shugababie Posted 15 Jul 2013 , 7:59pm
post #1 of 26

for those of you that have an actual store front, how did you know when you were ready to take that step?  part of me wants to have an actual store front......i just don't have the space i need in my kitchen to do everything i'd like to do....yet when i go check out vacant locations i get overwhelmed and feel i can't do it.....i have a full time job that pays the bills and at times it requires a lot of overtime.....i wonder how would i be able to make that transition....i go back and from from thinking i can do it because it's what i really want and thinking i can't do it; i'm not ready.....

 

then i wonder isn't it just like having a baby.......are you ever really truly ready to have a baby or do you just have one and make it work?

25 replies
ColinLeger Posted 15 Jul 2013 , 8:20pm
post #2 of 26
Quote:
Originally Posted by shugababie 

 

then i wonder isn't it just like having a baby.......are you ever really truly ready to have a baby or do you just have one and make it work?

 

It has to be a calculated risk...literally. We just saw a business open down town and within less than a year, they were closed, found that they were selling their car, house and nearly begging to rent their space on Kijiji (the other Craig list). I don't know the details, maybe one of them got a new job, baby, were actually moving but long story short, I can bet that when they closed that they had more dept than they would want.

Make sure your business is established first (if you can, we do) then do the move... the math will be easier too.

We have a 1 month old so now is not a good time for us.

LoveMeSomeCake615 Posted 15 Jul 2013 , 8:39pm
post #3 of 26

You need to have A LOT of start up capital. A LOT. I'm not exaggerating. You should not expect to be able to support your family from the storefront for at least a year, if not more. Which means you not only need the money to build out the space and get the business going, but you need enough to cover your personal expenses for that time. 

 

It used to be that you could get a small business loan for start up costs, but that's really hard to get these days. Not to mention that it's really better if you just have the capital and don't start out with a bunch of debt. 

 

Other than that, you need to realize what a huge commitment of time and energy this will be. You know the time and energy you now devote to your full time, sometimes overtime job? Double it. At least. It's A LOT of work, and you don't usually have a lot of employees at first to help you (if any), which means you have to be there every time the doors are open. 

 

It's not just about your ability as a baker and decorator. It's about the business aspect, the not-so-fun part. 

as you wish Posted 15 Jul 2013 , 9:00pm
post #4 of 26

AI was talking with a restaurant owner recently. She grew up working in her parents restaurant and had decided to open a place of her own. She said that a lot of people will comment to her about how lucky she is to own her own business, especially because she does have staff. They seem to think she is just sitting back collecting money! She said that having a restaurant (and I think a cake storefront would be much the same) is very much like having a newborn. You have to give it all of your time and attention. If you try to give it less than it needs it will die.

jason_kraft Posted 15 Jul 2013 , 9:58pm
post #5 of 26

A

Original message sent by shugababie

for those of you that have an actual store front, how did you know when you were ready to take that step?

When your business plan tells you it's time, and you have both the available time and the available money to do so. When I put together the business plan for my bakery, I realized that a retail storefront would bring in much more revenue, but the relatively small increase in profit would not be worth the much higher capital investment and operating cost. So we ended up renting an existing commercial kitchen instead with no retail storefront and custom orders only.

Starting a business is only like having a kid if you were required to pay for all the kid's expenses for the first 18 years of their life before they are born.

shugababie Posted 17 Jul 2013 , 11:40am
post #6 of 26

thanks for your responses!  i think money has been the biggest obstacle....i've looked into local commercial kitchens and they are just way out of our price range at $40-$50/hour......since i don't get big orders i would be losing money if i went that route....i guess for now i'll just keep it as a hobby.....i have seen too many small food related businesses start up and shut down within a couple of years and i don't want to be one of them....

