What I The Next Step For My Business?!

Business By kvand Updated 29 Oct 2015 , 9:01pm by Webake2gether

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kvand Posted 28 Oct 2015 , 9:06am
post #1 of 7

Hi All!! 

I feel I am at a point in my business where I need to make a solid decision and stick with it.  

Our current situation... 

We built a licensed, commercial bakery in the basement of our house about 2.5 years ago.  It is about 350 s/ft.  At the time I thought it would be plenty of space for a long time... lol. I now have two lovely ladies who work for me.  In the summer months (May to October) we are super busy with weddings and other celebration cakes to the point we turn away a ton of work because we just can not take on any more in our current location and with our current oven/space.  Since the bakery is in my basement some people come to our house to pick up their cakes.  We operate by appointment only in an effort to avoid people just randomly popping by.  This works most of the time but sometimes people show up super early or super late for their appointments which is super challenging for obvious reasons.  The basement of my house is partially underground (no direct access to outside) so people and supplies must come into my home and down the stairs to get to the bakery.  Due to the stairs my refrigeration space in the bakery is limited so we have an overflow fridge in the garage.  It is a super huge pain in the butt to be constantly going up and down the stairs for more eggs, butter, milk, or to switch tiers of cake while we are icing/decorating.  I have two kids (5 and 7 yrs) and working from home has been really great for flexibility for school drop off/pick up, activities, field trips etc.  On the same token working from home I often feel like I can never get away and even if my staff are working I feel kind of guilty if I am not there helping them. (I realize this is my issue and I need to get over it!)  

Here are what I see for options with my business and I could sit here and argue it any way all day long... 

Opt 1 - stick with what I am doing... deal with the annoyances of people assuming I am on call 24/7 since I work from home and all of the "good stuff" that comes with working from home.  There really is not much room for growth in the business in my current situation.  

Opt 2 - I have found a retail location to build a new cake shop outside of the house.  The space is large (1500 sq/ft).  My brother runs a food based business (healthy meals so no conflict of interest here) and is looking for a new location so we would split this space and put two kitchens in.  This would allow us to split many of the costs of moving out of the house.  I estimate MY cost for rent and utilities in the new spot would be about $1000 per month which at our current level of work is absolutely no problem in the summer months and tight but do-able in the slower months.  In the retail location there will be the possibility for foot traffic and daily sales such as cupcakes/supplies etc. which I am pretty sure I can make enough off of this to cover the additional cost of moving out of the house.  The new location will allow us to expand our offerings and take on more work as we will have more refrigeration/oven space and just more over all space to work with out tripping over each other.  My biggest hesitation with the move is with the retail space I will actually have to GO to work and have a work schedule. I plan to only have limited hours to start with so that I can minimize my labor costs and maintain some level of flexibility for my family.  Sometimes I work late at night so that I can do other things in the day (like help in my kids classes) but if I have a retail space that means I actually have to go to the bakery to work late and I actually need to be open for some sort of regular schedule even if that is only 4 days a week and shorter days.  which is basically what I work right now in my slower season anyway. 

In order to move to the new location there will be a build out cost of about $20,000 of which I have $10,000 put away and I am confident I can get a loan for the difference.  

Anyway, I am hoping for some insight and suggestions from those who have been in my situation. Make the move? Stay put? why? What else should I be considering before making the move? 

Thank you for reading my novel! 

Oh... there are no other storefront cake shops in my community.  

6 replies
costumeczar Cake Central Cake Decorator Profile
costumeczar Posted 28 Oct 2015 , 11:18am
post #2 of 7

It sounds like the storefront plan is your best bet, especially if you think that your finances are okay to cover it and your expenses will be shared with your brother. Remember that if you do have things to do late at night you'll still have your basement kitchen to work in. You could do gumpaste stuff and things like that then, and keep the baking and decorating for the storefront where your employees could do that kind of thing. So I would vote for the storefront. (If I had a legitimate vote.) But what is your gut telling you to do? Does it make you feel sick to think of working outside the home? That's an adjustment if you're used to being able to flip back and forth between home and work. It might end up being more productive in a storefront, though, since you wouldn''t have the option of flipping back and forth!

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Snowflakebunny23 Posted 28 Oct 2015 , 12:51pm
post #3 of 7

I'm torn here.  i guess my first question is what is your motivation?  Do you want to make more cakes?  Or make more money?

I ask because your decision will depend on your objectives.  If you just want to increase your profits and are turning away that many orders, just increase your prices bit by bit.  You should end up with the same amount of work, but for more money.  You don't increase your risk, you don't increase your costs and therefor are protected during the winter months.  If you want to do more cakes then yes, I guess you need a bigger space but that will mean hiring more people to make them (who I am guessing, you will not need in the winter) and the actual profits will therefor take a long time to increase.  Can you extend your basement in some way?  Or knock through and extend your garage to make it more practical?  I don't know how the laws work in the US - would you have to continue paying for licences/insurance if you want to continue using your basement kitchen?

I would be wary of the drop-in trade purely because you will end up having to hire someone just to deal with that.  I can imagine someone being headlong into flower making, the bell goes, they serve them, go back to the seat and the bell goes again!  Lol.  I would do fixed orders for local business but not sure I would go with foot traffic, at least to begin with.

On a personal level, I wouldn't underestimate the benefit of 'working from home' versus going to the 'office'.  i know many people successfully make the transition but it can be a very big shock.  Good luck with whatever you decide!

