Economy?

Business By Kitagrl Updated 25 Mar 2008 , 1:49pm by TheButterWench

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kansaslaura Posted 21 Mar 2008 , 8:42pm
post #31 of 48

Indy tapped me and asked me to chime in on this thread. I don't have a head full of steam at this moment, I'm in the middle of a wedding cake for tomorrow--

However--

I've always been very conservative with my money and decisions. I also am a risk taker. Yes, they can go hand in hand--IF you believe in yourself enough. Maybe cake orders are off, then it's time to think outside the box and see what other niche you can fill. I fulfilled a life long dream of opening my own restaurant years ago. When I was a kid I would sketch out pictures of what I wanted my dining room to look like, dream up menu ideas and look at table settings whenever we'd go shopping.

I didn't open my place at a particularly good time, according to the media and all the "experts" I asked the bank for $5000. and they scoffed at me and the VP at the branch I was dealing with told me the "Big Boys" told him that the ....Little lady should just stay home and bake her cookies.

I was determined to do it before that jackass statement and an atomic bomb of determination was ignited when I heard that. I found my funding elsewhere, bought used equipment and with my DH did most of the remodel ourselves.

Fast forward several years to the expansion. On the first day we opened our new 55 seat expansion to the original location in walked the suits that had laughed when I asked for the $5000. They did a quick look around, rolled their eyes, took a good long look at my very pregnant belly and said.. Humph.. I guess you hadn't heard there was a recession...(this was when gas had*gasp* peaked at $1.30 plus for the first time and the world was surely coming to an end...)

I set my jaw and looked them straight in the eye and said .. Oh I heard, I just decided I wouldn't participate in it.

The jackasses stopped their braying, sat down and ordered.

GRIN!

It wasn't always easy, but I never gave up. If one door closed, I opened a window. You may have to make adjustments. Frankly I think some of the prices that people talk about charging for birthday cakes would send me screaming in the other direction. Debi has the right idea--give them a good value for their money and they'll keep coming back.

Out of my little place I used to cater, do specialty baking, had a deli counter and a restaurant. I also did tons of special orders for companies in the area. I don't have that place anymore, it's a long and personal story but it had nothing to do with financial failure.

The bottom line is not what the economy is doing, it's how bad you want to make your dream come true.

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mezzaluna Posted 21 Mar 2008 , 9:17pm
post #32 of 48

Lordy.... I wish I had a little down time. I could use a breather. My minimum order is about 150 USD and I turn down between 5 and 30 orders a week.

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JackieA Posted 21 Mar 2008 , 9:28pm
post #33 of 48

this is such an interesting topic. Even we here in Canada are feeling a wee bit of a pinch. People are just uncertain of the future. We are waiting to see what happens with your election.

But I agree with all of the other ladies...make a great product and it will sell itself...

Jackie

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mom2spunkynbug Posted 21 Mar 2008 , 9:40pm
post #34 of 48

Iamlis & KansasLaura - THANK YOU so much for your responses! And thank you to the OP for posting this!

I was ready to call it quits. NO ONE has ordered a cake from me since January. The last one before that was November.

Well I just "opened" in February '07. I do this from my licensed home kitchen.

I've had a bunch of brides email me, and after I responded I got no reply from them again. Quite depressing.

But, I will do like you guys said - and like the quote I got out of Chinese fortune cookie recently "Struggle as hard as you can for whatever you believe in" icon_smile.gif

So as soon as I am feeling better (hopefully by Monday) I will start on making little cakes to give away to potential clients.

