Going From Licensed Kitchen To Storefront... Is It Worth It?

Business By chefjulie Updated 6 Jun 2010 , 6:08pm by loriemoms

chefjulie Cake Central Cake Decorator Profile
chefjulie Posted 29 May 2010 , 4:26am
post #1 of 16

Hi guys! I'm currently baking out of a licensed kitchen and staying hella busy. I'm thinking about taking the plunge and opening a storefront. Really just trying to decide if it's worth it.

For those with storefronts... can you tell me a little about your market area? I'm in a suburb of Houston, and I *think* the market would support a storefront, but I'm a little hesitant to spend 10's of thousands of dollars on that hunch! We're surrounded by upscale grocery stores that sell all sorts of gourmet (not great) desserts at WAY less than I could sell them for and still make a profit.

I'm thinking I'd have to go from all custom orders to mostly ready-made desserts for walk-in customers. As it stands, I am consistently booked for 3-6 months out, so I know I couldnt possibly do both. I am ready for a change, though, just wondering if it's actually worth it (monetarily).

15 replies
FH_Cakes Cake Central Cake Decorator Profile
FH_Cakes Posted 29 May 2010 , 3:42pm
post #2 of 16

I am interested too!

sweetiesbykim Cake Central Cake Decorator Profile
sweetiesbykim Posted 29 May 2010 , 4:19pm
post #3 of 16

I don't personally have a storefront, but have worked in many, starting with my Aunt's downtown bake shop/sandwich shop.

The first thing I noticed was that the owner "lives" at that shop. The largest expense is labor cost, which you would need to stay sane. Parking was the reason one of our local French gourmet bakeries in town closed -busy street, but absolutely no parking. Is the location in an area where people walk to your shop -families or college students? I talked to an owner of a large gourmet bake/coffee shop in a large college town -she said half her business is orders, the other half in the store.
A shop I worked for lost so much money on labor because we were all working to have enough in the front case, whether it was busy or slow, and the food waste just killed me! We took things home every day that weren't spoiled, but just old enough not to sell.
They had a lot of issues with the township, and I'm sure they paid additional taxes that they wouldn't otherwise if it was a home business. We also had to make sure the front walk was shoveled, make sure the drawer had change, displays dusted, grounds mowed and flowers in the front, windows clean, bathrooms clean, front walk clear and safe, etc. I'm sure the insurance must have been really high. And Thursday-Saturday, when trying to get orders done in the back, we were so busy in the front that we stayed into the evening to get everything finished.

To sum it up, in my opinion it's apples and oranges. I have plans for a downtown "cake studio" -no open door, but still on a busy street to get lots of exposure and interest, and specialize in high-ticket wedding/tiered cakes. From what I've seen, it's just not worth the expense to have front case full of items, when the average sale was under $5. icon_smile.gif

korkyo Cake Central Cake Decorator Profile
korkyo Posted 29 May 2010 , 8:47pm
post #4 of 16

That's a really hard call. I have an in home shop adn love it.

I think about some day having a store front but I just don't think I want all that additional cost to put out and extra hours.

It just depends on your goals. I like being at home. If I had the store front I'd be there A LOT. I know I would.

If you really want it you will need to research the heck out of it. Talk to others with similar busiensses. Has your past records of sales shown that you can handle this idea? Will it be just you or do you have to hire staff in order to increase sales? Many people still keep it at a one person shop to keep the cost down. If you do walk in cakes it sounds like you will need a staff. Then there's the transition and the timming of the switch. Can you schedule that when it's slow enough to handle the planning of it + your orders.

Wow, So many factors. Good luck with that decision. Let us all know what you decide.

littlecake Cake Central Cake Decorator Profile
littlecake Posted 30 May 2010 , 4:44am
post #5 of 16

i have an order only storefront, just me and my son work there now, we did about 50 cakes in the last 2 days, theres no way you can do that kind of volume at home.

we are not there 24/7 either...full days thursday friday and saturday...by appointment only monday tuesday and wednesday.

if you have a separate kitchen i would stay put...if you are working out of the family kitchen i would go for a storefront.....if you are that booked up you need the space....you can go WAY faster in a shop than at home ,mo $$$$$$

i don't keep anything at all for walk ins too much waste, people are getting used to the idea of custom order bakeries, thanks to duff.