 

on a side note.....anyone in hampton roads know of a reasonably priced commercial kitchen?

as you wish Posted 17 Jul 2013 , 12:22pm
post #7 of 26

AAgain, not a cake business, but my husband was talking to an optician who just moved out of the mall into her own building. She said it was far more affordable for her to own her space than to rent it. Just thought I would put that out there as another consideration!

liz at sugar Posted 17 Jul 2013 , 1:18pm
post #8 of 26

Owning your own space comes with another set of problems - property taxes, repairs and maintenance, insurance.  When you have your money tied up cash flowing your business, it can be an advantage to rent and let the landlord worry about all that.  Of course, that all depends on your market, and rental and occupancy rates.

 

The biggest determination of if your business will make it past the first year is 'working by the numbers'.  In our restaurant, labor costs have run 25% of sales for the week.  Food costs have to run 30 to 35%.  (And those are high for our industry, but our menu includes lots of fresh/scratch items which require a lot of prep).  If either of those run higher, it comes right out of our profit.  Run either of those higher for any length of time and you will drive yourself out of business.  We have had some very smart employees who still didn't get that it all boiled down to numbers.  They thought just taking care of customers was enough, and it isn't.  We aren't accountants, but keep a close eye on where we are at in any given week (our POS system is where employees clock in, so that is tracked automatically), and if we need to send someone home to keep costs down, we have to do it.

 

Liz

Stitches Posted 17 Jul 2013 , 2:36pm
post #9 of 26

I think it's important to have worked in multiple food businesses (cake decorators or bakeries) and be fully skilled in running all the different positions involved, plus be a knowledgeable business person. The people whom have opened cake shops in my area did so when they found themselves and their spouses unemployed from their regular jobs. It's the people who should question themselves about their skill level and experience that don't. They jump into businesses with-out any professional experience in that field.                                               On the other hand I'm friends with many talented professional chefs and none of them are willing to risk everything opening their own place.

Stitches Posted 17 Jul 2013 , 2:41pm
post #10 of 26
Quote:
Originally Posted by liz at sugar 

Owning your own space comes with another set of problems - property taxes, repairs and maintenance, insurance.  When you have your money tied up cash flowing your business, it can be an advantage to rent and let the landlord worry about all that.  Of course, that all depends on your market, and rental and occupancy rates.

 

The rental space in my area tend to be triple net. Of which (to the best of my understanding) means your paying property taxes and repairs, etc... The building owners pass every cost onto the tenants.

 

I'd love to buy a shop. I think of it as owning your own home verses renting....in the end hopefully you will have made a profit on your investment instead of having nothing to show.

BatterUpCake Posted 17 Jul 2013 , 2:49pm
post #11 of 26
Quote:
Originally Posted by as you wish 

I was talking with a restaurant owner recently. She grew up working in her parents restaurant and had decided to open a place of her own. She said that a lot of people will comment to her about how lucky she is to own her own business, especially because she does have staff. They seem to think she is just sitting back collecting money! She said that having a restaurant (and I think a cake storefront would be much the same) is very much like having a newborn. You have to give it all of your time and attention. If you try to give it less than it needs it will die.

I hate when people say someone is "lucky" to have a business, good job, blah blah..no...lucky is winning the lottery...success comes from hard work. I remember when my kid opened her restaurant and was happy the day their receipts were up to $160....lol. That was 4.1/2 years ago and they are always busy and have about 6 employees. They WORK WORK WORK constantly. Their one day off a week is spent ummm..working..lol. . My daughter was back at work 2 weeks after her C section and my granddaughter spent her first year in the restaurant 

liz at sugar Posted 17 Jul 2013 , 4:43pm
post #12 of 26
Quote:
Originally Posted by Stitches 

The rental space in my area tend to be triple net. Of which (to the best of my understanding) means your paying property taxes and repairs, etc... The building owners pass every cost onto the tenants.

 

I'd love to buy a shop. I think of it as owning your own home verses renting....in the end hopefully you will have made a profit on your investment instead of having nothing to show.

 

We rent in an "up and coming" area (which is code for a really crappy neighborhood that is just starting to be revitalized).  While it would be nice to have a building to sell if you decide to close up shop, in my area there aren't people lining up to buy buildings.  It would be a risky investment at best.  Instead we decided to both work in the business, make enough to pay ourselves back in the first 5 years, and then if we need to sell, we can either part it out, or sell it as a successful business.  No worries about selling a building or renting it to pay off a mortgage, and we come out with what we put in, plus some.

