Taking The Leap With A Business...advice Needed Please!

Business By kkhigh Updated 22 Mar 2006 , 9:29pm by ncdessertdiva

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kkhigh Posted 14 Mar 2006 , 9:19pm
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Hello,
I am new to this board and have spent days just reading all the useful information here. I am contemplating starting a custom cake business and have so many thoughts running through my mind, it is becoming overwhelming! I finally decided to post here with some of my thoughts because I know most of you here either have had or will have the same kind of thoughts and will be able to relate and know exactly where I am coming from regarding the issue. I am really hoping to gain some sound advice, insight, perspective, etc..... and I will truly appreciate any help with this. I apologize in advance because I know this will be long. I'll try my best to keep it brief and to the point but still include enough info so you can have a good handle on the situation.

So, here goes...
I have a talent for baking and cake/sugar artistry. I've sold a few cakes here and there (weddings, corporate, sculpted) on my own and through a caterer and have always recieved rave reviews on apperance and taste. While I have done lots of thinking and dreaming about a business, I've never really persued the idea for various reasons.

I am now finding myself at a point in my life where I can actually go forth with a business. My youngest starts school in the fall, our finances are pretty stable, and I am now living in a state (VA) where operating a home-based business is actually doable. I am considering operating from home but am also thinking of opening a shop. This is where I find myself wondering which direction to take. Operating from home vs. a shop.

I find positives and negatives for both options. At home would be convenient, less startup and less overhead $. Less risk. If business was slow for a month, I wouldnt really be out anything like in a shop (rent). But, I am unsure about a few things like how to do consultations (do I really want 'strangers' coming to my home, would that be professional? do i really want to drive all over to meet the brides elsewhere?, etc..) and wondering about conflicts due to the kitchen being used for home and business use. I couldnt just have my cake projects out at will. Also, small orders would not really be feasable since it takes nearly as much time to mix and bake a small cake as it does a large one and delivery wouldnt be practical.

At a shop, I think I would have more production potential because it would be a dedicated space. Also, I can only bake 1, maybe 2 things at a time in my home oven, while I could bake several items at once in a shop oven. Also, because of this, I would be more willing to take on smaller orders than at home, because I could mix or bake more than one thing at once. Also, I think consultations would be easier, the client could just come to my shop. Same with smaller order pick ups. A shop has an appearance of being more legitimate, more real. But, along with all these positives, comes the financial responsibility of making $. Shop rent is due whether I had a good month or not.

Either way (shop or home kitchen) I would not be open for walk up business. Custom orders only and consultations by appointment. I also plan on doing gift baskets by order. Either way, I still have to have permits and pay taxes. If I had a shop I thought of having an area for doing children's birthday tea parties, cake parties, bridal showers, etc...for additional income. I do also have the posiblility of building a dedicated kitchen in my basement which would solve some of my home-based concernes but still have some of its limits. Either way the thought of opening a business is scary and overwhelming at times.

I live in a fairly rural area, in a sm/med city with a few larger (but not huge) sized cities w/in 30 min drive. It does not appear there are many wedding bakeries around, I feel my custom products would be unique. The few cakes I have done here have gotten positive responses, and comments about how I should do it professionaly. But we all know there is a difference between raving about something and handing over the money for something.

Of course, if I had my wish with no strings attached, and money (invested or earned) didn't matter, a shop would be the way to go, a dream. But how do I decide if that is a practical decision? How do I determine if a cake shop would succeed? How do I go about determining if it is worth the investment and risk? I do not have tons of money to invest. I have some I could use from a home equity line of credit but do not want to spend it lightly. I guess I am looking for a gaurantee that I know does not exhist.

I could go on and on and on but I will end the post now and anxiously await what everyone has to say on the matter.

I truly appreciate any advice, insight, etc... you all are able to provide. Hearing the pros and cons of home vs. shop along with any experiences you can share would be really helpful. Thanks so much for letting me share.

Thank you,
Kim

14 replies
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JoAnnB Posted 14 Mar 2006 , 9:55pm
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It really does get overwhelming when you start thinking about the possibilities. I have a kitchen in my garage, which makes it a dream for me. However, I did work out of home kitchen for a while before I moved to my current home.

To consider-starting at home will save you a very large investment until your business grows enough to support a storefront operation.

It takes a lot of cakes to pay rent/utilities/equipment costs/insurance, etc for a cake shop. Many who started just with cakes, had to supplement that with some sort of menu just to pay their overhead.

I don't have customers come to my home for consultation. I go to theirs, or meet at a coffee shop near then or at some other convenient location with a reasonably quiet table.

Your stress level will be much less, if you start with a little control and not so much debt.

Plese PM me if I can help.

JoAnn

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loriemoms Posted 14 Mar 2006 , 10:07pm
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I agree with JoAnn. Starting from home, you have a lot better control over finances and even if you want to see if you WANT to do this! (there are some weeks where I am glad i don't have to do a cake!)

And she is also correct, a LOT of people start the shop, and they find themselves having to do other things, and constantly trying to sell to meet the rent, and utilities.

I do all my cakes from my kitchen, my family understands Cake times, and I meet brides in my front room. (I am lucky, I can close off that room from the rest of the house) I have a table and chairs in there and keep books and photos and my cards. The brides really enjoy the coziness of the room and feel like they are getting more attention.

Did you know its now "in" to book your wedding cake with a home baker? May as well enjoy the trend, huh!

