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Turn your passion into profit!

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If you want to make a success of your business there’s a few easy things you can do to ensure you will still have a business which is turning a profit in 2 years’ time.Whether you are a new business or someone who is finding it hard there are things here which you can all try.

Costings – Get it right the first time. Make sure you calculate everything which you will use right down to the washing up liquid you will need to wash your cake pans and mixer. It all adds up and it is the only way to really see how much the cakes cost you to make before you add on your mark up.

 Look at ways to lower your out goings, could you buy in bulk and save? Remember to be cautious though. It is only a good deal if you will use it all and in the right time frame if it is perishable. Otherwise you could be increasing your costs and that won’t help.

Market research and general bakers etiquette – It is always a good idea to introduce yourself to other bakers in your area. They’re not the enemy far from it; if you build a good rapport with them you may well get extra orders when they are too busy to take them on. I myself have several local cake companies who I work closely with and we all refer our customers to each other if we are busy. The end result is we are all now busy thanks to each other.

Other bakers may be able to offer you advice on suppliers and pitfalls they have found which will in time save you making the same costly mistakes.

There is no point in pitching your prices against each other let the customer decide and instead focus your efforts towards being the best not the cheapest. You will find if you undercut others you will become known for it and you will find that hard to shake off. Your peers will not respect you and customers will wonder about the quality of your cake in comparison to others if it is too cheap. Instead look at other's pricing to see what the local catchment area is willing to pay and then work out your costings and find the price level to suit you.

Family discounts – This is something which can often cause issues for bakers. Families watch you grow from someone who bakes for fun and they regularly forget you have progressed to a business. Whilst you were practicing your skills offering a giant cupcake to your nephew for £10 helped you cover your costs and they benefitted, but quite often they expect the same treatment when you have started your business and it just isn’t feasible when you have paying customers looking to book the same date.

Get registered – So many times I see bakers popping up on Facebook offering cakes and cupcakes at rock bottom prices and they often say “I do this as my hobby, not my job” Let’s just clear one thing up. If you accept money or advertise your services in any way you are operating a business. There are no grey areas there are no get out of jail free cards either. If you are caught doing this you will feel the force of the Inland Revenue, the environmental health and possibly other government agencies if you are claiming anything like tax credits or other benefits.

Start as you mean to go on. Get registered with both the Inland Revenue and environmental health. They are there to protect you as well as your customers. If you ever have any questions they are there to help you and if you were to ever receive a complaint over one of your cakes they will fight your corner too. It’s not as scary as you would think, registering takes moments.

Telling tax credits could help you; you will be working more and may be entitled to more help not less. It’s better to tell them straight away than owe them money if they find out later down the line. If this is your first step back into work you may also be entitled to business start-up grants. This is something you won’t be able to claim if you do not do this officially.

Get insured - If you add silver dragees to a cupcake and Aunt Bessie’s dog chokes on it and you aren’t insured your home, savings etc. could be at risk if they sued. Get insured and you will have plenty of protection. It’s not expensive and many companies will offer a monthly instalment option. Mine works out at just over £5 per month!

These are my top tips for starting out in business. Most of it is common sense, but it seems the cake world in some parts has lost its way. I hope it helps you and you will have a thriving business which is here for many years to come. If you are ever unsure of something just ask a fellow baker, were not as scary as you think and you may even make a friend for life!

I would be interested in your thoughts on this please do feel free to make a comment below. If you liked this blog please subscribe and share. I will be sharing lots more business advice and cake based topics soon.

Shelly

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  1. Coral Miller

    Thankyou for replying, what is your email address please ? i tried [email protected] and it failed to send Hi Coral, It's [email protected] I look forward to hearing from you. Shelly

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  2. Coral Miller

    Hi Shelly I am a complete beginner to all of this but baking is my passion and i would love to start my own business. At the moment I am just baking for friends and family and still practising the art of cake baking ! Everyone seems to enjoy my cakes but they are very basic at the moment. What advice could you give me to start with. Im thinking of doing a few courses in cake decorating and sugarpaste. I want to beable to offer as much as I can and i know people especially love character cakes - im more of a carrot cake and cupcake girl ! It all just seems so daunting as I know I am starting right at the bottom. Any advice would be greatly appreciated. Thankyou Coral Coral, If you drop me an email with any concerns you have I can try and help. I do of course host classes in cake decorating and business advice too so thats also somewhere I could be of help. Shelly

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  3. Tina

    I am very impressed with this blog..it was very interesting reading..i have just had my kitchen passed by my local council and got a 5 star rating...i have just to register with Inland Revenue and get my insurance i will officially be a self employed home cake maker..im so excited thankyou for the information Tina Hull UK

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  4. Panama

    Can you share more . I am starting and I need as much info as possible

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  5. Chris Wirth

    Hi! I'm from South Africa and read this blog to find out more. I'm looking to start from home just for extra income but never realized all the hidden things about running a home business. These points mentioned above are also valid here in SA and probably all over the world. Reading this blog and comments has motivated me even more to get started. As far as grants go, I'll have to do more research as it might not fall in an industry that qualifies for grants. Thanks very much for your blog.

