Am I Taking On Too Much???

Business By nicolesplace Updated 22 Mar 2008 , 12:15pm by AKA_cupcakeshoppe

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nicolesplace Posted 20 Mar 2008 , 5:47am
post #1 of 11

I am in the process, again, of starting my cake shop. I am going through a local agency - Community Futures, that helps with small businesses. I had my "intake" meeting 1 1/2 weeks ago & my case worker (nice title) doesn't seem to think that just cakes would be enough for a business that they would help to get off the ground. I live in a town of about 17,000 in between Vancouver & Whistler (yep, the Olympics are coming!!) Other than the grocery stores (3) & a high end chocolate shop that caters to a very select clientele there are no other options for celebration cakes.

My feeling is that with a population of nearly 17,000 minus the % that do not celebrate birthdays/holidays, that probably leaves roughly 13,000 celebrated birthdays. Include also weddings, anniversaries, baby showers, etc........ why couldn't I make a full time business?

Her suggestion to me is to set up some wholesale accounts with local restaurants and coffee shops to supply them with desserts and other various baked goods. Is this something that any of you do? If you think it a good way to start, should I be concocting desserts to suit their indivdual fare & presenting them with samples and a proposal?

Don't get me wrong, I would love nothing more than for my baking to be served in many of the fabulous restaurants but, where should I draw the line? Could I become too busy with wholesale that I won't be able to accomodate custom orders?

Sorry for the rambling.. my 3 kids all decided to take turns getting up last night so I have been awake for almost 20 hrs.

If you are able to decifer my questions, I would love your feedback.

10 replies
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TheButterWench Posted 20 Mar 2008 , 5:54am
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Well, first of all who is this case worker that want's to edit your plan?

Can you come back at her with examples of businesses that are successful with just cakes?

Wholesale is a lot of work and very little money, did you tell her that?

and doing wholesale is like cutting your own throat, why would anyone come to you for a cake if they can go to such and such a place and get the same cake for less?? or more??

Tell her that you not only can make a success from cakes ( did you show her a budget on one of those celebration cakes?) but that you may add cookies, cupcakes or other things along those lines.

Maybe bake them a cake to drive home your point?

What would happen if you do get busy and you're still having to turn on your ovens for those 20 dollar cakes for your wholesale accounts?

and besides to do wholesale, tee hee, tell them you need a bigger place with heavier and larger equipment.

When they realize that they may have to give you more money they may just trow the smaller amount at you for the smaller shop!

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nicolesplace Posted 20 Mar 2008 , 6:06am
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In order to qualify for the program, my business plan needs to show that $30,000 is not unachievable in my first year of operation. $30,000 seems like alot to me, being a newbie to the whole 'charging' for cakes thing. I am so used to just doing it for fun.

My fear is this:

I approach a local restaurant with a unique, amazing cake but they want a contract that I cannot reproduce the cake for custom orders - making it my "signature dessert" made only for them. Do I agree? Do I re-tweak the already tweaked recipe so that I can offer something similar but not the same for my custom clients?

Oh my, I think my pillow is SCREAMING for me! icon_eek.gif

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indydebi Posted 20 Mar 2008 , 12:40pm
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Wholesale doesn't mean a small cake here and there. It's a high volume, CONSISTENT sale that enables you to buy in larger quantity and work more efficiently (lower overhead). It doesnt' have to be a "why should they buy from you when they can buy from them."

I have a commercial account with a Cadillac dealership. They use 26 dzoen cookies every single day, putting them out in their customer lounge for customers to have with coffee while waiting on small repairs, talking with sales staff, etc.

This check buys the supplies and pays my rent. I do 4 of their location and they are thinking of adding 3 more locations. It takes me 30 minutes to bake 300 cookies (using double convection ovens). This is assuming I have the cookie dough balls made up ahead of time in the freezer. If I dont, then it takes me only 2-3 hours to get this order done.

Since April is my slowmonth, I'll be soliciting other car dealerships for similar accounts. This consistent type of sale pays my rent and utilities so I can NOT worry about paying the overhead and can focus on what I love doing. (and if it gets too big for me, well, that's what hiring teenagers are for .... making cookie dough balls!)

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dinas27 Posted 20 Mar 2008 , 2:11pm
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I think that it is OK to have a unique amazing cake that you make just for a restaurant! Just make it a cake that would not stand up well for a wedding or celebration cake... like a brownie base with a few inches of mousse, flan cake etc. Something that is not layers of cake with filling.

