Need advice on starting a new business

[alona]

I am a cake decorator and need help figuring out what to do. I'll make it short.

I have the opportunity to open a cake decorating shop. Here's the problem. I'm not sure how well I'll do so I don't want to create an official business (with tax id #, etc). I want to just see how it goes for 6 months. If there is a steady clientelle, then I plan to get all paperwork completed. Right now I just bake cakes at home and sell them to friends and acquaintances. Word is spreading and people are asking for my cakes. One dilema is advertising. I don't want to advertise in the paper or with flyers because I'm not a full-fledged business but the more customers I have the faster I can open the shop and become a legal business.

What is the best way to handle this? All suggestions are welcomed.

Thanks in advance

[FortuneLeaf]

Well, I want to congrats you first on your pursuit to be a successful Entrepreneur

I have many relatives that have their own businesses from salons, nails, Many
restaurants, food store, and messages. All these businesses started out rough, but of course you have to have a reserved fund. Banks will most likely need to see this if asking for a investment loan.

Some took 2-3 years to finally take off, some are just breaking even, and some closed down.

Unless you get a good deal, good commercial location are usually expensive from $2000 to $6000+ a month

My cousin is building a catering business right from his home. This too has its tax advantages.

In my opinion, having your own cake decorating business may be better starting from home and build up from there but also I guess it depends if your home is a good place to conduct a business.

Here is some questions you may ask yourself:

-Do I have a business plan that is written out.
-What are the legal ramifications of operating a food service business from home?
-What are the best cake recipes?
-How can I start will very little funds?
-How can you build a portfolio of cake options to show clients when just starting out?
-What kind of insurance do you need?
-Where will I find customers?!
-What does a contract need to stipulate ?
-How much will it cost me to advertise

You may want to look into:

-pricing and packages
-insurance
-equipment
-building a portfolio
-accepting credit cards advertising
-book keeping
-taxes & tips to save money!

These are some Ideas and may help serve you.

[ablaye]

You almost have to create flyers and do business cards and distribute them (even though you stated that you don't want to do that). That's the best way I know to let the word out and let people know about your biz.
You can post your flyers at your church, grocery store, laundromat, etc... that have a section where you post free flyers.

[honey415]

I agree about posting the flyers & handing out business cards. Also word of mouth is a great way to build a clients. You said that you have made them for friends & acquaintances ask them to tell people that they know about you.

Good Luck

[MicheleDB]

I am a cake decorator and need help figuring out what to do. I'll make it short.

I have the opportunity to open a cake decorating shop. Here's the problem. I'm not sure how well I'll do so I don't want to create an official business (with tax id #, etc). I want to just see how it goes for 6 months. If there is a steady clientelle, then I plan to get all paperwork completed. Right now I just bake cakes at home and sell them to friends and acquaintances. Word is spreading and people are asking for my cakes. One dilema is advertising. I don't want to advertise in the paper or with flyers because I'm not a full-fledged business but the more customers I have the faster I can open the shop and become a legal business.

What is the best way to handle this? All suggestions are welcomed.

Thanks in advance

Yes, flyers and business cards are the way to go. Also perhaps contact established home industries / bakeries etc. They might well buy your cakes. Building a business takes time, but every little bit helps. It's a process, sometimes a long one, but with determination and perseverance you will get there!

[Lori]

Do you have to worry about your kitchen? My Mom looked into this type of thing once for one of her entreprenuerial ideas and I think her kitchen didn't meet certain stipulations.

That wouldn't be the end of the world though -- I remember a woman who cheaply rented kitchen space from a restaurant on their off hours to make sandwiches that she sold.

[tam2005]

Hi there,

Word of mouth, and flyers and business cards work really well. And best of all...it's cheap advertising, some of it free! I'd go with it if I were you. :)

Also...have you thought of starting a website? There are also lots of free advertising techniques online as well. You could work your business at home.

Then, after your name gets out more...start a shop outside the home if that is what you want to do.

[Audrey]

Do you have to worry about your kitchen? My Mom looked into this type of thing once for one of her entreprenuerial ideas and I think her kitchen didn't meet certain stipulations.

That wouldn't be the end of the world though -- I remember a woman who cheaply rented kitchen space from a restaurant on their off hours to make sandwiches that she sold.

I live in CA and in order to make food you MUST have a commercial kitchen and meet other criteria also.

[MaryAnn]

I live in CA and in order to make food you MUST have a commercial kitchen and meet other criteria also.


I'm in MA and its the same here as in CA - you must have kitchen facilities that are completely separate from your home kitchen. In addition to other sanitation and food prep laws.

Before you go too commercial from your home, you might want to look into the food laws. You will also want to consider insurance to protect your home and family. Unfortunately, we live in a highly litigious society that will sue someone at the drop of a hat.

Getting a tax ID# shouldn't be that expensive and you don't necessarily have to start out with a full fledged bakery store front.

[sahm629]

The best thing I can think of is to contact the SBA (small business association) and meet with a business counselor who will (hopefully) help you. Go to www.sba.gov to find the nearest one.

Also, not trying to be a downer, but I think you have to follow health codes, etc. I wouldn't want you to get in trouble.

Good luck!

[SOHOdesignprint.com]

You'll want to check into the laws where you live. If you open an actual shop you'll need insurance, licenses etc. I know several people who did the math for a restaurant they wanted to open and found they needed about $3,000 in sales each month to break even.

My grandmother made cakes from her home for about 30 years and did very well at it. I'd suggest you look into a good dedicated freezer/refrigerator and oven for your basement that you could devote to just the baking.

I'd also look into a very simple website and business cards. The problem with flyers or brochures is that they can be quite expensive. If you have the funds to do it then I'd suggest you get a few hundred glossy brochures done up with nice photographs and include two or three with every cake you send out. If you don't have the budget for brochures then send a few business cards with each cake. Someone will almost always ask where your client got the cake. My grandmother lived off referrals and didn't have a business name or business card, although times have changed a bit.

I'd love to hear what you decide and how you're progressing.
Kira

[kevinw1]

It seems that your first job before making decisions is to find out all the information you need. What, exactly, are the legal requirements for opening a business generally in your locality? What are the specific requirements that apply to a food-related business - in many places those are very stiff as soon as you go beyond selling a few things at a local market or craft fair. They also come with unpleasant consequences if you fall foul of them.

Once you know those things, and the costs associated with complying with them, and the possible consequences of not complying, then you can make decisions based on better information.

"Flying under the radar" puts you in a cleft stick, as you noted - advertising for new customers puts you at risk of being "found out". If you want to build a real business, not a pocket-money generator (which is a perfectly fine thing if that's your objective), it needs to be based on a firm foundation of knowledge, informed decisions, and a plan for future growth to the size and income you need.

[Revka]

To expand on the idea of meeting with a business counselor, I recently learned about a nationwide organization called SCORE (http://www.score.org/index.html) which offers free business mentoring services. They even have a section targeted to women entrepreneurs (http://www.score.org/women/site.html).

I signed up for my local chapter and met with my mentor for the first time last week. I found it to be quite helpful. I would definitely recommend your signing up for their services, particularly since they're free.

[Audrey]

Revka,

Awesome suggestion. I've been promoting SCORE for years now. They are wonderful.