Cottage Food Law Questions And Concerns.
Business By cakelady2266 Updated 29 Apr 2012 , 7:39pm by cakelady2266
And just to point something out, there is NOT enough cake to go around for everyone. That' s nice thought but it drives me nuts when people say that.
Wait a second, you mean when the supply of something increases exponentially, that the demand doesn't automatically increase by the same amount, based solely on the fact that there has been an increase in the supply?
Since I am the one who made the comment, I would just like to explain what I meant.
Many of my friends would love for me to make a cake for them. When I don't, they do not go out to another baker to make the kind of cake I would make for them. Most either go to Sam's Club or just make their own.
I do think there should be limits on the amount a person can sell under the CFL. Not sure if this is the case or not. This would ensure that those operating under the CFL are small bakers and not someone operating a bakery out of their home as I don't think that is fair.
Since I am the one who made the comment, I would just like to explain what I meant.
Many of my friends would love for me to make a cake for them. When I don't, they do not go out to another baker to make the kind of cake I would make for them. Most either go to Sam's Club or just make their own.
I do think there should be limits on the amount a person can sell under the CFL. Not sure if this is the case or not. This would ensure that those operating under the CFL are small bakers and not someone operating a bakery out of their home as I don't think that is fair.
Not trying to pick on you...It's not the first time I've heard that, though, which is why I wrote about the concept. I've heard people say the same thing at least three or four times recently, not just from bakers. Sam's Club is a good example, actually, since whenever one of those tries to open up businesses in town have a fit for months ahead of time. They know that the megastores will basically be undercutting them and siphoning business away from them. A lot of small businesses have closed because a big box store opened nearby. I could go on but I'm tiiiiired. 
Interesting topic. The only thing I don't like about CFL's is under cutting prices and yes, it does happen. But I always wonder how much it effects me, cause a lot of time, and I am not saying everyone, some of those CFL cakes are some of the fuggliest cakes and the person would have been better off going to Wal-Mart, ie. "Cakewrecks", hello. So do those person's still get customers and how do the manage to stay in business at those $1.25 a serving price range. Or is it that they don't last, but then there is another new "Duff" on the scene who just finished their first Wilton's course and are in full business mode. Like I said, I know it does take a toll, I just wonder in what exact way.
Costumeczar.....Thank you so much for understanding how I felt when I posted my question. My main source of income is wedding cakes and not every year is a big as others. I more than understand what you are saying. Several of the venues in my area require permits, licenses and liability insurance. The weddings that are booked at those venues are usually larger and more profitable. I have become a preferred cake vendor of several of these venues. No, just because there are more cake bakers that isn't going to spur more people to hop up and decide to get married. I don't think having a larger number of bakers to choose from is what they've been waiting to gt engaged.
This is something that I saw happen to another industry. I have several professional photographer friends that were established long before digital photography was ever heard of. After the price of digital cameras dropped and people pick up one everywhere, you couldn't sling a dead cat without hitting a "photographer." This really hit professional studio owning photographers hard, one guy had to lay off his own son. Another photographer got a call from a guy that went like this "I picked up a camera at Best Buy yesterday and I'm shooting a wedding next week, can you give me some pointers?"
I just had to wonder.
[quote="cakelady2266"] After the price of digital cameras dropped and people pick up one everywhere, you couldn't sling a dead cat without hitting a "photographer." [quote]
Ahahahahahaha!!!!! Okay, I am sorry, but I have just never heard of that phrase of slinging a dead cat. 
And I know of photographers that it hit them the same way. But then people got crap wedding photos as well.
HAhaha! Photographers always have that complaint, it's true. Also the weekend DJs who have an iPod and some speakers. The category that gets hit really hard is the wedding planners, because everybody and their brother thinks that just getting married makes you qualified to arrange someone else's wedding. I can probably name about twenty "planners" who have come and gone in this area in the last two years. They hire someone to make a fancy website and a logo, then book maybe one or two weddings at bargain basement prices, screw them up, get yelled at by angry clients, decide that they don't like working on weekends, and quit. In the meantime, the established planners who will not screw up your wedding get shortchanged because of brides who hire the new ones. The new ones generally charge WAY less than the established businesses, so it takes money out of their pockets and the brides are the ones who save money while getting crappy service.
