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Cake Business not doing well

post #1 of 36
Thread Starter 
This is my first post, I browse a lot here icon_smile.gif I'm looking for some advice on my business as I'm really stuck and don't know what to do.

A year ago roughly I opened a new cake shop and for about 6 months I maybe had 20 customers total? Every day was dead really, we calculated how much money we should be taking on average and halved it to make sure we were in front, and we are not even making half. I've given out leaflets to other shop owners/bridal places, I've had about 5 newspaper ads, I'm on yell.com and 118.com and a few others and my rent is incredibly cheap. We are not out of the way, we are on a busy road and cars are passing by all the time, we are not tucked away. But for some reason I am not being able to afford anything to even live on because I have no customers. We're not expensive either, there are several other cake shops that have opened in our area in the past 6 months who sell out of cakes every day and get tons of orders but are twice as much money. I don't think it is the way our cakes look either, we craft everything by hand and our figures are made from modelling chocolate and look life like which I haven't seen anyone else do. Even some home business's are doing better than us. I don't begrudge those business's doing well but I just can't get my head around why I am not? There aren't any places to park where my shop is and our window doesn't have a whole lot in but then neither do the other places probably even less so but they are getting out 20 cakes a day. Is there something I am doing wrong? Am I in the wrong area? It seems that most of the people who come in want an £80 cake for £20 and I just can't do it. I don't use store bought mix either which I know one of the other places do and have been told by my customers that my cakes are the best they have tasted. I'm getting a bit down over it now, I am trying hard to get more noticed over facebook but I don't know how to get people in my area seeing the page. Do you think I should try something like a groupon to raise awareness of my business?

Sorry for the long rant, I can't see what I'm doing wrong though so if you have any advice it would be much appreciated xx
post #2 of 36
Make a dummy cake (or a few) and put it in the window!
Getting mentioned on groupon is nice, but I have no idea how that works unfortunately.

Get a friend or two to review your business on Yelp.com. Also make sure your business is in the local directories.

Good luck!
post #3 of 36
Well I do not own my own cake business, but I will quickly discourage you from running any sort of Groupon type deal. Talk about not making any money....that's the way to really lose money. Avoid it.

It sounds to me like you're possibly in the wrong part of town? You say your rent is cheap...is the area a well off area or just average? I can't imagine it's well off if the rent is cheap. You are looking for a client that wants high quality, from-scratch products and willing to pay for them, but it seems like you're in a location that doesn't have that type of client walking around. Even what you consider to be affordable doesn't seem affordable to the client finding your store.

The ad sites you mention seem to be like our Yellow Pages here in the US, which is ok for a business directory, but not how you should expect your desired clientele to find you. You need to reach out to more high end mediums. If you feel your cakes are high end then I suggest finding a high end bridal show. Avoid the crazy packed bridal shows. Those are full of brides looking for deals, etc.

So I guess my two cents is that your product is more expensive than the client you're reaching out to can afford. Find high end, good quality avenues of advertisement. Maybe isntead of flyers at the bridal shops, go by with some actual samples for them to try. This way they know first hand the product you provide and will be more apt to recommend you.

Good luck with everything. Hang in there! It sounds like you have a great product, you just need to tweak the business aspect and I'd say that's a simpler problem to have than a bad product icon_smile.gif Just my opinion.
Hobby baker for now.....
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Hobby baker for now.....
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post #4 of 36
What is your target market, where are they located in relation to your shop, and what are your competitive advantages? Have you done any networking with local venues or event planners? What is your monthly advertising budget?

The fact that your rent is incredibly cheap is probably not a good sign. If home-based businesses are legal in your area you may want to look at closing the shop and working from home until you can build a client base.
post #5 of 36
The most successful local cupcake shop takes her cupcakes to the customers.

Put four dozen cupcakes in your car with a folding table. Go where the business people lunch. Sell them cupcakes. Don't sell them cheap. Bring business cards. Bring order forms for cakes. Make money.

If you sell out, great. Bring more the next day. If you did this five days a week for a month, you'd probably be making a heck of a lot more than you are now.

This alone could gross you $2,000 - $3.000 a month. If you do this, you will start to create buzz and see more potential for profit.

For now, go sell four dozen cupcakes.

Try it. what have you got to lose?
post #6 of 36
Quote:
Originally Posted by matthewkyrankelly

Put four dozen cupcakes in your car with a folding table. Go where the business people lunch. Sell them cupcakes. Don't sell them cheap. Bring business cards. Bring order forms for cakes. Make money.


Make sure you clear this with the local health department and municipality first, in some areas you need permits to sell like this.
post #7 of 36
You may also want to post your web site address here if you'd like some constructive criticism.
post #8 of 36
I don't know much about running a business but here in Australia a lot of people in my area use facebook for their cake business.. They attract customers by running promotions (sometimes with sponsors) and run competitions with prizes to give away for people that 'like' their page...Very popular....Sometimes the giveaways are small. The latest was a 'kitchenaid' give away (and she's a bake at home mum not fancy in the least).....The most important is that they are always putting pics of their latest cakes on fb..I hit 'like' and all my friends see it!!!!!!!

I hope you work it out!!!! My husband and I just had to close our business recently (a truck transport bus.) because we weren't making any money...Very sad!!!!!!
post #9 of 36
Warning! My answer below uses my own experience as an example. No criticism intended icon_wink.gif

How much experience in cake making did you have before opening your shop?

