ASo i have been baking for about 5 years now and just these past 2 my business has really gone off. I'm a licensed at home baker and I actually do all my baking at a commercial kitchen which my parents so amazingly built for me because it seemed a lot smarter than to keep renting a space. I specialize in cheesecakes but have taken many classes and training so now I do smaller tiered cake (3 or less). My profit has been great and I've saved enough to open my own store front. I'm just terrified! Im a bit young and I can bake anything I feel but owning a business!!! That's crazy I think about all the things that go into having a shop and its mind blowing, hiring people, financials are completely different from just me saving my money I'm one person is all and i don't know how I can handle it. My parents are very supportive but I should stand on my own at some point and I'm not sure if this is too much for me to take on. Any advice would help! Thank you! Sorry for my jumbled ranting!
First you need a business plan. This will really help you decide if you are ready or not to start a business. Just because you make great looking and tasting cakes does not always mean you need or can start a storefront business. Be prepared to work your butt off and not have much time to yourself, not make much or any profit in the first year and maybe not in the first 5 years. If you have no business knowledge then you need to take a few business courses. If you are making good money and still love what you are doing then I would recommend just staying put especially since you already have a commercial kitchen. HTH
I made the move from a registered at home kitchen to a store front, and before I did that I received two pieces of advice from my Accountant. 1. You will work harder and longer hours for yourself than you ever will for somebody else, and 2. As soon as you start hiring staff you will never make as much money as you did when you are doing it yourself. Both these facts are true.
"Should" is an interesting word, why do you feel you "should" move on from a commercial kitchen that was made for you? If you are concerned that you are still dependent on your parents and want to be more independent is it possible to put the arrangement on a commercial footing, by that I mean pay your parents the going rent of what it would cost you to rent a shop front. This covers two issues, you have a realistic idea of how much it will cost you to rent a shop, and will give you a sense of ownership as an adult, rather than having your parents just give you something.
I wholesale as well as retail and it is very common to see very good chefs start small businesses, usually cafes or restaurants, most of them only last 2-3 years. The reason? While most of them are excellent chefs and have spent a lot of time perfecting their food, they have spent no time learning how to run a business. To be a successful business owner, you will very quickly realise that the products you produce are only a small part of what your business is made up of.
As I don't know where you are I'm not sure what resources are available to you. In my area there is a government department that is set up to help small business owners. One of the things they do is run a series of one day courses covering all sorts of issues to do with running a business. We also received the services of a business mentor for a 13 week period, it was very helpful as well as intimidating having a stranger pass a critical eye over your business and help you identify your weaknesses and how to work on them.
My sense is you are not ready to take your business to the next level, yet. I think using some of the money you have saved to receive further education on how to run a small business would be a better use of your resources, rather than jumping in and hoping for the best. Good luck whichever way to decide to go.
AGreat advice thank you! But my kitchen was built with my saved profits. My parents just manage my money because i am only 19 but all the money I use for my business is solely what I earned from my own sales. I do have classes that I regularly take (2per week) because I want to be able do larger tier fondant cakes. Now what is your opinion on hiring people two question I have on that are 1. Should I hire just one extra person in the back with me? And two for front of store. Or do you believe I would need more? 2. Is it vital to have new hires who have previous experience because aside from classes i haven't had "formal" training and don't want to make one feel uncomfortable because they believe Im doing everything I guess in a sense of being "wrong"? Also this would be a 16 month plan due to building on from the space we are thinking of renting so I have a year before my store front would possibly open.
Hire someone to do your dishes and cleaning and the basic front desk stuff.
I think that is great, don't be afraid, just let yourself be confident! Experience will be your teacher. You are young and have lots of time to correct mistakes you may make along the way. Having your parents for support will also make all the difference in the world. If you are a talented decorator, have already been successful with a customer base and are passionate, you have the 3 most important things.
As was said before, be prepared to spend all of your time with your business. Even if you are not baking you will be thinking, preparing, developing marketing techniques and just in general constantly strategizing about how to run your business. If you love baking, this will all be fun for you, even when you are tired. If it becomes something you hate, you simply change course and do something else….as like I said before, you are young.
I have quite the list of things I have done with my life….all have caused me to have a fruitful and productive life.
