AivaCake Posted 5 Feb 2014 , 6:11pm
post #1 of

Hey there, 

     Ive been decorating my cakes for years, but turned legal when the Texas Bakers bill was passed in 2011.  Since then, business has been booming and my skills have improved a lot, I think.  I had a very steady income with at least 1 wedding per weekend (sometimes 3 in the month of June!) on top of birthday cakes and cupcakes.  I had a large customer base and word of mouth did wonders for my business.  I would have never considered opening up a bakery where I lived, though, because where I lived, there was a cupcake shop and cake bakery on every block, it seemed.  It was financially sounder (?) for me to not have the overhead and to keep my profit and work from home.  However, in October my husbands job relocated us 5 hours away to a new, smaller town where nobody knew who I was.  I took a few months off to unpack my house, get the kids settled in school and to mourn the death of a family member, but in January I attended the bridal show here with BOOMING success.  Literally, my phone has done nothing but go off since then.  I've booked at least 7 weddings since then and have done quite a few birthday cakes, etc.  What a lot of the customers, and most importantly, owners of other businesses and wedding vendors are telling me is that the other bakeries in town (maybe 4?) are really going downhill.  The cakes are dry, wrong, look horrible, fall, crumble, are late being delivered and set up, etc.  Literally, one of the business owners said "You couldn't have moved to this town at a better time".  So my question is whether anyone else has successfully transitioned from a successful home baker to a bakery owner.  I would love any advice out there!  There isn't a whole lot of retail space, so there isn't really one location that I would be too dumb to pass up.  I'd really have to spend a lot of time, energy and money into finding something suitable for my needs.  Thanks in advance!!!

38 replies
LoveMeSomeCake615 Posted 5 Feb 2014 , 7:12pm
post #2 of

I'm just going to copy a response I did to this question a couple of months ago, because it applies here too:

 

We just closed our storefront that we had for about two years, and one of the reasons was exactly what Mimi said here- it consumes your life. You don't have time or energy for anything else. As Mimi said, consider the daily reality of running a retail bakery- it's a lot of work, repetition, and drudgery. Not that we didn't enjoy it at all, but it got to where we felt like we were beating our head against a wall and getting nowhere because, although the store did pretty well, the overhead was oppressive and EVERY dime went to that. We went into it knowing that was going to be hard work, we counted the cost and all that, but it still kicked our butt. I have never felt so much relief and happiness as the day we closed our doors.
 

 

Bottom line- a storefront is worlds away from a home bakery, so realize how much more work it will be, and that all that money you are making off of cakes now will go right back into the shop for a while. Don't expect to take home a paycheck for a while, you need to have start up capital not only for build out, but to live off of until you can take a paycheck from your business. Realize that if you are working on a cake during the hours your shop is open, you will get interrupted at least eleventy million times to help customers, so it can be hard to really focus on your work like you want to.

 

If you do find a space that you like, try to get an estimate from a contractor of the build out costs BEFORE you sign the lease, so you know if the build out is feasible for you.

Truly not trying to be a dream crusher here! :smile: I just want to make sure anyone who is contemplating a bakery knows what they are getting themselves into.

AZCouture Posted 5 Feb 2014 , 7:45pm
post #3 of

ABrilliant, it's true, dreamcrushing or not, it's the truth.

AivaCake Posted 5 Feb 2014 , 7:57pm
post #4 of

Oh no, this is exactly the stuff I want to know!  From home (before we moved), I was making between $3,000-$4,000 a month, before expenses.  My prices weren't sky high, but my profit was somewhere in the 80% mark.  One of the spaces I'm looking at is a shopping center that is still under construction.  From the way it reads, the leasing agent would be able to accommodate for my needs (layout, sinks, vent hood, etc) during construction for whatever their terms are, I haven't spoken with him yet.  But I for SURE would never ever sign a lease until I was 1000000% sure of every little detail going into this.  This specific building would be $1,900 a month for 1200 sq ft.  

