LovelyCakes4Us Posted 6 Feb 2013 , 6:29pm
post #1 of

AHay all, I have some questions and would like some advice on renting a church kitchen, Ifound a church right up the street from me that will rent their kitchen to me, a few weeks later I went to meet with them it was brief maybe 10 minutes. They looked sceptical until I told them Ihave taken safe serve have liability and so on. The head lady of the kitchen said quote "maybe this will be a lot better then I thought" :). We then went over storage and ect, then how much to pay a hour. The lady said 10.50 I said that perfect I'm on a low income trying to start a business. The guy on the other hand insisted I pay more due to oven use. Understandable right? Yes. But then again most of my time there will be fondant work maybe a hour worth of baking. I left and received a call today he said I will be paying 20.00 a hour plus 100.00 deposit. I know this is a good price for a rental but with how tight my budget is makes $20 a hour impossible for me..

Any ideas on how I could try to see if they could reconsider to maybe $15 a hour or less being as I won't really be using the oven that much.. Heck I only get 1 order a week if that lol!! Any tips advice would be great!! How would you try to see if they could reconsider price if you're income was low?

Please no negitive comments on how I shouldn't try to start a business with low income.. Trust me its possible with the str eighth of the lord.

61 replies
Sassyzan Posted 6 Feb 2013 , 7:27pm
post #2 of

AFind out the manufacturer of the oven and see how much gas/electricity it uses. Calculate how much it will cost to run the oven per hour based on utility rates. Offer to log your oven time and pay them accordingly. $10/hr for non-oven time, and more for baking days.

jason_kraft Posted 6 Feb 2013 , 7:31pm
post #3 of

AHow much does your business plan say you can spend on a kitchen rental and still make a decent wage and profit margin based on your local market?

LovelyCakes4Us Posted 6 Feb 2013 , 7:41pm
post #4 of

A

Original message sent by Sassyzan

Find out the manufacturer of the oven and see how much gas/electricity it uses. Calculate how much it will cost to run the oven per hour based on utility rates. Offer to log your oven time and pay them accordingly. $10/hr for non-oven time, and more for baking days.

I will give that a try, sounds pretty fair to me! Thanks, any other ideas would be greatly appreciated.

LovelyCakes4Us Posted 6 Feb 2013 , 7:43pm
post #5 of

A

Original message sent by jason_kraft

How much does your business plan say you can spend on a kitchen rental and still make a decent wage and profit margin based on your local market?

Still working on my business plan, but it looks like for right now only 750.00 a month, Idont get many orders. I should once I advertise more.

jason_kraft Posted 6 Feb 2013 , 7:46pm
post #6 of

AIdeally you should have a maximum hourly rate that you can build into the cost of your products (along with labor, ingredients, and other overhead) so your price including markup will not be too high for your area. Without this number you are flying blind.

I'm not sure what the $750/month figure represents.

LovelyCakes4Us Posted 6 Feb 2013 , 10:38pm
post #7 of

A[quot.

I'm not sure what the $750/month figure represents.[/quote]

That's how much I have right this second to spend on rent.

-K8memphis Posted 6 Feb 2013 , 10:52pm
post #8 of

i think you need a regular customer like a restaurant or independent coffee shop or two that you can supply all the time with great baked goods

 

the gas stations like wrapped baked goods

 

a school maybe --the adult technical shool types maybe

 

large work places that might want continual breakfast/lunch goodies supplied on an ongoing basis

 

i'd say i think you need some regulars maybe

 

i do wish you the very very best

jason_kraft Posted 6 Feb 2013 , 11:00pm
post #9 of

A

Original message sent by LovelyCakes4Us

That's how much I have right this second to spend on rent.

You should not be making decisions based on your current cash on hand. Your customers should be paying for your time at the kitchen, not you, and you need to know how much you can build into the price of your products without outpricing your market.

You may find that spending $15/hour will price you out of the market, in which case your business has already failed before you even started unless you can find another target market. Or you may find that you can go as high as $25/hour, so $20/hour would work for you and leave you some extra room for profit. This is why it's so important to have your business plan ready before you start looking for a kitchen.

LovelyCakes4Us Posted 7 Feb 2013 , 3:38am

A

Original message sent by jason_kraft

You should not be making decisions based on your current cash on hand. Your customers should be paying for your time at the kitchen, not you, and you need to know how much you can build into the price of your products without outpricing your market.

You may find that spending $15/hour will price you out of the market, in which case your business has already failed before you even started unless you can find another target market. Or you may find that you can go as high as $25/hour, so $20/hour would work for you and leave you some extra room for profit. This is why it's so important to have your business plan ready before you start looking for a kitchen.

[quot.

