Once some people hear the phrase “starting a business” their hearts begin to palpitate. The truth of the matter is that you don’t have to be a business school graduate to know how to start a cake business.
Starting a cake business can be a lot of things but it’s very doable and a lot of people are succeeding at it.
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Today we would be sharing some nuggets of wisdom and tips with you. These nuggets are gleaned from both experts and people who have failed at one point in their cake business journey. We hope that at the end of this piece, you’ll learn what to do and what to avoid as you explore how to start a cake business.
Table of Contents
How To Start A Cake Business – First Things First!
Training
Before you contemplate starting a cake business, it is imperative that you have some level of training. Hold your horses! We are not asking you to register in a high brow culinary school. You can attend online courses, intern at a thriving bakery/cake shop, read cake decorating books, watch tutorial videos and self-train on YouTube; yes Youtube!
Whatever you have to do to improve your skills and have something beyond good to bring to the market, do it! Do not go running to spend money, time or energy on anything unless you have the requisite skills. Bear in mind that you don’t have to be a pro to offer great products and services but you must have the basic skills.
Practice
Practice is part of your training. In the course of this training and practicing, you might have to do some freebies. Test out your cakes on friends and family. Bring a surprise birthday cake to a friend at his/her office. Take a free cake to a baby shower.
Trust me things like that would help alert people to the fact that you make cakes and also help you to practice. Also ask for honest criticisms from the recipients of your cakes and be ready to work with them.
Sometimes you think you’ve done a bang up job but people looking at it aren’t as wowed as you expect. Listening to such feedback would go a long way to help you improve your skills.
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Market Survey and Research
This comes under your business plan. Your business plan covers a wide range of issues that would set the tone for/of your business.
Do a market survey of the product you want to put out. Find out what kind of cakes are in demand in your area and what kind are in ready supply. Who are your competitors? What do they have going for them? What can you offer that would give you an edge in the market? How would you price your cakes in relation to the pricing structure in your area?
All these and many more are questions you should settle before you wade any deeper into the waters of starting your cake business.
Research to find out how you would source for ingredients and other products that you’ll need for your business. Also find out the cost of the equipment that you would need . This would help you in your costing and budgeting.
Create a Niche
In starting out a cake business, it’s best to be known for a specialty. This doesn’t mean that you wouldn’t offer any other recipes or styles if requested. But creating a niche helps you to stand out; people know that there is someone to go to if they want a certain kind of product and service.
For example; did you notice a need for a vegan cake shop in your environs? Do you think you’ll be providing a worthwhile service by having a vegan cake shop and at the same time turn a profit?
This is like a follow through of our previous point of knowing the product you want to put out.
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Financing
How do you intend to finance your business? Do you have what it takes to survive until your business breaks even? Yes, you’ll not turn a profit overnight. You need to make allowance for the time it would take for your investment to pay off.
Remember that you’ll have to buy tools, equipment, ingredients and allied products. You would also have to pay utility bills whether you are making sales or not.
Location
Location they say is everything. Hmmm! We are a little bit doubtful whether that’s still true in this day and age. The world is now a global village remember? You can now place an order for anything online and have it delivered at your door step.
With this thought in mind, consider whether you want to start your cake business at home or rent a shop. Having considered your budget and how you hope to finance your business, you would be in a better position to make the decision for a home business or outside the home location.
Whatever you decide would determine some other steps that you’ll need to take.
How To Start A Cake Business – Legalities
There a number of legalities that are involved in running a cake business. Different regions have different laws that regulate food business whether run from home or outside the home.
Take the time to find out all the legal requirements that you need to meet before even thinking of setting up shop. If possible engage the services of a lawyer that would help you wade through all the legalities.
Knowing all the health regulations and code for food handlers in your region would go a long way in helping you know how to set up your cake business.
You would also know what equipment you can use and how you can set them up. There are many other heartaches that you would avoid down the line by starting out right.
Also learn all about taxes and related issues; you don’t want to be caught in any tax evasion issues down the line. You might even need to consult a CPA; infact we recommend that you do!
We are sure you know that this is just a summary telling you that you need to consult the experts in your region. Do not make any assumptions at this point and do not work with hearsay. Get everything in white and black; if possible study all the fine prints.
Yes this process might seem or be tedious but trust me you’ll be glad you took the time to sort out all legalities.
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How To Start A Cake Business – Expert Advice
Many veterans have gone through the rigors of setting up cake business. Some also have had the dubious honors of failing! But the great thing is that both experiences (success and failure) contribute to the wisdom that is passed on to the next generation of entrepreneurs.
So in this segment would be sharing tips that contribute to the success or failure of a cake business.