 

And I apologize that you had to copy and paste :/  I tried searching the forums for something similar to my question, but couldn't find any thread from a home baker transitioned to a store front owner

LoveMeSomeCake615 Posted 5 Feb 2014 , 8:01pm
post #5 of

Quote:

Originally Posted by LaurenSadler 
 

Oh no, this is exactly the stuff I want to know!  From home (before we moved), I was making between $3,000-$4,000 a month, before expenses.  My prices weren't sky high, but my profit was somewhere in the 80% mark.  One of the spaces I'm looking at is a shopping center that is still under construction.  From the way it reads, the leasing agent would be able to accommodate for my needs (layout, sinks, vent hood, etc) during construction for whatever their terms are, I haven't spoken with him yet.  But I for SURE would never ever sign a lease until I was 1000000% sure of every little detail going into this.  This specific building would be $1,900 a month for 1200 sq ft.

 

And I apologize that you had to copy and paste :/  I tried searching the forums for something similar to my question, but couldn't find any thread from a home baker transitioned to a store front owner

 

Glad to help! Please let me know if you have any other questions or anything else I can help with! I certainly don't have all the answers, but if I can help someone navigate the craziness of a storefront, I will!

No worries about the copy and paste, it wasn't hard to find. Besides, I'm bored at work and it gave me something to do! :-D

MimiFix Posted 5 Feb 2014 , 8:03pm
post #6 of
Quote:
Originally Posted by LoveMeSomeCake615 
 

Bottom line- a storefront is worlds away from a home bakery, so realize how much more work it will be, and that all that money you are making off of cakes now will go right back into the shop for a while.... 

Truly not trying to be a dream crusher here! :smile: I just want to make sure anyone who is contemplating a bakery knows what they are getting themselves into.

 

I understand your excitement, I just hope you can mix in a dose of reality. If things are going that well and you have plenty of business with little competition, I'm not sure I understand why you're thinking about moving to a storefront. Trust us here, it's not what you think it will be. LoveMeSomeCake did a great job of filling in a few details. Another factor you need to consider is the chance that your husband will be relocated again. If that happens, even if you can sell your business, you will not be able to recoup all the money you spent putting it together. 

AivaCake Posted 5 Feb 2014 , 8:04pm
post #7 of

I guess the hardest part is determining the value of "worth".  Is it WORTH it?  And this is where I'll get mixed reviews, haha.  I've talked to a few of my own friends who own bakeries that you can tell wish they could have done it differently and then others who wouldn't trade it for anything.  Not sure if its a personality thing or a secret to success! haha! 

-K8memphis Posted 5 Feb 2014 , 8:06pm
post #8 of

grossing $4k a month is not a recipe for supporting a $2k rent--not even close--then add on the utilities and the payment on the costs of the initial build out--plus plus plus

 

you would need to ramp this up considerably to make it work--

 

there's a good reason four other businesses didn't make it--i'd research that too--i'd contact each one--

 

if you're having a good time at what you're doing--there's nothing wrong with keepin' on doing that--

 

good luck

LoveMeSomeCake615 Posted 5 Feb 2014 , 8:09pm
post #9 of

Quote:

Originally Posted by MimiFix 
 

If things are going that well and you have plenty of business with little competition, I'm not sure I understand why you're thinking about moving to a storefront.

Agreed. Really think about the reasoning behind this, if you truly feel like having a storefront will add to your business, or just add to your workload. See the difference? Even if it would increase your sales by 50%, how much of that money would you actually see, and how much would go towards your now exponentially greater overhead? It's not to say it's never successful (obviously it works for some people!), but you just really have to count the cost.

MimiFix Posted 5 Feb 2014 , 8:16pm
Quote:
Originally Posted by LaurenSadler 
 

I've talked to a few of my own friends who own bakeries that you can tell wish they could have done it differently and then others who wouldn't trade it for anything.

 

Just how many friends of yours own bakeries? ... Virtual friends or real life friends? I ask this second question because what people put on the internet is not always accurate.

Godot Posted 5 Feb 2014 , 8:32pm

AI wouldn't trade it for anything, but I certainly will discourage anyone and everyone from doing it!

If you are noot prepared to work 24/7 for years and have no lifa at all then go for it.

I was never a home baker - it's illegal where I live (thank goodness!)

