Well, That's Interesting...
Business By LoveMeSomeCake615 Updated 7 Jan 2012 , 2:57am by Bridgette1129
So I was looking at the website of a local custom cake business, and I saw a tab at the top that said "Bakery Fundraiser". I clicked on it to see what it was, thinking it was probably something to do with donating cakes to charities and such.
Not hardly.
This lady currently operates under cottage food law, but she would like to have a retail storefront someday. But apparently doing what she does now isn't cutting it in bringing in enough money for her to save up. So she is holding a fundraiser for her future bakery. This is the text from her website:
"Ever since I made the decision to sell customized cakes it was with the goal in mind to have a commercial bakery. I have spent the last few years refining my craft and I feel it is time to start preparing for the bakery that is in my future. My intention is to have a cake shop that makes stylish take and go cakes, customized cakes, cupcakes, cake pops and whoopie pies.
However, attempting to fund this venture with weekend birthday cakes has proven to be futile. I had all but given up the idea of a store front when the mass of emails from politicians asking to participate in fundraisers arrived. Then it occured to me that if people are willing to donate money to politicians who might do what they say to help improve the economy then maybe people will be just as generous to someone who wants to do their part to help the economy by opening a bakery that will employ more people and help keep jobs that are already in existence by working with food vendors and the like.
I am not the type of person to ask for something for nothing so I created this fundraiser... or should I say Yumraiser... that rewards those who are so generous to me."
She then goes on to list different tiers of giving, and the "reward" for each gift, all varying amounts and types of cake pops, cupcakes, custom cakes, etc.
As someone who is currently wading through the red tape and massive amounts of cash required to open a storefront, and doing it without asking for "donations", I find this kind of, um, presumptuous (And that's putting it nicely).
Not too mention that I question the legality of asking for donations as a for profit business. I don't plan on doing anything about it or approaching her about it (If she wants to attempt to raise $80,000 from strangers, more power to her I guess), I was just curious if anyone had ever heard of someone doing this and what your thoughts are on it.
Well, she gets points for creativity! LOL
I think that is crazy! I'm curious to see if someone has "sponsored" her. I have never heard of such a thing. Not too many people have the cash to start a business but they get business loans so i don't get why she is doing that. Evidently, she has no shame!
if it is not for non profit I do believe it is not legal....
I better close my mouth before I catch a fly. Just how good were her cakes? I think she needs to look to friends & family who really think she is good & worth the investment. I can see where she is frustrated trying to save up for a store on the weekend cakes but if she isn't making a profit there, she should cut her losses. Not an easy business I'm sure. Good luck with getting your storefront.
have to agree on her points for creativity...
tho not necissarily illegal, taxes would still need to be paid and the "sponsor" would not get a tax credit. this is still income, she is providing a cake or item for the $. so this would not be a true donation or non profit. maybe she should ask for investors or sell advertising to display in her shop.
LoveMeSomeCake615 i feel your pain, going through that myself, start building in a few days and still wading through the health dept requirements. i currently have a sub-license and rent a commercial kitchen. but very exciting...Good luck!
It's kind of similar to the kickstarter.com idea but less professional, organized or planned. She's nuts if she thinks people will simply donate money out of the goodness of their hearts but some people will donate small amounts if she shows them a sound business plan and plan to move forward.
Very easy to google a phrase from the text you posted and find her website...doesn't look like there have been any donations yet.
There are enough good causes and people in real need to donate to, in my opinion.
Of course it's legal to ask for donations, the donor just wouldn't be able to deduct the donation on their taxes.
It's an interesting way of raising capital, but chances are she won't get any "donations" without offering a more substantial reward like a more long-term commitment to free/discounted merchandise, company equity, or some kind of profit sharing.
If she stood out on a street corner begging for money, she'd probably have more luck. I have to admit, she's gutsy but I doubt seriously anyone will 'donate' enough money to open her doors--especially since the highest level of donation only nets you a scuplted cake and 20% off future orders. I went to her website too and she's pretty young. She's got talent and no doubt would do well. She just needs to grow up a bit and learn about the real world of starting a business--you know--the hassle of going for loans, the mind-numbing regulations and hoops you have to jump through. It will be interesting to see if she gets anything!
