How Much Competition Is Too Much?

Business By rockymtnbaker Updated 10 Jan 2014 , 5:51pm by DeniseAtTCR

rockymtnbaker Posted 9 Jan 2014 , 4:30pm
post #1 of 17

I had a booming cake business years ago when my kids were little (we're talking early 90's here) and I'm just getting re-started with my cake business now that they're all grown up and Colorado finally got a cottage food law in 2012. In assessing the local bakeries, home and otherwise, there are quite a few in my area. Like, over 30 different businesses that I've found that would be my direct competition, not even counting the grocery store/WalMart/Costco market. In your opinion, does this many bakeries = too much competition and an over saturated market?

16 replies
jason_kraft Posted 9 Jan 2014 , 4:43pm
post #2 of 17

AIt depends. There are many different segments of the market, so if the market you are targeting is under-served and/or you have a strong competitive advantage you should be in pretty good shape.

-K8memphis Posted 9 Jan 2014 , 4:53pm
post #3 of 17

i think it depends on the population and whether or not you're depending on this to pay the mortgage--but if you're doing cottage then it's not the only source of income huh----if there's 30 in direct competition that means folks are ginned up for custom cakes--and you already have booming expertise--getchoo a piece of that pie, gf--

liz at sugar Posted 9 Jan 2014 , 4:56pm
post #4 of 17

Sounds like Colorado should have a booming "munchies" market this year - maybe you can get in with one of the new businesses popping up and sell ready to eat treats of all kinds. :)

 

(I am totally joking there, but couldn't resist.)

 

What is the population of your city?  If you were to make a chart of the 30 bakeries, how many are low end/middle of the road/high end?  Do they specialize in birthdays, weddings, or specialty baking (allergies)?

 

Maybe you can craft a niche after your review where current bakeries stand.

 

Liz

jason_kraft Posted 9 Jan 2014 , 5:02pm
post #5 of 17

A

Original message sent by liz at sugar

Sounds like Colorado should have a booming "munchies" market this year - maybe you can get in with one of the new businesses popping up and sell ready to eat treats of all kinds. :)

(I am totally joking there, but couldn't resist.)

That could be a legitimate niche. One of the other tenants in our commercial kitchen in California specialized in wholesale baked goods made with cannabis for medicinal purposes. Given that Colorado allows recreational use there should be a pretty big market.

LittleMom Posted 9 Jan 2014 , 5:18pm
post #6 of 17

Quote:

Originally Posted by jason_kraft 


That could be a legitimate niche. One of the other tenants in our commercial kitchen in California specialized in wholesale baked goods made with cannabis for medicinal purposes. Given that Colorado allows recreational use there should be a pretty big market.

I agree. I've had multiple requests for this already, to the point where I have addressed it in my website FAQ. I'm not even open for business until June. It's not legal here, so I'm not touching it, but it's a great idea in my opinion.

liz at sugar Posted 9 Jan 2014 , 6:09pm
post #7 of 17

Quote:

Originally Posted by jason_kraft 


That could be a legitimate niche. One of the other tenants in our commercial kitchen in California specialized in wholesale baked goods made with cannabis for medicinal purposes. Given that Colorado allows recreational use there should be a pretty big market.

 

I wasn't even thinking of cannibis in the baked goods . . . I was just thinking of regular treats for sale in the dispensaries for sale when the munchies came on. :)   In Colorado I think the seller (dispensary) has to have grown the pot, so a baker would have to have some kind of partnership, I believe, to make that legal.

 

I do agree that would be a pretty big market.

 

Liz

rockymtnbaker Posted 9 Jan 2014 , 6:45pm
post #8 of 17

lol..I'm not interested in getting into the cannabis market, although I agree it would definitely be a lucrative one. Good idea about the chart..We're a population of just over 1 million in the greater metro area (Colorado Springs). A large section of the home bakers seem to be geared more towards weddings, which is the market I would most be interested in. Not a ton of children's and such, although my hairdresser, who's gluten free said she could refer a ton of other GF people to me. I'm not sure I want to take on the responsibility of that though, and risk someone getting sick from my amateur mistakes in that arena. Great food for thought, everyone. 

rockymtnbaker Posted 9 Jan 2014 , 6:51pm
post #9 of 17

BTW, does anyone have any constructive criticism of my website? Link in my signature line below. Thanks in advance! :)

-K8memphis Posted 9 Jan 2014 , 6:51pm
post #10 of 17

30 bakers give or take for 1 million peeps--i just did a quick online search and if this is accurate it says 353 weddings last year in your area--sounds like that's enough to go around--

 

http://www.theweddingreport.com/wmdb/index.cfm?action=db.viewdetail&t=m&lc=17820&setloc=y

rockymtnbaker Posted 9 Jan 2014 , 6:57pm
post #11 of 17

Quote:

