Hi,
I've had my cake business since March 2006. I still don't have a steady business, but I've recently started doing the Farmer's Markets, I think this will give me alot of exposure. But for now I'm $1000 in debt. This includes pans, cake accessories, airbrush machine and all the freebies and test cakes I've done. I guess I would just like to know, in your opinions, how much is too much?

Thanks
Joanne

I think the amount of debt depends on the persons' personal finances. For each of us what we can afford to put out is different. For me to much would be if I couldn't pay my 'every day bills' like electric and food, that sort of thing.

But If you love it that I say go for your dreams! It will pay off in the end!

Good luck!!

ps- I'm not sure what you've done already but to help bring in more business maybe some creative advertising would help you boost sales? Maybe you can make a few small cakes and give them to local small business along with some home made business cards to display. This will get your 'name' and your cakes out there to the public! Plus it helps the local business by getting people into their store. Just an idea!

Just want to add--I know it's so much fun to go through those Wilton yearbooks and decide you need the complete set of petal pans (and hexagons, and ovals, and so on) so you can practice and be ready for each unique order, but it's a fast way to lose money, so try (if it's possible) to wait until you have an order to buy new equipment. I've bought a lot of pans I couldn't resist, and there are more than I care to admit that I've never used.

i personally don't think $1000 is too much... i've had that on a credit card already without having a business. a farmer's market is probably one of the best ways to get exposure... i'm hoping next year i'll be able to do something like that. is your business just home based or actually licensed and everything?

What do you do at the farmers market?

Thanks for all your comments.
Yes I've handed out lots of cakes/goodies with my brochure and business cards to real estate businesses, banks and so forth.

It is very difficult to resist an item you think is sooo cool and could do so much with. I keep all my receipts, if I've purchased something and haven't used it in a month I return it (if I purchased within driving distance).

Yes I'm a licensed home bakery. In Virginia we cannot sell one baked good without having/using a licensed kitchen.

I know there is alot of potential here. We have the typical grocery chains and one bakery (which has gone down hill) and they only do traditional cakes (characters, flowers).

Fortunately we don't need my income to pay the bills (however, husband wants me to hurry up so he can quit, lol, told him he could be my dishwasher).

Thanks
Joanne

I don't think a thousand dollars is a lot of money either considering you already have something line up to sell your cakes. I think i have everything in the wilton books except all of their pans and wedding supplies and not mention the other items purchase such as airbrush gun, boxes, printers and the list goes on and on . I think it all depends on where you are trying to take you decorating level to . I just put all my receipt in a box and will not dare to go and look at them to actually find out how much I have spent. Yet, I know it over a thousand dollars.

I sell my baked goods.
Well last week I made a bunch of 8 inch rounds and cookies. Didn't go over very well, everyone wanted smaller portions instead of a big cake. So this week I've made cakes and sliced them and made some 4 inch and 6 inch.
I also take a couple of cookie bouquets and cookies.
I think once people get use to seeing me there I will sell more, but for now I'm happy with handing out lots and lots of brochures.

If you're starting a business $1000 is very reasonable.

I do cakes mainly as a hobby and I don't even want to think about how much I've invested over the last few years! I do try not to buy too many gadgets or toys unless I have a reason to use them, but I have a few things that are still in the boxes.

Good luck with your business!

I do not buy anything that costs more than a few dollars unless I need it for an order. I'm actually doing a wedding cake this weekend, and only bought one set of round pans for it. It would have been nice to have a second set, but I just improvised and baked two different types of cake at the same time. The only things I've bought so far that I haven't used are two impression mats. I would say for a licensed business, 1,000 isn't too bad if that includes license and all! I'm waiting til I'm able to buy a kitchenaid!

oh wow, if you were able to start your business and your only $1000 in the hole.....that is actually pretty good....considering what it usually cost to start a small business. is this out of your home?? did you have to do buy any 'special' equipment or meet certain requirements for you to get your license??

i'm going through the same thing...but in Florida!! So it kinda sucks and is very expensive.

Have you only been doing cakes since March?? B/c it will take awhile for the word to spread that you do cakes. It sounds like you are getting the word out, and it has only been 4 months....so it'll come!! I'd just keep handing out the samples and giving brochures and business cards to everyone!!

Good luck!!
christine

Starting any business is rough and you always start in debt, unless you can find a wealthy investor to back you which is like winning the lotto with just as much chance.

I think that amount sounds about right and I am surprised it is that low. On the plus side, the farmer's market is a very good idea. Here is a local cake store that started out that way (you can read about it on their website) and they just recently opened up shop in a swank culinary boutique area of the city, so I hope this inspires you.
http://www.miettecakes.com/

Advertising is your biggest key. Use the cheap printers on the internet and print out business cards, postcards, brochures or whatever and visit the financial/business areas of your town or city, all the wedding planners, gowns, bridal supply stores, even local beauty salons (everyone gets their haircut.) It is also good practice to offer something in return for referring or displaying your advertisements, like baking them a free cake or sheet cake for their next event, or so many referrals will get you ______ . The best tip, always, always hand everyone you meet a business card. It is your #1 selling tool and in fact, the only advertisement that people tend to keep and not discard in the trash.

Good luck...

You'll be surprised that well-known cake decorators like Kate Sullivan and Warren Brown, did fall into debts during their first year in owning a business. I saw their stories on television "Recipe For Success" (if you have TIVO, check it out and see if you can find it to recorded it for you).

$1000 is low and you are lucky! I don't buy supplies until the customer tells me what kind of wedding cake she want and then she gives me the deposit to hold a date. I use some of that deposit to buy supplies. This method could help you financially.

