Farmer's markets are another option.
And don't forget that if you have a business set up, your losses can usually be deducted against your personal income, so you'll at least get some tax savings.
Just my opinion, but I would use all of my caking down time to get my advertising up. Facebook, adwords, craigslist, topix, etc....anything that will get your name out there. I don't know how much exposure you're getting now, but it might help, and all of those are free with the exception of adwords which can be as low as 1 cent per click and I think theres a one time fee of 5 dollars....but it can be set to show up in your metro area with whatever tag words you choose. I'm not in the cake business, but my biggest expense, now more than ever, is advertising. The economy isn't great right now, but that doesn't mean no one is willing to spend their moeny, just that the group that is has become smaller. The more you put into advertising, the more of that small group you'll reach.
Whatever you do, good luck to ya.
Yep, work on marketing. And don't think just in terms of buying ads, but in more unique ways to get your name out there. Take freebie samples to fire stations, hospitals (nurses stations), car dealers, radio station, teachers lounges, etc and bring a bunch of cards. Look into farmers markets, county fairs, grand openings, bake sales, fundraisers and see if you can contribute or set up a booth. Approach privately owned restaurants and coffee shops and see if you can supply any of their desserts. If there's a kid-centric birthday place (like a bounce house or Little Gym or something) approach the owner and see if you can strike up a deal to be their preferred cake dealer and give their customers a discount. Find out where the kids go and put up flyers. Maybe call the high schools and find out about getting ad space in their school newspapers, yearbook, program booklets.
You want to be a presence at EVERY event in your community.
If you're also trying to get "in" with others in the wedding industry, you should read my article in the August issue of Cake Central Magz (pink cake on the cover) on networking. However, building relationships with other wedding vendors is more than just taking them cake samples. It's actual RELATIONSHIP building. There's good info from 2 wedding professionals on how they like to get to know cake bakers.
Car dealerships can be a good idea. Many dealerships offer snacks and goodies for their clients while they are waiting for their car repair. I had a contract for approx 300 cookies per day, 5 days a week, for months and months for a Cadillac dealership.
If you want to approach dealerships, DON'T just take samples in and leave them with the receptionist (trust me .... done that..... it don't work!). You need to ask for the "person in charge of your customer refreshments in your lounge area."
Side story: I went to a BMW dealership and was told by a lady with a hoity-toity voice "oh we put out doughnut holes in our waiting room!" KNowing by her look and voice that there was NO sale going to take place here, I feigned a look of shock and said, "Your customers pay HOW much for a car and you only feed them DOUGHNUT HOLES???? Oh, darlin', you need to taste some of MY cookies!" 
A survey on Wedding Wire revealed that newspaper and yellow pages ads were the WORST waste of money in an advertising budget.
Like everyone else said marketing is your friend! I'm just restarting my business in a new state and what I've been doing is giving out samples of mini cuppies and loads of business to the florist, jewelers, firestation, and tomorrow the middle and highschools.
I went to vista print spent $10 for 500 great business cards and tons of other free advertising stuff. I also put my business on several free websites.
Good luck and don't give up yet
The recession is going to get worse so it is not your fault. The person who keeps their name out there will get the most benefit when things start looking up... people will know you and you won't be starting over later. In the mean time, hopefully the marketing and perseverence will keep you going.
I do a steady business with doctors and dentist (specialists) who rely on other medical professionals for referrals. They deliver my cupcakes, cookies, cakes, muffins themselves for a personal touch. So I only have to deliver to one place. It's great! I took samples to a local restaurant and wound up doing all their desserts.
Talk about yourself all the time to everyone you meet. I've gotten a lot of business just by striking up conversations in stores.
Hang in there!
I took samples to a local restaurant and wound up doing all their desserts.
This is a good idea, but make sure doing this doesn't put you into new issues with the health department. In most states they would consider you a wholesaler and then you may have more guidelines/rules to follow.
I'm in Virginia. Don't have to answer to the health department! For some reason I fall under the department of agriculture. If it becomes an issue, I'll just use her kitchen. Thanks for the warning though!
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