Thanks so much for the uplifting post - it was the smack in the face that I needed icon_biggrin.gif

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iamlis Posted 21 Mar 2008 , 10:04pm
post #35 of 48

It was a long hard road for about 2 years (HOWS THAT FOR ENCOURAGEMENT!) LOL! But I worked a fulltime job 50 Hours weekly, evening nanny jobs a minimum of 3 times a week and take cakes in my spare time-LOL! WHAT IN THE HECK IS SPARE TIME?? But all of my night babysitting $ went to cake boxes, boards, Powdered Sugar, Crisco, Dream WHip, Pans and spatulas BECAUSE like Kansas Laura I HAD to make my dreams come true-But as we speak I am running credit card orders for MAY, I am booked every weekend till MAY! It's alot of hard work making your dreams come true-sometimes you are tired, but you have to find encouragement and keep pushing yourself-YOU ALL DO AMAZING CAKES! I am in awe all the time, I finally today had a chance to load pictures that are about 2-3 years old-BECAUSE I know some cakes, even just 1 might help out a mom or at home baker that has a last minute cake order and MAYBE would need the picture for a little help? I WISH YOU THE BEST OF LUCK! Don't give up-I want to buy your cake book some day and figure out how you created this cake or that! LOL!

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TheButterWench Posted 21 Mar 2008 , 10:16pm
post #36 of 48
Quote:
Originally Posted by mezzaluna

Lordy.... I wish I had a little down time. I could use a breather. My minimum order is about 150 USD and I turn down between 5 and 30 orders a week.




If I understand correctly you are doing very specialized items, right? that's why you're so busy.

Thank your lucky stars! and hope it stays that busy for you! thumbs_up.gif

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mkolmar Posted 21 Mar 2008 , 10:25pm
post #37 of 48

I'm in MI which is a hard hit state because it was built on the auto industry and that's not doing so great right now. However, people where I live have always expected the whole cow for the price of a gallon of milk! They are mega cheap. I only do word of mouth and except what I can order wise. I'm not a store front so there is little overhead for me. My prices are more than what some people are willing to pay and less expensive than others think they should be. Just stay positive and do as kansaslaura, andiamlis and indydebi suggested. After I graduate from school next month I plan on really starting to concentrate more on my lil' business and trying to get my name more out there.
*As a side note. My DH is a computer tech and started his business almost 4 years ago. People laughed at him and told him that he would loose his shirt because of the way the worlds economy was. He didn't have a store front but rented an office space and also worked from home. He didn't want to do home-users computers but only businesses computers. People told him once again to change his business plan to include home users or he would go under--He refused. He also refused for people to be locked into a contract with him if they were not happy. He doesn't do contracts which is unheard of in his industry. People once again laughed at him and said he would fail. Well, he started with just 6 clients and now has over 100 in a little less than 4 years. They don't laugh anymore at him, but ask his business advice. Which I think is hilarious!*

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iamlis Posted 21 Mar 2008 , 10:43pm
post #38 of 48

Just a thought-I think having a supporting husband helps too! It is unfair to think they don't sacrifice-BABIES TOO! For all of you single ( I AM SO JEALOUS-just sometimes icon_smile.gif) LOL! but honestly, in the weakened economy they support alot of us cakers more than we realize. I just got an email from my hubby begging to go out tonight for a maragarita icon_sad.gif How sad! I know the weekends are hard on them too when we get slammed with cakes, they work all week then get to watch the kids-or help fold parchment, or just allow us to spend WAY too much money on cake supplies icon_smile.gif I remember after my grandma passed 2 years ago, wrapping all of her beautiful depression glass, and I could hear her tell me the depression stories again and again-in my mind. It took true grit and determination to get through that-and it took families pulling together-this Missouri gal just got a Margarita-reality check! I have a great hubby-that is worth a million bucks-inflated or not! I guess I will go out and worry about these cakes when I get back home!

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playingwithsugar Posted 21 Mar 2008 , 10:52pm
post #39 of 48

KansasLaura -

What a great response you had to those suits!

I am glad this subject came up, as it has pointed me in a direction for when I decide that it is time to go into business. I see that in this type of economy, it would be worth my while to stick with the upscale cakes I planned on offering when the time comes.

Yes, my first goal is to teach, but if I can make a few bucks doing a cake or two on the side, then what the heck, right?

