I am probably a year out from starting my own business, but I am going to do it. I want to make sure I have a really solid business plan down before I start.

I want to help people who are hobbiest like myself be legal. So I am going to create a certified kitchen. I will have supplies on hand, people can use my cake decorating tools if they want, they are available, or I will have cake supplies for sale. I'll obviously have storage, refrigeration, stoves, sinks, etc... Selling points are 1) certified by the health dept. 2) professional equipment to use, can bake all your cakes at one time with multiple ovens 3) we wash the dishes 4) No contracted committment, you can make 1 cake or 1000.... allows you to have the flexibility of your own business but not worry about paying rent when you take time off or having to come up with the capital to start your business.

Clearly I need to be profitable. I think I have seen on other discussion threads that people are paying (this is California, so that makes a difference too) about $10 an hour to rent kitchens, but I assume that also means they do full clean up and bring their own supplies...

So, would any of you be interested in something like this or is it a stupid idea? And how much is reasonable to charge? Remember I am covering the cost of electricity, equipment, soap, water, dishwashing (which is also time!) and have to have an employee there to wash the dishes, rent on the location, health board, business licence, inspections, corporation tax, etc...

I will also take care of your taxes, meaning if you have your clients write the checks to my business and I deduct my fees from your sale, then I will send in the sales tax and stuff so you aren't in trouble with the tax man.

I was thinking $10 - $12 an hour, although I need to do some real number crunching to evaluate my actual COSTS and make sure I can make some money on that...

Here is what I figured, I made a cake last weekend and it cost me $35.35 in materials to make. So I would sell the supplies and put a little mark up on them (although I will buy in bulk-wholesale, so probably the regular price I paid would be my mark up price to the customer). I didn't do all the decorating and set up on site. I baked the cakes and watched TV while they were baking, I should have been making the frosting at the same time.... But lets pretend someone comes in and bakes the cakes and then makes the frosting and decorates seperately. That would be 4 - 6 hours. If $12 an hour the total cost of the 4 tier 120 - 134 servings (if you include the top layer) would be between $86.89 and $110.89 (that includes supplies!!). Then the baker would want to mark up for their labor. So if they added $100 in for their labor (set up and time) The total cost of the 120 serving 4 tier cream cheese cake would be between $186 and $210 which comes out to $1.56 to $1.76 a serving.

Does that seem reasonable and would you actually consider it?

for myself, i would consider using a professional kitchen, because i live in a tiny apartment with pretty much no counterspace and no storage space, it's difficult for me to do a whole lot of baking. added to which, i can only make a couple of cakes at a time as i have only a limited number of pans and a small oven. and i have to wash my pans between bakings.
if something like this were offered in my area, i'd definitely jump on it! it does seem like a great idea... maybe you could have classes and/or parties too?

A friend of mine and I spoke at length about this very subject recently, as she has a certified kitchen in her garage that she is not currently using.

1 - The first thing you must do is to find out what the insurance costs will be. Owning a commercial kitchen for your own business, and leasing one out to others is an entirely different price.

2 - Do not provide any cake decorating equipment or supplies, ingredients, etc. If you participate in the preparation of a cake or food product in any way, you are opening yourself up to great liability.

3 - You should consult with your business insurance agent about equipment breakage policies that they can purchase at a small fee. If we have to pay for insurance to rent a car, then why should you not have them pay for equipment rental insurance? Either that, or charge an equipment rental deposit, with most of it (not all, as they are causing wear and tear on the equipment) refundable after inspection of the equipment.

4 - Cleaning the facility when done - you must charge a cleaning deposit, which should never be less than $100. If they leave the kitchen in a condition that would pass your local health inspection, (and you should know the criteria for this) then the deposit is returned.

5 - Liability waiver. As long as your equipment is in good working condition, you should not have to be liable, if their products turn out poorly.

6 - Your fees should be based on your site cost (rent, mortgage), utilities, taxes and business fees, and insurances.

Yes, it is going to get quite costly for your clients, and I really do not want to sound like I am trying to discourage you, because I think it is a wonderful proposition, but in this day and age of lawsuit-happy people, you will need all the protections you can get.

Theresa

Thank you for the things to think about. I have definately thought about most of them, but you explained them so clearly, I really appreciate that. More food for thought. Before I even THINK about opening the business, I am going to do a LOT of research into costs and I need to get super nitpicky and down to the nitty gritty. I am sooo glad to have CC for advice that is brutally honest!!!!!!!

(and definately yes on the classes and parties)

I live in California too and I think this is a great idea! I would pay to use it. It's hard to find kitchen's to rent and when you do, they usually want some kind of contract.