11cupcakes Cake Central Cake Decorator Profile
11cupcakes Posted 30 May 2010 , 5:44am
post #6 of 16

I do not have a store front , but think it worth it. Go for it! Do more custom cakes in the beginning and then introduce more product.

carlee521 Cake Central Cake Decorator Profile
carlee521 Posted 30 May 2010 , 6:35am
post #7 of 16

I would say...stick to the custom cakes if you decide to go the storefront route.

I wouldn't want to walk into a bakery and buy a premade cake unless someone/something boo-boo'd my original cake and I don't think that's what you are going for. There would be nothing to set you apart from the grocery stores.

The bakery my friend got her baby's christening cake had a small stocked front case that was full of cookies, cupcakes and donuts. She ordered a custom cake and while we were picking up her cake..4 or 5 people bought cookies and donuts. Mostly high school aged people worked the case and order pick up..so keep that in mind too when thinking about part-timers and so forth.

Any business starting a new venture is going to take time an effort..so either way you are still going to put in long hours...it's just how you feel, how you market and etc that's going to make a difference. icon_smile.gif

Never forget anytime you are putting in, if you are measuring ingredients, mixing colors, rolling fondant/gum paste that's still labor time.

Also, always consult a tax lawyer..there are so many things you will need and never have thought of with hiring employees, self-employment tax, sales tax, local tax, business deductions, business expense...yes they cost money..but it's worth it in the long run.

Good luck with your business venture icon_biggrin.gif

tracycakes Cake Central Cake Decorator Profile
tracycakes Posted 31 May 2010 , 12:25am
post #8 of 16

It's something we've been discussing also. I am blessed enough where I rent that I have my own space and we recently opened with regular store hours for customers to be able to come by. We still only do custom orders but we are beginning to get walkin traffic that sees our sign, comes in, and then we are able to talk with them and give them a brochure. We've talked about having a few things available for walkin's but we haven't yet. We may not ever have that because of the time and resources and then the waste.

I have a great space, more than I could ever have imagined, but at some point, I will probably grow out of it. It's just a matter at what point do we take that HUGE step. I just pray about it and listen for God's direction.

Loucinda Cake Central Cake Decorator Profile
Loucinda Posted 31 May 2010 , 12:34pm
post #9 of 16

I have a licensed home kitchen which we remodeled last year specifically for my business. I personally would not have it any other way. I can pick the days I want to work, and have NO overhead for another building. I don't have to keep dummies in the window, I have the best of both worlds, IMO. It is a decision only you can make, but if you do choose the storefront route, make sure that there is parking specifically available for YOUR business - there is nothing that ticks me off more than not being able to find a place to park when there is a business I need to get to. Good luck!

cheatize Cake Central Cake Decorator Profile
cheatize Posted 31 May 2010 , 3:55pm
post #10 of 16

I'm wondering if you're so busy because of your pricing. The thought occurred to me yesterday that perhaps if you raised your prices, you could do less cakes and still make the same amount of money. It's only slightly related to your question, though.

A storefront is a lot more paperwork and management involved than working from home. Do you think you have enough knowledge, talent, and interest for that?

tarheelgirl Cake Central Cake Decorator Profile
tarheelgirl Posted 31 May 2010 , 4:38pm
post #11 of 16

I love working from home. I always dream of having a storefront but then get hit with the reality of having one. At home I'm able to work around my family and my work schedule. There is no overhead to pay and I can work within my own pace. Sure, it does have it drawbacks such as not being able to take on as much as I would like to but every cake I do has my own personal touch. I did just go up on pricing and do less cake for more money. Definitely agree with the previous poster..

Katiebelle74 Cake Central Cake Decorator Profile
Katiebelle74 Posted 31 May 2010 , 8:20pm
post #12 of 16

I built onto my home. 500 sq.ft. 3 ranges, 1 dishwasher tons of counter space and storage area only thing I really am starting to need more of is refrigerator space. You get a lot more exposure in a store front and people automatically seem to act more respectful. I have great friends who own storefront cake shops in the area. The things I hear them say that make me quite happy to have my great kitchen here at home and not venture out are some of the following.... they pay way higher taxes, really high monthly rent, and the shocker for me was my two friends who are both pastry chefs husband and wife co-own the business together and have to pay 600.00 a month in unemployment insurance to NC state even though they do not have any employees! Only the 2 owners work there. No thanks I'll stay right here.

