Shop or no shop, lots of questions

[atcake]

So, over the last year or two, my DH and I have been considering going into a shop and moving the entire business out of the house. We're currently on the look out for potential buildings, but would prefer to own, rather than lease. You know, keep the money in 'our' pockets, lol, so to speak.

I'm very nervous and confused as to what we should do. Yesterday, I was presented with an opportunity to supply cakes to a local restaurant. Granted it's only 6 cakes a week, but I thought, maybe this is the arrow telling me to make the move. (Yeah, I know, it's a small arrow, lol). I'm not sure if I can legally do the wholesale thing from home, which is why I'm maybe seeing this as an indication.

Business has been very good, booking rate at approx. 80-90%. Party cake calls have been coming in almost every day, multiple per day. I limit what I take on each week simply because of space and the fact that it's just me.

I have a very clear vision of what I'd like to do, how I'd want the shop set up, etc. I want to have classrooms (2), would like a separate room and playground for my kids, and also be able to host "birthday cake/cookie" parties. I'd also expand the pastry and cookie end and add a few 2-4 top tables for self serve. Not so much a restaurant, but a bakery with tables and coffee. NO DONUTS though, lol Might also look into the possibility of shipping cookies/favors.

We'd most likely have to gut a place to make it work.

I would love to hear from those of you who made the jump. What made you do it? Are you glad you did? What did you do about employees? What about insurances? Was it worth it? Are you really happy? Are you making a profit? How long did it take to start making a profit? Did you purchase or lease? ETC...

I currently work from my home...even built a second kitchen for it. But, I'm outgrowing this one and we have to consider what to do.

I do understand there are a lot of costs involved, daunting really. But I appreciate any input/advice any of you can offer...good OR bad.

For those of you who don't know me personally or professionally, here is a sample of my work: http://www.aboutthecake.com

Edited April 27, 2006 by atcake (log)

[dejaq]

So, over the last year or two, my DH and I have been considering going into a shop and moving the entire business out of the house. We're currently on the look out for potential buildings, but would prefer to own, rather than lease. You know, keep the money in 'our' pockets, lol, so to speak.

I'm very nervous and confused as to what we should do. Yesterday, I was presented with an opportunity to supply cakes to a local restaurant. Granted it's only 6 cakes a week, but I thought, maybe this is the arrow telling me to make the move. (Yeah, I know, it's a small arrow, lol). I'm not sure if I can legally do the wholesale thing from home, which is why I'm maybe seeing this as an indication.

Business has been very good, booking rate at approx. 80-90%. Party cake calls have been coming in almost every day, multiple per day. I limit what I take on each week simply because of space and the fact that it's just me.

I have a very clear vision of what I'd like to do, how I'd want the shop set up, etc. I want to have classrooms (2), would like a separate room and playground for my kids, and also be able to host "birthday cake/cookie" parties. I'd also expand the pastry and cookie end and add a few 2-4 top tables for self serve. Not so much a restaurant, but a bakery with tables and coffee. NO DONUTS though, lol Might also look into the possibility of shipping cookies/favors.

We'd most likely have to gut a place to make it work.

I would love to hear from those of you who made the jump. What made you do it? Are you glad you did? What did you do about employees? What about insurances? Was it worth it? Are you really happy? Are you making a profit? How long did it take to start making a profit? Did you purchase or lease? ETC...

I currently work from my home...even built a second kitchen for it. But, I'm outgrowing this one and we have to consider what to do.

I do understand there are a lot of costs involved, daunting really. But I appreciate any input/advice any of you can offer...good OR bad.

For those of you who don't know me personally or professionally, here is a sample of my work:  http://www.aboutthecake.com

←

My Dear! you are very talented!There is a place under the sun even here in D.C. if you ever get tired of Ohio...

As to your question, I have several honest answers...

1. Map it out, go to your local best buy and purchase one of those nifty Business plan software programs, that help you to compile a business plan for financial reasons. At the very least, if your well backed, you can use it to steer into the wind (in the right direction) later on.

2. figure out what's going out and what is going in, costs that you never figured out when you go commercial such as liability insurance, health benefits, matched wages..TAXES...is like Mortal Kombat: Annihilation! they will eat you alive! and are relentless!