It's legal, bold, creative and smart if she can raise this money. She's upfront and honest about where the money is going towards so it's legal. If her customers donate enough money for her expansion, then kudos to her for finding a way to finance her business without having to deal with interest ridden loans and credit issues.
I dont see anything wrong with what shes doing. Just because she is not going the traditional route of trying to get her business off the ground doesnt make her wrong. She may not have friends or family who can loan her money. She is trying to fund a dream without taking out loans or owing anyone money.
On that show shark tank people present their product to people they dont know in hopes of funding their business. Other people use private investors and give them a percentage of the business. She decided to provide her product and keep them coming back as customers with the future orders discount. I think that is pretty smart on her part.
It seems tacky to me, but if it's working then good for her.
LoveMeSomeCake615 i feel your pain, going through that myself, start building in a few days and still wading through the health dept requirements. i currently have a sub-license and rent a commercial kitchen. but very exciting...Good luck!
Congrats on your shop! It is exciting, isn't it? 
Our contractor has a pretty good start on the build out, and we should be on our way to opening in February!
There sure is a lot of red tape and rules. I totally understand the need for it, though. The hardest thing for us is when we are at a stand still while we wait for the city to sign off on something! 
yes Jason is tight thats what I meant haha...not tight.......but right....oops
It's totally legal but really stupid...If she can sell under cottage food law then she can sell for this. She's basically told people "I'm going to raise the prices of my baked good to ridiculous amounts and call it a fundraiser." Of course people can't deduct this "donation" from their taxes unless she's a registered non-profit, which she obviously isn't. I think that people don't understand how tax deductions work, though. I just wrote on my blog recently about the bride who wanted me to give her a free wedding cake, and in her letter she said that it could be a tax deduction. I think that people assume that if you donate something it's automatically deductible. Durrrrr....
I saw this once last spring while looking for a different site, I don't remember what site but the woman runs a cupcake truck and her customers were wanting her to open a shop so she setup a fund raising site and last I saw her shop was open as of this summer! So I guess if the customers want it they'll help fund it!!
So I was looking at the website of a local custom cake business, and I saw a tab at the top that said "Bakery Fundraiser". I clicked on it to see what it was, thinking it was probably something to do with donating cakes to charities and such.
Not hardly.
This lady currently operates under cottage food law, but she would like to have a retail storefront someday. But apparently doing what she does now isn't cutting it in bringing in enough money for her to save up. So she is holding a fundraiser for her future bakery. This is the text from her website:
"Ever since I made the decision to sell customized cakes it was with the goal in mind to have a commercial bakery. I have spent the last few years refining my craft and I feel it is time to start preparing for the bakery that is in my future. My intention is to have a cake shop that makes stylish take and go cakes, customized cakes, cupcakes, cake pops and whoopie pies.
However, attempting to fund this venture with weekend birthday cakes has proven to be futile. I had all but given up the idea of a store front when the mass of emails from politicians asking to participate in fundraisers arrived. Then it occured to me that if people are willing to donate money to politicians who might do what they say to help improve the economy then maybe people will be just as generous to someone who wants to do their part to help the economy by opening a bakery that will employ more people and help keep jobs that are already in existence by working with food vendors and the like.
I am not the type of person to ask for something for nothing so I created this fundraiser... or should I say Yumraiser... that rewards those who are so generous to me."
She then goes on to list different tiers of giving, and the "reward" for each gift, all varying amounts and types of cake pops, cupcakes, custom cakes, etc.
As someone who is currently wading through the red tape and massive amounts of cash required to open a storefront, and doing it without asking for "donations", I find this kind of, um, presumptuous (And that's putting it nicely).
Not too mention that I question the legality of asking for donations as a for profit business. I don't plan on doing anything about it or approaching her about it (If she wants to attempt to raise $80,000 from strangers, more power to her I guess), I was just curious if anyone had ever heard of someone doing this and what your thoughts are on it.
This sounds like kickstarter.com
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