Pro's and cons of opening in a small town

I've watched two cake shops go under in my "small town" in the last 2 years.  I think the overhead was what killed them.....

What is the demographic or your surrounding towns?  Also, will it just be cakes?  A small town alone most likely won't make much money because it's so small.

How close to a big town are you?

I am 1/2 hr south of Cleveland.  I am competitively priced with Cleveland bakeries, which may be a little high for my area (although I do have many customers from my town) but I offer what no one else in my town is doing.  I'm marketing to a certain income demographic ALL over the Cleveland area.....not just the people in my town.

And to some, it's worth paying $50+ for delivery to many miles away for better cake than what is found at a high-end bakeries in other towns.  I am going to start concentrating my efforts to high-end suburbs of the Cleveland area.  Target Market...here I come!

Can you keep it in your home?

My business is in a very small town. All of our cakes are custom ordered. We do several wedding cakes and lots of birthday cakes. We do have cupcakes for walk in customers. We do not charge as much as we could in a big city, our cupcakes are only $1.50 each. The folks in our town are pretty supportative.

If your overhead is not too high, you can be successful in a small town.

Not mine, but there is a shop that opened in my small town about the same size as yours. She sells cupcakes and custom cakes, but has branched out into doing classes, as well as making soup/sandwiches etc for lunches. I'm guessing she couldn't pay the rent just making custom cakes.

Plus, just by looking at her FB page, I'm guessing she does about 4 wedding cakes per year, and the vast majority of the rest of her custom cakes are pretty plain. I'd say that most people just won't pay the money for anything more complex and expensive.

Quote:

Originally Posted by mcaulir 

Not mine, but there is a shop that opened in my small town about the same size as yours. She sells cupcakes and custom cakes, but has branched out into doing classes, as well as making soup/sandwiches etc for lunches. I'm guessing she couldn't pay the rent just making custom cakes.

 

Plus, just by looking at her FB page, I'm guessing she does about 4 wedding cakes per year, and the vast majority of the rest of her custom cakes are pretty plain. I'd say that most people just won't pay the money for anything more complex and expensive.

That's what happened to the shops in my small town.  They tried to branch out to do catering to supplement the lack of income for the cake business and neither of them made it.  I think perhaps if you start out in a Rental Kitchen and see what kind of business you can drum up with a strong advertising campaign, you will be able to see if you will be able to make it, in your small town...