Is The Economic Downturn Effecting Your Business?

Business By kissylips Updated 15 Mar 2009 , 2:54pm by Kitagrl

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kissylips Posted 11 Mar 2009 , 7:22pm
post #1 of 22

Seems like a bride wants her dream cake regardless of the state of the economy, but maybe other types of products you have seen a difference in?

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chutzpah Posted 11 Mar 2009 , 7:33pm
post #2 of 22

Actually, yes. I have record sales every week.

Folks think twice about buying a house of a car or a new couch, or even those $300 boots, but they sure can treat themselves when times are bad.

That $4 cuppie seems like an affordable luxury.

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jlsheik Posted 11 Mar 2009 , 7:39pm
post #3 of 22

I am busier this year than last year at this time...People will always get married and always have b-days and anniversaries!! I just have to make sure I am the one who is making the cake!!

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marmalade1687 Posted 11 Mar 2009 , 7:58pm
post #4 of 22

This will be my busiest year so far for both weddings and regular orders - sales are definitely up over last year! And I also find that people are ordering bigger and fancier cakes than last year.

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Monkess Posted 11 Mar 2009 , 8:02pm
post #5 of 22

I agree there hasnt been on a superficial level much change in our business-BUT scratch the surface below and you see people are hurting. Sometimes we easily slip into a comfort zone a sort of bubble if you may, and therein exists our business and customers, and our general issues. I think in times like these it is important to stay on top of what is coming and make the requiste changes in plans.

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SugaredUp Posted 13 Mar 2009 , 11:40pm
post #6 of 22

I have grown, but not fast enough for my liking. I'm actually pretty bummed about it lately. The economy where I am is one of the worst in the country. It's HORRIBLE. I try to stay positive and keep in mind that people usually love my products, but it's hard to stay positive sometimes when it's such a struggle. Sorry to be a downer.... Last week, I was too busy, this week NOTHING.

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indydebi Posted 14 Mar 2009 , 12:33am
post #7 of 22

I have booked 28% of the number of bookings as last year and I'm at 68% of the dollar sales of last year. Avg dollar value of invoices are more than double what they were last year.

If you're one of the kids on here, who were barely born during the 70's recession, here's your history lesson......

In 1975, when I got my driver's license, all the parents were worried about gas being rationed because it got up to (gasp!) 39 cents a gallon!!!!!!!!! icon_surprised.gif Seriously, it wasn't just a huge price jump, but people couldn't get it. Gas stations would shut down in the middle of the week because they couldn't get gas. Houses that heated on traditional fuel oil (not gas or elec) couldn't sell because even if you had the money, you ran the risk of not being able to get the fuel.

When the 80's rolled around and we all had jobs again, and we'd gotten caught up on our bills, we were SICK of anything that represented 'conservation'. We dumped the little CHevettes and bought SUV's; we unloaded our ranch house with the little windows and bought a big house with cathedral ceilings and open floor plans (to heck with heating efficiency! We want SPACE!). It was big houses, big cars, big HAIR, big wedding cakes.

I see it happening now. We will happily trade in our SUV for a fuel efficient car; we will do the bean-n-rice from walmart for dinner. But a wedding? Now THAT'S a special occasion and we're going to do it RIGHT!

That doesn't mean brides are throwing money around willy nilly. They are shopping and they are bargain hunting. But in the end, they want a nice wedding that will commorate this once-in-a-lifetime event in their life.

I'm not considered inexpensive in my cake prices. Lots of full service bakeries have a base price way cheaper than me (no idea what the final price ends up being..... icon_rolleyes.gif ). My cake-only sales are 3 times the previous year.

If you're concerned about stagnant sales, look around and see what you can offer that other places aren't. Or start advertising something you're already doing but put a spin on it. "No extra charge for Sunday delivery". (You never HAD an extra charge for Sunday delivery, but now it sounds like a real benefit! And seriously, there are places who DO charge double for Sunday deliveries.) Marketing! thumbs_up.gif

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melodyscakes Posted 14 Mar 2009 , 1:43am
post #8 of 22

My problem seems to be that my prices are in the middle.....the ones with the money go to the very famous high end bakery and the ones on a budget, want Walmart prices and shop around until they find someone to to the cake for almost free. I feel like I need to raise prices a great deal, or lower them...which I will not do. my sales are down from last year.
any advise indydeb?


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indydebi Posted 14 Mar 2009 , 2:23am
post #9 of 22

Melody , you're in the perfect position!! See, I place my catering prices in the mid-range, too. Some are cheaper ... LOTS are higher!

As people start to cut back, I'm in the price range they are cutting back to. Those who would shop the lower priced caterers, were never my customer to start with, because I was too high for them anyway.

