I an within 2 months of opening my home based shop. Licensed and legal.
I will need to get a part time job to pay the bills because I will have to quit my good paying job in a retail bakery due to a "conflict of interest", because they would fire me in a heart beat. 
This would all be easy if I could keep that job but that will not be allowed.
SO, I will purchase the last of the appliances and equipment next week. The big fear is just how much I can handle. I plan on doing a lot of sample cakes for many businesses and schools and such, window ad on my van, etc etc, to really get my name out there fast. Part of me knows it will go well, the other part lives in fear of faliure.
The questions I have are varied:
How consistant are your orders and how many? I'm fast, so I could handle quite a bit. Two or three a week will not cut it. I could do 15+ and be happy with it.
What's your best advertising method?
What is a good figure to estimate taxes to be paid?
When you first started how long did it take to really get things rolling?
Has anyone done this (legal at home) and failed?
As you can see I still have a long way to go. I'm just hesitant to take the leap. My husband is supportive but needs more facts.
Help!!!
Thanks,
Korkyo. 
I don't have a business so I can't help you out there but one girl on CC got lots of immediate business by putting an advertisement on her van.
I'm in the same boat as you...just starting out. I'm interested in these questions, as well. What area do you live in?
I can answer the taxes question for you, in general. I am a tax accountant and work with a CPA. You can take your revenues (all the money you collect from people), subtract all your direct expenses (those directly related to the cakes you are selling) and then you'll have your net income figure. The equipment that you bought you can deduct dollar for dollar up to $110K (I think - would have to check my book). The improvements you made to your house depend on what was done - leave that to your tax person. Take your net income and multiply it by your tax rate from last year (take your taxable income divided by your tax liability). Then multiply your net income by 7.65% and add these two numbers together. That should an approximate tax liability on your net income. To figure it out in more detail takes more work, but this should give you an idea, and if anything, should over-estimate your tax on the income!
Of course, you need to consult your tax person to get a more accurate calculation based on your tax situation.
I hope that helps!
~Chelle
Are you just doing cakes? When a aquaintance of mine started out in a smallish town a few years ago, to give herself a fallback she started with muffins/pastries, took a big platter to schools & factories and got cozy with the receptionist/secretary, when she brought the platter she also brought a bunch of order forms and they faxed them in everyday and she collected payment at the end of the week. She had to get up early to make deliveries but this bread and butter kept her going until she built up her cake clientele, she also got multiple orders from these places by leaving small samples of her work.
I don't have a cake business, but I know advertising and the joy of earned media (free press).
The sign on the van will really help in getting your name out there. Make sure you keep your van sparkly clean (pollen season and all that).
I would not advertise in the main newspaper. I'm not sure of your area, but an ad in the "big paper in town" will get lost and cost you a lot of money. If you have one, focus on the specialty papers - the ones that come out once a week or once a month and focus on children or women. A weekly newspaper has a readership time of approximately two weeks. With a daily, people look at it and then recycle it. Weekly papers are kept on the coffee table and each paper is read by an estimated three different people. If you go to take out an ad, demand that the paper show you their press run (the number of papers printed) and the price per column inch. Some places may artifically inflate their press run. That way, you can really look at the numbers on who you are reaching.
Focus on free advertising and loads of business cards. It's baseball season, soccer season and ballet recital season. Go to the ball field and pass out business cards. If you want to make up a bunch of sample mini cupcakes, all the better. For the dance studios, girls are having to stay at auditoriums for hours. That means their moms are at studios and auditoriums for hours. Make up a free cake featuring whatever dance they are doing and just take it to the studio. If attractive enough, people will ooh and ahh and ask. Ballet moms spend a LOT of money on this type of thing and wouldn't blink at paying $150 on a birthday cake.
Go to places that host parties, skating rinks, jumpy places, where ever. Ask about posting a nicely designed flier or leaving a stack of information so that they can pass it out to moms when they come in to schedule a party.
Is there a bakery in town that ONLY specializes in wedding cakes? Leave them your information and a sample so that they can direct the special occasion and birthday business your way.
If you do cookies, make up a bunch of "house" or "sold" cookies and take them to realtors offices. Leave a few samples at each office. (Don't feed the whole place, but give a good idea of what a realtor can order for a closing)
A lot of this is sweat equity that you're putting into your business. That said, you're paying for the ingredients and the time hanging out at a ball field, but that's a relatively small price in comparison to what you may be putting out in an ad that won't get seen.
I hope this helps some. Good luck.
I'm not in business, but if I were, I'd get cozy with a few wedding photographers, florists, caterers, bridal shops, etc. Weddings are where the cake money is. Also, register with respond.com
I'd also try craigslist.com for advertising posts (free). Update this every 1-2 weeks.
Good luck! I'm sure you'll do great!
Hello you at home business bakers! I did a out of home bakery for 2 years, and it had awesome points and not so awesome as with anything. I did design and place those magnet signs on my van, I also connected with the flower shops, huge hit I must say. They brought me a ton of business with wedding cake orders. Make a friend in your florist!!
I also donated about $300 worth of cakes for this event and that event. I did sidewalk sales, I purchased a table and made some sheet cakes and gave pieces out for free sampling. I also had 2 dummy wedding cakes for people to look at. I always had business cards with me, when I tipped someone, I would leave a card with 10% off. I brought themed cakes to doctors offices, gosh, it is endless really. I got busy quickly very quickly, I think my first week open I had 8 cake orders, little ones and one big one, your portfolio will grow quickly. I actually forgot to get photos 1/2 of the time, uggh! You really learn as you go. You will get a ton of different senarios, people want the darndest things!! And of course they are always trying to save a buck or two, but don't sell yourself short, good Lord, your work hard!! Really think about your pricing and stick to it! Do not change prices all the time, your clients will get annoyed. I had a price list that I went off from, and I would hand out. I always put on the bottom prices vary to each order due to variations made by you the customer. These are base prices only. My base price included basic cake no fillings and wording and bc flowers. BASIC! The only down side for me personally was, I got burned out so fast, at the end of the two year period, I couldn't look at another cake, I am just now getting back into it. Only for family and friends though. I do wish you luck, you will enjoy it and hang in there when you feel you want to pull your hairs out, it does get better, and people are really understanding. Bake on!! 
chelleb1974,
I have another thread going right now about my busines but have a quick question for you since you know numbers. I will be taking a portion of the payment and donating it to charity, in the customers name. I will be talking to an accountant hopefully soon to get all of the details, but thought since you are a cake person and accounting person you could tell me if there is anything special i need to know ahead of time. I am still waiting on my license and kitchen inspection appointment. Thank you so much.
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