Thanks for all your input -

Theresa icon_smile.gif

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CoutureCake Posted 23 Mar 2008 , 6:44am
post #40 of 48

Remember that "Most Millionaires AND especially BILLIONAIRES are made during times of recession. It's only a recession if YOU CHOOSE to participate in it!"... They invest when the market is low in smart investments so when the market goes back up, they can sell high. It's all that economics stuff that we slept through icon_rolleyes.gif ... Now is the PERFECT time to purchase used equipment because the market is getting saturated with it so the prices are dropping even more.

For me I was forced out of business last October when I lost my space rental SUDDENLY (hint: don't deal without a contract even if it IS family!). I've turned down 20-30 cakes for this year because of the building of the new space that we're anticipating will be done in late fall(I'm a goodie two shoes afraid of my inspector -- o.k. icon_surprised.gif ).. I just opened up shop two years ago, first year nothing is what I anticipated getting for orders, 2nd year I anticipated 3 wedding cakes and did 5. This year, things BALLOONED and I wish I was in the market, but there's nothing I can do to change the situation because the frost isn't out of the ground yet to start construction.. Like FlowerGirl said, it's ALL ABOUT targeting YOUR market! The market will always be there if you fill a void regardless of the industry you're in.

It's also times like this that tell you who is the better businessperson, and as much as we like to think of cakes as art, this is a BUSINESS first. A lot of places are going out because people made HORRID business decisions (ahem, read above.. OTOH, I own every piece of equipment so only have to purchase fridge/freezer, hood, and the buidling itself which will have sweat equity for a large portion of it). Instead of going for the minimal supplies to get the job done they invested HUGE amounts of money into new supplies they didn't NEED that were NEW, got shoddy funding for it, targeted the wrong market, didn't charge enough when prices started to go up, and now are paying the price for those decisions. If they had invested in the minimum and bought up as they had cash on hand to afford it making due with what they had, then put money away for a "rainy day fund" we wouldn't see the issues that are going on now with many businesses. You have to remember that people WILL drive to a business that provides GREAT customer service even if they still have to pay more for it.

Also, as others have mentioned, this is a light time of year for the cake business. Things will start to pick up in a couple weeks when it's the First Communion cakes then the graduation cakes.

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littlecake Posted 23 Mar 2008 , 11:08am
post #41 of 48

i do mostly party cakes...during wedding cake season i'll do 1-3, sometimes more a week in addition to my regular orders....then i'll have to turn a few of the party cakes down.

i haven't noticed a slow down, other than the usual slow times...i had 24 orders yesterday...i quit taking them friday afternoon, or i could have had more.

they don't have to order from me a week in advance, and i'll take all the last minute orders i can fit into my schedule, i do plab for the last minute orders and bake ahead, in anticipation of them...when the cakes i baked on wed/thurs. are sold up...i'm done taking orders.

sometimes i'll miss count and end up being up on friday night baking...i hate when i do that!

you'd be amazed at the poor planners that call on friday, or the day before for an emergency order.

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indydebi Posted 23 Mar 2008 , 12:56pm
post #42 of 48
Quote:
Originally Posted by CoutureCake

You have to remember that people WILL drive to a business that provides GREAT customer service even if they still have to pay more for it.




Yep! Had a customer drive 1.5 hours ... one way!..... for a little ole birthday cake just last month.

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funbun Posted 24 Mar 2008 , 5:42pm
post #43 of 48
Quote:
Originally Posted by mkolmar

I'm in MI which is a hard hit state because it was built on the auto industry and that's not doing so great right now.
*




I also live in the heart of the auto industry (in Canada) Everyday you hear of layoffs and plant closures, but my business has grown in this market. (Thank God)
I think we need to put the market worries in the back of our mind and concentrate on making great products that people are willing to pay for.