 

I am also renting space for my bakery in our new indoor farmers market that will open in a few months.  The biggest positive about this space is that there will be traffic - which is just what a retail bakery needs.

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

MimiFix Posted 17 Jul 2013 , 5:06pm
post #13 of 26
Quote:
Originally Posted by shugababie 

for those of you that have an actual store front, how did you know when you were ready to take that step?

 

Think about why you want to "take that step" and move to a store front. If you are not happy with your current situation, there are other ways to make changes. Moving to a store is not your only choice. If you want to have a retail store, think about the reasons. You need to consider a few things. First, look at your business plan to see if your idea is financially viable. And look at your commitment to hard work. This business will take more hours and pay you less than any employer who demands a lot of overtime.

 

I started as a home-based bakery, then moved to a small neighborhood shop, then bought a building to house my all-scratch bakery and cafe. If increasing your income is a prime motivator, I can say that I grossed more during those retail years, but netted more when I worked alone, at home.

LoveMeSomeCake615 Posted 17 Jul 2013 , 5:18pm
post #14 of 26
Quote:
Originally Posted by liz at sugar 

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

As a fellow storefront owner, I will say YES, this is SO true! Absolutely by far the biggest challenge! 

 

We are in a pretty good location, at the beach in a fairly busy shopping center, but even so we struggle to get noticed. We have people come in every day asking if we just opened, even people who are in this shopping center every day! They just get tunnel vision to where they are going and don't notice a new place. 

Stitches Posted 17 Jul 2013 , 5:42pm
post #15 of 26
Quote:
Originally Posted by liz at sugar 

 

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

I've heard this over and over....it really scares me because in order to be in a high traffic area it's premium dollar rents (in my area). There is a spot I've been eyeing that is right behind the main downtown shopping street at 1/4 of the price the main street rentals are. I want it soooo bad, but the fear that no one will walk around the block to me stops me from renting it.

liz at sugar Posted 17 Jul 2013 , 6:44pm
post #16 of 26
Quote:
Originally Posted by Stitches 

I've heard this over and over....it really scares me because in order to be in a high traffic area it's premium dollar rents (in my area). There is a spot I've been eyeing that is right behind the main downtown shopping street at 1/4 of the price the main street rentals are. I want it soooo bad, but the fear that no one will walk around the block to me stops me from renting it.

 

How are the other businesses doing on the block behind the main street?  If they get enough traffic, you may have a chance.  You could always find a park bench and do a traffic study a couple of days and see how many people venture back there.

 

Liz

liz at sugar Posted 17 Jul 2013 , 6:48pm
post #17 of 26

On a similar topic, our Main Street organization recently sent out a flyer saying that "70% of consumer spending happens after 5 p.m."  He sent that fact out as a wake up call to downtown/retail businesses that are only open 9 a.m. to 5 p.m.  I can't speak to the accuracy of the data, but his assertion was that you MIGHT be better off being open 5 p.m. to 9 p.m. (at least a few days a week).  In cities and towns with lots of office workers, he might be right.  We have lots of factory workers though, and they can work any shift, so I'm not sure how well it applies to a city like ours.

 

Liz

kaylawaylalayla Posted 17 Jul 2013 , 6:55pm
post #18 of 26

AThis is all very helpful information

Stitches Posted 18 Jul 2013 , 3:24am
post #19 of 26
Quote:
Originally Posted by liz at sugar 

On a similar topic, our Main Street organization recently sent out a flyer saying that "70% of consumer spending happens after 5 p.m." 

Liz

One thing I don't get at all is, there are NO bakeries open on Sunday or Mondays with-in a 45 drive from my home in suburban Chicago. Many bakeries have limited hours on Sat. too, like only open until 3:00 p.m.

 

There's a cupcake shop (I used to work at) that's located by one of the busiest breakfast places in town. And they aren't smart enough to be open when those hundreds of people stare into their shop while they are waiting outside in line to get into the restaurant.

