Marketing A Home Based Business

Baking By Pattycake12 Updated 6 Jul 2012 , 2:37am by Pattycake12

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Pattycake12 Posted 22 Jun 2012 , 12:57pm
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Running my business out of my home has it advantages but also is a challenge in letting folks know who we are and what we do. My marketing plan has been to visit all local business and introduce myself with a sample of my cupcakes, menu, biz cards I have also thought of local fairs coming in the fall because of the large crowds. I have joined a local group for women in business to meet others and get ideas. I will visit local farmers market to see what is being sold and if this would be a benefit for me. Just wondering how the experience bakers on this website got their product noticed and built a customer base.

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jason_kraft Posted 22 Jun 2012 , 2:09pm
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What are your competitive advantages (i.e. why customers should buy from you instead of your competitor), and who is your target market?

Your web site is another important piece of your marketing strategy, including online ads on Google, FB, Yelp, etc.

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MimiFix Posted 22 Jun 2012 , 4:23pm
post #3 of 12

Good start, Pattycake. Have you done a business plan? Many new folks think of it as a real pain, but it will help you stay competitive. It used to be that new businesses could start off with little planning. But these days there's an overwhelming number of competitors. Especially cupcake businesses.

And P.S. - I would listen to everything jason_kraft writes.

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Pattycake12 Posted 23 Jun 2012 , 1:55am
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Yes I do have a business plan. I will have to make adjustments as I go along My price is a tad lower than my competition but my product quality is top notch. We bake our cupcakes using local produce, farm fresh eggs and top shelf chocolate etc. I have a beautiful website with professional pictures of the cupcakes. We deliver for a reasonable price and I still make a profit. My competition have stores and their prices are higher. They bake a certain amount and when they run out - they close down. My plan is to capture this market by offering my premium cupcakes at a slightly lower price and offer the convenience of delivery to their door. My challenge is to get folks to try them.

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jason_kraft Posted 23 Jun 2012 , 2:11am
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Originally Posted by Pattycake12

My competition have stores and their prices are higher. They bake a certain amount and when they run out - they close down. My plan is to capture this market by offering my premium cupcakes at a slightly lower price and offer the convenience of delivery to their door.

Unless I'm misunderstanding, as a custom home-based baker I don't see how you can capture customers from competitors with retail storefronts unless you can offer something like same-day delivery. One customer segment enjoys the convenience of having baked goods delivered to their home and is willing to wait, and another segment wants the convenience of being able to walk into a store and get a cupcake right now. There isn't a lot of overlap between these segments.

You'll also want to be very careful about competing on price. If your product is just as good or better as than competing bakeries, you should be priced at or above their level, unless you want to ramp up volume and use economies of scale to increase margins (which it doesn't sound like you want to do).

If your state has a cottage food law and you have a local market for premium products you are in a great position profitability-wise, your net margins should be at least 20%.

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Pearl645 Posted 23 Jun 2012 , 6:13pm
post #6 of 12

Hmmm competiting on price for a top notch product can be tricky. Especially from a branding point of view and eventually from an accounting / profitabilty point of view. I did that in the 1st yr of my business (because that is what my cake decorating teacher taught me) but over time, you will develop a brand that will stand for quality over price. As your work gets better each year (and it will) you will be able to quote better prices. I was once told by a customer "I have been telling everyone about you! You do fantastic cakes at affordable prices!" Imagine that combination! Felt like I was selling Rolex watches at underground market prices. Your competitive edge as a home-based business might be things like a fast turn around time on orders, free delivery (I only offer this for special occasions but I am in a small island so delivery isn't really that far) and outstanding customer service. Being small means you can responds to emails quicker and the one-on-one personal service can be just what customers want.

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Pattycake12 Posted 27 Jun 2012 , 4:33am
post #7 of 12

Yes my state has a cottage food law. I have a license and believe this will benefit me as I don't have to have the MAJOR expense of a storefront right away. However down the road a store is a realistic consideration. However I would like to build customer base before I expand into a store. I have a big beautiful kitchen in my home. As time goes on I will have to get another fridge and a bigger mixer etc but I am doing good with my space and equipment so far. You make very interesting points about price that has given me many ways to look at this. Thank you again for your invaluable advise

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scp1127 Posted 28 Jun 2012 , 8:42pm
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I agree the price should be higher. The home has nothing to do with price.

Example: Girl opens bake shop in building owned by grandma and pays $500 when fair market is $1000. She sells for less than competition because grandma helped her. She has no benefit to grandma's help. Only the customers are reaping grandma's gift.

Grandma passes and the store is the girl's free an clear. She lowers her price in exchange for volume with her new inheritance. Now she really has the competition in the dust with her pricing. Again, more work for girl, all benefit to strangers.

In this scenario, you must look at profit on your investment. In the above case, girl should have been at market value, profiting on grandma's gift. When she passed, that gift should have been factored again into the girl's personal profit.

This is a big problem with CFL. The home should not be discounted. All you do is add work with no benefit. And then the market pricing gets skewed because of incorrect pricing by the CFL practicioners.

Maybe the best way I can put this is to charge yourself imaginary rent in a fair market amount. This amount goes to profit, a return on your investment.

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j92383 Posted 28 Jun 2012 , 9:30pm
post #9 of 12

I agree with scp1127 I'm a home baker and my prices are often higher than my competition with a store front. Baking at home has nothing to with pricing for me. I provide a high quality product baked from scratch for every order and great customer service and clients are willing to pay for that. Plus eventually I want to open a store front and I believe the way my product is priced will help reduce any drastic price hikes once I do so I don't alienate my current customer base.

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ibeeflower Posted 29 Jun 2012 , 8:25pm
post #10 of 12

Don't sell your products short. There are cupcake shops in my area who sell expensive, dry and crummy cupcakes. But people still buy from them. So if you are selling delicious cupcakes at a similar or higher price you will reap the benefits in the end. People are already paying so much for awful cupcakes so why not spend the same money or a little more on your tasty treats?

Also, giving samples to businesses is a great idea. They can taste your stuff and recommend you to other people or use your service for catering.

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Riley6929 Posted 1 Jul 2012 , 7:29pm
post #11 of 12

Using social media is an excellent way to promote your business whether home or office based. It enables you to 'talk' to your customers in real time.

Tell your customers on social media about your new product lines, special offers, etc.

We use social media extensively as part of our marketing strategy:!/Just_Bake

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Pattycake12 Posted 6 Jul 2012 , 2:37am
post #12 of 12

Great ideas and viewpoints to think about. Yes - I am working on a FB page and going out to local business and bringing them samples of the cupcakes. Building a business is so much more than just baking.

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