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  6. Notty

    Thanks so much for the advice and sharing. It was really good advice, things to ponder and get started. Thanks again

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  7. Emma

    Thankyou so much for this info, I hadnt even considered insurance :S I'm only baking for family and friends at the moment but I guess I need to do some research! I never know how much to charge either, I find it really hard as there all friends & relatives, but you made a very valid point about friends & customers wanting the same date, think maybe I need a rethink...

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  8. Lisa Dashper

    Thank you so much for your blog, I went from baking for friends & family to a business baker last April, I didn't advertise my business until I had all the key elements in place such as Inland Revenue, Environmental Health, Insurance etc (too scared not to!)I wish other bakers were more aware of this as these things do cost us money and they are also a legal requirement. Over the last year I have found the costing side a real eye opener, I used to charge a pittance for my cakes but I now realise that cakes made by artists (as that is what we are) are always going to cost more than the mass produced & nasty tasting supermarket cakes, there is no comparison. I just wish customers could grasp that bespoke, unique and personalised celebration cakes and cupcakes cost more for a very good reason.

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  9. **Shelly Baker **

    Hi Jenna, I'm afraid your friends are wrong. I think they might be confused with the fact that you can earn upto that ammount tax free per year but as you already have a job some of that will have been taken in that. The best thing you can do is call the inland revenue and ask. You don't have to give your name if your worried. No matter what you earn even if it's just £200 over the year you must be registered. It's often confusing and can be scary getting registered, but it's better than finding someone has seen you selling the cakes and reported you. then you have nothing there to help you and saying you didn't know won't help as they get so many people trying that. Give them a call they have dedicated teams to help new start ups and sometimes youll find you can claim help with things just through registering like grants for equipment etc. Which is fab as you'll have more pennies for cake goodies then. I hope this helps Shelly

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  10. Jenna

    Hi Shelly, I'm looking into starting up a small business in my area. When I enquired with friends & family do I have to register with Inland revenue they told me that I did'nt have to if I earned under £5,000 a year. I feel I wouldnt even earn half of this over the year as I work full time too so don't have the time to do that many cakes :)Would you know if this is correct? Thank you Jenna

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  11. Julie

    Hi Shelly I found your blog very intersting as at the moment I am helping my son look into doing this sort of thing where he's interested in doing cakes and has been taking lessons while staying down in Bournemouth studying and he has a back condition so we'd thought if he did this kind of job then he can rest and go back to his work if he was in pain, I will keep looking to see if there are any other good tips. Julie x

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  12. **Shelly Baker **

    Hi Sarah I use Direct line. I had to use a different insurance for my home insurance as I have students. If you intend on holding consultations for weddings in your home you will need to call your insurer and check you are covered as you assume. I found my extras I paid for such as accidental damage were no longer valid when I added the fact that students would enter the home. So I called Direct line and they were very helpful and I am now fully covered. I also have seperate business insurance for public and product liability insurance which was only something like £58 per year so very little. The home insurance wasnt much more either and if you're clever you can usually negotiate a deal if you buy both with Direct line. If you intend on doing farmers markets call the places you'd be looking to sell in and ask what cover they request of their traders. It's the best option as they all seem to vary. I hope this helps and good luck with the business! x

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  13. Sarah Starkey

    Hi Shelly. Really informative stuff here. Ive been baking cakes for a little while on and off.Im almost ready for selling (in a very small way) have registered my kitchen with the EHO, Informed the tax office and next thing on my list is insurance.Did you go through your home insurer or is there a 'special company' who deal with this sort of stuff? Also costings are a nightmare.....im in the process of designing a spreadsheet ;)

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  14. Jayne @ Jayney Cakes

    Brilliant blog and spot on tips for being registered etc :o)

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  15. We love you Mrs Baker - what a fab couple of blogs! I'm off to share with everyone I know ;)

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