Now replace the word "planner" with " baker" and you get what I'm dealing with
I knew I couldn't be the only one with concerns. But for a few post there I was afraid I was gonna be lynched.
I didn't know much about the CFL and since Alabama hadn't passed one yet I really wasn't too bothered. So when it came up I wanted to know how it would effect me.
I'm not a storefront so there is nothing going out the door every minute of the day for me. Birthday cakes aren't money makers for me, since folks want Buddy the Cake Boss cakes at Wal-Mart prices. I focus mainly on wedding cakes. But to my advantage, I have the credentials to get in preferred venues that home bakers didn't. So with CFL all that would change. In addition to that CFL bakers would be able to advertise, bringing those who had baked "in the shadows" for the years into the mainstream. These are real financial concerns to me.
To address the repeated statements of restrictions. If no one is enforcing them, then there really are none. Yes everything is labeled, okay got that. Financial caps, who is in charge of that? Do folks stop baking when they reach that magic number? What about orders on the books passed that point, do they get baked? I'm just curious.
Now I apologize in advance for anyone one this offends but I'm throwing out here. READ CAREFULLY....This is not a generalization of home bakers, I'm speaking of folks I know personally. I know for an actual fact that there are some home bakers that have always made cream cheese and meringue icings, used fillings that need refrigeration, made tons of cheesecakes. So if that is something that they did with success as illegal home bakers, who is gonna know if they continue making and selling these products? If they don't advertise it but they offer it in a consultation with a customer, who's gonna know? Some people have operated illegally for years and they didn't have a problem operating illegally. So the states stamping legal on it may not change some folks way of doing. That is also concerning.
Once upon a time I was a hobby baker with a dream, so not only do I understand you... I've been you. I don't begrudge you anything. I don't think many of you understand me. Many have considered me whining, complaining, jealous, petty, short sided or just plain scared. I'm not, I don't feel threatened by you. I'm just not so sure that this is an entirely a level playing field that's all.
I live in a CFL state, and my concerns are the same as the ones mentioned in this thread, mainly undercharging. I know not all home bakers undercharge, and that's great if you don't. But a lot of them do, and I'm getting tired of quoting a cake to someone and having them respond that "so and so's cake company" quoted them a lot cheaper and why is it so much??? Well, it's "so much" because we have at least 4 times the amount of overhead than the average home baker.
If your going to operate under CFL, great! Just charge appropriately to at least be in the ballpark with what storefront bakeries and commercial kitchen bakers in your area charge. The worst that can happen is that you get to keep a lot of more of the money than those of us with rent, insurance, electric, gas, water, vent hood maintenance, grease trap cleaning, etc.
Once upon a time I was a hobby baker with a dream, so not only do I understand you... I've been you. I don't begrudge you anything. I don't think many of you understand me. Many have considered me whining, complaining, jealous, petty, short sided or just plain scared. I'm not, I don't feel threatened by you. I'm just not so sure that this is an entirely a level playing field that's all.
I promise not to stone you
It is good to read your thoughts. I also get that you have invested a lot of time and money into you business. I get that, I really, really do.
I also think that those bakers your referred to in your post, will continue to do what they did before. Their own thing without concern. The difference is that maybe with a CFL on the books, they will have a bigger chance of getting into trouble because people are actually "regulating" them.
Now, I will say I don't think that it would be fair for someone to operate a full out bakery under the CFL. I also don't think that is what most of us are looking for. Maybe some are, but I don't know how they could do that in a home they actually live in. I also think that many do want to eventually go the route of opening an actual storefront business, but want to test the waters first. Also most do not have the start up costs which are very high taking it out of most peoples reach..
I also have a dream.....My dream is not to open a bakery nor make wedding cakes (who wants to deal with the brides or their mothers?). My dream is to make a little extra money selling cakes to friends or friends of friends. To be able to say, no I can't make a cake that weekend because we are going to the beach. But on the flip side, say yes, I would love to make that cake for you. My dream is to be able to follow the rules of my state (if they ever get out of committee) and do something that I love that will benefit my family
ChristineCMC....I have invested 23 years in cakes, 14 of which have been in my own legal shop. Yes I had my first years as I hobby baker then several years in a borrowed kitchen.