Anyway, good luck!! It is so much fun and exciting...be prepared though to do a lot of None Cake work. Bookeeping, invoices, contracts, and being a salesperson.

icon_biggrin.gif

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pancake Posted 14 Mar 2006 , 10:19pm
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I have also been contemplating starting my own cake business.......thought I'd start out at home and see how it goes first....my ultimate dream though is to have a cute little cake shop someday. The problem I am having with the home based cake shop is that there are a tonne of regulations in my area involving home-based food production. Things like separate entrances and industrial dishwashing equipment are a huge hassle to deal with (in the city where I live anyway!) I've recently been told to rent some space from an industrial kitchen (like a restaurant) during off-hours (so we're talking like 3am-5am!) I don't think I'm into doing cakes on the graveyard shift!

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peachstate Posted 14 Mar 2006 , 10:21pm
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kkhigh- Where did you get your information on home based cake decoration in Virginia? I am moving there in the fall and have also thought about selling from home. Any information you would be able to give me to direct me where to find the info would be great. Good luck on everything too.

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Doug Posted 14 Mar 2006 , 11:40pm
post #6 of 15

two additional home-based options (gleened from many posts here on CC)

conversion of garage into your shop...space to cook and do consultations

separate building on same property (many excellent prefab buildings available...just go by a big HomeDepot for a look/see/covet!

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cakesondemand Posted 15 Mar 2006 , 2:24am
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If you have a shop you have to be prepared to work 24/7 for the first 2 years just to break even. Thats why I rented a church kitchen low over head
it takes time to get your name out there but once the calls start it can be very busy, with a shop you can't say no but if the over head is low and you need some time you just take it and say your booked. Do you have grown children because you won't be home much.

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kkhigh Posted 15 Mar 2006 , 5:11pm
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First of all, let me thank all of you that posted! I had been tossing these thougths around in my mind for so long that I didnt know what end was up. After reading all the replies I feel much more clear headed! Thank you thank you thank you all for the advice.

For now, I am planning on persuing the at-home business. It is a logical first step to oneday owning a shop. I am blessed by the fact that I am able to actually be licensed from home and I agree, it is a very practical way to start. I am still trying to figure out the details of how I want to run everything and am thankful for this board as it is such a great resource.

thanks again for the help!
Kim

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kkhigh Posted 15 Mar 2006 , 5:16pm
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peachstate, in VA, home bakeries are regulated by the dept of agriculture. Their ph # is 804-786-8899. Just let them know that you are wanting info on a home based bakery and they will send you out some info. If you know for sure what county you are going to be living in, you can ask dept of agric for that county ph# that would be regulating you as well. Aside from the license from dept of ag, you will need to check with zoning and health dept.
I am still learning about the details but if you think of any questions for me I will try my best to help!
-Kim

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peachstate Posted 15 Mar 2006 , 8:31pm
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Thank you so much for your help and best of luck with your home bakery.

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missyjo30 Posted 22 Mar 2006 , 3:40am
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I'm so jealous, i live in Florida and you cannot bake out of your home kitchen,you have to have a seperate kitchen althogether to bake at home. I would love to start a business, but maybe my husband will get orders (AirForce) to a state where I can do this!! Good luck!!!

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sugartopped Posted 22 Mar 2006 , 3:56am
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Quote:
Originally Posted by missyjo30

I'm so jealous, i live in Florida and you cannot bake out of your home kitchen,you have to have a seperate kitchen althogether to bake at home. I would love to start a business, but maybe my husband will get orders (AirForce) to a state where I can do this!! Good luck!!!




Yes, Fla is one of the tough states!!! I'm attempting to do a home based bakery right now....we are putting an addition onto our house!! LOTS of regs to weed through....county & state....uuuggghhh!!! But I think I'm making progress and I think it will be well worth my time & money in the end!! Right now it is getting hard to see the light on the other side though!! Just trying to hang in there!! But I am meeting w/my contractors tomorrow....so I'm starting to actually get the project moving!!!

I'm just lucky and greatful I have a VERY understanding & supportive husband!! thumbs_up.gif

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fearlessbaker Posted 22 Mar 2006 , 3:56am
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Florida, You are lucky too. Here in Los Angeles I couldn't put a separate kitchen in my back yard. so I am jealous of the two of you.

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itsacake Posted 22 Mar 2006 , 8:04pm
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I met yesterday with a volunteer from SCORE! This is a non-profit organization partnered with the US Small buisness administration and staffed by retired buisness people who will give you FREE counseling on how to start a business. Even if you just want to do something small and from home, they can help you organize all those whirling thoughts into a resonable business plan.

Here's the website.

http://www.score.org/cgi/third_party.cgi?url=http%3A//www.score.org/explore_score.html

They have regular seminars that cost money, but as I understand it, the one-on-one counseling is free. It certainly can't hurt to call them...... but you can even ask questions on-line.


Shalom,
itsacake!

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ncdessertdiva Posted 22 Mar 2006 , 9:29pm
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I am currently enrolled the REAL Entreprenuer course offered through my local community college and it has been enlightening. Working on my business plan. I plan to have a home-based specialty bakery out of my garage-kitchen. Its in the incubation stage but it is very exciting. I would highly recommend working with SCORE as well as your local community college Small Business Center. The cost of my course was $85.00 and I've received that much in networking for my business!!
The business plan will help you get your thoughts together as well.
Good luck!
Leslie

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