UGH! I will like to start building my business clientele the legal way but I cannot do so out of my home unless I build a separate structure, etc. onto my home. I been doing some intense research regarding starting up a small business and the price is quickly skyrocketing. I have individuals who are wanting me to bake/decorate their cakes but unless they are close (family, immediate friends) I am having to turn them away. The laws for my state allow me to rent a place to bake and decorate but the cost is so high $50-$75 up per hour + I am required to use their equipment and having your products ordered to the site (this is per my counties ext. office). I would like to start baking and selling cakes + move on from on there in regards to being able to open up something small and work my way to becoming established.
This is disappointing. If you sell a cake for $50 i.e. and the place cost $60 I am losing everytime. Does anyone have any ideas for someone who would like to start building a business with this type of scenerio to work around? Any ideas are welcomed (except the illegal suggestions
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Have you considered a possible barter situation with a local business(delis, coffee shops, etc). I am not familiar with your state's regulations, but it is very strict in CA. Maybe you can solicit small businesses in your area for legal use of their kitchen in exchange for a certain set amount of product for their purposes to sell. Maybe cupcakes, or mini cakes, etc whatever might work for their business. Or this in additional to a set weekly or per use amount to use their kitchen during off hours. This will give you the opportunity to be legal and run your own business, gives them product to sell at little to no cost to them, and also gives you exposure and marketing opportunity to potential clientele. Just an idea.
Well if you have increasing interest then the best option may be to acquire a loan and build the structure. While this is a lot of upfront cost and much of your early sales will be toward paying down the loan, once it is paid off you are ahead of where you would be if you are still paying by the hour. Can't really start a legal business on the cheap. You may also simply have to operate at a loss early on, until you are generating sufficient business where you would be making more than one $50 cake per hour. That can be rough but if interest is building then hopefully that will happen for you soon.
Yes, it can be very frustrating. When I started, it seemed all of the information was just not "easily" obtained. You've really got to be obsessed with the idea, keep hammering at it. I was completely obsessed to get it done.
I've been legal for a year now and business is picking up. I rent space in a commercial kitchen for $266 a month. Some months I earn enough to cover rent and supplies, some months I don't so at times it feels like an expensive hobby but boy do I love doing it.
Good luck.
Finding a kitchen you can rent would be a great idea. Tehre's a local coffee shop/sandwhich place that doesn't sell cake just down thte street from me. They aren't open on Sunday after 3 and not on Monday. places like that are great to talk to.
Have you looked into non-traditional kitchen options such as a church, school, VFW, or masonic lodge? The last two tend to use their kitchens less than some of the other venues and might be more open to a flat rate.
Otherwise, it might be time to take the big leap and get a loan.
KM, here is a reality check from one who's been there...there's really no way to 'get around' spending money to get yourself legal and keep your shop running. You definatly need the passion and drive and finances to succeed. Everyone of us who has opened our own cake shop has had to jump through all the hoops and pay all the bells and whistles that are required. Most all of your profit goes back into your business for supplies/equipment, rent/utilities and licenses, insurance and taxes until you build up a good clientelle. I've been in business since 2007 and just now beginning to turn a profit with wedding and speical occasion cakes. There were and still are some months that I feel so blessed when I could bring in enough to pay the monthly bills and pay for a few hours for someone to help me on the really heavy weeks. You'll find it's impossible to stay in business and compete in pricing with Walmart, grocery stores and illegal home bakers who undercut their product and their worth. Where in Alabama are you located? Location is a big plus in succeeding. If you are close to my shop come in and I would be glad to talk with you. Pam
If people in your area who rent commercial kitchen space are actually getting tenants for $50-75/hour, you may want to consider buying or building commercial kitchen space and renting some of it out to others. That rate is at least 2-3 times higher than what most people are paying, even in areas with a much higher cost of living.
Have you checked with some farmer's markets? I just recently learned that while I can't legally sell a cake from my home, I can make cakes/cookies/breads and sell them at a farmers market. I'm gonna start looking into that and seeing how much it would cost me to have a stand there. Unfortunately in my area, farmer's markets run from May to November, but it might be enough to make a little profit and get my foot in the door of something.
Farmers Market is a great way to get your work out locally, without all the overhead. It's a great way to do product testing. If people like your product, they will return and tell others. Great way to build clientele. Think of it like testing the waters before jumping in.
I like the farmers market Idea.. do you need to already have licencing for that though? just thinking out loud here but if you sell at the farmers market and people like what you have to offer than they are going to ask for a buisness card or place side orders... how would that work?
I would find a kitchen with a flate rate. The only good choices would be community halls or lodges because they are often not booked up regularly. I found a comm kitchen in a community hall for $250 per month, flate rate, 5 days a week. It's possible!!
I was frustrated for over a year and didn't want to spend $$$ because I couldn't even get a good business plan done. How can you make a plan when you don't have sales figures to help you forecast? I could guess but I wasn't confident in presenting guesses in exchange for money, esp. big amounts of money I had to pay back eventually! If you're going to lay out the money, get your ducks in order with a solid plan.
I like the farmers market Idea.. do you need to already have licencing for that though? just thinking out loud here but if you sell at the farmers market and people like what you have to offer than they are going to ask for a buisness card or place side orders... how would that work?
I sell at farmers markets because I cannot sell anywhere else without a commercial kitchen.
And I hand out business cards, if someone wants a custom order, the only thing is they have to pick it UP from the farmers market. I do a market on wenesdays, saturdays and sundays.
Farmers markets you dont need a licence, but your product gets inspected by a health inspector EVERY WEEK.
And etsy, its up to you to know what is legal in your area, i cannot sell on etsy.
What I dont understand is why at a farmers market, I have stricter labelling rules then anyone else. And why if my food is safe there, that I cant sell anywhere else.
my husband thinks its bigger companys "suggesting" that its to keep people safe.
CONSPIRACY!!!! lol
You need to check with your local food departments. It is different in the states than Canada. And even then it varies from state to state and county to county and sometimes town zoning laws are at play also.
Farmer's markets are regulated where I live also. There are lots of rules and you have to get certified.
I am in the same boat!! My friend's Mom does catering and rents a church kitchen, am checking into that!! Nice to know about the Farmer's Market, we have them here from May to September, perfect wedding season opportunity!! Especially if they can pick them up at the market. How do I find out what is legal in my area and what is not? Do I just call the city or county? I am on my Mom's business license so covered there but there is SO much to know and I am NOT business savvy at all!! Taxes and insurance! Its enough to make your head spin, but I love doing this and HATE my full time job, would love to someday do cakes full time!
I rent a private school's kitchen in the evening at $400 per month. I carry my own liablity insurance and have my own permits in my business name. Besides rent and insurance....my start-up costs for my permits alone was $1500-$2000. And then $250 per year after that.
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