I have been thinking about this on and off - I am looking into starting a cake business, no decorating though. I would like to sell to cafes and wholefood shops (I know the interest is there).
My kitchen is just very small and I want to keep my Business seperate from my home. Now there is a service in our city called "Kitchen Share". I am planning to work max 3 days a week. Prices depend on length of contract and usage. But it will cost me about 770£ pm all in (electricity, Wifi, storage, ovens etc.)
But when I look at the prices of a slice of cake in cafes (1.50£ - 2 £) and a cake has maybe 8-10 slices - I can't see the cafe paying more than 15£ for the whole thing. Then I have the costs of the ingredients. The kitchen might have more than one oven and they are maybe more efficient but I can't see myself being able to make more than 1000£ a month (at 10 cakes - having then to pay 770£ for the Kitchen almost leaves me out of pocket.
Am I being realistic with my calculations? I can't see any catering business thriving that way! I hate it how there are services charging a premium just because they are selling to Businesses and then making it look like they are "helping" start-up Businesses. Can't see that working :-(
Does anyone have any experience - and how many cakes I can bake a day? Some will have cream on it some won't - but there is not much to decorate..
well I'm sure someone else will chime in with better advice but just from doing simple math, you would have to sell approx 13 cakes (12.8) a week just to cover your rent (assuming you're selling them at 15£ per cake) and that's not including ingredients and your time.
I would guess -at the very very least (not knowing your other costs)- that you would have to sell 25 cakes per week to manage (at least 100 cakes per month)- and even then that's some hard work ahead.
can you do that?
If you can't imagine selling more than 1000£ worth of cakes per month, then the kitchen share program just can't work for you. Is there any way that you can share the cost of the rent with someone? For how many hours do you get per month for 770£?
APutting together a business plan will help you answer these questions. Do some dry runs to see how many products you can make per hour, then look at your costs vs. retail prices and wholesale markups. It's entirely possible that you may not be able to make any money based on your current efficiency level, cost structure and market prices, in which case you need to improve your efficiency, reduce costs, and/or find a new market.
Well actually 13 cakes a week is more than do-able...I was just concerned about what is physically possible. I would be happy to work from 6am - 4pm non-stop. But it all depends on the facilities I presume and how many cakes I can bake at once.