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post #91 of 112

I'm not sure if anyone has mentioned liability insurance as well.  I carry mine through State Farm, and there are venues in certain cities that require you to have it.  We just had a new one open up here, and not only did I have to have a million dollar policy (which is what mine has always been), I also had to show proof of $500,000 in automobile liability.  I had never had to do that before. 

 

Also, have you thought about polishing your skills at another bakery, first?  Learning the ropes, etc..?  Seeing if this is something you are really cut out for?  I am sure someone might of suggested this already, but it can be helpful.  Or, partnering with a venue in town?  When I first started out, I did work for a venue where I provided the cakes for their packages that they offered.  They had up to 4 weddings per weekend, and it really honed my skills and allowed me to build a great portfolio of work.  They paid really well too.  If the clients wanted fondant or something that didn't fall into the package, then they paid the extra for it.  This built word of mouth referrals, and my business took off, quickly.  Before starting my business, I taught Wilton for a year and that really honed my basic skills, and during that time I got all of my ducks in a row and researched and set things in motion to build my business. 

post #92 of 112

and working at a grocery store bakery offers benefits too--not a small commodity in this day & times

favorite slogan "you sweet talker, Betty Crocker"

 

favorite slogan "you sweet talker, Betty Crocker"

 

post #93 of 112
Quote:
Originally Posted by -K8memphis View Post

and working at a grocery store bakery offers benefits too--not a small commodity in this day & times

Working at a grocery store, working at a fast food joint, working for a caterer, working on a census or election--whether you get paid or not, these places teach the most useful business skills like being organized, inventory control, working with regulations.  And some of them pay better than minimum wage.

 

You don't have to be working at a bakery--making sandwiches or assembling desserts is the same skill set and ther are more deli jobs than bakery jobs.  Same health rules and certification too.

 

I have done all the jobs on my list part time and I can highly recommend them to people of all ages who want to learn how to run a business before they spend their own $$$ to set up their own.

post #94 of 112
Thread Starter 
Quote:
Originally Posted by DonnaOK View Post

I'm not sure if anyone has mentioned liability insurance as well.  I carry mine through State Farm, and there are venues in certain cities that require you to have it.  We just had a new one open up here, and not only did I have to have a million dollar policy (which is what mine has always been), I also had to show proof of $500,000 in automobile liability.  I had never had to do that before. 

Also, have you thought about polishing your skills at another bakery, first?  Learning the ropes, etc..?  Seeing if this is something you are really cut out for?  I am sure someone might of suggested this already, but it can be helpful.  Or, partnering with a venue in town?  When I first started out, I did work for a venue where I provided the cakes for their packages that they offered.  They had up to 4 weddings per weekend, and it really honed my skills and allowed me to build a great portfolio of work.  They paid really well too.  If the clients wanted fondant or something that didn't fall into the package, then they paid the extra for it.  This built word of mouth referrals, and my business took off, quickly.  Before starting my business, I taught Wilton for a year and that really honed my basic skills, and during that time I got all of my ducks in a row and researched and set things in motion to build my business. 


I wish getting into a bakery her was easy, not so much.. Most are small and family owned, the "big ones" apparently you HAVE to have a culinary degree to work there trust me I have tried for years to get into a bakery no luck. They don't have many hear at all.
The whole venue thing sounds pretty neat, could you private message me with more information please? Also I'm not a fan of making cub food or Walmart cakes, I just can't see myself working soooo hard on amazing recipes,and self teaching myself fondant work and everything else I'm learning. To just go slap some sugared down frozen cakes together nooo way! Sorry if that offended anyone.


Honest opinion.. What do you guys think of my skills? Do I have what it takes, I posted one of my photo's. I honestly have great confidence in my product! I've heard (this is the best cake Ihave ever had you should sell these) soo many times!
post #95 of 112
Thread Starter 
Quote:
Originally Posted by -K8memphis View Post

yes and op did not gain income

truly she lost income on the cake projects

in my mind she did not sell the cakes either

she willingly spun straw (ingredient money) into gold (pretty cakes) for friends & family 

that's not income to me nor to the irs

for example if she painted 10 houses for friends and they bought the paint there is no income to report there

maybe report her to a psychologist to get her head examined for painting for free but no just kidding icon_biggrin.gif

on one hand we are encouraging her to be professional and foresee not only the ins and outs but also the extremes of a new venture while trying to hold her  accountable for trying to gain some experience by working for free

how's a girl 'sposed ta get ahead

Lol thanks!
post #96 of 112
Unfortunately the IRS does consider converting ingredients into cake in exchange for money to be reportable income, regardless of whether or not it is done at a loss or break-even. The good news is that if OP meets the requirements to treat her side income making cakes as a business she may be able to reduce her tax bill from her day job if her documented expenses are greater than her income. Again this is something OP needs to talk with her accountant about to make sure she is not evading taxes or losing out on potential deductions.

