So to the POINT(FINALLY): I have heard so many licensed bakers make the assumption home bakers have stolen their clients based solely on PRICE undercutting. Perhaps in some cases and with some bakers, that is true(clients told you point blank that is the case. If so, once again- those clients were probably not YOUR clients to begin with.). The OP's post didn't really quite say the clients told them it was because of price, alluded that they said that, but didn't explicitly say they said that.
Some of those poached clients might simply have went another way because of the art aesthetic. I have seen plenty of cakes on here that are good, great technique, from professional bakers but then seen the same cake (style)done by someone else(maybe not a licensed baker, maybe a home baker) and there is that IT factor that says THIS was created by that natural artist.
So maybe folks, sometimes its not just PRICE. And even if a client tells you that, it could also be that THEY dont want to hurt YOUR feelings by telling you that other baker was simply design wise, BETTER.
I see your point and I agree that it is probably not all about price. However, I am not sure why it is particularly relevant to the situation where a licensed decorator is losing business to individuals operating out of their home living in a state without a cottage law. Whether or not they offer a more appealing aesthetic or their skill level is better is frankly irrelevant to the questiontheir aesthetic or skill level should not be competing for clients. So yea if a client is looking for a cake and the OP is the only legal business in the area and they are going to illegal operationsthen yes they have lost clients as those clients, if they wanted an artisan style cake, would have no choice but to buy from the OP.
If it is a legal business sure aesthetic mattersindeed your examples all site legal businesses competing against each other not Buddy competing against an unlicensed home baker down the street. Giving potential clients an option is irrelevantthey should not be given options at the expense of creating unlevel playing fields. Likely there are other legal businesses in the areaI live in an area where the nearest legal bakery is 40 miles away and I know of people where I live that drive 90 miles to buy cakes. That there is only one option whose aesthetic an individual does not prefer is not a justification for an unlicensed baker to be able to compete with legal businesses.
Sorry if you feel creamed---was not my intent.
CookiesbymomME, everyone you named is a licensed baker. We are talking about a level playing field where talent or other marketing tools can be the deciding factor. We are talking about the unfair advantage of cutting legal corners. And I am sure many of us have impressive educations.
Pattycakesnj, thanks for your comment. When we all go out to eat, we expect to be eating from a regulated kitchen, whether it be a 4 star restaurant or a street vendor. We take it for granted as we feed our families. Likewise, we expect a license from our butchers, the ice cream truck, and the food trailer at a fair. It is as if some people feel that the law applies to everyone but them, again... including the tax law.
You know I didn't respond back to gatorcake because I was addressing one part of the complaint in the original post, in that it is not always price that loses a client. A person can address one aspect of a situation/question without claiming to answer the entire question.
As far as the illegal baker issue goes. Illegal is illegal. They may not know they are and if they do, THEY are the ones that one day will be held accountable. Tattling won't get YOUR CLIENT back and may not even get you the next one that would have booked with the illegal baker. The illegal baker will get a warning and can choose to do with that what they will.
Long story short, I sold some cakes before I opened up a business not knowing it was illegal. I happened to have a home with a 2 full kitchens in my home. I was reported for my (1-2 cakes a month by a jealous licensed baker in my neighborhood I never had heard from prior to this). She called(got my number from the preschool our kids went to) to tell me she reported me and I should go to jail(ha ha- funny). The county official gave me the 411( I said okay- game on). Got all official(when I had no plans to go in to this business prior to this confrontation- I was just doing something I had a passion for, for some preschool parents who had seen some of my work(brought stuff to the school for teachers appreciation week, birthday parties, holiday parties, etc for free) and wanted me to do it for them. I am not independently wealthy and couldn't do it for free. By the way- i WAS MORE Expensive than the legal home baker, I rarely made cakes and when I did, since I lacked volume, it needed to be worth my time to do.
People came to me over her for other reasons than price- her cakes were not smooth, her ribbons on cakes were rippled(crooked), etc. Her figure modeling was just okay. She was a legal decent/average decorator, she was not an artist and it showed. She went out of business once I set up my nice legal shop. I started advertising, going to the same shows she went to, farmers markets, etc. I set up relationships with florists and local well known wedding sites and coordinators. She got what she asked for, me nice and legal.
KARMA is sometimes more of a beach 
than the legal baker I was dealing with was!!!!
I would say, do your thing, do it well, price yourself correctly and things will shake out as they will. If it isn't price then there is another reason bakers loose clients to unlicensed bakers. Don't assume illegal = cheap. There may be less overhead costs, but there are no perks of membership either so to speak. No wholesale ingredients, packaging etc. Plus, if you only do a few cakes a month, do you think they are going to do them for $1 a slice or $4 a slice. For me, if I break out my kitchenaid, the client is going to be making sure for me it is worth it.
Impressive educations comment is the snarkiness I mentioned in my post that I was expecting(I listed my education and background as a qualifier for my story. I assume many people have educations from a variety of places (life, school, history, etc) that qualifies them. Must of hit a sore spot for the prior poster though. Sorry if it rubbed you wrong, but tone can't easily be conveyed in email(message form). People will read into it what they will.
op.. do what you feel is right. do what you will feel comfortable with. everything will sort itself out in the end, and at the end of the day, it will be you living with the consequences (good and/or bad) of whatever you decide to do!
im a hobby baker, sell to friends and family for cost of ingredients, basically because i cant afford to bake for free... i dont advertise or anything like that, my cakes are well.. crap.. lol. and it is illegal to home bake here. that being said, there is a lady around the corner from me who was advertising, big sign on the back of her car and all, as a home baker, and her cakes were.... dodgy to say the least. used to make me cranky everytime i went by, but.. the sign has disspaeared! no more advertising.. one can only assume shes been shut down.
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