I am in the process of becoming a licensed home kitchen and was wondering if anyone here is a licensed home kitchen and has a store for just pickups and consults, like a retail site? I will more than likely utilize the store to sell other items in the future, but never to bake in. The rent of the store I am looking at is affordable, so the cost of that plus utilities should not be an issue. The reason I would like a store is because I think it would make it easier for clients to come for consults and pickups during business hours as opposed to me making hours at home for these things. Thoughts?
I also wanted to add that the store is on the main street of town so it would have a ton more traffic for selling of cupcakes, muffins, etc at retail in order to bring in more revenue. :)
AMuch of the cost of a storefront comes from staffing it. If you have regular business hours, do you have enough time to staff the store during those hours in addition to baking at home, and have you accounted for this additional labor cost? Does your home bakery license allow you to sell at a retail storefront, or are you limited to direct sales from home only?
What value does having a storefront add, and does the added value outweigh the additional labor and overhead costs?
Personally, I can't even imagine working all day at the retail shop then coming home to do all the baking.
You are talking about supporting a whole other location with rent & utilities but not the benefit of using it to bake. Things can be baking while you are consulting. You can do stuff during the down time.
Personally, I can't see any benefit to running 2 locations.
My home bakery license will allow to sell at a store or retail location, I would just have to add another step to the licensing process by making a business plan for the store. Ideally, the store would only be open short hours during the day and some evenings, allowing time for pickups, etc and myself and my husband would be the only actual "employees". I have also thought about the time aspect of baking at home and then having to work at the store, but I could always decorate the cakes at the store filling in the time that I am there. This is why I asked if anyone has done it before. I wanted the opinions of others before just diving in.
The only reason I don't want to use it as an actual place to bake, etc is because I am not sure of the licensing process for a store as compared to home licensing. Also, the cost is much, much more for commercial equipment.
Oh, and the added value would be that I could sell premade cakes, cupcakes, pastries, etc, that I wouldn't normally be able to do with just a home based business.
Original message sent by Jencee
I have also thought about the time aspect of baking at home and then having to work at the store, but I could always decorate the cakes at the store filling in the time that I am there.
Selling pre-made cupcakes and pastries is a completely different business (higher volume, lower margin) than a custom cake shop so you'll essentially need to write two business plans. Launching and operating two businesses simultaneously can be done, but it's the equivalent of giving birth to twins.
If that's your only value-add it's critical to quantify how much profit (net, not gross) you expect to get out of the storefront sales to see if it's worth your while. For example, if you are open for 8 hours a day, 3 days/week and rent + utilities is $2000/month, your daily labor + overhead is ~$250. If you clear $2 net profit on each cupcake you will need to sell at least 10 dozen cupcakes every day just to break even.
Thanks for your advice. I never thought of it that way! I will have to check on a few things before I make a final decision as to what to do.
Many people here do that. The cost of opening a retail location selling ready-to-eat foods is a fraction of the cost of opening a "restaurant", which is any place that makes food on site, or a partial restaurant (the name of the permit escapes me), where you make all your food at a commercial facility but sell it in a hot or cold case and only do limited prep of non-perishables on site. When I open my place, I have no doubt that I will continue to make everything from my rental commercial kitchen and sell it thru a small brick and mortar.
If you get your rent low enough, you don't even have to have it necessarily open to the public with food sitting on the shelf, it could just be "by appointment only". All depends on your business plan.
AWhen I did my calculations for this same sort of set up, I did all the math and saw I would need to sell 7 dozen cupcakes a day, but would also have the benefit of paying my husband for the baking. That same 7 dozen would also pay him enough to quit his job.