Established Cake Decorating Store???

Business By brensmom12 Updated 31 Jan 2011 , 10:36pm by Navyempress

brensmom12 Posted 20 Jan 2011 , 7:04pm
post #1 of 15

I have an opportunity to purchase a cake decorating store that sells cake, candy & cookie supplies as well as teaches classes. The buisness is well established (~20 years). I do have experience with managing and co-owning a business now.

The problem is it is in a very bad/financially depressed location. If I did purchase this buisness I would be relocating to a better area that is more centrally located to other surrounding cities, hopefully generating more business. I am cautiously excited, but want to get the opionions of other CCers who may have done this or something like it.

I know right now there is a huge boom for everyone to be a cake decorator and I worry that when this wave crashes what will happen. The only silver lining is that this is an established business and is the only business like this in a 25 mile radius. Any suggestions or comments are welcome (I have thick skin icon_biggrin.gif ) Thanks!

14 replies
jason_kraft Posted 20 Jan 2011 , 7:30pm
post #2 of 15

Do you have a business plan? Regardless of location, it will be very difficult keeping a cake decorating retail business above water since your competition includes Michaels and Walmart.

If you can subsidize the retail business with the classes (and/or drastically scale back retail offerings to minimize your loss) you will probably be in better shape.

CWR41 Posted 20 Jan 2011 , 8:37pm
post #3 of 15

I don't see the point in purchasing the existing business since you know that the first thing you'd do is relocate, UNLESS the price for their inventory is dirt cheap. You aren't purchasing their customer list because this isn't a business that has repeat contracted services to fulfill... anyone is free to walk in and become a customer at any time or not.

Same thing at your new location--customers are up for grabs... anyone can get them! They'll either come to you, or go to the other place (for as long as they're in business). Complete your business plan and do your own thing if the numbers work for you. I don't view it as a great opportunity for you to purchase in a financially depressed location, but rather a gratuity that you'd be giving them to help them get out.

TexasSugar Posted 20 Jan 2011 , 8:41pm
post #4 of 15

Why are the current owners selling the business?

brensmom12 Posted 20 Jan 2011 , 8:55pm
post #5 of 15

They are selling because the owner is older and has health issues otherwise they would not sell. I have not seen the books yet but their gross last year was 6 figures. The price they are selling for is seeming reasonable, but they need to sell and are considering all offers (so far I have been the only one...could be a good and bad thing).
They do no advertising or promotion, which I would introduce and with the new location is in a prime location. I would add on other classes as well that Michaels does not offer (Candy,cookies etc.). I would also build a website (since they do not have one) to allow for purchases & class registration. These are just my first impressions of what I could do to improve the business. There is only 1 Michaels in close proximity and this store stocks much more than Michaels.
Thanks so far guys!

Navyempress Posted 21 Jan 2011 , 5:52am
post #6 of 15

I'm going to take a stab in the dark and say this store is in Norfolk, Virginia?? icon_wink.gif

Nevermind.. you said it doesn't have a website and the one I'm thinking of does..

soledad Posted 21 Jan 2011 , 6:45am
post #7 of 15

brensmon 12
quote by CWR41
I don't see the point in purchasing the existing business since you know that the first thing you'd do is relocate, UNLESS the price for their inventory is dirt cheap. You aren't purchasing their customer list because this isn't a business that has repeat contracted services to fulfill... anyone is free to walk in and become a customer at any time or not.

Same thing at your new location--customers are up for grabs... anyone can get them! They'll either come to you, or go to the other place (for as long as they're in business). Complete your business plan and do your own thing if the numbers work for you. I don't view it as a great opportunity for you to purchase in a financially depressed location, but rather a gratuity that you'd be giving them to help them get out.

Read well what cwr41 is saying...

Maybe the name and inventory is worth something, if you are planning in not changing it , once you move the local. Whatever you decide, GOOD LUCK!!!Best wishes thumbs_up.gifthumbs_up.gifthumbs_up.gif

scp1127 Posted 21 Jan 2011 , 5:43pm
post #8 of 15

Gross sales mean nothing. An accountant can help you with determining net income and net value. I agree that you do not need to buy a business like this. Think, for example, if a better cake supply store opened next to this one. The old store would be severely impacted. Knowing that this store is closing gives you the opportunity to start fresh and do it better! There are so many new products on the market that you may be better off starting fresh. Established stores always have a portion of "tired" inventory.

MariaK38 Posted 22 Jan 2011 , 12:30am
post #9 of 15

oh my gosh, it is my dream to open a store like this on my end of town! the one that we have is established and very nice, but frustrating sometimes because when I need something quick it takes 20 minutes to get there, and they run out of things just when I need them! we also have a Michael's and a Hobby Lobby. If I had the money, I'd open one today!

milmil95 Posted 22 Jan 2011 , 1:14am
post #10 of 15

I think the shop she is talking about is in Va Beach VA. I used to go there to get my supplies as well as the other one in the area. Last time I went in the shop the lady was sitting there reading a magazine and had no desire to help me find anything at all. If this is the same shop and someone else buys it I will go back to shopping there again. They have a lot of items you can't find at the box stores and I'm afraid if they go out of business the other shops prices will go through the roof. There won't be any local competition.

Navyempress Posted 22 Jan 2011 , 2:15am
post #11 of 15
Quote:
Originally Posted by milmil95

I think the shop she is talking about is in Va Beach VA. I used to go there to get my supplies as well as the other one in the area. Last time I went in the shop the lady was sitting there reading a magazine and had no desire to help me find anything at all. If this is the same shop and someone else buys it I will go back to shopping there again. They have a lot of items you can't find at the box stores and I'm afraid if they go out of business the other shops prices will go through the roof. There won't be any local competition.




I saw an ad on craigslist for a cake supply store with the same description but it says Hampton Roads and doesn't specify which city. It could be either one. I just assumed it may be Wine and Cake because the OP said it was in a bad location..

tokazodo Posted 22 Jan 2011 , 2:35am
post #12 of 15

I'm from the OBX, I'd shop there! I already run to Michael's in Chesapeake to get supplies, occasionally. We've not got much here on OBX as far as cake supplies go.

(I just find it so surprising that so many of us are from this area in this thread)

BlueMoon73 Posted 22 Jan 2011 , 2:45am
post #13 of 15

I would shop at a store like that and go to classes!! We have Michael's and of course Walmart but I get so frustrated with the lack of selection!! Good luck to you whatever you decide to do!!

VaBelle Posted 22 Jan 2011 , 3:07am
post #14 of 15

If you're talking about Hampton Roads, I live in Virginia Beach, not far from the one located here. Being that it's a mile from my house, you'd think I'd always be in there, but the handful of times I've tried they never have anything I need. No fondant. This summer they ran out of white chocolate. If that's the store you're talking about, I hope you have some ideas for big improvements, more than just changing the location. If you're talking about the store in Norfolk, I think they would be worth it and the area they're in now is pretty out there. There's only a few things that I've looked for that they didn't have.

Navyempress Posted 31 Jan 2011 , 10:36pm
post #15 of 15

Did the OP forget about this thread? I am curious to whether they went ahead with buying the store..

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