Have faith in your abilities and plan for your future orders! icon_biggrin.gif

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Erdica Posted 24 Mar 2008 , 9:22pm
post #44 of 48

I've been in business for 3 years. The first year I did 3 weddings total. And like 4 special occasion cakes. I'd have a consultation once every 2 months or so. Then I stopped advertising because we were suppose to move to a different town 2 hours away. But that didn't work out either. So I started my advertising again in mid December. I started 2008 with 1 wedding booked. I now have 25 plus consultations are so booked that I've had to add extra times to try and fit people in. I've had to turn away some people for wedding dates that I just couldn't do. Right now things are a little slow on the order side...but for me that's good. I had to go in 2 weeks ago for carpal tunnel surgery on my right hand. And I have to have the left hand done in 3 weeks. So I'm glad it's slow. My plan is to work my consultations, take any extra special occasion orders and work on my business plan. So when the economy does pick up, that will already be almost done. I guess since it's a little slow, that I am going to work more on the back bone of the business. And of course heal from surgery.

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JulieB Posted 25 Mar 2008 , 5:32am
post #45 of 48
Quote:
Originally Posted by FlowerGirlMN

Nah, I'm not really worried about the economy.

Realistically, a downturn in the economy only *really* hits the lower income end of things. Anyone who's in the market for a high end cake is making enough money that they're not going to let an overall downturn in the economy affect their wedding in such a way.




I couldn't agree more. I think it completely depends on your market. For me, my market is nurses, the nurses I work with. Talk about job security! And here, nurses are well-paid, and when their kids have a party, they gotta have killer cake.

Then you get to doctors....... and to their friends............. and you're beyond the lower income, and your business is secure.

Now, I'm a cake here and there kinda person, not full-time, but usually when I need to sell one, there's somebody wants one. One of these days, I keep saying I'm gonna sell more, but I love nursing, and so far, don't want to give it up. Gimme time. icon_rolleyes.gif

But I ain't cheap, and ain't nobody complaining!

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Petit-four Posted 25 Mar 2008 , 12:52pm
post #46 of 48

I read a recent article about the new phenomenon of customers "haggling" over prices -- even at places like Home Depot and other box stores. But the article concluded that the common wisdom that gaining customers by low price alone does not help a business in the long run -- because these type of customers will simply take thier business to the next low price. In other words, bargain hunters do not build businesses.

Instead, quality or customer service were found to keep customers long run -- customers who saw price as a reflection of a quality experience.

Looks like you cake-pros already knew that!

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smoore Posted 25 Mar 2008 , 1:19pm
post #47 of 48
Quote:
Originally Posted by Petit-four

I read a recent article about the new phenomenon of customers "haggling" over prices -- even at places like Home Depot and other box stores. But the article concluded that the common wisdom that gaining customers by low price alone does not help a business in the long run -- because these type of customers will simply take thier business to the next low price. In other words, bargain hunters do not build businesses.

Instead, quality or customer service were found to keep customers long run -- customers who saw price as a reflection of a quality experience.

Looks like you cake-pros already knew that!



Absolutely right on!!!! And, if you differentiate yourself in your marketplace, they can't rightfully compare your cakes with ... say ... Walmart or even any other baker. When your pricing is higher it's what makes you different that will make consumers make that initial purchase .... taste will keep them coming back! icon_biggrin.gif If your concentration is mainly on standard sheet cakes with basic decorations, you are going to have a harder time in this economy than if you'd truly personalize your cakes and concentrate on more specialty cakes. Why? Customers are naturally going to compare you with what they know. When you make it easy to see the difference, not just taste the difference, from the get go, you're battle's half won. For those of us with a customer base, they shouldn't be too hard to keep, though they may scale down to fit budgets ... it's getting new customers that will be hard - unless we differentiate!

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TheButterWench Posted 25 Mar 2008 , 1:49pm
post #48 of 48

The area I live in is a TOURIST driven area, so it's been slowly going downhill since 9/11 ( hate to bring that up ) As people have become afraid to fly a lot of places down here have been closing up slowly but surely.

Also since the price of gas is going through the roof people are also keeping closer to home.

But I think Little Cake has a plan, I have been turning away same day customers because they call up to see if I have anything they can pick up.

Maybe I should rethink Custom only and have a few t hings for cash and carry, that may be a good option for me right now.

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