I'm not sure what the $750/month figure represents.[/quote]

That's how much I have right this second to spend on rent.

Sounds good thanks.. Can you explain more on the whole market thing..

LovelyCakes4Us Posted 7 Feb 2013 , 3:44am

AI charge 2.00-2.70 per serving, I'm kind of the "budget cake diva" around these parts. You'd think I would have business coming out of my ears, nope not the case. Don't advertise much as for right now, still in the process of everything.

Maybe a few words of wisdom on constructing a business plan with a low budget?

jason_kraft Posted 7 Feb 2013 , 3:45am

A

Original message sent by LovelyCakes4Us

Sounds good thanks.. Can you explain more on the whole market thing..

I strongly recommend contacting your local SCORE chapter to find a local business mentor who can help you get your business plan in order. There is an entire field devoted to explaining "the whole market thing".

http://www.score.org/chapters-map

Suffice to say that being known as the place people go when they are on a budget is not a good thing, unless you have a legitimate cost advantage over your local Walmart.

LovelyCakes4Us Posted 7 Feb 2013 , 3:55am

A

Original message sent by jason_kraft

I strongly recommend contacting your local SCORE chapter to find a local business mentor who can help you get your business plan in order. There is an entire field devoted to explaining "the whole market thing".

http://www.score.org/chapters-map

Suffice to say that being known as the place people go when they are on a budget is not a good thing, unless you have a legitimate cost advantage over your local Walmart.

Went to S.C.O.R.E no luck, the guy was a joke! I know they are volunteers but sheesh he was no help what so ever, told me to come back when I have a business plan? Lol dude I came to get help with my business plan der!

Yep i know being the cheapy cake lady is not a good look, but hell try to get people to pay more in my neck of the woods is like pulling teeth! I live in a Walmart community they have no idea the quality or hard work that goes into creating custom cakes. I use WASC with a twist, SMBC with home made vanilla y'all know how spendy them beans are, expensive butter should I go on? Then charge 50.00 for a two tier cake! Aaah drives me coo coo!

jason_kraft Posted 7 Feb 2013 , 4:01am

AIf there are no other SCORE volunteers in your area (definitely contact them to tell them about your bad experience), a good starting point is bplans.com.

http://articles.bplans.com/writing-a-business-plan

Where are you located?

LovelyCakes4Us Posted 7 Feb 2013 , 4:10am

A[quote name="jason_kraft"

Where are you located?[/quote]

Mpls Mn Question, how do bakery's such as Mexican bakery's that accept Ebt make a profit? The one by my house sells. Cakes at $20 a pop! Then again their cakes are not the best to be honest..

-K8memphis Posted 7 Feb 2013 , 4:16am

there's a lady who comes on here sometimes and mentions a web site where you can get business plan help

 

yeah i found it http://cakecentral.com/t/752346/business-plan

 

now some of them cost yah but some of them might be free--i don't know--but there is that

 

and then s.c.o.r.e.?

 

and i paid $75 for a score seminar thing whatever--yes i got the $75 joke

 

the session with the lawyer--he about swallowed his tongue when i said you could incorporate yourself--he wanted to get us all signed up to let him do the incorporation paperwork--phffft -- and this way before legalzoom etc.

 

good for you you found out and kept your $75 too!

 

i think it's just a good ole boys club--maybe not everywhere but useless/clueless garage sale fodder crabby old men--and maybe there's some women in there but none here at that time

 

s.c.o.r.e. sounds great--looks good on paper but it is pretty anemic/lethargic imo

 

i'm still pissed at that pushy lawyer! icon_biggrin.gif

 

but anyway--sounds like you need to trim your spending and offer a product that will be more in line with the prices you can garner

 

there is no hope for a clientele with a more discerning palate/pocketbook?

jason_kraft Posted 7 Feb 2013 , 4:33am

A

Original message sent by LovelyCakes4Us

Mpls Mn Question, how do bakery's such as Mexican bakery's that accept Ebt make a profit? The one by my house sells. Cakes at $20 a pop! Then again their cakes are not the best to be honest..

There are more than 3 million people in your metro area, sounds like you need to do some serious research to find out where people are willing to pay for quality. If you are not in an affluent area you may need to target your advertising farther away.

How much are you currently paying for your commercial kitchen rental?

The Mexican bakery may or may not be making a profit on that $20 cake. It could be a loss leader, or they may just not know how to set prices based on costs. Or they could be efficient and focus on volume with cheap ingredients and cheap labor: if it takes a minimum wage worker 1 hour to make that $20 cake, ingredients cost $4, and per-order overhead is another $4, their cost for the cake would be $16, which leaves a healthy 25% markup for profit.