More info:
http://www.smartmoney.com/taxes/income/how-the-irs-targets-hobbyists-1334347068114/

There's nothing wrong with gaining experience by making cakes for free, but if you accept any money for cakes (even if it's just for ingredients) you are not making cakes for free.
post #97 of 112
I'm not a professional cake decorator, but have owned a cafe for the last 15 years. During this time we all know that food allergies have become so prevalent, so as a business owner I had to make some hard and fast rules about this. Our solution was to offer some items labeled as "no added Nuts", "no added Gluten" etc. We advised customers that we do use gluten, nuts etc. in our kitchen, and whilst every care would be taken, we could not guarantee "gluten/nut free". When advised of this 99% of our customers said that was fine - they had food intolerances, NOT allergies. If I ascertained that the customer had a genuine allergy, I would again stress the "no guarantee" and therefore was not happy about accepting the order. I feel that if you do accept orders for people with allergies, you really need a a complete set of equipment for that purpose only, and also a totally separate area in your Kitchen. This would not be financially viable unless you mean to go into special dietary cooking in a major way. My advice to you would be to make your policy clear in your promotional material, and stick with that - no exceptions. I'm sorry this was such an unpleasant experience for you - just try to learn from it and have your policy ready for next time!
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Quote:
Let them eat cake
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Marie Antoinette
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Let them eat cake
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Marie Antoinette
post #98 of 112
Quote:
Originally Posted by jason_kraft View Post

Unfortunately the IRS does consider converting ingredients into cake in exchange for money to be reportable income, regardless of whether or not it is done at a loss or break-even. The good news is that if OP meets the requirements to treat her side income making cakes as a business she may be able to reduce her tax bill from her day job if her documented expenses are greater than her income. Again this is something OP needs to talk with her accountant about to make sure she is not evading taxes or losing out on potential deductions.
More info:
http://www.smartmoney.com/taxes/income/how-the-irs-targets-hobbyists-1334347068114/
There's nothing wrong with gaining experience by making cakes for free, but if you accept any money for cakes (even if it's just for ingredients) you are not making cakes for free.

Thank you Jason!!! This is what I said, but apparently, I have no idea what I'm talking about. Hopefully you won't have any snide comments made back to you.
post #99 of 112

disagreement is not snide snide is in the eye of the besnider

favorite slogan "you sweet talker, Betty Crocker"

 

favorite slogan "you sweet talker, Betty Crocker"

 

post #100 of 112

..."Fortunately, the tax law automatically assumes you have a for-profit business if the activity produces positive taxable income (revenues in excess of deductions) for at least three out of every five years."...

 

so it seems she is in the process & has a few more years to go to get in the microscope according to that article

 

plus the focus of that article is about deducting losses 

 

and you have to itemize

 

i don't think op has been at it for five years

 

i just think that all of us started up somehow, some with brilliant professional insight and mentors and know how and some of us have flown without much light at all propelled by passion and grit and it's all good and it all works one way or another

 

i hate *taxes--i give it to an accountant--could care less than not anything at all in real life

 

i can do sales & use though  icon_biggrin.gif all that other stuff is like kryptonite

favorite slogan "you sweet talker, Betty Crocker"

 

favorite slogan "you sweet talker, Betty Crocker"

 

post #101 of 112
Thread Starter 
Quote:
Originally Posted by -K8memphis View Post

..."Fortunately, the tax law automatically assumes you have a for-profit business if the activity produces positive taxable income (revenues in excess of deductions) for at least three out of every five years."...

so it seems she is in the process & has a few more years to go to get in the microscope according to that article

plus the focus of that article is about deducting losses 

and you have to itemize

i don't think op has been at it for five years

i just think that all of us started up somehow, some with brilliant professional insight and mentors and know how and some of us have flown without much light at all propelled by passion and grit and it's all good and it all works one way or another

i hate *taxes--i give it to an accountant--could care less than not anything at all in real life

i can do sales & use though  icon_biggrin.gif  all that other stuff is like kryptonite