 

Having worked in food service for 25* years the reality of the job is you work when everyone else is off of work (my husband hates my line of work for that reason). Too many small shops set their hours for their own convenience instead of what will make the most money for them. 

Stitches Posted 18 Jul 2013 , 3:35am
post #20 of 26
Quote:
Originally Posted by liz at sugar 

 

How are the other businesses doing on the block behind the main street?  If they get enough traffic, you may have a chance.  You could always find a park bench and do a traffic study a couple of days and see how many people venture back there.

 

Liz

There isn't much foot traffic. It's not the shopping area, that block is mainly offices.

 

It's 1/4 block from the train station and I've wondered if I could get commuters buying cinnamon rolls.

 

It's on a one way street next to a Mexican restaurant and bakery on one side and a 3 story building of offices on the other side. Across the street are a few town homes, no business. It's not office buildings that have tons of people working in them on that block, unfortunately.

MimiFix Posted 18 Jul 2013 , 11:20am
post #21 of 26
Quote:
Originally Posted by liz at sugar 

... "70% of consumer spending happens after 5 p.m." 

 

It's important to look at our own business plans for guidance. That's an interesting statistic but he doesn't include details. I would assume that this covers restaurants, bars, and entertainment, all of which usually happen after 5 pm. PR and marketing folks are adept at using statistics to their advantage. 

 

Every business is unique in its product line and location. Bakeries are traditionally open in the early morning hours to capture the coffee and donut crowd. When I moved my home bakery to a neighborhood retail store front, I started working at 3 am and opened at 7 am. I worked alone until my counter help arrived at 9. I was quite surprised that from 7-noon I had very little business - mostly neighborhood moms out for a walk and looking for entertainment. My little shop was filled with strollers and annoying questions. "What kind of butter do you use? How thin can I slice a loaf of banana bread? My little Johnny only likes square cookies so why can't you make these cookies in the shape of a small square?" They left my shop saying, "Everything looks so good, we'll be back." Some mornings I had no sales and a countergirl who helped me with small chores but mostly sat around with nothing to do. 

 

After re-evaluating my business plan (product line, advertising, etc.) I decided to change my hours and opened at noon. Many people told me I was wrong and foolish since of course all bakeries had to be open early. But my new hours made me a much happier person. I didn't have to stop working every time a bored mom walked in and I didn't have to pay an employee to sit around. (Those moms did come back in the afternoons and make purchases.)

 

I learned a valuable lesson - every business is unique and it's important to evaluate your own situation.  

 

  

liz at sugar Posted 18 Jul 2013 , 2:02pm
post #22 of 26

Stitches, our one bakery/cupcake shop is now open 7 days a week!  She says her business on Monday is terrible, I'm not sure why she continues to be open.  Maybe she thinks she absolutely has to be available in case someone wants something.

 

Have you all heard the "salt shaker" story?  It is from a book on a famous restauranteur, and he said a mentor taught him a valuable lesson before he opened his business.  The mentor asked the restauranteur to place the salt and pepper shakers on the table exactly where he wanted them to be placed for business.  So the man did it.  Then his mentor said "but I want my salt over here" and moved the shaker.  Then he said "and I don't want pepper at all", and put it on another table.  The mentor explained to the man that ALL DAY LONG people will want to "move his salt shaker" - they will want you to be open when they want, they will want you to serve this food instead of that, they want you to buy their products, they want you to host live bands, etc., etc., etc.  The mentor told him it is his job to be continually moving his shaker back to where his vision had it placed.  He was reminding the man that his restaurant was formed in his vision, and he would have to work every day to keep it true to that vision.

 

Anyway, our new bakery sure lets her salt shaker get moved often.  She opened up on Sunday because someone requested it.  She occasionally serves all kinds of odd items that don't fit in with cupcakes, because she asks her customers what they want.  (The list included soup, smoothies, pretzels, sandwiches, candy, iced coffee.)  But they are only around for a few days until she gets bored making them.  Maybe she had no idea where her salt shaker should go, and that is why she asks for input?!

