Hi all,
I am a total newbie here (been stalking for a couple weeks though). I have gotten so much helpful information here and am strongly considering starting my own business selling cakes, cupcakes, desserts by order and at local farmers markets. Luckily there is a cottage law that allows me to do this from my home kitchen.

So here is my situation. A lady who lives in my neighborhood owns a cake/cupcake decorating business with her sister (who's husband work with my husband...). Their business is from her home in the next town over. Their cakes are mostly decorated fondant cakes or cupcakes with fondant decorations.

I am not focusing on decorating cakes (ie no wedding cakes or sculpted cakes), only making cakes/cupcakes with local ingredients and some non-traditional flavors and flavor combinations (like ones including alcohol). So I don't feel like I will be totally competing against them.

The ethical question-because I am somewhat aquainted with these ladies should I- out of respect, let them know that I am opening up my own business and that I am not doing the decorating piece? It may be helpful to know I live in a very small community.
Thanks for any advice you have!

If I were you I would contact the other business...not out of an ethical concern, but for marketing purposes. Since you seem to be serving different markets you may be able to work out a referral agreement where you refer wedding cake customers to this other business, and they refer people looking for party cakes to you.

Of course, if you decide to start branching out into wedding cakes you should have no qualms about doing so, good businesses thrive on local competition.

I agree - approach them on a marketing standpoint. Totally legit in your case.

Take them some cupcakes and introduce yourself. A friendly chat between the two of you will stop speculation on both sides.

If anything your going to HELP her business by being able to refer Fondant and sculpted cakes to her. Maybe even ask her to start a mutually benefical partnership. Give eachother a small portfolio and when you can't meet the needs of the client in front of you refer them to the other person. I don't see anything wrong with it. In this economy you have to do whats best for you to get by.

I think these are perfect solutions...I agree 100%

Yep I agree with everyone else! I run a candy stand at my local farmers markets, and have been the only one for a long time. This year there were 2 that joined. First one I went over and we had a very nice chat, and discussed about undercutting, and decided to consult each other when we would have a new product, make sure the other one doesn't have it. SECOND ONE was Very rude I will tell you, and actually said "well we are competition why should I talk to you"........ not good for business I will tell you that much!

Well, that's how a threatened dog reacts, right? lol...you reach out your hand to show kindness and he'll bite

for sure!

I would go with the recommendations made here - they're sound and reasonable. Best of luck to you!

I think I would say " AT THIS TIME" I am not thinking of doing wedding cakes, etc.... that way you are covered for future projects if things change... other wise it sounds like you are on the correct path..... GOOD LUCK WITH YOUR VENTURE !!

I am actually friends with several other cakers in my area. We each have our own specialty and often refer clients to each other.

Many nights we just sit on the phone and share ideas, tricks and new techniques that we have learned. Even though we are from a small town, there is plenty of business to go around!

Also, it is nice to have a back up in case you ever get sick or have emergencies to arise. That way you don't have to cancel, you just call in the calvary!

Thanks for the helpful advice. I was thinking talking to them and letting them know I would refer people to them who were looking for wedding cakes or decorated cakes. Now I just need to jump in and to it!