I read recently that higher income folks use more coupons than lower income folks, and they shop at 2 or 3 different grocery stores to get the deals. That's why they have their money, I guess! Being price conscious, they are the ones who really shop their cakes and catering. They will think twice about using The Big Boys in Town ... and they'll come down a notch to you and me.

Everyone's cutting back .... some cut back from Walmart to Dollar General, and some cut back from Nordstroms to JC Penney.

While we would all LUV to have the high income "sky's the limit!" customers, let me share what I heard a marketing guy say one day:

"How many people would love to have that $100,000 wedding? ..... Now after you've done BOTH of those, then what?" His point being that we all slobber after the big dollar client, but there's like 100 of us and 2 of them.

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AmyCakes2 Posted 14 Mar 2009 , 2:31am
post #10 of 22

I'm busier than I've ever been. icon_smile.gif And this year, I'll have more wedding cakes than I've done in the past 3-5 years. Last count, I was up to 5-7 weddings. One is tomorrow! icon_smile.gif

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melodyscakes Posted 14 Mar 2009 , 2:35am
post #11 of 22

thank you indydeb!

I've just been so frusterated, because the numbers are so much lower than last year. I truely expected to double or triple the business this year, the talk of recession around election time caused the orders to all but stop. now they are comparing prices, not quality.
I've finally got most of the running of the business figured out, the delivery, the decorating, ect..finally have gotten faster...then business is slowing down. I have a few competitors that all but give the cakes away, and the brides are flocking to them.
I was reading another post about offering a lower cost cake, 6' 8' 10' simple decorated, one flavor, $149.00 I think I am going to offer that.....then suggest they pick the cake up so I don't have to mess with delivering a small cake. or charge them extra to deliver it.
how would you label that on your web site? recession special? or budget bride? this months special?
thank you so much for your input!


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Momof4luvscakes Posted 14 Mar 2009 , 2:48am
post #12 of 22

I have started this year way ahead of last year. I think some things might be slower, but people like to celebrate to forget the other things going on. I have caterings and cakes booked for every weekend for weeks!

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indydebi Posted 14 Mar 2009 , 3:12am
post #13 of 22

As I mentioned above, it's all in how you market it. Lots of bakeries in my town are $2.00, $2.25, $2.50 per serving. I'm $3.50. But I market it with all of my "no extra charge for ...." cake flavors, fillings, design elements. I don't charge rent for a silver plateau ... I do charge a (refundable) deposit to use one for a D&R cake, but if I I'm there doing the catering, then I won't charge them a deposit either, so they get to use a silver plateau totally free.

If I also do the catering, I'll throw in the cake plates and forks at no charge. I dont' charge a cake cutting fee when they buy a catering and my cake (I'm there anyway).

The reaction to brides is just what I want it to be. They hear "Sure you can have that ... no, there's no extra charge for it." (My favorite story was the bride who told me someone charges $65 to add ribbon to the base of a cake and charges extra for dots/scrolls on a cake. icon_confused.gif )

I dont' charge a delivery fee to a particular town about 20 minutes from me. I don't tell them "There's no delivery fee." I tell them, "I'll waive that fee for you." They feel they're getting an extra deal.

It's all in how you market it.

What can you do that sets you apart from everyone else?

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SugaredUp Posted 14 Mar 2009 , 1:28pm
post #14 of 22

Indydebi, last weekend I was overbooked and realized I can't do so much at once. This week, nothing. I really try to do my best work each and every time, and aside from the nightmare week last week, never had a customer call to complain - they usually call and compliment. Anyway - - I have this new higher rent I'm paying, and I'm freaking out (which is why I overbooked last weekend, big mistake) about making the rent. I'm out there passing crap out for free, giving my schpeal (sp?) and it's not getting me anywhere. It sucks! Here in MI, the economy is just so horrible. I'm about to do a bridal show, and I was going to do a small FAQ sheet, but at the top do a "Why should you book your cake with us?" type of heading and put all those little details down that you were mentioning that sets me apart. Like you said, make a big deal out of the fact that I don't charge for mixing tier shapes or flavors and whatever else I can think of... no charge for delivery/set up for bridal show based bookings...

But I'm thinking it won't be enough. I am contemplating advertising for the first time. I'm worried I'm throwing away my $$ and I guess I'm scared....

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indydebi Posted 14 Mar 2009 , 9:19pm
post #15 of 22

Being worried is a good thing. We all should worry at least a little about how we spend our money, especially our advertising dollars. (Spending money on new pans, at least I have something to show for it. Spending money on bad advertising makes me cry!)

I heard an ad on the radio recently that said, "You think business is bad now, wait until you pull your advertising." I realize just how true that is, but many of us have to weigh our cash flow. It's an evil Catch-22 .... we can't afford to advertise if we don't have the business, and we dont' have the business because we can't afford to advertise.

