Not trying to ignore your posts, I will respond to them......

I have a question. There is certain info that I want from them.....am I allowed to get it? And what else should I make sure to get? I want a copy of the lease; tax returns for the past 2 yrs; list of inventory; profit & loss statement; operating expenses; and their books.

i decided to give my input cause i was in a similar situation not too long ago. i had the opportunity to buy an established cake business for 75k. she would have stayed on to transition me, i would have gotten all her brides, equipment, recipes, everything, much like your person is offering you.

in the end i started from scratch, like littlecake and k8 are suggesting. i spent less than 25k and i have my own little space, $500 a month rent utilities included, approx 650 sq ft. very affordable, and very manageable on my own. you said you wanted to be established by september. well let me tell you, i signed the lease beginning in Dec 2008 and by the end of Jan 2009 i had all of my inspections passed and i was in business. it didn't take long at all once i made the decision to follow through with it. my debt is really no more than a car loan, which i plan to have paid off by next year at the latest.

you're looking at 125k in debt to buy the biz, then over $3000 a month in rent. that is a LOT of baggage. i know that if i were in that situation, it would weigh me down.

good luck with your decision, but i vote no as well. for much less $$ and a little elbow grease you can establish your own place. i think you'll find it much more manageable too, to start small.

doesn't establishing my own place require not only the location, but then purchasing the equipment as well?

Yes sometimes you'll need to purchase your own equipment but it will be a lot less then $125k.

I don't know, after reading through this again, I'm nervous for you.

You'll need to come up with $125k just to purchase the business, so you'll have that monthly payment on top of the $3400 a month for rent.

Like k8 said this business opportunity sounds more like a *moving up* business, not a *first* business.


To me this is just too risky.......especially in this economy. There has to be a reason why this woman is trying to sell, and I don't think she's being 100% truthful with you. (Don't trust that the numbers she's showing you are the real deal.)

Do you know what she purchased the business for? (I think you could find this out at your town/city hall.)

There is an absolute treasure trove of information in these 5 pages. I have to say that I vote with some of the veterans here in thinking this is "too fast, to furious" for what you're really looking to do.

I rent a commercial kitchen to have a legal business and to me, that was even a huge step. It's dollars that have to be made up for in labor. I do everything myself but am looking for a part-timer. I repeat, I am renting. With the amount of time caking takes (which I love) I simply can't imagine having to run a full-fledged business, which entails everything from taking out the trash to repairing broken front doors to keeping inventory on that scale straight. Hours tick by... Lord, my husband would end up leaving and I wouldn't notice he was gone for a week! J/K I went to a college that was 4 years of intensive business courses, no general ed. and have written a boat-load of business plans. That right there is enough to keep me at bay for awhile.

Good luck in what you decide but I would definitely heed the advice of K8, Debi, dKelly, etc., etc.

By the way, your cakes and cookies are beautiful.

Don't know if you've thought about this or not.....

If you have a business you also must have a contingency/succession plan. If you get sick or have a family emergency that goes on for a while you need to know who will take over for you and pay those fixed costs that keep on coming.

I used to work with business start ups in another state and more often than not people have a talent/idea/craft that they excel in and don't want to or don't know how to handle the business side of things. I suggest you contact your local SBDC (Small Business Development Center) and ask for a consultation. They can help you with a business plan that spells out what your known expenses will be (and believe me, there will be unknown ones, too) and what your revenue should look like to break even and make a profit.

Good luck to you!

Hello....
I just want to add my two cents worth. As everyone has already said, do your homework. Think of every angle you can, on what it will take to run this business. You will be surprised....Just when you think you have it all worked out, something else will come up to consider. You'll have the rent, utilities, phone service, credit card machine charges, maintenance of equipment, maintenance of the building, insurance to take care of. Get all the initial excitement of this out of your system, then settle down and really think about it. Be careful too...when someone tells you that they will do this, and this is the way this has worked, be careful. People are full of goodwill, when half of what they say is crap. I don't mean to knock anyone you are dealing with....But all too often, what is said, to what is really done, are two very different things. People will say anything to get out from under something....
This is only my opinion, but K8 can't be more correct. You will have a hard go of it, if you think you won't put in long hours. Yes, there are days when you can work 8 to 5:30, but don't bank on it being a regular thing. If you really want to make it work, you will put in those hours. When I had my shop, there were many times I was ready to lock up, only to have a customer come to the door. I never turned someone away. You will get orders that will keep you there until they are done. You have to have your product restocked for the next day, ready to sell. It doesn't get done when you do home.....
My biggest concern is the fact that you need to get real serious about doing it all. You need to know what is going on with the finances, EVERYTHING. You simply can not run a business when you don't have your hand in the till for everything. Good luck to you!