Originally Posted by -K8memphis 
 

30 bakers give or take for 1 million peeps--i just did a quick online search and if this is accurate it says 353 weddings last year in your area--sounds like that's enough to go around--

 

http://www.theweddingreport.com/wmdb/index.cfm?action=db.viewdetail&t=m&lc=17820&setloc=y

Heh, that's totally cool, K8! Awesome what you can find on Google. :) It does sound like enough to go around..I'm trying to figure out how to get my piece of the pie. 

costumeczar Posted 9 Jan 2014 , 7:12pm
post #12 of 17

I can guarantee you that if you know of 30 in your area there are about 80 more that you don't know about. Your advantage is going to have to be in your marketing, because if you have business experience you're probably miles ahead of most of them in that area.

 

In Virginia the cottage food law has hit established business pretty hard, other than the ones who really know the market. I did well last year, and I know of a couple others who did too, but a lot of people are scrambling for work. I've also seen a lot of people who said they would NEVER do this or that now offering this or that, so they're willing to expand their product line to try to make money.

 

If you want to do weddings I'd go straight to the venues and planners and get to know them. Don't worry about building your facebook fan page, ads etc., just work on networking for a while. Weddings are planned by word of mouth, not by facebook.

SweetCarolines Posted 9 Jan 2014 , 7:14pm
post #13 of 17

Quote:

Originally Posted by liz at sugar 
 

Sounds like Colorado should have a booming "munchies" market this year - maybe you can get in with one of the new businesses popping up and sell ready to eat treats of all kinds. :)

 

(I am totally joking there, but couldn't resist.)

 

 

No joke, this is something I would totally get into. The demand already is outrageous, as people don't want to have to deal with the smoke and the smell.

 

OP, there is an oversaturation over here as well. And it happened so fast it's completely overwhelming. The worst part is, everyone is doing it illegally. I've asked some successful bakers how they went about getting their permits and all the paperwork they had to fill out and they laugh in my face. I don't even know if there's a Cottage Law here in Puerto Rico (Jason?). It doesn't seem to matter.

 

People think it's an easy buck. My cousin, who has no artistry whatsoever, took an expensive course because, as she put it, "cakes is where the money is." She's constantly complaining that she has no patience for it and no art. When she watches me decorating cookies or cakes she tells me I put way too much effort into my work. Her most famous phrase is, "don't spend so much time on it. People are just gonna eat it." It drives me crazy. And she's making and selling cakes left, right and center, of course.

 

The good news is, a lot of people give up quickly. My cousin's already complaining that she's not making any money. I think the good ones will persevere and the ones who are overestimating the work will move on. You already know your stuff. Stick to it.

-K8memphis Posted 9 Jan 2014 , 7:21pm
post #14 of 17

Quote:

Originally Posted by SweetCarolines 
 
Quote:
Originally Posted by liz at sugar 
 

Sounds like Colorado should have a booming "munchies" market this year - maybe you can get in with one of the new businesses popping up and sell ready to eat treats of all kinds. :)

 

(I am totally joking there, but couldn't resist.)

 

 

No joke, this is something I would totally get into. The demand already is outrageous, as people don't want to have to deal with the smoke and the smell.

 

OP, there is an oversaturation over here as well. And it happened so fast it's completely overwhelming. The worst part is, everyone is doing it illegally. I've asked some successful bakers how they went about getting their permits and all the paperwork they had to fill out and they laugh in my face. I don't even know if there's a Cottage Law here in Puerto Rico (Jason?). It doesn't seem to matter.

 

People think it's an easy buck. My cousin, who has no artistry whatsoever, took an expensive course because, as she put it, "cakes is where the money is." She's constantly complaining that she has no patience for it and no art. When she watches me decorating cookies or cakes she tells me I put way too much effort into my work. Her most famous phrase is, "don't spend so much time on it. People are just gonna eat it." It drives me crazy. And she's making and selling cakes left, right and center, of course.

 

The good news is, a lot of people give up quickly. My cousin's already complaining that she's not making any money. I think the good ones will persevere and the ones who are overestimating the work will move on. You already know your stuff. Stick to it.

 

 

oh man the ultimate cure for what to do with cake scraps-- sell them by weight  :lol: we need to move to ca or co, man

SweetCarolines Posted 9 Jan 2014 , 7:57pm
post #15 of 17

:P Or WA!

-K8memphis Posted 9 Jan 2014 , 8:09pm
post #16 of 17

wait a minute--it's legal in pr? dang that's the place to be! trade winds and all 

 

me some sj pr

DeniseAtTCR Posted 10 Jan 2014 , 5:51pm
post #17 of 17

Oh, I like your BlogSpot website; it is very thorough. you answered a lot of questions people might have and it has a positive tone throughout. Good for you.

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