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Personal question for business owners...

post #1 of 18
2/3/12 at 9:16pm
Thread Starter 
So this could probably be considered a touchy question but I thought I'd ask and anyone that wants to respond can and those that don't to share don't have to.

First, I want to share a scenario:
I've been figuring numbers if I would start a business, for example selling cupcake bouquets. I've broken down all costs and figured it takes about $13 to make one 12 cupcake bouquet. If I sell them for $27 per bouquet (or $2.25 a cupcake) I would make $14 (general) profit.

If I want to make, let's say, $20,000 per year doing this I did the math and figured I would need to make roughly 1,428 bouquets a year/119 bouquets per month. That's a LOT of cupcakes in one month! A great deal more than I could ever bake out of my home. I was hoping if I started something like this it could turn into a full time business some day. But by looking at those numbers I'm figuring I better stick with my day job.

So, basically I'm just curious as to how many bakers on here are actually doing this full time and how many are doing this as a side business. I was wondering if you would mind sharing how much money you guys make each year doing this (that's the "touchy" question I was talking about above). Don't answer that portion of it if you don't want to.

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post #2 of 18
2/3/12 at 9:47pm
Your costs seem VERY high. Are you sure they're accurate? If they are, can you figure out a way to lower them?
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post #3 of 18
2/3/12 at 10:01pm
Thread Starter 
Well, here's how I figured...

Cost:
$7.08 for 12 cupcakes ($0.59 per cupcake)
$3.00 for basket (this could fluctuate depending on whether I can find a cheap/durable basket)
$3.00 for styrofoam ball
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$13.08

My biggest expense is the basket and styrofoam. That's where I'm losing profit.

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post #4 of 18
2/3/12 at 10:04pm
Thread Starter 
Correction...the basket and styrofoam aren't my biggest expense but they're basically equal to what the cupcakes cost to make. :-/
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post #5 of 18
2/3/12 at 10:08pm
Ive been buying materials to do cupcake bouquets for gifts.I was shocked at the price of styrofoam balls . 6"costs $7.
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post #6 of 18
2/4/12 at 2:00am
You need to also up your amount that you pay yourself unless yo do this production assembly line style.

Pm me concerning marketing your product as this is going to decide the viability of your product.

This can be a simple business plan for success, but you have to know how to do it. My personal costs for baking are very high, but it's because of expensive ingredients. Certain income groups will appreciate this and this is also the group you would need to target.

You also didn't mention the demographics of your area which will also make or break your plan.

This type of aggressive selling will require that you have some decent marketing , branding, and PR skills. College and/or direct sales experience will be needed.
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post #7 of 18
2/4/12 at 8:30am
Thread Starter 
scp thanks, I PM'd you!

I would still like to get some input from others as to whether or not you guys are doing this part time or full time.

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post #8 of 18
2/4/12 at 8:59am
From what I understand to make an actual living doing cake decorating you would need more big ticket items. If you did one $300 wedding cake, that's the equivalent of 10 bouquets. I love the bouquets but you have to find cheaper suppliers. I only pay $1 per container for 6 inch or smaller bouquets. Check out Dollar Tree and the dollar area of target. They always have cute buckets. Also are you using a full ball per bouquet? I cut mine in 1/2 to reduce cost.

Sometimes I can find the styro balls at dollar tree but the sizes are hit to miss.
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post #9 of 18
2/4/12 at 9:06am
I just did some quick research on line and I think if you could afford the initial investment you need to buy your balls & baskets in bulk and on line. In looking some 6" balls would only be around $3 a piece. Hope you figure it out! I totally get it, I still have my day job as well!
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post #10 of 18
2/4/12 at 9:42am
I do not use a ball for them. I bought a huge bag of beans from Sams for a few dollars to weigh the container. I use the thick foam core boards and predrill holes in them (to hold the cupcakes or cookies) the size of my bucket/basket. I also use the dollar tree (can order online as well) for containers. Target has a dollar isle that MAY have something of use. I have storage space, so I can buy discount holiday AFTER the holiday for the following year. As a store front business, you need to find a wholesale supplier in my minds thought.
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post #11 of 18
2/4/12 at 9:50am
If you wish to pursue this dream, you will be well served to read current and past threads on the Cake Central forum: Cake Decorating Business
There is a WEALTH of information from people who have successfully followed their dream and developed a viable business model that is profitable, AND a wealth of stories of "what not to do!". Perhaps you will discover a "cupcake bouquet" business model that has succeeded.
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post #12 of 18
2/4/12 at 10:21am
Quote:
Originally Posted by sillywabbitz

From what I understand to make an actual living doing cake decorating you would need more big ticket items.


You don't necessarily need big ticket items, you need items with a high profit margin. Considering you are offering a value-added item over and above a dozen boxed cupcakes you may be able to charge considerably more. Many custom cake shops have starting prices for a dozen boxed cupcakes higher than your bouquet price.
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post #13 of 18
2/4/12 at 10:35am
My cake business is technically Part Time (although I have no other job- other than Mommy). I am in a fortunate position that we do not need my income and I intentionally keep my business small because my kids are young. I do not overbook myself and keep it to a max of 3 cakes a week and I take 1 week off each month. My primarliy focus is wedding cakes, although I also do smaller orders. After expenses I bring in around 10-12,000. Not a big enough paycheck to live off of, but perfect for my situation.

I agree with previous posts that you need to find the right balance betwee costs and price to make it worth your effort. Buying in bulk if at all possible can really help too. Even though I may not use 50 12" cake boards in 1 year, I still by them by the case because it reduces the cost by more than half and with non-pershable supplies there is no risk (as long as you have space to stor them)
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post #14 of 18
2/4/12 at 12:22pm
Thread Starter 
Thank you so much for all of the helpful input. I appreciate it all.

The demographics for my local area show that the average annual income here is about $32-$34,000 per year. Unfortunately a lot people probably won't want to shell out $27 a pop for a dozen cupcakes. I'm going to keep looking into marketing though and I think if I market to the right people I might be able to make a decent go of it.
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post #15 of 18
2/4/12 at 3:03pm
Quote:
Originally Posted by Artsygurl

The demographics for my local area show that the average annual income here is about $32-$34,000 per year. Unfortunately a lot people probably won't want to shell out $27 a pop for a dozen cupcakes.


Except you're not selling a dozen cupcakes, you are selling a cupcake bouquet, and you should be offering your product as an alternative to flower arrangements, gift baskets, etc. If Edible Arrangements can sell fruit on sticks in a cheap container for $50-100+, you have some room to increase your prices.
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