AivaCake Posted 5 Feb 2014 , 9:17pm
Quote:
Originally Posted by -K8memphis 
 

grossing $4k a month is not a recipe for supporting a $2k rent--not even close--then add on the utilities and the payment on the costs of the initial build out--plus plus plus

 

you would need to ramp this up considerably to make it work--

 

there's a good reason four other businesses didn't make it--i'd research that too--i'd contact each one--

 

if you're having a good time at what you're doing--there's nothing wrong with keepin' on doing that--

 

good luck

Sorry, I wasn't too clear, I meant that there are only 4 other bakeries in town because this is a small town, and the ones that are here don't have a great reputation that they have made for themselves, whether it be that their product doesn't taste well, customer service, or hiring employees, not cake artists, to put it nicely.  

Dayti Posted 5 Feb 2014 , 9:23pm

AI own a retail bakery and I sell custom cakes. I work alone. My place is has no passing traffic (foot nor transport). I rely a lot on word of mouth for my business and I only advertise on 1 wedding website. I decided to go from hobby to storefront business when I left my stock market job (selling from home is illegal in Spain). Luckily, my pay off was enough for me to build out an empty location and support myself for 2 years approx.

That was 3.5 years ago and things are going well for me - meaning that I have not had to close although I have seen other like businesses fail. I know that their product was not up to scratch though. I work 12 hours a day at the shop (I don't close at lunchtime - takes me 5 mins to eat a sandwich if I'm not interrupted, get on CC if I have another spare few minutes). I have a 30 min commute. After I close, a couple of times a week I have to go to the wholesalers and get supplies. I get home and answer emails and order supplies online. Have dinner with hubs, watch some TV if I can stay awake, go to bed.

It is frustating that people come in usually just as I've rolled out my fondant to put on a cake, but I went in knowing that that was something I would have to deal with. Again, I don't sell much retail since I am not in a prime location (although my address is), so it doesn't happen too often.

On Sundays and Mondays I do not open for the public but teach classes, which is a great way of increasing your income. Basically I am at my place 7 days a week.

So yes, no life except the caking one at the moment! I want to grow a bit more before hiring anyone else to help out. Being a control freak doesn't help but someone to make buttercream and cupcakes and brownies and wash the dishes would be fabulous in the near future!

There is a blog called The Business of Baking, and she has some very interesting blogs about whether or not you should "take the plunge", I really recommend it.

I don't know if I've helped, but good luck with whatever you decide to do!

AivaCake Posted 5 Feb 2014 , 9:25pm
Quote:
Originally Posted by MimiFix 
 

 

Just how many friends of yours own bakeries? ... Virtual friends or real life friends? I ask this second question because what people put on the internet is not always accurate.

Actual friends; one of them being my former boss at the bakery I first started at :)  Another being a young girl who bought out a bakery going out of business (retiring - not due to lack of sales).  I've also spoken with a few other bakery owners back in the other town I lived in just to see what they had to say, and most of them wouldn't recommend it, either.  So unfortunate :/  Cheesy as it is, the motto "do what you love and you'll never work a day in your life" has been about 90% accurate working from home, it just sucks having to turn customers away because it feels like I'm outgrowing my kitchen when I'm super busy, like during wedding season.  There are no commercial kitchens here for rent, either.  So theres no middle, here.  

-K8memphis Posted 5 Feb 2014 , 9:35pm

oh oh oh -- gotcha -- sorry i misunderstood --

 

still i do have one other question that you just answer for yourself--the $200 you invest to make the $800 (per $1,000) --the 80% you make --is that 20% your out of pocket expense -- the amount of money you spend at  the grocery store and cake store only?

 

because you still need to add in your overhead like utilites and household things like paper towels, dish soap, gas and time, etc? or is the 20% just out of pocket expense--

 

oh and oops thought of one other question ;)

 

in your small town, there's enough market for five brick and mortar bakeries? all the households in san angelo are also your competition because of cottage law of course so lots to weigh and man i wish you the very best--

 

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

 

different subject---

 

i was selling some doughnut filling equipment and i actually had a potential buyer in san angelo tx--so i was all over google maps looking up the addresses of bakeries to be sure my buyer was legit--just an interesting aside that i've been lightly researching bakeries in your town --lol

 

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

 

best of the best to you!