What most bakers who do good work will find out once they start selling cakes they will have a following. It's sort of an avalanche effect. The friends of friends, the relatives and coworkers of friends, the relatives and friends of the coworkers of friends friends and so on. That will be the birth of a business. And soon there is not enough of you to go around and life is good and the money don't hurt either. Until one day you wake up and instead of being the only baker on your street you are one of six bakers on your street. I know after the cake shows on t.v. became popular EVERYBODY was a cake decorator. Like somebody said, just because supply of bakers has increased, supply of customers may not.
One thing I know for certain is brides and their mothers are less of a PITA than the "birthday mother" who wants a 4 tier cake to serve 20 for $25. For all the hassle and time of a bunch of fondant critters, do dads and what nots on a $75 birthday cake, I can make a couple 200 serving wedding cakes for well over a grand. That is a lot of beach time.
See, I'm giving everybody free business advice.
One thing I know for certain is brides and their mothers are less of a PITA than the "birthday mother" who wants a 4 tier cake to serve 20 for $25. For all the hassle and time of a bunch of fondant critters, do dads and what nots on a $75 birthday cake, I can make a couple 200 serving wedding cakes for well over a grand.
Our business handled mostly birthday cakes, and "birthday mothers" were not a hassle at all. If they want more elaborate decorations, they pay for them, just like a bride would pay for them on a wedding cake. If they don't want to pay for the elaborate decorations, they get a simpler cake.
Birthday cakes do tend to be smaller, but the demand for birthday cakes is far greater than for wedding cakes, and a high volume of simpler cakes can help quite a bit in paying down fixed overhead costs.
Jason....I wish there was some way to show you the cake pictures and ideas I get emails on every day of the week. Here is one example of what I'm talking about. I got an email from a lady wanting a 3D gumball cake. I priced the cake at $250. The lady didn't want to pay that for the cake and I suggested she find a simpler design or another decorator. Oh no she wants that cake and me to do it. So I again tell her that will be $250. She again tells me she doesn't want to pay that much, she has spent so much on the party already. This goes on for many emails. Then finally she realized she wasn't going to be able to talk me into doing that cake for any less she wanted to know what I will do for $50. She got a sheet cake with a fondant cutout of gumball machine.
Jason that is just a drop in the bucket of stories I could tell you about birthday cakes. They don't want simple cakes at reasonable prices they want elaborate cakes at Wal-Mart prices and don't understand why they can't have it. So since they can't get a 4 tier cake to serve 20 people with fondant critters, do dads and what not's for $25 they go elsewhere. Where I live isn't a large metropolitan area. Nobody around here and nearby is willing to pay hundreds of dollars on a birthday cake, because folks have birthday's every year. BUT brides understand before they walk in the door, that a wedding cake will be expensive.
The vast majority of the population have no idea what goes into making a cake and how much that they cost. I price cakes accordingly. People see elaborate cakes on t.v. made in 30 minutes and think well there can't be that much to it, so it's bound to be cheap.
I've had customers over the years who ordered all their kids birthday cakes from me but come wedding time for one of those kids, they go to Wal-Mart or a home baker who charged half or less than me.
I also have this theory...People shouldn't ask for or expect more cake than they are willing to pay for just because they want it.
Jason....I wish there was some way to show you the cake pictures and ideas I get emails on every day of the week. Here is one example of what I'm talking about. I got an email from a lady wanting a 3D gumball cake. I priced the cake at $250. The lady didn't want to pay that for the cake and I suggested she find a simpler design or another decorator. Oh no she wants that cake and me to do it. So I again tell her that will be $250. She again tells me she doesn't want to pay that much, she has spent so much on the party already. This goes on for many emails. Then finally she realized she wasn't going to be able to talk me into doing that cake for any less she wanted to know what I will do for $50. She got a sheet cake with a fondant cutout of gumball machine.
We have gotten customers like that too...the trick is to clearly give the customer their options: for example, they can have an elaborate cake for $$$, a simpler cake for $$, or they can go to Costco for $. If they try to argue instead of accepting one of the options I thank them for their email, wish them the best of luck on their event, and cut off the conversation. Nine times out of ten the customer will come back and end up placing an order anyway.
Where I live isn't a large metropolitan area. Nobody around here and nearby is willing to pay hundreds of dollars on a birthday cake, because folks have birthday's every year.
You're right that people generally don't spend hundreds of dollars on a birthday cake, but there is plenty of room to profit by serving the middle of the market with simpler birthday cakes in the $50-150 range, especially if you can offer a unique competitive advantage.
