I've found a great lady that is renting me space in her commercial kitchen. She sharing her equipment and seems very supportive.
Here is my dilemma. I now can advertise and expand my business. However, now that I have "overhead" per hour, I'm kinda freaking out about profit margins now.
Example: 3 cakes = $245.00 I bake for 4 hours. I am estimating each cake to take at least 2 hours to decorate. That is 10 hours. So if I do all the work at the rental location, I'm out $150.00 already. Not including the ingredients.
I now this is an awesome opportunity for me in the long run and I will need to get more cake orders to make it profitable, but in the meantime. Ouch! lol
I guess I'm looking for moral support. 
what im doing is during busy season i pay a flat monthly fee. that way the more cake orders the better! and i don't lose out a ton of money on the hours im there. just in the off season do i pay hourly since i don't know how often im gonna be in the kitchen. if i grow to a point that im really busy year round, i'll switch to always paying monthly. is that an option for you?
good luck!
I don't rent a space, but I know that I've read of some people just doing the baking in the commercial space and continuing to do the decorating at home - and it's perfectly legal. Would that be another option for you?
im pretty sure that in most states (texas and california in particular) thats not legal. in most states you have to do everything at the commercial/licensed kitchen. now, some people might be doing this anyway, even if they do live in a state where its illegal.
I'm not sure how much oven space you have, or if you would even want to do this, but I find that it takes about as much time to make the batter and bake 3 cakes as it does 6 (if they are all the same flavor) Could you possibly bake more cakes than you need all at once and freeze the extra cakes to use for future orders?
It wouldn't be legal here to decorate in an unlicensed kitchen. I had checked into the possibility of using all pre-made ingredients but it didn't matter. It's not that you're baking that requires a licensed kitchen, it's that you're making a product that is meant to be eaten.
I agree you might want to try making as much ahead of time as you can...extra cakes and making flowers, decorations and icing up ahead of time while you're already there baking cakes for a particular order.
It would be really hard for me to make a decent profit though paying that rate per hour for a facility.
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