LoveMeSomeCake615 Posted 5 Feb 2014 , 9:45pm
Quote:
Originally Posted by LaurenSadler 
 

Actual friends; one of them being my former boss at the bakery I first started at :)  Another being a young girl who bought out a bakery going out of business (retiring - not due to lack of sales).  I've also spoken with a few other bakery owners back in the other town I lived in just to see what they had to say, and most of them wouldn't recommend it, either.  So unfortunate :/  Cheesy as it is, the motto "do what you love and you'll never work a day in your life" has been about 90% accurate working from home, it just sucks having to turn customers away because it feels like I'm outgrowing my kitchen when I'm super busy, like during wedding season.  There are no commercial kitchens here for rent, either.  So theres no middle, here.

 

I totally get what you're saying, part of our reasoning for opening the storefront was because we were outgrowing where we were, getting more orders than we had the capacity to take.

 

Renting a commercial kitchen would be a nice middle ground (there's not much of that available where we are either), I think the biggest issue with a retail shop is how much you have to be there at the shop, and then because you are the owner, even when you go home you are still never really "off"- there is always shopping to do, emails, quotes, accounting, etc. At one point we actually considered if it would be feasible to turn it into a custom cake studio only, and maybe have retail hours only 2-3 days a week, but it wouldn't have been sustainable for us, our overhead required us to have the storefront sales in addition to cakes.

I have heard of people doing that with success though. Or they just have a studio, no retail. But the only reason I could see doing that is if you really feel it would be worth it and it would help you expand your capacity. Otherwise you're better off just baking from home in that situation, and not adding extra overhead in the form of rent, possible build out, permits, licenses, higher utilities, and so on.

 

As far as if it is "worth it", unfortunately that's something you have to answer for yourself. You have to reeeaaalllyyy love it and be committed to it as a lifestyle, and find joy in what you do enough to overcome the drudgery parts. For us, we just realized that it ultimately was not the kind of life we wanted.

 

AivaCake Posted 5 Feb 2014 , 9:58pm
Quote:
Originally Posted by -K8memphis 
 

oh oh oh -- gotcha -- sorry i misunderstood --

 

still i do have one other question that you just answer for yourself--the $200 you invest to make the $800 (per $1,000) --the 80% you make --is that 20% your out of pocket expense -- the amount of money you spend at  the grocery store and cake store only?

 

because you still need to add in your overhead like utilites and household things like paper towels, dish soap, gas and time, etc? or is the 20% just out of pocket expense--

 

oh and oops thought of one other question ;)

 

in your small town, there's enough market for five brick and mortar bakeries? all the households in san angelo are also your competition because of cottage law of course so lots to weigh and man i wish you the very best--

 

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

 

different subject---

 

i was selling some doughnut filling equipment and i actually had a potential buyer in san angelo tx--so i was all over google maps looking up the addresses of bakeries to be sure my buyer was legit--just an interesting aside that i've been lightly researching bakeries in your town --lol

 

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

 

best of the best to you!

Haha, wow, SMALL world!  Would you mind messaging me the name of the donut place?  I'm curious to know if its 'the' donut shop here in town.  

 

But the 20% includes the percentage of utilities, I track my milage (wear and tear), gas costs, etc.  The only downfall that I've never been good at 'pricing' is my own time.  I know I've read countless times I need to try to estimate how many hours a cake is going to take and how much I feel I deserve per hour, but I am very picky about details.  If a buttercream cake has a spot that won't smooth out NO MATTER WHAT I DO, I'll scrape the whole dang thing and start over.  I don't like taking short cuts, even though I work by "work smarter, not harder".  So I guess I'm not accounting for my own decorating time in that 20%.   

 

Also, I just spoke with the owner of one THE known bakery here in town.  She's 70 something and looking to retire and is wanting to sell the business; building, equipment, supplies and all.  She wouldn't disclose the cost over the phone, but I'm not sure how I feel about taking over someone elses business and constantly being known as "the old blank blank bakery". 