3. figure out what is the maximum cap for what you can sell your market for... triple, no quadrouple your prices, you are selling Art.

4. market your self prodigously, press release, internet buz, anything you can think of

5. as a stepping stone, a "studio" storefront in a smaller facility showcasing your work is terrific for starters, it creates a pro atmosphere and a relaxed environ.

deck it out, offer your clients Espresso, make them feel at home, give them something the "other" gals don't have.

6.be like cool hand Luke in business, you have no friends, and emotions are kept at the door.

7.stay focused, and disciplined.

8.go to www.costguard.com download there trial F.C. regulation software and watch you P's and Q's.

9. I wish you Godspeed in your endeavour, you will do well.

Michael

[Pam R]

I'm sorry if I missed this ... do you do all this wonderful work yourself? Have any employees? What sort of hours/days do you want to be open?

[atcake]

Yes, actually, it is currently just me. I have my sister who volunteers once in awhile when I'm backed up, but for the most part, I take the orders, bake 'em, ice 'em, decorate and deliver (when delivery is part of it).

I thought about just making some more room in the basement where I currently am, but DH doesn't want me taking over the entire basement. I'm already almost half way there! My kitchen is currently 385 sq. ft.

Gee, maybe I'd just be better off building a shed in the back for the extra storage?

As for hours, at this point, I'm 10-6 Tu-F, 10-3 Sat so I can do deliveries and consultations. Everything is by appointment.

[Beanie]

Yes, actually, it is currently just me.  I have my sister who volunteers once in awhile when I'm backed up, but for the most part, I take the orders, bake 'em, ice 'em, decorate and deliver (when delivery is part of it).

I thought about just making some more room in the basement where I currently am, but DH doesn't want me taking over the entire basement.  I'm already almost half way there!  My kitchen is currently 385 sq. ft.

Gee, maybe I'd just be better off building a shed in the back for the extra storage?

As for hours, at this point, I'm 10-6 Tu-F, 10-3 Sat so I can do deliveries and consultations.  Everything is by appointment.

←

If you buy a building, renovate it, hire employees, open a cafe, deal with codes, insurance, taxes etc., etc. you'll be working 24/7. Your work is great. If you want to have total control and limited hours, I'd say stick to what you're doing and build a shed for storage. Suggest you do a search for other threads on opening a business (sorry, I don't have time now to search for links.) I hope I don't sound negative or discouraging; I really wish you luck.

[atcake]

Thank you so much for your input and advice!

[LaurieB]

I wish you great good luck!

Before making major investments in time/labor/construction/materials, etc., check to see what you legally need to do to continue/open/incorporate your business, if you haven't already done so. I've seen too may people move ahead, in a major way, only to be set back by legal issues.

Again good luck!

Laurie

[Pam R]

There is a lot to consider. And every situation is different. But it can almost be guaranteed that the time you must give to opening your own store will be all-consuming.

A great thread to look at is Mel's New Bakery. Mel took us through all of her trials and tribulations that led to her opening her new shop.

I can tell you personally that I am re-evaluating what I produce in my shop because I just don't have the time and energy to do it all.

I don't want to be discouraging - I just think it's really important to know what you'll be getting yourself into - and comparing that to what you're already doing.

Whichever way you go - good luck! You're producing beautiful products and I'm sure will continue either from home or a new store.

[atcake]

Thanks.

To give you a little more info, I currently take on approx. 50 weddings per year, plus serveral (2-10) party cakes each week. I have a kitchen that we built in the basement set up for this. My biggest issue is that I'm running out of space and the calls keep coming. I've taken over approx. 1/2 of our basement already, meaning about 700 sq. ft. of space. The kitchen itself is 385 sq. ft.

Also, I already am using a commercial (49 cuft) refrigerator, 2 freezers (bringing in a 3rd one today or this week), baker's rack, 5 qt, and 20 qt mixers, and 2 ovens.

I do carry liability insurance on the business and we are finishing up the incorporation process as I'm typing this. Our official inc. date was April 20, 06.

I guess I'm seeing this as a 'natural' progression. Still don't know what we're going to do, but I appreciate the advice.

Thanks for the link about Mel. I'll be printing it off to read!

[Tweety69bird]

Thanks for the link about Mel. I'll be printing it off to read!

