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Hobby baker?

post #1 of 14
Thread Starter 
Hi, I like so many others stumbled into making cupcakes for friends and family. I'd like to make more for other people. I don't see it as a business as such because i have a day job.
I need some advice though. What is the definition of a hobby baker?
I know I need to register my kitchen with the council, inland revenue and complete my food safety course which I'm doing after pay day icon_wink.gif

Any advice would be greatly appreciated as I'm self taught and just looking to continue my hobby, make people happy with my cupcakes and make a bit of money to pay for my supplies etc

Thanks Suzie x
post #2 of 14
Most people consider a hobby something they do to satisfy their own creative urges, not accepting payment for what they do, because it's something they do in their spare time for fun. If you're selling, most of us consider that swimming in our pool. So....whether you want that kind of opinion or the legal kind of opinion with the regulations and whatnot, I don't know those answers. Because I think accepting payment negates the very definition of hobby.
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post #3 of 14

I would like to add: The baked goods market (cakes, cupcakes, cookies, etc) has been flooded the past few years with both "hobby" bakers and folks setting up home-based businesses (legal or otherwise). For the most part, these dabblers have set prices so low that consumers expect to pay very little. This hurts the people with legal/established businesses who (up until now) have earned a living by baking/selling. Adding insult to injury, most of these new dabblers have full time jobs and therefore a source of income.

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post #4 of 14
Quote:
Originally Posted by MimiFix View Post
 

I would like to add: The baked goods market (cakes, cupcakes, cookies, etc) has been flooded the past few years with both "hobby" bakers and folks setting up home-based businesses (legal or otherwise). For the most part, these dabblers have set prices so low that consumers expect to pay very little. This hurts the people with legal/established businesses who (up until now) have earned a living by baking/selling. Adding insult to injury, most of these new dabblers have full time jobs and therefore a source of income.

I find that interesting because I am doing an at home bakery in hopes of having my own real bakery one day and people never want to pay what I think are very reasonable prices! lol I think everyone just wants something for free anymore to be honest. They don't want to pay for the labor and just want to basically pay for the ingredients it costs to make it. I've even had people try to get out of paying me all together by offering to buy the ingredients with their food stamps!!! 8O uh, heck no!!

post #5 of 14

 If you have to fill out paperwork to sell food legally, and you're taking money for a product, you have a business, not a hobby.

post #6 of 14
Thread Starter 
I had written a long piece in reply but I accidentally/ frustratingly pressed delete. My simple reply therefore is going to be, everybody has to start somewhere.
One day I'd love to have my own cake shop and yes the market is saturated, there are some cupcakes and cakes out there that really should not be for sale.

But I believe that cake decorating is an art form and i am striving to do my best with each and every one. I would much rather do my very best making 6 perfect cupcakes that taste and look great than bang out 70 slapdash ones.

I support other bakers and believe in the community and all I want is to continue discovering a talent which I have little confidence in, in a legal and safe way.

What if by some miracle in the next few years I did really well, left my job, opened up a shop, started teaching others, displaying my work in competitions. Would I suddenly find many more supporters who previously sort to deflate my passion and dreams?

As I've said previously, we've all got to start somewhere!!!!
post #7 of 14

Nobody's trying to deflate your dreams, but since I've been accused of being a big meanie dream crusher before I'll respond to that.

 

You asked what the difference between hobby and business is. We answered your question. It looks like you're trying to do things legally, which is 100% in your favor, and which is what MimiFix was referring to (I assume, I won't speak for anyone else but that's what I read her response as.)

 

Everybody has to start somewhere, but it's better to start with a view of the reality that is the cake industry today, which is an industry that is bloated by illegal home bakeries and people who are underpricing their products because they don't know better. That drags the whole market down, and if you're going to enter the market it's better to know about this kind of stuff ahead of time than to find out about it after you've quit your day job.

 

If you're going into business you need to look at it as a business, not as a hobby, and that's where most people seem to make their mistake. You're getting your licenses etc, which is good, and you need to realize that when business owners answer a question we're just offering a dose of reality, nobody's trying to crush a dream. I've been in business for almost 20 years and have increased my profits every year, so I know what I'm talking about. I can also recognize good advice and bad advice and advice that's being parroted from an MBA coursebook from people who don't know what they're doing but who want to look like they do. That's the challenge of asking for advice and opinions online, you're going to get a mixed bag. (the people who have answered you so far know what they're doing, by the way.)

 

So yes, if you're selling product you're running a business. you seem to be getting everything in place before starting down that road, so good for you, that's more than a lot of people do. Don't get offended if people tell you something that you don't like the sound of, take it as something to consider and pay attention to who's saying it and you'll gain a lot of knowledge and maybe avoid some business mistakes.

post #8 of 14
Quote:
Originally Posted by Suzie162330 View Post Any advice would be greatly appreciated as I'm self taught and just looking to continue my hobby, make people happy with my cupcakes and make a bit of money to pay for my supplies etc

 

Quote:
Originally Posted by Suzie162330 View Post What if by some miracle in the next few years I did really well, left my job, opened up a shop, started teaching others, displaying my work in competitions.