 

As far as home bakers here, there are really only 2 in this area that I've found.  If there are anymore, they are hiding and I can't find them easily.  One of them is just starting out, and the other is sooooo cheap and I guess can afford to make a sculpted cake to feed 40 for only $40.  kudos to her. 

 

I guess the main issue for me is that I never envisioned that I would always be doing this out of my home.  The goal was to always get better and grow bigger.  But I do like keeping all of my profit :D

AivaCake Posted 5 Feb 2014 , 10:18pm

AI talk myself out of needing a retail space all the time, but it never fails, if I see a "for lease" sign, I'm looking it up, pricing it, day dreaming. So it's where my heart is, but my heart is also in other places, like my family, too. Ugh :/.

How do you guys handle the "where is your shop at?" Question and the "ohhhhhhhh" reply you get if you say you are a home Baker. I used to get by with it in Amarillo by giving them my home address but saying I was a custom order bakery, only, I didn't keep items on stock for anyone to just walk in and purchase, but our house now is out in the country, so that won't work too well for me here! Haha! And as much as I'd love to have the attitude that I'm a home baker and "damn proud of it, take your business elsewhere if you don't like it", I also don't like having to follow those questions with a list of credentials proving that I'm just as good, if not better, than anyone with a store front. It just comes off as arrogant.

-K8memphis Posted 5 Feb 2014 , 10:20pm

it was purely a donut place not a cake place and it was about 6 months ago----but i was drawn to look at all your bakeries  --so i don't actually remember which donut place it was--just sold the equipment last month though--yes!

 

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

 

but very good news there about your accounting--i vote for what it's worth that you keep your money and stay as is--because that overhead will eat your shorts and the rest of your wardrobe too--regularly --lol

 

it's just not typically a big money making business, right--it can be lucrative but few cakers are in the list for being the highest paid business owners around--if you're clearing 80% before your wages--that ain't bad at all--

 

AivaCake Posted 5 Feb 2014 , 10:29pm

AThat's what my husband says. He said he likes not having to give me any money! Haha!

ncsweetcreation Posted 6 Feb 2014 , 1:57am

I could not agree with you more..We are 10 months in the game and man ole' man..i said BEFORE opening the doors that I would not let it consume my life..HAHAHAHAHAHA..it kicked my butt AND consumed my life (and my hubbys) within six months..its really hard too cause you don't have the money to hire the help unless you just absolutely HAVE to. You are wearing all the hats in the bakery from mixing and baking to customer service to washing dishes to ringing them up to phone calls..get my drift and oh did i mention the burn marks on your hands and arms because the phone is ringing and a customer is waiting..Don't get me wrong, I absolutely love doing ALL cakes and have for years, out of the home is one thing, but a storefront..better think twice if it is only one person for most of the day. Just saying!

LoveMeSomeCake615 Posted 6 Feb 2014 , 2:15am

Quote:

Originally Posted by LaurenSadler 
 The only downfall that I've never been good at 'pricing' is my own time.  I know I've read countless times I need to try to estimate how many hours a cake is going to take and how much I feel I deserve per hour, but I am very picky about details.  If a buttercream cake has a spot that won't smooth out NO MATTER WHAT I DO, I'll scrape the whole dang thing and start over.  I don't like taking short cuts, even though I work by "work smarter, not harder".  So I guess I'm not accounting for my own decorating time in that 20%.   

This is definitely a consideration- once you are in a shop, you will not be able to dedicate that kind of time and attention to detail to cakes, you just simply will not have time. It starts to feel more like an assembly line of cakes. You do get faster and more efficient, because you have to. 

 

Quote:
Originally Posted by ncsweetcreation 
its really hard too cause you don't have the money to hire the help unless you just absolutely HAVE to. You are wearing all the hats in the bakery from mixing and baking to customer service to washing dishes to ringing them up to phone calls..get my drift and oh did i mention the burn marks on your hands and arms because the phone is ringing and a customer is waiting..

LOL about the burn marks, so true! I have scars all over my arms from burning them on the oven! 