One more thing…take care of your feet, your back and the tendons in your hands--invest in good shoes and floor mats, and rest when you need to.
I would be very very skeptical about the 'need' to open a storefront, largely because, as people have said before, the baking is such a small amount of it and the costs can be largely unnecessary. You certainly need a business plan (I don't know what it is like where you are but the banks here will help you with that). You also need to be aware that when you have employees, you instantly need to be making at least twice as much money straight away (or atleast have the backup to pay their salary) and they will not have the same commitment to the business that you have.
Can I also confirm what you mean by a storefront? Do you mean somewhere where you can go in and buy cupcakes individually as well as order large cakes or just a separate location which sees customers on an 'appointment only' basis? (sorry if this is common knowledge in the US! Could be a lingo thing...)
The answer to the above will dictate your strategy...
Instead of going straight in with 2 people, can you start with one part time to help you with the labour-intensive things? Washing up, cleaning, etc. They are basic but take AGES. You could set up a store in such a way as you can have the main decorating area visible from the store so you can do both jobs? That wouldn't work if you have the public coming in every few minutes but it's an option. As you grow, you could go to a full time employee etcetc. I say 'grow slowly' because we had a lady set up a cupcake shop in the shopping centre in our town (also doing 'big' cakes) - beautiful shop, nice product, good location and she had to close inside 4 months because she both couldn't make the rent and physically burned out. If you think about it, you have to sell a LOT of cupcakes to make £800 a month in rent! And that is before you even think about paying your staff, bills etc.
Don't let your age put you off (your work will speak for itself) but it will confront you with challenges: I was in a similar position some years ago and many people just didn't take me seriously to start with. It will be down to you to be professional, prove that you are competent and be the boss. While you have to accept wisdom from people with more experience, you have to remember that it is your business when you are hiring anyone!
Great advice thank you! But my kitchen was built with my saved profits. My parents just manage my money because i am only 19 but all the money I use for my business is solely what I earned from my own sales. I do have classes that I regularly take (2per week) because I want to be able do larger tier fondant cakes. Now what is your opinion on hiring people two question I have on that are 1. Should I hire just one extra person in the back with me? And two for front of store. Or do you believe I would need more? 2. Is it vital to have new hires who have previous experience because aside from classes i haven't had "formal" training and don't want to make one feel uncomfortable because they believe Im doing everything I guess in a sense of being "wrong"? Also this would be a 16 month plan due to building on from the space we are thinking of renting so I have a year before my store front would possibly open.
I think that is wonderful that you have saved enough profits in such a short space of time to build a commercial legal kitchen and be ready for staff. Good for you !
Obviously you are hiring qualified legal staff on the correct wage and all insurances and holiday pays in place for them. its wonderful you are taking decorators and ancillary staff on.
You of course will be their employer, unless your mum and dad are fronting this for you too?
That's the most important part, you should learn what's going on exactly with this..learn what your real overhead, costs are and what are your net vs gross profits- probably before you decide to take on legal employees.
AThe absolute best advice is to make a business plan. It will help answer many of the questions you've asked. Check to see if you have a local SCORE office. They help small businesses.
The advice we would offer (how many to hire, etc.) is determined by many factors. If your focus is a shop which sells a bunch of small items, you will need different support staff from one that primarily sells wedding cakes.
For example, my business would do better in a commercial kitchen than a storefront. I specialize in wedding cakes. I don't rely on street traffic. All My clients are by appointment. Although I love the idea of a storefront, it would not be beneficial (and in fact less profitable) to open a storefront. For the first 3 years, my only employee was myself. Just recently, my husband left his job and is my second employee. I created 52 cakes last year (average $1000).
Our next goal is to increase business to allow for one other assistant. My preference will be someone who knows a bit but can be trained to fill and crumbcoat.
Having a storefront, you will (I imagine) need at least one support staff employee. You at need more. You'll need to plan out how many items will need to be baked each day. Think of the logistics of how one item goes from scratch to door. How does that happen. Can you do it all yourself? If not, how many people do you need? Can you bake and run register at the same time? If you're slow enough, you can. If bake times are down times, maybe.
Start with a business plan.
Owning and running a business is a very different animal than being a great baker/artist. Some people succeed. Some don't have the business knowledge or passion.
Best of luck.