Athens does seem like a relatively small city (25K population) but if you also market to Hunstville you could increase your market size to over 200K. It sounds like you don't need to do this since you are already successful in Athens, just using this as an example to show other ways people can grow their business. With a larger market, the number of customers who really would spend hundreds on birthday cakes every year increases. These customers probably won't come to you if you aren't in their area so you would have to find them and create demand for your premium products.
This is just my two cents .
I don't mean to insult anyone on this thread or the forum . I'm a hobby cake creator myself .
With the passing of CFLs in new states people are tripping over each other to bake and sell cakes.
There will be some who will be successful.
With the economy slightly improving others will go on to get another job and forget about selling cakes.
Some will find its fun but realize they aren't making any money and it takes too much time away from their families.Also that making a deadline isnt much fun . Or the customer doesn't show up and you don't get paid doesn't cut it either.
Then there is the kind we see here everyday that doesn't have a clue and will probably not last long at all . ( Ya know the one who has never baked a cake but has an order for a wedding for 300 cupcakes this weekend )
There will be enough cake disasters that some clients will want a professional. And some new bakers will realize its just not worth the stress.
Once the economy is better and all the cake shows have run their course. The new bakers will dwindle .
Yes there will be a few who make it . But in a couple years things will die down and there will be fewer home based bakers selling cakes.
I deal mostly with brides, who are no problem at all other than the occasional one, but the birthday cake clients are by FAR the worst, most demanding and least realistic people of all. If I ever have a client I want to kill it's generally a birthday cake client. Don't know why, that's just the way it is. They're much higher maintenance than brides are.
If I ever have a client I want to kill it's generally a birthday cake client...They're much higher maintenance than brides are.
Geez costumeczar, I hope there's no unsolved murders in your town, you just posted a confession
If I ever have a client I want to kill it's generally a birthday cake client...They're much higher maintenance than brides are.
Geez costumeczar, I hope there's no unsolved murders in your town, you just posted a confession
I will say that it is probably the same in any industry..... People do expect to pay more for wedding related items. Example: I make custom scrapbooks for people. If it is a wedding scrapbook, they don't even think twice about the price. If it is just a family/child scrapbook, they look their head is going to pop off when I give them a price. They have no idea the amount of time it takes to create a one of a kind scrapbook. Same thing with cake. People think, " why is it so expensive, it's just cake (paper for scrapbook)?" They must think we are all magicians and can poof our ideas into creation
I just read in the business section a post dated March 19th about Alabama's new CFL. It looks like there will be a money cap of $5000.00.
I know there are two sides to every coin..Those who have storefronts and are licensed pay alot for protection and precautions against all negative possibilities and even though now it seems that the new CFL expands a home bakers ability to sell baked goods legally from home and not just at a farmers market....those who make the choice to become a CFL baker must understand that because you do not have a business license you cannot get liability insurance to cover any food related problems. Also, if there is a money cap...when you do your taxes any monies you made over the cap could be a problem.
I do think that with the increase in CFL bakers in Alabama and if more customer's realize that CFL bakers do not have the same protection as those who are licensed that there could be problems. I am neither for or against..I would just think very carefully and do some research before becoming a CFL baker.
those who make the choice to become a CFL baker must understand that because you do not have a business license you cannot get liability insurance to cover any food related problems.
This is not true. Texas cottage food operators are getting liability insurance, I personally found an agent with a policy for this.
I have been following this thread for a while and I must say it's a very good conversation! I never thought as operating under the CFL in Arkansas that I was taking anything away from a storefront business. But my thinking on this is if I'm better than the store front then now people have a choice and if I'm worse well then it's just one cake and then they will go back to the store and tell everyone they know to avoid me at all cost!! I understand that we are not regulated like storefronts but before the CFL I knew several people who baked and sold anyway (even for weddings) so like many have said at least those home bakers now have a spotlight on them. Before if someone bought from them the customer had noone to go to and now they do (if something were to happen). I also have insurance. And have tried to get a lincense but they ( my county) say i don't "need" one so they won't give it to me.
Jason...Athens is relativity small and has a couple of small, legal bakeries plus one Wal-Mart and one Publix. Athens city and Limestone county has a large amount of illegal bakers as well. So there is no shortage of bakers but there seems to be a shortage of people who care if their bakers are inspected. So you can get a cake from pretty much anybody with an oven.