Yes it's out of my home. No the inspector didn't require any special equip. I'm in Virginia. The $1000 only includes what I've bought since March. Before I already had alot of stuff including my KA.
Anyway did the farmers market for 2nd time this weekend, made $80. I must say Rodney, thanks for the www.miettecakes.com yes it's inspiration.
Thank you all for the tips and suggestions
Joanne

$1000 is not that much for someone starting a business. You seem to have purchased all the things you need to offer a variety of styles to your customers. Buying additional items like different shape cake pans can wait until you actually have an order that calls for that pan. To tell you the truth, I have spent at least that much in scrapbooking supplies and that's truly a hobby! Good luck to you and may your business grow exponentially!

I just started my business last year. I spent most the year working on the background stuff (forms and contracts) and practicing. I had my first bridal show in Oct last year.

I ended up spending $3000 last year and only making $300.

Any business, doesn't matter what it is, is going to hit your wallet the first couple years. I think they say on average, depending on the business, you can expect to take a loss for the first 3-6 years. Of course that's just average. So far this year I have 3 weddings booked and have done a hand full of birthday cakes and such in between.

We are in the process of moving to a different town so I'm not pounding the pavement hard yet in the new town.

Good Luck!

Here are a couple of tips on purchasing pans, etc. cheaply:

1. Go on Ebay. You can find sooooo much on Ebay and at a fraction of the price. If I ever need to purchase something, I first go on Ebay to see if anyone if selling it. It's amazing some of the buys you can get.

2. On Wednesday in our newspaper there is usually a coupon for A. C. Moore and it's usually 40% off and sometimes 50% off of an item. I bought my rounds at 50% with the coupon and got them for like $14.99. That is a great savings. Other stores in our area, Michaels, Party Needs etc. will accept the A. C. Moore coupons also. So if one store doesn't have it, the other one will.

Hope this helps. sunflowerfreak

I agree with everyone here... I think $1000 (assuming it's not taking food off your table!) is not a lot of money to start a business. I only do this for fun & I can tell you I've spent at least that much so far and I've only been doing this for about 10 months. Luckily I've used almost everything I've bought at least once so I don't fee too guilty about it!
I too have a hard time passing up when I see something that would be fun to try out. Even just hearing someone else talk about a decorating tool or book sometimes makes me want to run out & get it! I'm an advertiser's dream!!!

By the way, I've looked at your cakes & cookies & I think you'll have a great business once you get going. Your stuff looks terrific!

I have to agree, $1000 doesn't seem like a lot of debt. That being said, I would ask, do you have a business plan? If not "official" on paper, at least in your thoughts? And secondly, and probably most urgent, how much INTEREST are you paying on that $1000?

Bottom line is this: If you're not very, very careful, you could end up paying over 30% interest on revolving credit. That would add $300/year to your initial debt. Honestly, I'm appalled at what credit companies get away with these days, but that's a rant best saved for another day. And that interest isn't even tax-deductible anymore.

A lot of the credit offers that roll into our mailboxes and tout very low interest rates have some extremely interesting fine print. If you ever miss a payment on that card, OR ANY OTHER CREDIT CARD, your interest rate can be "adjusted" to a much higher rate.

Also, not sure what the laws are in Virginia, but in Texas, where personal bankrupcies were a way of life for a whole lot of overextended people in the 80's and 90's, the laws and the credit companies have changed the way they do business. If you have a home-based business here, you'll get inundated with offers for small-business credit, just like the personal credit offers, EXCEPT... if it's small-business credit, the laws protecting your home, car, etc., from debt collectors are not the same. I'm not trying to give legal advice, as I'm definitely not qualified, but please, make sure you read ALL the fine print on any debts/credit you secure.

As for the business plan, you should have some idea of how long you're willing to carry debt, have a cap on how much debt is acceptable, and try to have a plan on how much you can reasonably expect to have in gross income per month from your cakes. Of that gross, a certain percentage will need to pay for ingredients; you need to pay yourself a percentage for your labor; and a chunk of it should go to debt relief.

If you find this business is really what you want to do, and expansion seems imminent, save as much cash as you can now so less debt will be necessary in the future.

I also don't think $1000 is to much for a business. One idea I have (if I ever get as far along as you are) is ---- I have noticed alot of our independently owned restaurants don't make their own desserts. I plan on going to several of them (cake in hand) and proposing a business deal.
"I will provide you with a set number of cakes per week at set price. You in turn can sell the cakes by the slice making a profit for both of us. That way you have a steady income each week and a great way to spread word of your cakes. These cakes would not need to be decorated with anything fancy because they would be cut to serve anyway.

Great idea! Our local restaurants have their own bakers on site, but when they are over booked, I do their wedding cakes. (under the restaurant's name, not mine, but I still get paid!)

Virginia's laws on home bakeries are much easier than in many other states (maryland, for example - which KILLS me).

"The Virginia Department of Agriculture and Consumer Services (VDACS) has the authority to see that clean and wholesome bakery products, such as cakes, breads and cookies, are prepared under proper conditions. Although a license is not required for a home-based bakery, VDACS must inspect the facility that you intend to use. A separate kitchen is not required, but the products and ingredients must be kept separate from those used by your family. VDACS will need formulations (recipes) of the products that you intend to prepare as well as flow processes for these products. To insure that good manufacturing practices (GMP) are used, all products must undergo basic laboratory testing to make sure that they are not adulterated with bacteria that cause foodborne illness.

If the products will be sold to retail outlets, they must be labeled. The label must include: 1) name of the product; 2) net weight of the product; 3) name and address of the manufacturer and 4) a list of the ingredients in descending order by weight. All packaging used for the products must be made of food grade sources, as recognized by the Food and Drug Administration and the United States Department of Agriculture. "


It makes no sense to me that someone in one state can bakeout of their home and someone a mile away in a different state can't. Maryland requires you to have a completely seperate kitchen.