Get LOTS of paper!!!!

Edited April 30, 2006 by Tweety69bird (log)

[atcake]

Thanks for the link about Mel. I'll be printing it off to read!

Get LOTS of paper!!!!

←

Yeah! Tell me about it! LOL On just Mel's posts, it was 36 pages!

[Pam R]

I think my point is that even though you're doing all that your doing from home, it is going to change in a shop. In addition to your orders, you'll have to produce things for the shop. People will come in without appointments to discuss cakes - or expect to pick them up without ordering (which you don't have to do). I always plan out my days at work the day before. If I get half of what I've planned done, it's a good day. Dealing with customers can really eat into your day. So with a shop you'll probably need to look at hiring staff. And expect to put in more hours than you're open for.

[dejaq]

I couldn't agree with Pam R more, count on administrative tasts eating up a better part of your day, if you enjoy it great, but if your like me and you enjoy "creating" in the back of the house, things like PR, Payroll, time wasted shooting the breeze with reps and such will make you very nervous...

Edited April 30, 2006 by dejaq (log)

[atcake]

So....I'm about finished reading Mel's accounts of the year she opened her bakery. It sounds delish (the food, not the rest of the story! LOL)!! Oh to be in Portland right now!! It's really great to be able to read the trials and tribulations of what she went through. Scares the h@#l out of me too, lol. Granted, some of the stuff she talks about may or may not apply (but probably will!) since she's on a larger scale, but nonetheless, it's stuff to think about. There's still the issues of employees, vendors, merchant services, what to sell, and so on and so on...

Gave me some insider perspective as to what I may be getting myself into.

I completely understand the administrative aspect of things. Believe it of not, that's my background. Was a bookkeeper and administrative assistant in my 'former'/prebaking life. 10 years of it before I became a stay-at-home mom and then onto a cake maker. I do currently employ the services of a bookkeeper and a tax accountant. My bookkeeper keeps track of everything and the tax guy files all my paperwork...except sales tax. That's still my job

In most ways, this seems to be a natural progression of my business. We're official incorporated now, with new bank accounts to boot, lol. I'm in the process of changing everything over to the inc. including my vendors.

I completely understand the more hours than your open and busting your butt, and not having time at home. I think what scares me the most is the start up costs and the insurance and the taxes...AKA MONEY, lol.

Where I live is considered somewhat upscale (Avon Ohio) and there isn't a bakery around for miles. I do believe that the area will support it...as it seems we eat out a lot in Avon, lol.

I know, I know, I sound so naive. And I am. VERY naive. I still have TONS of research to do, and appreciate y'all being part of the process!

[Pam R]

I know, I know, I sound so naive.  And I am.  VERY naive.  I still have TONS of research to do, and appreciate y'all being part of the process!

←

You don't sound naive. Naive would be not asking these questions. It sounds to me like you do understand what you'd be getting yourself into - and that you understand that you may not know every little thing that may come up in the process.

If you go through with the shop I hope you share the process with us. Good luck!

[atcake]

I most certainly would! LOL

Thanks!

[NickLam]

Atcake,

your work looks amazing and I'm pretty sure your shop will be a rip-roaring success. And don't say you are naive. The fact that you are thinking about all these issues now says to everyone that you know what you are doing!

I've made the mistake thrice of jumping into a venture without knowing anything thinking I did and eventually burning the wallet really really badly. Thats the result of not asking enough questions. You on the other hand have the skills as well as prior business knowledge and zest for learning to do it.

Baker + Bookkeepr + admin person. The most important aspects IMO of a business owner. If you like reading, do read the E-Myth by Michael E. Gerber. http://www.e-myth.com/

Its a cookie cutter book that many professionals and business experts may turn their nose up on, but it touches on some concepts of entrepreneurship that they do not teach in schools.....even entrepreneurship degree programmes (I know coz I graduated from one in Australia). Best of all, its not academic and is really fun to read.

Basically, the book is a story based around this lady whom Michael meets and starts to help. She runs a small time pie bakery and what turned out to be a passion turned into a business that was killing it. She poured her sorrows to Michael who decided to help her.

Michael just mentored her slowly till she got her head around things and concepts that eventually helped her to succeed. I think its a true life account.....but I may be mistaken.