*Last edited by Snowflakebunny23 on 28 Oct 2015 , 12:52pm
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Brookebakescake Posted 28 Oct 2015 , 1:33pm
post #4 of 7

I'll put in my two cents here.  I was in a similar situation a while back. We have a 7-year-boy, and I home school him.

several years ago, I had an office near our home, and I was able to work there, then come home when my hubby went to work to take care of the kid.  I had a successful business, but I was very torn and decided to simplify my business so I could move the office to our home.  I've had to make some sacrifices, such as giving up part of my dining room to my work space.  I also had to give up most of my clients just because of time and space.  So I had to figure out WHICH client would work best for what *I* wanted to do.  I ended up keeping just one client, but they provide regular work, and I can easily pay the bills using just them, provided I stay on schedule and don't goof off too much. ;)  I am able to home school the kid, and would not trade my flexibility and time with my family for anything.  I know the decision to simplify was the right one for US.

that being said, snowflake is right: what is your motivation? Do you want more money? More family time? Less stress? Or do you want to be the next great baker? :)  that's what you need to figure out.  It sounds like you're running a successful business, and that's great! You need to figure out how to make the business work for YOU.  You could simplify the home business, take less cakes (but slowly increase price as mentioned), lose the employees, and have a nice little business still.  Take a good look to see if you could rearrange things to allow for more room.  Is that what you want?

or you could take a chance and go for the other space.  Working with family has both merits and challenges :)  the stress of trying to make rent, pay employees, being stuck at a retail space, upstart costs, etc....is it worth it to you? Is that what you want?

truly evaluate your end goals, and make your business suit your goals.  There are pros and cons both ways, and only you know which pros overweigh the cons. 

For me, staying home far outweighs being stressed at at office :)  I really wasn't making that much more money, and I had to pay rent and employees, and I've found a way to make it work better for all of us.  It takes time, patience, and dedication either way.  There are still days I'm up working at 2 am, but much less these days as I learn to focus and prioritize, and I'd much rather work at home at 2am than traipse though the snow to the office :)

thats just me.  You'll figure it out.  And if one way doesn't work, don't be afraid to recognize that and CHANGE.  Better to change when you first notice a problem than to keep going and have to deal with it later  

good luck to you!

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Webake2gether Posted 28 Oct 2015 , 2:07pm
post #5 of 7

Congrats on being busy first of all having an established business is something to be proud of. I just opened my commercial kitchen in my home and I have two sons ages  51/2 and 8  and we homeschool. this is our plan for our business stay in our commercial kitchen until my boys are much older. For us that means staying relatively small but I don't want to look back and wish I had planned it out better and had more time with my kids. My goal is to start now and over the years work towards having a full on bakery once I'm not a full time in demand mom.  If I were in the position you are in I would take the suggestions above into serious consideration your motives and objectives for the move what can be done if anything to expand where you are and make the space more condusive for your needs. can you increase price or decrease employees? Also working with family can pose its own set of challenges (i know from experiences and it wasn't a good idea lol) What if things don't work out for your brothers business where does that leave you? I hope great success for both but the food business is tough. Lots of serious considerations of the good bad and the ugly talk with trusted people in your life they know you better and understand what your life is like. opening a storefront may be right for you but the timing of it also needs to be right. Hope you share with us the decision  you make and again congrats on your success :)

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kvand Posted 29 Oct 2015 , 5:44pm
post #6 of 7

Thank you everyone for your valuable input and comments.   

My gut doesn't know what I think...lol.  The thought of staying put makes me feel sick to my stomach and so does the thought of relocating.  I am not really good a change as a general rule so i can't really count on my gut..lol

Long term I would like to see the business grow to a point that i have capable staff that can over see things so that I might actually be able to go on a vacation for a week or two with out shutting everything down and having no income at all.  This is something that can not happen if we stay in our current location but I think it could happen in the store front shop.  Obviously it never hurts to make more money.  I have been increasing my pricing steadily over the past two years. (it's almost double what it was and is one of the hire price points of those serving my area) and we just seem to be getting busier an busier. what an excellent problem to have! Some of my earlier clients can no longer afford my work but that's just the way it goes sometimes.

I've thought about the working with family concern and since we are literally splitting the space in two and he will have his section and me mine I think that will reduce the chances for conflict by a lot.  His business is successful and busy and so is mine.  (I actually think he might be busier than me..lol) in the worst case scenario there is a large demand for rental kitchen space so if for some reason one of our businesses isn't working out then we will sublet out that kitchen to cover our costs and maybe make a little bit of money. (I realize this has its own set of headaches associated with it (I've been a landlord before) )

In my home my only option would be to move the bakery to the garage which we have considered.  We live in Canada and I am not willing to give up my garage for winter as this is a HUGE pain the the butt to have to constantly be cleaning snow off of my vehicle and where would we store all of our current garage stuff. Our property is not large enough or zoned for having a secondary building on site. 

I've discussed this situation at length with many trusted friends and family and get such a mixed bag of opinions but those closest to me mostly all say to go for it.  I am still working on seeing if the loan will go through and if it does I think we will go for it.  Everything just seems to be working out.  If it was seeming like everything was a monumental struggle then I would probably walk away as i feel when things work out easily its because they are "supposed" to. Quitting my job in a dental office to pursue my hobby was more scary as I was going from a decent steady income to no guarantees.  At least with this move I have a better idea of how things will look in a year from now and hopefully it will be less chaotic than it is now..lol. 

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Webake2gether Posted 29 Oct 2015 , 9:01pm
post #7 of 7

Sounds like to me you've worked out all the what ifs and have plan b in place for them. We decided that we'd pursue our business if things worked out without everything being an up hill battle much like you said if things line out in a way that's moving forward without a ton of struggle then I'd go for it too! Of course there is a lot of hard work involved but that's not the same as forcing something to happen lol. And I wouldn't sacrifice my garage either if I lived in Canada the Midwest snow is enough to make me wish I could park my car in the garage ;)

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