so now what??? i have no idea what a fair price for time/space would be... at this point i wouldnt have much business... do i go and get a business license now??? my head is swimming and i'm not sure what the first step is..
Here's what I would do and some questions I would ask myself, I HTH:
First, check with the local /state agencies to find out what you need...I would imagine most of this is already taken care of through the other couple, since they are the owners and their business is already established. So, make sure to concentrate your questions on the aspects of you, and what you personally need to do/have (shots, licences, certificates, insurance, etc, etc) Make it clear to the agencies that you talk to that you will be renting kitchen space from an established food businesss so that they understand the situation.
Second, find out going rates for commercial space rentals. You can call realators in your area asking if anything is available in the same vicinity of the complex. That should give you a good idea of the going rates. Some cities post their average per sq ft rent price for commercial properties, call your city or local business association and ask. Is there anyway you can find out (now) how much rent the couple pays each month? The previously posted advice about basing the amount you pay on sq ft was a good base to start with, then depending on your situation you can adjust it. It was a really good point to try to negotiate a fixed price. Also, how many hours a week will you be doing this? Will you be working somewhere else, too? Depending on your situation, it may be better to negotiate an hourly rate as opposed to a monthly rate if you will only be spending a few hours a month doing this. Be careful though, if your business is successful, this tactic may burn you. Perhaps you could negotiate a clause, after X amount of hours, you pay a monthly fee, under X amount of hours an hourly fee? (They did say nearly anything is possible, don't be afraid to ask! All they can do is say no. Just remember, no matter how nice they are, you need to look out for your best interests first.
Third, figure out your ingredient costs for the products you are currently making, or will be offering. You need to know how much each type of cake base will cost and how long it will take to produce so that you can figure how much cost and time you need to allot for each cake base. From there you can add decorating time. Then, when you meet with the couple, you will have base numbers in your head so you can say, "hmm, it takes $35 in deorating time, ingredients, and baking time to make 1 9in cake, plus I need to add the cost of rent/utilities they want to charge (proportioned), which means I would have to sell each cake for a minimum of $X...is that doable or do I need to negotiate more?" How many cakes would you then have to sell each month to break even? How many would you have to sell to realize a profit? Make sure you do these calculations, too. Don't forget to have a base figure of your extras, too, like insurance, transportation, etc, etc. All of these things need to be in the back of your mind so you can make an accurate evaluation. It may sound like a steal if they want to charge you $700 a month, but after you add in all of the other costs, you might be paying close to $1500. Could you sell enough cakes to stay in business?
I think this is really important, because if you underprice yourself, it will spell disaster for you, so right from the beginning you need to make sure you have your prices set correctly and factor in all of the variables.
I hope everything works out for you. How exciting!! Good luck!