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.