Did you work from home for a long time before moving to your shop?

I think 6 months is a bit too short a time frame to expect loads of business, but it depends on how well you've established a client base and that "word-of-mouth buzz".

When I started out in my home-based business, I increased turnover and got my name established by creating small cafe cakes, cookies, friands, tartlets macarons etc. and selling them direct to a number of cafes and restaurants. I also did High Tea catering. In my first year, my city's most highly regarded catering company were given my business card, and they became a customer who remains with me to this day. They get most of their cakes from me for catered celebrations including weddings.

Over the years my focus has shifted to doing more wedding cakes. I attended one wedding expo 3 years ago, and the business I generated from that (less than 6 jobs!) has led, through word of mouth, to more business than I can now manage on my own.

My business has been running for over 5 years, so for me I can say I have grown it organically and its not something that happens over night. I think in the immediate future, you should look maybe beyond the ultimate cake jobs you want to be doing some day, just to get some cash flow. You need to also investigate more into your target market. I agree with Jason on two points in particular:
1. Consider sharing your website for some input on this primary and highly important frontline contact point for your business. Facebook is also a good adjunct to having your website.
2. If you have not moved from a home based business originally, consider starting from a home-based position first to build a solid client base. These clients become your best advertising, as they tell everyone they know about you. If you are in the UK (just guessing from your use of pounds instead of dollars) maybe the ideas I mentioned inclusing high tea catering could be something to consider to help with the money coming in.

I hope this helps a bit icon_smile.gif

Life's too short to make cake pops.
___________________________________
www.sweetperfection.com.au

www.sweetperfectioncakes.blogspot.com.au/
www.facebook.com/sweetperfectioncakes (come visit sometime!)

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Life's too short to make cake pops.
___________________________________
www.sweetperfection.com.au

www.sweetperfectioncakes.blogspot.com.au/
www.facebook.com/sweetperfectioncakes (come visit sometime!)

Reply
post #10 of 36
Can you share your FB page please? I'm sure that would give everyone an idea of what you are producing, where you are at, etc.
post #11 of 36
I had a very busy shop in central NY, then we moved south. I opened a smaller shop in TN. Before we signed the lease the landlord said "twenty-thousand cars drive by here a day." During the holidays we were packed, but otherwise we had very few customers. I agree with an above poster, look for wholesale accounts. This can bring in additional revenue and widen your customer base. This helped my overall income but one day we had no customers. No one! I decided to move to a downtown location with a lot of foot traffic. It was a hard decision, I sure didn't feel like packing up an entire business. But it was a wise decision - our average customer count went from 2 to 300.

For now: Do you sell individual items in addition to cakes? For shops with small amount of foot traffic, I suggest filling the case with long shelf-life items such as biscotti, butter cookies, and pre-packaged granola. Customers like to see a full case - the more products you have, the more you will sell. Good luck.

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post #12 of 36
I think the lack of parking is probably having a big impact on you. Could you offer free delivery within a certain distance for orders over a certain size? As has been said, try and make the most of your window, even nice big photographs if you can't physically fit even a small display.

One thing I'm after thinking of - you know the sandiwch vans that drive around offices/industrial estates? People seem to love them. Could you do something like that for cakes/sweet food and go around in the afternoon or about 10/11o'clock? If you are in a city you could use a little hand cart instead of the van. Ask companies (ideally close to your shop) if you can come in. Take a selection of things and have lots of business cards and leaflets of what you can do with photos.
Check out the male/female ratio of the companies you are going to. This is a 100% sweeping generalisation based on my office, but if there is a high male proportion try and include things that are less chocolaty and sweet on sweet (eg cupcakes with tons of buttercream forsting). Certainly the men in my office (it's about 80% men and a lot of engineers and other traditional type roles) prefer simpler foods like simple cookies with just a little icing and more traditional cakes. This may be just here but worth bearing in mind at the start at least.
post #13 of 36
See if you can sell whole cakes to restaurants, for them to slice and serve as desserts. These cakes would not have much more than borders top and bottom and maybe a rosette on each portion.

Put up signs that say "special this week" and change them according to the holidays. Again a simple cake with borders and a little piping for the occasion like Valentines or St Patricks etc.

Start baking coffee cakes or Victoria sandwich cakes in small pans. Change the filling every two weeks.

The simple cakes are to get people in the door for your best decorated special occasion cakes. Cupcakes do the same job--they let people taste without having to special order.

If you can't sell offsite, put a table on the sidewalk and sell cupcakes right in front of your shop. Bake 2 dozen minicakes and give them away. Call this "cupcake day" and time it for local payday.

And look at your local bakeries NOT your cake competition. You will get better market ideas there.
post #14 of 36
Quote:
Quote:

Warning! My answer below uses my own experience as an example. No criticism intended icon_wink.gif



Ha ha ha- Rainbows and unicorns disclaimer!
post #15 of 36
Perhaps offer a tasting day once a month where people can come along and taste mini cupcakes?
A down-to-earth South African who has a growing interest in fondant cakes...I've been bitten by the cake bug!
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A down-to-earth South African who has a growing interest in fondant cakes...I've been bitten by the cake bug!
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