Business Opportunity...what Would You Do?

Business By BakeVT Updated 5 Aug 2014 , 10:09pm by ellavanilla

BakeVT Posted 4 Aug 2014 , 2:21pm
post #1 of 6

Hello all!  Long time lurker, first time poster here.  I want to start off by saying that this place is absolutely amazing...the advice provided and support given is stellar!  That being said, I could use some advice.  Here's the deal:


I've been a licensed home baker since 2007.  Baking is my passion, but I never really had the time to commit to an actual business, until now.  I've made a few cakes for profit, but I mostly bake for family and friends.  I feel like I have the basics down, but I am not comfortable enough with my skills at this point to sell cakes to the general public.  I was laid off at the end of May, and recently moved to a new town.  I started selling baked goods (cupcakes, donuts and artisan bread) at a local farmer's market and the feedback has been outstanding.  I now have regular customers who come to the farmer's market specifically for my products and they're requesting special orders.  The past two months, I've sold out every week.  I know my overhead, I've done my homework, and I have a pretty good handle on what I need to charge to break even.  I've taken advantage of programs offered through the SBA, and I have a S.C.O.R.E. mentor that I meet with on a regular basis. 


Currently a couple of recent events have changed the business landscape significantly.  An extremely talented baker in my town who specialized in wedding cakes is relocating and no longer taking orders.  The local donut shop closed at the end of June after 18 years of business due to the fact that they couldn't recover from the recession.  There's a bakery in town, but they don't do custom orders and they don't even sell donuts.  The closest place to buy individual donuts is 10 miles north, cupcakes even farther, and legit cake decorators are few and far between.


I wouldn't be asking this question if I didn't think that there was a viable market for my products.  If you were in my situation, would you consider expanding?  I feel like I'm at a crossroads.  On one hand, I could finally achieve my long time dream of having my own bakery.  I've always been a workaholic and I know that I could succeed.  On the other hand, the cost, logistics, and inner workings of it all seem overwhelming.  My mentor is wonderful, but she's a number cruncher, not a baker.  I wonder if I should just keep it small and simple and grow organically, or if this is a huge opportunity that I could be missing out on.  


Thanks in advance for your thoughts, I could really use some feedback from like-minded individuals!        

5 replies
TheItalianBaker Posted 4 Aug 2014 , 5:16pm
post #2 of 6

If I was in your shoes and I had the chance to open a store front in my city, no I would not do it.

First because I know the rent is crazy expensive here, second because I'm/you are new in town.


I think you should be profitable for a couple of years before taking the big step. You sell your items from home, so I would focuse on advertising first so you can built a large group of customers.

MimiFix Posted 4 Aug 2014 , 5:22pm
post #3 of 6

Do you have any other baking experience besides home baking? Have you ever worked in food service - restaurant, bakery, deli, etc? Do you have business experience? Have any experience supervising employees? The answers may help you decide.

810whitechoc Posted 5 Aug 2014 , 11:55am
post #4 of 6

I read from time to time on here that it is somebody's dream to open their own bakery, and it often without any idea of what that really means.  I do own my own bakery and have done since 1993, I began just wholesaling to cafes and restaurants and now have my own factory where we also retail. During that time I have seen many many people start up their own or take over existing businesses and they are quite often very good cooks who produce great food.  Unfortunately all too often they don't know the nuts and bolts of running a business and don't understand how important knowing how issues like what benchmark figures are and how they can help you keep your costs in line, costing out everything to the cent and making profit not just turnover, having a proper budget, knowing what your break even point is etc.


Once you take the step onto the small business roller coaster there is no getting off unless your business is extremely successful and you are able to sell it or it is not and you crash and burn and lose the lot. Sorry if that sounds a bit harsh, I'm not doubting in any way your drive and commitment or the quality of your baking, but do you have a business plan, a realistic budget, the capital needed to not just start up but to provide ongoing finance during the initial growth period?


Have you looked at the dollars and cents versus hours worked, will you be better off where you are or starting up your own bakery. 


Good Luck to you whichever decision you choose :).

cupadeecakes Posted 5 Aug 2014 , 1:20pm
post #5 of 6

What does your mentor think about expanding the business?


You didn't mention it specifically, but it sounds like you want to continue the donut business as well.  How much do you know about the donut business, and do you know more specifics on why the previous owner's failed?  After 18 years they should have had the business formula down pat, one would think. 


When I started my cake business almost 10 years ago I made the decision NOT to open a storefront.  It keeps my overhead much lower and I don't have to worry about things like staffing and theft.  And if I want a week off I can just mark that week "booked" and make plans.  Folks in town have begged me for years to open a shop (with one lady offering me free rent for 6 months if I would open a shop in her center) and it's just not something I'm after.  It was (and still is) the best decision for me.


And yes, best of luck to you whichever road you decide to persue!

ellavanilla Posted 5 Aug 2014 , 10:09pm
post #6 of 6

I have been very close, twice and I have decided not to pull the trigger, because I don't want to be apart from my family for hours on end, which is how running a biz works. The first time, my sister was going into business with me and the second time it was supposed to be my mother. When they backed out I decided to stay with the custom cakes. Running a business, whatever the field, is so much work. Take the amount of time you think you will dedicate to the business and triple it. 


It's also a lot about running the business and a lot less about baking and decorating cakes. I decided that wasn't for me. I also want to be able to take time off at my discretion. Unless you have a manager to keep the biz open you cannot do that. Many shopping centers require that businesses be open a min number of hours and days a week. 


It's a lot to think about. 



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