 

Liz

liz at sugar Posted 18 Jul 2013 , 2:11pm
post #23 of 26

MimiFix - I agree that the statistic above may not be accurate for all markets,  But maybe there is some hopping downtown area in some city where a late night bakery could really make a go of it, where all the young hipsters hang out. :)

 

Sometimes you need to think outside of the box, and that may include what hours you are open - traditional might not get you far!

 

Liz
 

tracycakes Posted 20 Jul 2013 , 2:24am
post #24 of 26
Quote:
Originally Posted by jason_kraft 


Starting a business is only like having a kid if you were required to pay for all the kid's expenses for the first 18 years of their life before they are born.

 

Love this!!

 

1.  You have to have a Business Plan. 

2.You need LOTS of capital upfront.

3. You need working capital for the first several years since not only will it keep the shop operating,  you will be living off of it. 

4. Be prepared to skip vacations.

5. Be prepared to work 12 hours a day, 6 - 7 days a week.  I did take off 2 days last weekend so my husband and I went out of town,  it was the first time out of town in over a year and I've been in business 4 years now. We used to take 2 vacations a year, minimum.

6. Be prepared lose your social life - you are too busy working.

7.  Be prepared to spend most of your time running your business, not decorating cakes.  If you want to spend your time decorating, it's better to go to work for someone else.

 

No one understands how hard it is to run a business and how hard it is to get good employees and that stay with you. 

 

Number one - make a business plan.  Do your research. There are a lot of templates out there for business plans.  I used several different, some that I got from my local Small Business Association and made them work for me.  

 

Good Luck!

Stitches Posted 20 Jul 2013 , 2:36am
post #25 of 26
Quote:
Originally Posted by liz at sugar 
Have you all heard the "salt shaker" story?  It is from a book on a famous restauranteur, and he said a mentor taught him a valuable lesson before he opened his business.  The mentor asked the restauranteur to place the salt and pepper shakers on the table exactly where he wanted them to be placed for business.  So the man did it.  Then his mentor said "but I want my salt over here" and moved the shaker.  Then he said "and I don't want pepper at all", and put it on another table.  The mentor explained to the man that ALL DAY LONG people will want to "move his salt shaker" - they will want you to be open when they want, they will want you to serve this food instead of that, they want you to buy their products, they want you to host live bands, etc., etc., etc.  The mentor told him it is his job to be continually moving his shaker back to where his vision had it placed.  He was reminding the man that his restaurant was formed in his vision, and he would have to work every day to keep it true to that vision.

 

Anyway, our new bakery sure lets her salt shaker get moved often.  She opened up on Sunday because someone requested it.  She occasionally serves all kinds of odd items that don't fit in with cupcakes, because she asks her customers what they want.  (The list included soup, smoothies, pretzels, sandwiches, candy, iced coffee.)  But they are only around for a few days until she gets bored making them.  Maybe she had no idea where her salt shaker should go, and that is why she asks for input?!

 

Liz

I LOVED that story Liz! Thanks for sharing it.

kaylawaylalayla Posted 20 Jul 2013 , 3:16am
post #26 of 26
Quote:
Originally Posted by tracycakes 

 

Love this!!

 

1.  You have to have a Business Plan. 

2.You need LOTS of capital upfront.

3. You need working capital for the first several years since not only will it keep the shop operating,  you will be living off of it. 

4. Be prepared to skip vacations.

5. Be prepared to work 12 hours a day, 6 - 7 days a week.  I did take off 2 days last weekend so my husband and I went out of town,  it was the first time out of town in over a year and I've been in business 4 years now. We used to take 2 vacations a year, minimum.

6. Be prepared lose your social life - you are too busy working.

7.  Be prepared to spend most of your time running your business, not decorating cakes.  If you want to spend your time decorating, it's better to go to work for someone else.

 

No one understands how hard it is to run a business and how hard it is to get good employees and that stay with you. 

 

Number one - make a business plan.  Do your research. There are a lot of templates out there for business plans.  I used several different, some that I got from my local Small Business Association and made them work for me.  

 

Good Luck!

Woohoo! I already have no social life and don't get to take vacation!

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