For those who have a cake business whether its a store front or home base, how did you come up with a business plan and all the figures you needed as far as costs go? In order to start your business did you have to go to a bank to obtain a loan? If you had to get a loan was it hard to present to the banker why you should get a loan for your business? Meaning it seems like everybody wants to do cakes b/c its hot right now when you see shows like Cake Boss. Did you have to explain how your business would stand out compared to others?

Interested in this as well.....

Here is a good starting point for writing a business plan:
http://www.inc.com/guides/2010/07/how-to-write-a-bakery-business-plan.html

Describing your competitive advantages is a big part of a successful business plan, but even with a great idea, getting a business loan at a reasonable interest rate will be extremely difficult in this economy. It might be a good idea to start slowly with a rented commercial kitchen that requires a minimal up-front investment -- we spent less than $5K to start our business in CA with no retail storefront. If your business does well you should have enough to start expanding into a retail shop.

My understanding is that most banks won't loan to start-ups, or at least that it's very difficult to get a loan. They usually don't want to loan to you until you are established, at least in business for a few years.

The other options are investors, (but then you have to be ok with someone else owning part of your business), and using your own capital. There may be some government grants available, but I'm not sure how hard those may be to qualify for.

Getting a loan for a start-up is extremely difficult. If it was easy there would be start-ups all over the place. And since statistically speaking, the rate of success of new start-ups are so low you pretty much either need to have the capital straight up or have an investeor.

New businesses, especially food businesses have a high rate of failure. Unless you have plenty of collateral to back up a loan, the chance of getting a loan are slim. The best way to do it other than the route that Jason suggested is to save, possibly for years, until you can open debt-free. Probably not what you wanted to hear, but it is a reality.

I recently interviewed an SBA official about financial help for start-ups. He said there are NO grants EVER available but people insist on repeating that grants do exist.

So if you've heard rumors about grants for small food businesses, you should know that they are only rumors. Why are there no grants and very few loans available? As previous posters have mentioned, the failure rate is extremely high.