Huntsville is about 30 minutes away and is main source of wedding business for me. Huntsville city and Madison county is much larger and incomes are higher. The HD there has more inspectors and is much more strict, so there home bakers there are still kind of hiding in the shadows. Several of the venues there require licenses, permits, inspections and insurance. So I am known there as well as in other surrounding towns.
I don't see the tide changing on the birthday cakes request any time soon. I average 6 to 12 calls or emails a day inquiring about elaborate birthday cakes. I would safely say that 95% of birthday customers are asking for more than they are willing to pay for. I don't over price birthday cakes to keep from doing them. I give them a price based on what goes into it. The ball is in their court after that. I give them other options but they want their dream cakes at a dream price....cheap or free. After all it's just cake. In their mind it flour, sugar, eggs, butter, cake mix or what ever it's made from and time never plays in to it.
Lets say a two tier cakes starts at $50 (6 and 8 round) for a cake iced in buttercream with fondant dots or minimum decorations. Now lets factor in they want zebra stripes, 6 fondant critters and a fondant #1 for the topper. The price just went from $50 to $125. They don't get why it should cost more than $50. I understand and so does everybody else here. The ingredients cost roughly $22 for the cake. The time for making the critters, icing the cake and cutting the fondant zebra stripes is about 5 hours. So if I charge $50 for the cake minus the ingredients that leaves $28 for 5 hours work. That is $5.60 per hour, not very much incentive, right. Even if the agree to pay the $125 that works out to be $20 per hour, now that is more realistic. Most of yall get that, they don't
Now on the other hand....a wedding cake with buttercream icing and some fondant accents or scroll work to serve 150 is gonna cost about $450.00. Ingredient cost would be about $50. Icing, decoration, plus delivery time is about 5 hours. So the remaining $400 divided by 5 hours work is $80 per hour. Huge difference. And as the design increase so does the cost. Brides seem to understand the cost of a wedding cake for the most part.
Now the time spent with each customer is about the same. There is more baking involved with the wedding cake sure but I can be doing other things during that time. But the actual decorating is a hands on, right then, can't do anything else thing. So if I'm going to be tied up for 5 hours on each, damn right I'm going to be tied up on the one that pays the most. I'm more into making sure we have electricity, running water, food on the table and clothes on my kids back than making "memories" for somebody who wants something cheap or free. The utility department, bank, car and house insurance, water department, phone company, grocery store, cable, internet and gas people don't give a crap how many people I made happy with cakes, they just want to be paid.
Costumeczar....I think it is possible we may been twins. Thank you so much for your wisdom, input and just simply getting it. And if you need an alibi for an unsolved murder let me know and I will vouch for you. LOL....
Cakery2012...you make some very good points. Like someone pointed out earlier, a lot of people are ready to jump into business after the finish their first cake decorating class. Some will make it and be very successful, while other will find out it really isn't a piece of cake. It gets real stressful, it's a lot of last minute work. And the VAST majority of what cake people do is on the weekends, taking them away from family, friends and activities they could otherwise be enjoying. There has been more times than I could count where I spent all day Friday and all night Friday night work on cakes, delivering a wedding cake, catching some of my kids baseball games and loading up another wedding cake. That is just what it is.
Sorry I went off on a tangent there.
I average 6 to 12 calls or emails a day inquiring about elaborate birthday cakes. I would safely say that 95% of birthday customers are asking for more than they are willing to pay for.
Adding clear, up-front pricing information about birthday cakes including example cakes and what they would cost should help reduce these inquires. Accessing pricing info on your current site requires three clicks, the last two of which are tiny links at the bottom of the page (and the Flash delays don't help).
Including a brief summary of this information on the contact page would also help. We used to get all sorts of questions from customers where the answers should have been obvious, but after taking an objective look at our web site and navigating it like a customer would I realized that some information needed to be more conspicuous.
Including a brief summary of this information on the contact page would also help.
I like that idea. I am always baffled when we receive requests for general pricing that come via contact form from our web site, the pricing link isn't remotely hidden. Of course people also pass over the stupidly large "Click here to schedule a tasting online" button in favor of going 1/2 inch lower and submitting a contact form that states "I'd like to schedule an appointment". 