I spoke with a friend of mine (finance person on Wall Street) and she is going to sit down with me and go over all of the financials and teach me about what I am looking for and what are potential red flags. I spoke with her this morning - she knows the biz that is for sale and agrees with its potential (she has been a customer there for many years and knows the owner). She is also going to connect me with a biz lawyer.

I AM learning the biz end. I AM learning and trying to put together a biz plan. And I AM NOT making ANY decision until I see numbers. I still haven't gotten them. I am still waiting for those. I do have questions about where there expenses are going, whether they flat out own all of the equipment, what their debt is and all of that.

So, although I would prefer to have somebody else do all of that (after all who WOULDN'T), am doing it. I am not going to wait around for some knight-in-shining-armor to take care of it for me. I will learn dabnabit and know EXACTLY what I am doing. Plus, I think this is a test to see if I REALLY AM interested in doing this...because if I AM, I MUST know this stuff, right?

Too much, too fast.....quite possible. My DH has been looking into buying a biz for a few years, so this isn't an entirely new concept....we just weren't actively seeking it out. Now, having said that, I will learn what needs to be done and what needs to be known. I have been trying to educate myself about all of this and I SOOOOOO appreciate all of your input and feedback.

Keep it coming. I believe that everything happens for a reason and that it is high time for m to learn about the biz end of stuff. Even if this doesn't work out, then I am more prepared for next time and possibly starting from scratch. But I think the key thing is: I AM LEARNING IT!!!! I am using that side of my brain. Just don't ask me which side it is

wow - shorty! that looks GREAT!!!!

I've been devouring these sorts of threads since I first starting lurking on this site. I'll never own a cake business of any sort, but I love cakes and baking and I've helped with start up businesses. I love figuring out this stuff.

So I'll say as someone who has probably read every thread on this subject for about 2 years, I think you need to "get real" about a few things.

The first thing you need to know is how fast a decorator are you? If you are slow as molasses, you aren't ready for this yet. A set up like this, with its expenses, will require that churn out a LOT of cakes.

The second thing you need to know is what is profitable in this type of business. Some items are simply not worth offering. No profit in them.

The third thing is you need to figure out what a reasonable price is for what you will be selling to compare it to your full monthly operating cost. I would listen to the folks who tell you that you need to figure out how many slices of cake you have to sell a month to break even. Is that even possible? And if it is possible, how soon would it be possible? What would it require to make that happen?

The fourth thing that comes to mind is how are you going to make your monthly payments when you don't sell enough? How quickly will you be bankrupt if it takes a couple of years to manage to break even?

Even with great equipment that can help you bake large quantities in a short amount of time, there is no automation for your decorating. How many servings of cake can you manage to get out the door in a week? Do you know?

Shorty56--GREAT space. It's made me wistful...

saberger, you said you've been researching through the forums so you may have already seen this but it's a good one so I'll post the link. I especially liked Indy's post on page 2. Hope it helps.

http://www.cakecentral.com/modules.php?name=Forums&file=viewtopic&t=600727&postdays=0&postorder=asc&&start=0

Here's another pat on your back. I have to say - you are staying so opened minded to everyone's opinions. I'm impressed!!!!

Thank you bmt4995. Now I REALLY feel better!

Here is a blog I like to read that shows someone starting a cake/dessert storefront from scratch in California. If you read back through the archives to where she started, just try to add up in your mind the $$$ her family has saved her by doing all the work. Plus note how she frequently talks about being sleep deprived and her storefront isn't even open yet. Her cakes and desserts are awesome, but I am wondering how the money and business end of things will progress. I wish her well!

http://www.mysweetandsaucy.com/

Great blog!

Y'know what though? Making it a coffee shop would totally work. Your sister could run the coffee end of it--put out some tables--cater to the croissant crowd bring 'em in! You do the cakes and...why aren't there enough johns? I cannot believe that got constructed to code these days with only one john.

20 years ago they prevented me from opening a cake shop (no eat in trade) 'cause of only one john.

You gotta be kidding me?? One bathroom--incredibly shortsighted. Put in a bathroom!!!!! That will totally work!!!!

edited to say--see people would like to watch you work too. It'd be like reality Duff same bat-time same bat-channel/bakery.

Yes... # of bathrooms required depends on how many seats you have. In NH you only need one restroom for up to 24 indoor seats and two restrooms for 25 and up.

Tennesse is nothing if not huge on plumbing. If a little plumbing is good a lot of plumbing is better. I guess the only thing we dig more than plumbing is taxes.

Hi saberger, just wondering if there's any news on the bakery.

Deb