It will not teach you how to run your business, but it will teach you important concepts to grasp and think about.

Call me silly for supporting the E-myth (Michael was basically a bum who never started a biz before he wrote the book), but sometimes, an outsider sees things differently.

It is not a motivational get-up-and-do-something-about-your-life book, nor is it a 'how-to-stop-working-and-invest-in-real-estate-and-business' kinda book. So don't worry, after reading it, you will not become a highly motivated annoyance to everyone around you.

But hopefully, it will answer some questions of yours, give you a peek into the future if certain decisions are made and make the brain tick on a different tangent.

Cheers and all the best for your decision!

[heleen1]

Unfortunately, I have no advice for you regarding the shop, but I wnted to let you know that your website has been booked as a favorite on my computer for a very long time ). Your work is wonderful!

[atcake]

Really? WOW!! Thanks!!

[Allura]

Wow; your website is making me hungry.

The one thing I notice you saying the most is that you don't have SPACE for the extra orders. Do you have time for them? And then time again for the retail ideas? If it's really just space that's slowing you down, then yes, I'd definitely go ahead and investigate a larger spot.

Not that I have any experience to base this on.

[atcake]

Yep, it's certainly a space thing, lol. I would certainly have time for additional orders, especially if I get help. I try to stay organized and get baking and prep finished early in the week so the end of the week is more for construction.

I'm about 1/10th of the way through the health code......

[atcake]

Well, it seems that for now we will be putting plans on hold. We just found out that my mom's cancer is incurable and we don't have any idea how long she has. I'm pretty much the only one with a flexible schedule who can take care of her, so for now...we'll wait.

Doesn't mean the future doesn't hold hope though...

[Beanie]

I am so sorry to hear about your mom. Please know that both of you will be in the prayers of many in the eGullet community. The life of a caregiver is stressful and can be debilitating, so don't forget to take care of yourself during this difficult time.

Ilene

[Desiderio]

Atcake,

your work looks amazing and I'm pretty sure your shop will be a rip-roaring success.  And don't say you are naive.  The fact that you are thinking about all these issues now says to everyone that you know what you are doing!

I've made the mistake thrice of jumping into a venture without knowing anything thinking I did and eventually burning the wallet really really badly.  Thats the result of not asking enough questions.  You on the other hand have the skills as well as prior business knowledge and zest for learning to do it.

Baker + Bookkeepr + admin person.  The most important aspects IMO of a business owner.  If you like reading, do read the E-Myth by Michael E. Gerber.    http://www.e-myth.com/

Its a cookie cutter book that many professionals and business experts may turn their nose up on, but it touches on some concepts of entrepreneurship that they do not teach in schools.....even entrepreneurship degree programmes (I know coz I graduated from one in Australia).  Best of all, its not academic and is really fun to read. 

Basically, the book is a story based around this lady whom Michael meets and starts to help.  She runs a small time pie bakery and what turned out to be a passion turned into a business that was killing it. She poured her sorrows to Michael who decided to help her.

Michael just mentored her slowly till she got her head around things and concepts that eventually helped her to succeed.  I think its a true life account.....but I may be mistaken.

It will not teach you how to run your business, but it will teach you important concepts to grasp and think about. 

Call me silly for supporting the E-myth (Michael was basically a bum who never started a biz before he wrote the book), but sometimes, an outsider sees things differently.   

It is not a motivational get-up-and-do-something-about-your-life book, nor is it a 'how-to-stop-working-and-invest-in-real-estate-and-business' kinda book.  So don't worry, after reading it, you will not become a highly motivated annoyance to everyone around you.

But hopefully, it will answer some questions of yours, give you a peek into the future if certain decisions are made and make the brain tick on a different tangent.

Cheers and all the best for your decision!

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Hehe I really enjoy that book actually and made me understands lots of things I didnt even thought about before .Like dont jump in a business only because you know how to make something , its the rest of the process that burns you out at the end if you dont know how to manage everything.

But I really think this isnt your case Atcake , you seems very well informed and willing to learn even more > I wish you the best luck and fun ever

[Desiderio]

I am so sorry , I think in a moment like this everything else take another prospective.I wish you the best and we will support you form here for what we can

Sincerly