 

And yes, the hiring issue is real- it would have helped a lot to hire someone to run the front, but we never could afford to. 

liz at sugar Posted 6 Feb 2014 , 2:38am

Quote:

Originally Posted by -K8memphis 
 

grossing $4k a month is not a recipe for supporting a $2k rent--not even close--then add on the utilities and the payment on the costs of the initial build out--plus plus plus

 

you would need to ramp this up considerably to make it work--

 

This is where I would focus as well - do you feel that you could comfortably bring in $2000 in sales a week to support this rent?  That would put your rent at 25% of sales, which is still quite steep.  If not, I would focus on finding a site with a much lower rental rate.

 

Liz

Cakepro Posted 6 Feb 2014 , 3:02am

As a person who owned a bakery for a short while when I had kids at home (never underestimate the advice of others to never go into business with a friend!!!) and now as a person who owns a bakery as all 3 kids are now in college, I can tell you this: if you have children at home, then continue to cake from home.  There will be an enormous amount of time to dedicate to running a retail bakery once the kids are on their own.  I missed one of my kid's whole football season (games and cakes are always on Friday nights!) and nearly missed helping my daughter get ready for prom.  It was NOT worth missing any moments of my kids' lives!  The bakery WILL consume your life.

crushed Posted 6 Feb 2014 , 3:11am

Is there any way you can remodel your kitchen at home to add more space, another oven, etc?

MBalaska Posted 6 Feb 2014 , 9:06am
{ may I add here, that if I were to go into business I'd set up a travel trailer refurbished into a bakery kitchen like the decorator from Oregon.  That was the sweetest set up, and it would follow you wherever your husband transfers to next.}
AivaCake Posted 6 Feb 2014 , 12:20pm

A

Original message sent by Cakepro

As a person who owned a bakery for a short while when I had kids at home (never underestimate the advice of others to never go into business with a friend!!!) and now as a person who owns a bakery as all 3 kids are now in college, I can tell you this: if you have children at home, then continue to cake from home.  There will be an enormous amount of time to dedicate to running a retail bakery once the kids are on their own.  I missed one of my kid's whole football season (games and cakes are always on Friday nights!) and nearly missed helping my daughter get ready for prom.  It was NOT worth missing any moments of my kids' lives!  The bakery WILL consume your life.

This right here is great advice! It definitely is a great thing setting your own schedule when you don't have rent to pay!

AivaCake Posted 6 Feb 2014 , 12:24pm

A

Original message sent by MBalaska

I'll have to look that up! My husbands job wasn't a transfer, he was offered a job in his late 20's that most men in his field have to wait years and years for. And it also came with a nice salary so that if I didn't have cake income one month, we wouldn't have to stress about bills or food or anything. It was one of those "jobs you'd be crazy to say no to". We will be here for a good while! So it may be worth it to add onto our home. My grandmother (who practically raised me) passed in November and I do all of my cakes on her dining room table that we have. It makes me so nervous :/. I'd love to work on a stainless steel table, again!

morganchampagne Posted 6 Feb 2014 , 1:28pm

AI can remember when I worked in a storefront it was crazy but it was very very fun. I'm the kind of person though that doesn't mind working all the time. I remember the owner though being very stressed. Idk I still think id like a store front one day like you...we will have to see I guess

liz at sugar Posted 6 Feb 2014 , 2:34pm

Quote:

Originally Posted by LaurenSadler 

My husbands job wasn't a transfer, he was offered a job in his late 20's that most men in his field have to wait years and years for. And it also came with a nice salary so that if I didn't have cake income one month, we wouldn't have to stress about bills or food or anything. It was one of those "jobs you'd be crazy to say no to".

 

It is nice to have a partner with a good salary to rely on while you work from home, but remember that you don't want that same scenario to occur once you have committed to $2500 in rent/utilities/expenses per month.  Then you are on the losing end of that equation, with his salary being eaten up unintentionally during any months that are slower than expected.

 

And I am not trying to be a negative nellie - just realistic.  My bakery opens in a month, with overhead a FRACTION of what you are looking at, and I still worry about bringing in enough to make it worth my while.  And we own a restaurant across the street from the bakery, so I am already familiar with life consuming endeavors. :)  Really just trying to be helpful.

 

Liz

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