Your "Reasons to Book With Us" is a good idea. It will get them thinking. When I point out "Our catering price includes real glass plates, silverware and all the staffing. We don't charge extra for that. As you do your comparision shopping, be sure to ask those questions, because many caterers do charge extra for those things."

Once I did a "Compare Us to Them" sheet. My cake price ....their cake price. My delivery fee ($0). Their delivery fee ($50). My charge for 2 flavors of cake ($0). Their charge for 2 flavors of cake ($50). etc etc. Bottom line showed my price was cheaper and more important, it showed a LOT of "$0" in the column.

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SugaredUp Posted 14 Mar 2009 , 9:24pm
post #16 of 22

You hit the nail on the head, Indydebi. I am between a rock and a hard place on this advertising. I think I will reevaluate that once I'm done w/ my first bridal show, 4/4 (also my daughter's 2nd bday). I want to see how the public reacts to my pricing, my schpeal, my cakes. Then, if it goes well enough, I will try advertising. If that doesn't get me anywhere, I will have to seriously consider bowing out for now. I hate that I feel that way, but money is too tight in our family for me to throw it away. Hopefully, all will go at least well enough for me to keep going until things get a little better around here.

As for my incentive at the show, I plan to offer free delivery and set up locally which is a $40 value. I'm also going to do a give away -not sure what yet. A product of mine or gift certificate to my bakery or whatever... Crossing fingers.......

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Swede-cakes Posted 15 Mar 2009 , 1:52pm
post #17 of 22

Glad I saw this thread, as I'm in that middle range too. The Why Book Your Cake With Us idea is great.

What about following suit of the reception venues to attract more business? Many offer discounts for Friday and Sunday dates. Would offering a Sunday wedding cake special for a small discount be a wise strategy? I was thinking 5% or something? I don't know how many of you get Sunday bookings, so far I get all Sat. dates.

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indydebi Posted 15 Mar 2009 , 2:17pm
post #18 of 22

As a caterer, I can't discount for Friday or Sundays. I have to pay my staff the same hourly rate, I have to pay the same price for the food supplies, I have to pay the same price for gas to get to the venue. And by Sunday, my staff and I are dog-meat tired from working the weekend!! And I'll probably have to pay a premium to them to convince them to work on Sunday, TOO!

Maybe a venue can afford to discount their daily-rent fee because they have a fixed expense .... the rent. They pay the same amount per month if they have one event or 4 events. So to schedule in a 5th event is just extra money for them.

But I have add'l expenses with add'l bookings and I have a responsibility to cover those expenses every day .... not just on Saturday.

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Kitagrl Posted 15 Mar 2009 , 2:28pm
post #19 of 22

My best investment so far has been my website. I have been trying other things but still, the biggest two things that customers tell me is either "heard from a friend" or "found your website online".

Right around the elections everything was dead silent as far as cake orders but now business is back up to what it was before, and I'm slowly getting more wedding inquiries this year too for which I am happy.

A few complaints about the "economy" but otherwise...seems like people are still celebrating with cake! The nice folks over at my bakery supply place say that no matter what the economy, people still get married and celebrate birthdays!

I could definitely have more business...I am not always booked every week....but I'm up some from last year so far so that is good.

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Swede-cakes Posted 15 Mar 2009 , 2:44pm
post #20 of 22

I definitely see your point, indydebi; catering and staffing costs stay the same no matter what day it is. My post was referring more to those who only do cakes; sorry, I should have clarified that. icon_smile.gif

With regards to the economy, so far business is light but steady here. Important events in people's lives are still being celebrated; baby's first birthday party, wedding, Sweet Sixteen. I actually haven't invested in any advertising other than my website hosting and our town message board. I get orders just from that board alone, then it goes word of mouth.

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indydebi Posted 15 Mar 2009 , 2:50pm
post #21 of 22

The same logic applies to just cakes. My ingredients, electricity, etc., all cost the same on sunday as they do on saturday.

See, people are assuming that I have NO cake orders on Friday or Saturday and I should be slobbering to get the ONE cake that might be wanted on Sunday. In reality, this cake is made on Friday or Saturday anyway, for pick up on Saturday (i'm not at the shop on Sunday). So it's just another order on a regular baking day. Why should it be cheaper?

The weekend ..... Friday, Saturday and Sunday .... is peak sales time. If you want to offer a discount, then offer a Tuesday Night Special.

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Kitagrl Posted 15 Mar 2009 , 2:54pm
post #22 of 22

I'm finding its amazing what people come up with to try to get discounts! haha.

My "regular" cake customer who wants a discount for being so faithful (3 cakes in two years).... customers who want a discount for buying a wedding cake/grooms cake/finger desserts all from me....other customers who want discounts for being a "regular customer"...

Next thing I know they will want a discount just because they are "helping" me out so much by ordering! I find that with me working from home, some people do feel they are doing me a favor, I think.

I guess they get points for trying!

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