 

Not trying to simply dampen your dreams, but telling you what the real-world market is like. But miracles do happen.

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post #9 of 14

many state governments have made it even more difficult for existing legal bakers/bakeries by enacting cottage food laws so while it clearly opens the door for multitudes it does close it on the fingers of those who have had  to invest more to start out and have been in operation--ouch...

 

but...the irs says a business is determined by intending to make a profit and some other things--you can reference it here:

 

http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions

 

the irs clearly makes it possible to report hobby income and proceed at a hobby level not as a business--also the baker would still be required to comply with their local legalities as well as jump through all the proper hoops of which there can be few to many--cottage food law does not open the door for everyone--it is true that cottage laws have diluted the market even more but baking in general has never been a fortune making venture--

 

all that to say--go for it--

 

best to you--


Edited by -K8memphis - 2/19/14 at 6:53am
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post #10 of 14

I understand why you would interpret the replies as dream-crushing, but keep in mind that reality is the biggest dream killer of all.

 

Many people have started out small and built their business. It's a smart way to go about it, if you do it right.

 

But you will probably find frustration coming back to you from the Business message board because people who are already in business know you can't find your answers here. Putting a question out asking what you need to do sends the message that you want others to do your work. We can't. Every situation is different and no one here can generalize. If you lurk long enough and watch, you will see this same message pop up every few days asking the same thing.

 

If you love making yummy things, keep it as a hobby. If you try to make money with what you love, you will learn to hate it. If you are not smart about this, the day will come when you pour your heart into the cake batter and hand someone a work of art. They will underpay you because you were willing to do it for cost or below... you will feel taken advantage of.

 

If you ARE smart about this, you will take years to learn your craft, become a small business guru, find your niche, become licensed, build your business, and never become the cheap cake lady. Consider your costs along the way to be start-up money, never ever undercharge or you will never get away from the cheap cake perception.

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post #11 of 14

Suzie162330: The phrases "register...with the council" and "inland revenue" make me think you are in the UK (or somewhere else, not the US). Much of the replies above pertain to the US states' cottage food businesses. A lot of it probably pertains to the UK as well. You are smart in determining what is required in your area. "Make a bit of money to pay for my supplies etc." is not a legitimate way to start selling. Most specialized education costs money, whether it is more classes, books, tools, other supplies, etc., and that goes for baking and decorating cakes too.

 

If you need to practice and don't want to spend a lot of money, buy cake dummies. Decorate, take a picture, scrape it off, and repeat. Also consider taking some business/bookkeeping classes.

 

Good luck to you.

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post #12 of 14
To register with the inland revenue you have to be a self employed baker a hobby doesn't require you to do that. Same goes for council approval, it's when you move from hobbyist to selling your wares to the public that the council will be all over your baking facilities and the inland revenue will be most interested in what you are doing. If you own your home the mortgage company likes a bit of involvement too, if you rent the landlord wants in on the act.
Quite a lot of research to do. Good luck
post #13 of 14
As a brit who works from home and that's my only source of income I'm a little put out by the phrase 'just a bit of money to cover my supplies' because its undercutting like that that makes it very difficult for those of us that need to business in order to pay the bills. Its bad enough that lay people don't 'get' cake decorating and end up looking for price over quality but that gets even harder when 'hobby bakers' take it upon themselves to undercut the market as a way of practicing. /rant

On a slightly different note I'm glad that you are planning to get your kitchen checked and register as a sole trader, that's great! Its honest and the right thing to do (and most aren't doing that!) But just be careful, you said you support local bakeries so just make sure you continue to do so by not pricing people out of the market in the name of practice.
post #14 of 14
Quote:
Originally Posted by natt12321 View Post

As a brit who works from home and that's my only source of income I'm a little put out by the phrase 'just a bit of money to cover my supplies' because its undercutting like that that makes it very difficult for those of us that need to business in order to pay the bills. Its bad enough that lay people don't 'get' cake decorating and end up looking for price over quality but that gets even harder when 'hobby bakers' take it upon themselves to undercut the market as a way of practicing. /rant

On a slightly different note I'm glad that you are planning to get your kitchen checked and register as a sole trader, that's great! Its honest and the right thing to do (and most aren't doing that!) But just be careful, you said you support local bakeries so just make sure you continue to do so by not pricing people out of the market in the name of practice.

Good points it's hard to get any small business off the ground in the uk at the moment and tax breaks aren't great. I deal in fresh and high end faux flowers and like the bakers my stock (fresh) has to be turned around in a week or it's going in the bin. Cheap supermarket tat has given the public the idea that cheap is every bit as good as something lovingly created out of high quality goods and they expect to pay accordingly.
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