LovelyCakes4Us Posted 7 Feb 2013 , 5:34am

A

Original message sent by -K8memphis

there's a lady who comes on here sometimes and mentions a web site where you can get business plan help

yeah i found it [URL=http://cakecentral.com/t/752346/business-plan]http://cakecentral.com/t/752346/business-plan[/URL]

now some of them cost yah but some of them might be free--i don't know--but there is that

and then s.c.o.r.e.?

and i paid $75 for a score seminar thing whatever--yes i got the $75 joke

the session with the lawyer--he about swallowed his tongue when i said you could incorporate yourself--he wanted to get us all signed up to let him do the incorporation paperwork--phffft -- and this way before legalzoom etc.

good for you you found out and kept your $75 too!

i think it's just a good ole boys club--maybe not everywhere but useless/clueless garage sale fodder crabby old men--and maybe there's some women in there but none here at that time

s.c.o.r.e. sounds great--looks good on paper but it is pretty anemic/lethargic imo

i'm still pissed at that pushy lawyer! :D

but anyway--sounds like you need to trim your spending and offer a product that will be more in line with the prices you can garner

there is no hope for a clientele with a more discerning palate/pocketbook?

Lol like the movie grumpy old men, "there is no hope for a clientele with a more discerning palate" what exactly does that mean haha.

LovelyCakes4Us Posted 7 Feb 2013 , 5:38am

A

Original message sent by jason_kraft

There are more than 3 million people in your metro area, sounds like you need to do some serious research to find out where people are willing to pay for quality. If you are not in an affluent area you may need to target your advertising farther away.

How much are you currently paying for your commercial kitchen rental?

The Mexican bakery may or may not be making a profit on that $20 cake. It could be a loss leader, or they may just not know how to set prices based on costs. Or they could be efficient and focus on volume with cheap ingredients and cheap labor: if it takes a minimum wage worker 1 hour to make that $20 cake, ingredients cost $4, and per-order overhead is another $4, their cost for the cake would be $16, which leaves a healthy 25% markup for profit.

I was paying $10 a hour but they are not able to give me more then 3 hours a month so that does no good.. I found this church so far.. Minneapolis has so much competition, not so much with custom cakes although these bakery's do make custom cakes they shoot more towards cupcakes. Which i believe cupcakes would be my daily retail.

LovelyCakes4Us Posted 7 Feb 2013 , 5:41am

ANow I have to figure out a way to brake away from being the cheapy cake lady lovely! Were should I start? Thanks for the tips btw!

BakingIrene Posted 7 Feb 2013 , 5:47am

With regard to the church, it might work to ask for two rental rates: one for baking, and one for just putting together cakes.

 

But you OP have been getting some strikingly similar feedback from business people, a church, and customers--they are just not taking you seriously. It's across the board.

 

So there is something that you are doing that people pick up on.  No I have no clue what, but it's coming across to ALL the people you deal with. Maybe you need to get a GED.  Maybe it's something more personal.  But you are not going to get any business off the ground until you can sort out your presentation.  Maybe you should ask the more friendly people at the church for advice--as they have been in face to face contact with you.

LovelyCakes4Us Posted 7 Feb 2013 , 6:18am

A

Original message sent by BakingIrene

With regard to the church, it might work to ask for two rental rates: one for baking, and one for just putting together cakes.

But you OP have been getting some strikingly similar feedback from business people, a church, and customers--they are just not taking you seriously. It's across the board.

So there is something that you are doing that people pick up on.  No I have no clue what, but it's coming across to ALL the people you deal with. Maybe you need to get a GED.  Maybe it's something more personal.  But you are not going to get any business off the ground until you can sort out your presentation.  Maybe you should ask the more friendly people at the church for advice--as they have been in face to face contact with you.

A GED, are you serious? I have my high school diploma, that's a smack in the face. As for my presentation I'm not by no means sloppy, I wear a custom made shirt with my business logo on it, black dress pants dress shoes, hair neat and make up perfect. I do however have trouble speaking, its almost like I'm in my very first interview so at times ill say something then think about it like why in the world did I say that? Well if its me there's not much I can say to be honest!

What give up just because people don't find me professional when I speak because lord knows I've been trying hard, I've went to the point of having my son record me and ask me cake related questions.. I just can't seem to get over the stage fright..

This site can really discourage a person, when its suppose to do just the opposite.

jason_kraft Posted 7 Feb 2013 , 6:39am

AIrene wasn't telling you to give up, her advice was to look for a common thread that could be adversely affecting others' perception of you. It sounds like you already have a pretty good idea what that is, so you're halfway there.

Luckily there is an organization tailor-made to address your issue: Toastmasters. Join your local Toastmasters club and if you are serious about it you are pretty much guaranteed to improve your speaking skills.