I'm happy you made that clear, thank you. I'm sure there are cakers on here that make over 500.00 and do not report to taxes. Id go after them. Not someone who sold cakes every now and then, yes 50 where free 50 percent to others that paid for ingredients. If it came down to it I have ALL invoicesand will do what ever is needed to clear my name. icon_smile.gif no biggy.
post #102 of 112
Quote:
Originally Posted by -K8memphis View Post

..."Fortunately, the tax law automatically assumes you have a for-profit business if the activity produces positive taxable income (revenues in excess of deductions) for at least three out of every five years."...

so it seems she is in the process & has a few more years to go to get in the microscope according to that article
The part you quoted refers to whether or not an activity is classified as a hobby or a business. Being a business under the IRS definition is preferable since you have more flexibility to deduct losses, but regardless of how an income-producing activity (which may or may not also be profit-producing) is classified the income still needs to be reported.
post #103 of 112
Thread Starter 
Lus
Quote:
Originally Posted by jason_kraft View Post

The part you quoted refers to whether or not an activity is classified as a hobby or a business. Being a business under the IRS definition is preferable since you have more flexibility to deduct losses, but regardless of how an income-producing activity (which may or may not also be profit-producing) is classified the income still needs to be reported.

I understand that, i seen it as a expensive hobby! No profit gained. I will report the small income to them then I guess (less then 300 a year!). This seems a tid bit crazy if you ask me. I feel as if I'm a criminal witch is NOT the case!
post #104 of 112

so it's any income not just profit

 

i just leave that with tax pros

 

cute cakes 1234 you would do well to follow Jason's advise than mine

 

but if you are under a certain amount of money you don't have to report it i think?

favorite slogan "you sweet talker, Betty Crocker"

 

favorite slogan "you sweet talker, Betty Crocker"

 

post #105 of 112
Quote:
Originally Posted by CuteCakes1234 View Post

Excuse my rudeness in the last few quotes..
I will take a brake from cake decorating, take a few classes and make some dummy cakes in the process to build a nice portfolio, also work on my emotions, I've been soo stressed with cake decorating three children and a part time job. I've let my emotions show all to much tisk tisk!
Sense I am doing this how should I go about telling my FB fans and loyal customers that I am taking a brake to build skill and knowledge to properly run a SUCCESSFUL business?
Also how long do you guys recommend? The cake skill is there so I will not need a cake decorating class I finished wilton 1234.. I'm guessing a half a year to a year? Id rather it be 3 to 4 months and be hard core in the books,classes what have you.

 You need to start with some real simple basics:

 

1.  Keep your personal details OFFLINE.  In one post you are a single mom, in another you have a DH and a MIL... You need to be aware that computer geeks like me sometimes save the threads that we comment in, that means it has been saved whether you deleted it or not. You MUST assume that what you post online will be "out there" forever.

 

2.  Make a separate web page for business ONLY.  Make sure that every single word is spelled properly, make sure that your best pictures are posted, make sure you put important information on there (deposits, order cancellation deadline, allergy) for your customers.  Forget about Fakebook that's for social (meaning PERSONAL) not real business.  Forget about discussing your business plans online.  The only people who need to know your business schedule are those who email you for a cake order.

 

3.  Get your labelling organized.  Take all your ingredient labels to a copy shop and copy the ingredients at MAX enlargement.  Put those into a notebook and highlight the allergy info that is required by law to be shown on every label. Learn what those words mean by reading info on the USDA (or your country) food regulatory website, they are written in plain English.  Organize your allergy info into a written sheet that you can give to customers and that you can email BEFORE you accept an order.

 

4.  Get your schedule organized.  There has to be an adult NOT YOU taking care of your kids when you are running around the kitchen with hot cake pans.  And doing that on no sleep is NOT the way to keep your license in good standing. Bake ONLY those cake orders that you can make safely and cleanly.  I'm telling you this as I have told so many people in the past, that YOU must work safe at all times.

 

5.  LEARN about your ingredients.  Rethink your ingredients based on the label info.  There is NO reason that I know of to use Lindt chocolate.  In fact there are good reasons to use cocoa or a brand of chocolate that is NOT finished in a candy factory where nuts are almost always added.  You MUST learn something from your original post--that is that YOU are responsible for knowing what could be in your cakes.

 

So however long it takes for you to get all your ducks properly in a row is how long you should take a break from cake sales.  It's up to you to work all this stuff out, it's not something that you just set a timer for. Most of this information is online with Wikipedia or your local board of health, as well as in public libraries and your county agricultural extension service. But some of it comes from hands-on foodservice work.

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