Recession-Proofing Cake Decorating/bakery Business
Business By AllyCake90 Updated 27 Jan 2009 , 12:55am by littlecake
Is a recession a good time to start a bakery or cake decorating business? Why or why not? How do you keep a business floating during economic downturns?
I suppose I'm just wondering all of this because I was considering opening a business from home, but I don't know whether demand is down... If a bride & groom are trying to cut costs maybe they would rather invest in the ceremony (and thus cake!) and have a smaller honeymoon, or they cut costs (& cake!) from the ceremony and spend the money on a spectacular honeymoon...I just can't figure out where logic lies here, lol.
We have owned our bakery for almost 7 years. Before that I baked out of my home for 2 years. In '08 we had a 47% increase in sales. But let me tell you my hubby & I hustled our tails off!! We were out promoting the heck out of our business and we really focused on the service end of our business. One thing to also consider that we are in Iowa which hasn't been hit quite as hard as other areas of the country. Our small town is home to a brand new ethanol plant and biodiesel plant and wind farm expansions. Green is in and we have really courted the corporate business.
I have also noticed that people have cut back on that daily $4 coffee but on a special occassion they make it even more special becasue they have been cutting back and buy a little bit bigger or extravagant cake.
So my advice would be to really analyze the area you live in and see what oppurtunites are out there.
Hope that helps.
Yeah, I 'heard' there was a recession, but I refuse to participate. 
If you listen to any "experts" on TV, they will always give you the gloom and doom version and according to them, it's never a good time to start a business, buy a house, have a baby, etc.
Never stop sellling. Never. Never. Never.
What I'm finding in '09: In 2008, my average wedding cake served 118 and average buffet was 112.7 guests. This covered a range from 50 to 600. The inquiries I'm getting so far in '09 are for 250, 300 and yes, even 400 guests at a wedding!! 
I did my annual price increase AND added a service fee and no one is batting an eye.
And I believe that no matter what they have to cut back on, there is ALWAYS going to be a cake at a wedding; there is always going to be a cake at a birthday; there is always going to be a cake at a milestone celebration.
Any venture into a business is risky, even in the best of times. Do your research and homework and be prepared. There are no guarantees either way.
All I know is that I keep hearing how more businesses are started and more fortunes are made in bad economic times than in good ones. Somehow, somewhere, someplace ... I'm gonna figure out how to cash in on that!
I, too, have heard that some of the most successful businesses were started in the midst of a recession. I suppose that no one ever knows exactly what the economy will do next, though there are plenty of proposals for its future. I must agree with you that the media is certainly a key player in making the recession such a dreaded topic.
And I must agree with cakesdivine, you're my hero!! 
Successful business starts with your mindset and determination, and you have a great mindset (cake is almost a necessity to people because they want to have a great party! lol)
I whole heartedly agree Debi
no matter what they have to cut back on, there is ALWAYS going to be a cake at a wedding; there is always going to be a cake at a birthday; there is always going to be a cake at a milestone celebration.
The media feeds us nothing but gloom and doom. I refuse to allow it to strip the joy out of life for my family and friends. Now's the time for us all to focus on what's really important and what just really isn't. I believe people will cut back where needed to keep their the special ocassions special. There are plenty of great examples to follow out there.
Thanks Debi for being one of them!
What a great thread! I have been in the same boat myself - wondering and worrying over starting up a retail shop at this time. I realize there are never any guarantees but it's nice to hear an optimistic outlook instead of the typical risk, doom and gloom.
I think that if the recession has hit you personally (and the area from where you think you might gather customers), then starting a business now is not the best idea. But, if you are not feeling the crunch, have the startup money and know for sure you can get a loan if you need one, why not? As long as you have a good business plan, you should do what you feel is right.
Thanks you so much Debi..Yes the media is terrible for always reporting the worst of every event and not the good.Hubby and I refuse to watch the news anymore as it is so depressing!! I also agree...a cake will always be wanted and afforded for for any special occasion.
I have also seen a trend for larger wedding cakes, which is nice! However, I live in a town that has a major car factory that is in danger of closing, and as far as birthdays & smaller cakes, people here are doing without. Know your local situation (which you will when you do a detailed business plan) before jumping in.
I have chosen to close my retail cake shop and will be renting time at a restaurant to make a few wedding cakes each week. Once I have 'healed a few wounds' (read: paid off some cake store debt) I may consider opening a retail location again if the economic situation in my town improves.
Best of luck to you!!
my sales were up last year too...i was expecting a lag in december that never came.
i do all the work i can do with just a 1 man show....i turn down orders almost every week....but i'm the only bakery in town aside from the grocery stores, and a couple illegal home bakeries, so i kinda got a monopoly.
Quote by @%username% on %date%
%body%