I honestly don't think some people could find the information if it was in 8 foot tall letters with arrows and flashing lights.
I'm not all that computer savvy but I can navigate most websites. I would think most everyone that was weaned on the internet should have a easy time getting to the information. But I think I'm giving too much credit.
I'll get with my web designer and see what changes would help make my site more user friendly.
I average 6 to 12 calls or emails a day inquiring about elaborate birthday cakes. I would safely say that 95% of birthday customers are asking for more than they are willing to pay for.
Adding clear, up-front pricing information about birthday cakes including example cakes and what they would cost should help reduce these inquires. Accessing pricing info on your current site requires three clicks, the last two of which are tiny links at the bottom of the page (and the Flash delays don't help).
Including a brief summary of this information on the contact page would also help. We used to get all sorts of questions from customers where the answers should have been obvious, but after taking an objective look at our web site and navigating it like a customer would I realized that some information needed to be more conspicuous.
It won't necessarily help. I got to the point where I put a big red message right next to the contact form that said something like "I NEED TO KNOW THIS SPECIFIC INFORMATION WHEN YOU WRITE TO ME" and I would still get people writing and saying "how much is a cake?" I used to have specific pricing for basic cakes on my site (before I changed how I price things) and people would read that, then get angry with me when their excessively non-basic cake design was more expensive.
It won't necessarily help. I got to the point where I put a big red message right next to the contact form that said something like "I NEED TO KNOW THIS SPECIFIC INFORMATION WHEN YOU WRITE TO ME" and I would still get people writing and saying "how much is a cake?"
It will never be 100%, but placing vital information in the eye line of the user has made a huge difference for us. For example, on our contact form I include a note just to the left of the input field for the order description indicating what they need to include. If a user is filling out this form they will always focus on the immediate area around the top-left of the input field (unless the user was brought up reading a right-to-left language, in which case the focus will be at the top-right), so critical info should be here.
Placing information elsewhere can be hit or miss unless you can effectively call it out and said information lies between the anchor point of the page (usually a toolbar or logo that stays the same across all pages) and the user's on-page destination. We include more general info directly below the toolbar, and dynamic critical information (like when we are booked through) is called out with a pink background. Long-term non-critical announcements are called out in pale yellow (these are eventually merged into the standard copy), and time-sensitive event announcements are in green.
If I could pick on your site for a minute, the contact form has a ton of blue boxes with various pieces of information. Black-on-blue is lower contrast which makes it easier for the eye to skip over, all text is the same size, and most of it is in italics which should be reserved for only parts that need slight emphasis. If you can pare down and consolidate all this information in one place with the real critical info called out in a different color, that should help quite a bit.
Of course, much like cake decorating and photography, the availability of better tools means there are far more web designers and DIYers out there without a real background in technology, design, typography, and usability. There's nothing inherently wrong with this for a blog or personal site, but if you run a business and you are getting the same questions from customers over and over, the usability of your site (or your marketing strategy, or both) could probably use some improvement.
I'm with Costumeczar, I'm a specifics driven pricer. I have the starting at price but I have to have the specifics in order to give them an accurate price. And since this pricing issues is mainly a birthday or party cake problem, I'm not overly eager to correct it.
If you say something like this to a customer " the cake pictured will serve 30 people and will cost $75 but if you add something it will be __, or it will be __less if you take off the whatever. And if you want that to be a non basic flavor that will be __ and if you want a non basic icing that will be ___. But if you want a basic flavor with a non basic icing it will be __." Hell by this time, my eyes have glazed over.
Also when I get a comment under a photo on Facebook for "how much for this cake?", I private message them back to ask for specifics. I'm not putting a price example on a cake on Facebook for the simple reason there are so many variables and it's too time consuming and frustrating to explain them. Plus I don't think the customer who actually purchased the "pricing example cake" would want everybody knowing how much or how little they paid for a cake. Maybe Susie doesn't want everybody to know she spent $100 on a cake for any number of reasons. Maybe Ann wants to tell everybody she spent $250 on her $75 birthday cake.
Most brides who contact me through my website found the price and want to schedule and appointment. I make sure that I tell the brides the starting at per serving price at the time they schedule the appointment. Do want a wasted trip for them or me.
And to be perfectly honest some people go "math dumb" on you.
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