KoryAK Cake Central Cake Decorator Profile
KoryAK Posted 31 May 2010 , 11:43pm
post #13 of 16

I used to do it low key. Had enough money to get by without sweating too much and not much more. Now I have a store front. Have enough money to get by without sweating too much and not much more. The difference? That tighrope is waaaay further off the ground. If I have a disaster month (which, thankfully, in two years I haven't) it's gonna take like 20k to get me through instead of maybe 2K. Also, as a PP mentioned, I LIVE here. The payoff? In about 30 more months I will be debt free and then I will be sitting pretty.

hsmomma Cake Central Cake Decorator Profile
hsmomma Posted 3 Jun 2010 , 1:32am
post #14 of 16

KORY~ I can SO relate!!! That's exactly it...the tightrope is higher. I remember when $200.00 would make a difference...now $2,000.00 makes the very same difference.

For me, wish I could go backwards and get rid of the store... I long for not having to deal with employees (especially tonight as I'm being bothered at home), 1400.00 Electric Bills and feeling like I never get to have free time. Everyone has to make their own call on this. Take your personality and family commitments into account when considering it. I feel terribly guilty at times that I'm busy working all the time...

Kitagrl Cake Central Cake Decorator Profile
Kitagrl Posted 3 Jun 2010 , 1:50am
post #15 of 16

I would think the farthest I'd ever want to go on my own is to convert a garage (in a future dream house!!!) to a small commercial style kitchen with extra ovens, and then just take whatever orders I can handle in that kitchen.

A friend and I joke around about starting a bakery someday, but if we ever DID...(which I doubt, but never know) it would be two or three of us being totally booked up and ready to merge, and trying to work it out to where none of us were too overworked.

I have heard though that owning a bakery, yep you do live there, practically...at least in many cases. Kinda scary really.

loriemoms Cake Central Cake Decorator Profile
loriemoms Posted 6 Jun 2010 , 6:08pm
post #16 of 16

I think a lot of it just depends on your setup and how your business is going. I have been baking out of my home for five years and have maxed out my space. I have one girl helping me legally and a bunch of others who help on the side (legally I can only have one employee) and we churn out 20 cakes a week from my home and turn down double that because that is all I can do. I have a seperate kitchen with a Deluxe oven, and 20 quart mixer and several tables, as well as we have take over my eat in kitchen space with stainless steel tables, taken over our family room with tables and storage and gum paste work area, taken over our dining room for display, taken over my guest room for storage. We eat on our back screened in porch and if its too cold, litterly at our kitchen counter! We have no house left. I work 7 days a week, 12-15 hours a day, and take one week off a quarter so I stay sane. We had no choice, the business was begging to grow, so we are busy getting a space ready that is in a small shopping center. I can hire all my people legally and with the economy the way it is, got a good price on rent and such. We are leasing our equipment, that we didnt already have, found a good contractor who is doing our entire uplift for us with a small SBA loan, and our customers are itching for us to open! We are planning on just doing doing custom cakes, with a small case for cupcakes and coffee, since there is a lot of street traffic. I already have a girl ready to start who is being paid like next to nothing (she wants the bakery exposure) to work the register and the cupcakes. We will have a couple of chairs outside to sit at if people want to. Nothing fancy. Its mainly just for the room and to get our house back! Sure, the expense is more, but like you said, its just a higher ceiling and our highest cost will be labor, Because most bakeries in our area are home based, people are so excited to have a decent Cakery they can drop in and get cupcakes or order a cake.

it really is up to you. Right now I LIVE in my bakery, so living at the shop isn't going to be much different, except I am hoping I can actually go home. I can't go home now and never get a chance to just be us, and not the bakery. Hope that makes sense!

btw, we are VERY excited and even though I work a million hours a week, I love every second of it!!

Quote by @%username% on %date%