As for dealing with your 'case worker'- do you need to produce $30,000 in gross or net income because that is a big difference! Have you developed a business plan? Indydebi posted a while ago about some demographic info she put together for her business plan. I dont think the whole post exists anymore but I'll paste what I copied from it. Something else to really think about is where people are getting there cakes from now. If the grocery stores dont make cakes who does? Are there established home bakers, illegal or otherwise? Does someone in the family usually step up to make the wedding cake? Not to say that this should dissuade you from opening but something to think about... home bakers can often undercut because of reduced overhead!

From Indydebi's brillance!
Indydebi â Business Plan
My wedding cakes are $3/serving, BC only (I dont' do fondant).

I got competition pricing by checking their websites (although not many are brave enough to put their pricing on their website), and by doing the phone call: "Hi, my sister is getting married next year and I'm in charge of the cake ... can you give me a general idea of cost per cake or cost per person?" I went in one bakery and told them my military son was getting married and the mother of the bride asked me to get her some local bakery info. They handed me their whole price list!

Number of cakes per week is also dependent on demographic numbers ... do you have those, too? Below is the section on demographics out of my biz plan, just to give you an idea of what you should look for. These numbers were put together about 3 years ago......

The geographical target market for Cater It Simple etal is a 60-mile radius from Indianapolis IN, (specifically, Lawrence IN), 60 miles representing approximately a one-hour drive. This can cover an area from as far east as Richmond to as far west as Plainfield.

⢠Indianapolis is the 12th largest city in the United States, with a population of 818,014.
⢠Metropolitan Indianapolis includes a nine-county area with a combined population of 1,461,684 and represents approximately 26% of the stateâs total population.
⢠Marion County proper represents over half of the Metropolitan areaâs population, with Hamilton county (north of Indianapolis) being over 10% of the metro population.
o Hamilton County is the fastest growing county in the state, experiencing a 68% population growth between 1990 and 2000, and where the median family income is $80,239.
⢠Indianapolis has a high average income per household, with 45.6% of the households in the Metropolitan area having an income above $50,000

The target market within this geographical area is the bridal/wedding market.

⢠With a 2001 marriage rate of 5.7 per 1000, and based on the above population of 1,461,684 for the metro area, this equates to over 8000 weddings in the metropolitan area.
⢠The national average cost of a wedding is $22,360.
⢠Depending on the source, one-third to one-half (or more) of the budget is spent on the wedding reception, or approximately $7,000-$12,000.
⢠This is a potential of $50-90 million to be spent on wedding receptions in the Indianapolis Metropolitan area.

I would really really appreciate you updating on your story. I live in Edmonton right now but am planning on moving back to my home town in rural SK in the next couple of years, with a population very similar to yours.

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nicolesplace Posted 20 Mar 2008 , 3:50pm
post #6 of 11

Thank you for your feedback! I was up most of the night brainstorming ideal wholesale accounts. I am considering approaching real estate agents. I was thinking that if I went into their office with a cupcake bouquet & a proposal for the bouquets for open houses, it could be someting that would be quick to make and also lend itself as advertising for new residents. The real estate market is HUGE here (with the olympics coming) and there is an estimated 3000 - 4000 units currently under construction in the immediate area!

Anyways - other ideas I had are childcare centres (muffins and 'healthy'bars, dealerships, schools (hot lunch days or M, W, F milk days), most banks here do a customer appreciation day the last Friday of every month with free coffee & cookies/muffins.

My dh, who is a carpenter thinks that I should also approach local contractors about baked goods for their morning coffee breaks (I never go to a gas station from 10 - 10:30 due to the mad rush for morning sweets).

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nicolesplace Posted 21 Mar 2008 , 4:54pm
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Yesterday I spoke with a friend who is a real estate agent. All 17 agents in her office love the idea of offering baked goodies @ open houses!! Now I need to make them some samples, and write a contract. Once they are signed on, I bet it won't take much for the other companies to jump on the band wagon ( hee hee).

I have also spoken to some daycare centres and they are all excited!!

In the course of one day I may have changed my near future. My dh thinks I should skip the start up program & just start. We are a little concerned that if I don't launch my business soon, my potential wholesale clients might lose interest or seek other vendors.

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indydebi Posted 21 Mar 2008 , 8:22pm
post #8 of 11

That is incredible! Way to go!! party.gif

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kakeladi Posted 22 Mar 2008 , 10:33am
post #9 of 11

Hey, hey ------- great work! Go for it gal. You are on the right path.

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Tona Posted 22 Mar 2008 , 11:40am
post #10 of 11

Great job of thinking out of the box that is what makes one succesful Good luck with your business.

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AKA_cupcakeshoppe Posted 22 Mar 2008 , 12:15pm
post #11 of 11

wow! that's awesome! i applaud your courage and wish you all the best! icon_biggrin.gif

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