Whether you plan to start up your cake business at home or outside the home, you need proper structure. When we talk of structure it doesn’t mean that you have to operate at the same level with established cake shops or bakeries. But it is important that you have policies and guidelines that regulates your business venture.
Some of the basic structures to consider are working hours, phone hours, pricing, customer relations, delivery and return policies, ordering and payment.
Working Hours
This is a very important issue to settle even before you commence business especially if you would be working from home. There’s always a tendency for cake decorators who work from home to work all hours. They are most times unable to reject orders that come in at odd hours.
The danger in this is that customers would take you for granted and you would burn out faster than a candle lit on both ends.
So set your work hours and stick to it; leave the phone to go to voicemail and don’t check emails after the set hours. Customers would come to respect your working hours.
Pricing
Set your prices before you take your first order. Have a standardized price for all your cakes. There are different parameters to use for pricing but whatever you do factor in your time, skill and energy.
The bane of most newbie cake decorators is the statement “it’s just a cake” This is a very annoying statement made by many clients who want to persuade you to cut down on your price. I would usually say with much sweetness “let me give you a recipe so that you can go bake yourself “just a cake” and after that remind them of the price stated.
Point to note however in pricing is that your pricing should be commensurate to that of other cake decorators in your area.
Do not attempt to under price in an attempt to corner customers. It is usually counterproductive. You lose goodwill with your colleagues and get undermined/undervalued by customers. Yes you heard that right! Customers gauge the quality of your cakes by how low you are willing to go below your competition.
They’ll come to you when they need cheap cakes but go to the “top quality” cake decorators when they have really important events. And trust me, they’ll pay the cost.
Alternatively, do not price yourself out of the market. Your prices should be commensurate to your skill and the quality of your ingredients amongst other factors.
Final Thoughts
Finally on pricing, determine how you would be paid. Would you get a deposit before delivery and full payment on delivery? Or would you prefer full payment before delivery?
Note that cake is a perishable commodity so once consumed it can’t be returned. So ensure that you get a deposit before delivery and full payment before you deliver the cake.
If for any reason your client isn’t forthcoming with payment upon delivery do not drop the cake. Trust me on this, if you drop the cake without payment, you may well not get paid for it ever!
That said, price your cakes in such a way that you can replace a botched order without going bankrupt lol.
Placing Orders
Have a definite timeline for placing orders and making deposit to confirm an order. This would help streamline both you and your clients and ensure that you never miss or mess up an order. The timeline you place would depend largely on prep time required for each recipe and the resources at your disposal.
Yes once in a while you would have to accept emergency orders but ensure that they are for good causes and not the norm.
As your business grows, you may decide to have a few ready to go generic cakes but that’s still some ways off.
In this same vein of placing orders, do not overreach your skills. Never accept orders that you cannot deliver on. It is better to under-promise and over-deliver than the reverse.
Do not be shy to say “I’ve never tried that before”. If the client is still comfortable with you attempting the design then go ahead (that’s only if you are confident that you can pull it off)
Delivery
Have a delivery policy in place. Do you deliver to clients or do they come to pick up their orders from you? If you decide on delivery to the customer, who bears the cost of delivery and how much is it?
Every region usually has acceptable delivery fees. Check them out and set your delivery fees appropriately.
When you have these issues standardized you stand less chance of “offending” any customer.
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Be The Expert
One mistake that many new cake entrepreneurs make is that of being push overs. Never allow any customer to undermine your expertise (that’s why you need to know your stuff).
I’ve had customers come up with designs that are not structurally safe for buttercream and I had to stand my ground. You know why? Because I’ve been burnt! And I learnt from the painful experience that no one would blame the customer if you deliver a cake that falls apart. You are expected to be the expert; that’s what consultations are for.
Politely give your clients the best options available and help them put their ideas into practical designs and flavors. Don’t be too desperate to make a sale that you risk your reputation. Learn to say NO; your customers would come to respect you and trust your judgment.
Learn To Network
Ever heard the term “no man is an island”? Yep! That’s true in every sphere of life. You need to network with other cake decorators in your region. Join a business club or be part of your region’s chamber of commerce or its equivalent.
Being part of a network of business owners helps you to keep abreast of best practices in business. Membership in cake clubs can grow your business and also help you know what’s trending in the cake world.
What’s more, you may have an emergency someday or be swamped with work and need to pass off some orders to your colleagues. I’ve had orders that I couldn’t execute all by myself; I had to reach out to a fellow cake decorator in my network to help out and the project turned out beautifully.
Yes other cake decorators may be your competition but they are also your colleagues. Have a good relationship with them and always extend goodwill to them (remember the price thingy? Don’t undercut them by lowering your prices).
Have An Online Presence
You need to be visible online whether you are running your cake from home or from a storefront. There are many social media platforms that are either free or relatively cheap to advertise on.