LovelyCakes4Us Posted 7 Feb 2013 , 12:57pm

A

Original message sent by jason_kraft

Irene wasn't telling you to give up, her advice was to look for a common thread that could be adversely affecting others' perception of you. It sounds like you already have a pretty good idea what that is, so you're halfway there.

Luckily there is an organization tailor-made to address your issue: Toastmasters. Join your local Toastmasters club and if you are serious about it you are pretty much guaranteed to improve your speaking skills.

Toastmasters? Ill look it up thanks!

Question, do you see anything wrong with my typing skills? Hay mite as well ask while I'm at it.

-K8memphis Posted 7 Feb 2013 , 2:38pm

opposition (perceived or real) is a built in part of building a new business

 

that part of your venture is a given--you gotta be tough and you gotta deflect it and push on

 

moses coouldn't talk too good either--so what-- put it on a list to improve it if you want --done move on

 

toastmasters is a great idea but it's not bottom line essential to your business

 

if you were going to be a bakery consultant--yes you need oratorical skills

 

your product will speak for you if you can figure out what it is and market that and get it out there

 

~~~~~~~~~~~~~~~~~~~~~~~

what i meant up-thread about a clientele with a better palate/pocketbook is what Jason said about targeting/marketing a client base that wants your product and can afford you

 

~~~~~~~~~~~~~~~~~~~~~~~

 

a huge thing here is you gotta zero in and focus focus focus

 

  • doing high end cakes

 

  • doing retail cupcakes

 

 

that's two different businesses

LovelyCakes4Us Posted 7 Feb 2013 , 3:04pm

ALet me know what you think..

Let's just say this is for starters and starters ONLY.

3.50 Per serving,

10 dozen of cupcakes a month at 2.00 per cupcake-960.00 3- 8" cakes a week- 600.00 a month 2- Two tier cakes a week, one being 40 serving, other 100- 1,960 a month 2 Wedding cakes a MONTH - 1,050 a month

Total 4,570 a month - 720 renting the kitchen a month -240 for cupcake ingredients -120.00 8" ingredients -100.00 two tier ingredients -120.00 wedding cake ingredients -900.00 house rent -100 electric -55.00 phone -300.00 food -100.00 car

Leaves me with 1,640 profit..

That's not terrific or anything but it would work for start up, as for marketing ill go the cheapy routes,flyers,business cards word to mouth,website,Google,Facebook,heck even door to door handing out flyers on the door knob. Etc etc

-K8memphis Posted 7 Feb 2013 , 3:18pm

the $720 kitchen rent

 

if it was @$15/hr that's 48 hours of kitchen time

 

so you can produce all that in 48 hours?

kpny Posted 7 Feb 2013 , 3:27pm
Quote:
Originally Posted by LovelyCakes4Us 


10 dozen of cupcakes a month at 2.00 per cupcake-960.00
 

 

Did you mean 10 dozen a month, or 10 dozen a week?.

 

maybe i need more coffee - but my calculation 10 * 12 * 2 is $240 - not 960.

 

if it was 10 dozen a week, 40 for the month, then the $960 makes sense.

BakingIrene Posted 7 Feb 2013 , 3:38pm

Well I guess this thread is going to crawl along. The OP's typing speaks for itself.

 

Dress pants and dress shoes are the traditional "uniform" of office workers.

 

High end catering and restaurant servers wear flat black shoes.  Their black trousers may be cut in different styles but more along the lines of Dockers. I'm talking about the folks who do the actual work going in and out of the kitchen.

 

Go into any bakery--the staff will uniformly be wearing flat shoes to work safely in a place where stuff spills on the floor.  The bakers wear either the white/grey chefs checked pants, or they wear white or khaki Dockers. The workers who handle the heavy jobs will be wearing steel toed shoes.

 

You have to dress like your chosen industry to be considered a part of that industry.  If your footwear and fingernails don't match your choice of trade, then you just won't get a toe in the foor.  Plain and simple.  And you OP can feel as insulted as you like but I am telling you God's own truth about the working world.

-K8memphis Posted 7 Feb 2013 , 3:43pm
Quote:
Originally Posted by LovelyCakes4Us 

...as for marketing ill go the cheapy routes,flyers,business cards word to mouth,website,Google,Facebook,heck even door to door handing out flyers on the door knob. Etc etc

 

 

i suggest you target your market

 

go to like minded vendors, florists, caterers who do not do cakes, bridal dress shops, venues, churches etc.

 

shoot your arrows at the ones who are already like minded

 

but you have two focuses here--the retail small potatoes and the high end tier cakes--where is your focus?

 

how can you retail out of a borrowed space?

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