Two friends and I started taking cake classes together a few years ago. We've all evolved our own styles and our own informal home-based businesses, mostly doing business for friends and family. We all work full-time jobs, so these are strictly hobby businesses for evenings and weekends, maybe 2 cakes every 3 months or so.

We've been approached by a local bakery who specializes in cupcakes and cake balls. They do no custom work, but get a lot of requests for cakes. They are interested in having a pool of cake decorators they can call on when these special orders come in. We haven't talked through many details, and as the bakery hasn't done this before either, we are making it up as we go.

Due to health reasons I will not be participating, but I'm helping my friends to gather information. Is there a name for this type of arrangement? Is this common in the bakery business? Has anyone worked with this sort of agreement before? Any advice for newbies who don't want to be taken advantage of?

We met today and made a list of questions and concerns, pros and cons (there are a lot). I was hoping someone here may have done this before and has some thoughts.

Thank you!

Be very careful that you model your contract in compliance with IRS code. I'm not getting into it here, but you have to either be an independent contractor or an employee. You can find everything you need to determine this distinction on the irs.gov site.

Skipping this step can be disasterous. Also check with your local business license office and the local HD. Both will have rules of compliance.