Endeavor to get a following on Facebook, twitter, instagram and all the available platforms. Display the pictures of your cakes and engage your followers and online friends frequently.
If you are not savvy with all the platforms available, there are young techy guys that would help you for a small fee. We even advocate that you engage the services of a social media expert; they don’t charge so much and you’ll really get your money’s worth.
Word of caution though; ensure that you employ a genuine social media expert and not a con artist. Some so called social media managers can get you into trouble by contravening some rules of a platform. So it’s best to work on recommendation based on track record.
But if you can learn how to work social media platforms to advertise and boost your business by yourself, then go ahead and do so.
How To Start A Cake Business – Common Mistakes To Avoid
Trying Too Hard To Please Customers
One common mistake that most new cake decorators make is to try too hard to please their customers. They bend over backwards to retain customers. Don’t do that!
This sounds like a counter intuitive advice but trust us on this.
Do not contravene the policies of your business just to pander to an unreasonable customer. We know the saying that a customer is always right but truth be told that’s not always true.
If a customer asks you put broiled chicken in pepper sauce in a cake batter would you do so? My sentiments exactly! Whilst you should never be rude to a client, you have to learn to be firm.
Always be willing to strike a compromise with your customer but only within reasonable limits.
Not Having Organized Recipes
When customers come in for consultations, it is best that you have recipes to present to them. It is not best practice to try out a new recipe after you have finalized a customer’s order. Ensure that any recipe you agree on with a customer is one that you have tested and tried and proven.
If you must try out new recipes make sure you have enough time for experimentation. Let the customer come for a tasting session before you make the actual order. But if you ask me, I’ll say you should develop your recipes before putting it out to
Having Arbitrary Tasting Sessions
This is on the same shelve with trying too hard to please customers. Some cake decorators don’t know how to protect themselves from being ripped off by freebie loving customers.
Do not make the mistake of allowing potential customers to have “uncensored” tasting sessions. This most often happen with wedding cake customers.
Ensure that you have a standard policy for cake tasting for any occasion. This would include how many times you are willing to showcase recipes, how many people are allowed per tasting and whether you’ll charge a nonrefundable deposit for extra cake tasting sessions.
Mixing Business With Pleasure
In these days of living online, it is easy for a new cake decorator to get carried away on social media.
Do not make the mistake of mixing business with pleasure on your social media handles. To avoid this it is best to have two accounts on each platform; one personal and the other business. That way you can do your pleasure on your personal accounts and your business on your business accounts.
No ranting about government policies, hubby’s annoying habits or calling out a friend on your business account. Always keep it professional online.
Attempting To Buy Every Equipment and Cake Decorating Tool At Once
Unless you have unlimited funds and financing at your disposal, this one one mistake you should avoid. There’s no way you can buy every equipment and decorating tool that you think you need from the onset.
You have to start out with the basics/essentials then move on to more complex, then great to have tools /equipment.
So first find out which equipment and tools are absolutely necessary; those ones are the “must haves”.
Then next move on to those that would make your life and work easier ; those ones are the “would be nice to have”.
And finally, the ones that are not absolutely necessary but still useful; those ones are the “keep in view” . Those are the ones you can buy when they come up on sales or you win a lottery(lol), or start turning a pretty profit.
We would assume that every one who want to start a cake business knows the essential equipment and tools to have. But for the avoidance of doubt let’s give you a list :-
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Essential Tools and Equipment
(i) A Commercial Oven
(ii) A Heavy Duty Stand Mixer And Hand Mixer
(iii) Cake Pans/Bakeware
(iv) Revolving Cake Stands aka Cake Turntables
(v) Basic Fondant Decorating Kit – Click here to read one of our previous articles to get more information on what you’ll really need
(vi) Basic Piping Set (piping bags ,tips and couplers)
(vii) Offset Spatulas and Straight Spatula ( a minimum of two sets each of different sizes)
(viii) Serrated Knife /Cake leveler
(ix) Bench Scrapper aka icing smoother
(x) Cake Boards aka cake rounds or drums
(xi) Mixing Bowl Sets and storage bowls
(xii) Measuring Cups and Spoons /Kitchen Scale
(xiii) Balloon Whisk
Some decorators have started out with fewer equipment and tools than we listed above. so if you are able to start with these tools then trust me you are starting big (lol) .
How To Start A Cake Business – Conclusion
This piece is by no means a comprehensive pool of information as you set out to establish your cake business. However, we hope that we have been able to contribute substantially to your info base.
Still in the spirit of contributing to your knowledge base for your cake business, click here to check out our ultimate recipe guide. It’s a treasure trove of awesome recipes that you can adapt and work with to create signature cakes and desserts.
Good luck and have fun as you start your cake business!
