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how do you know when you're ready?

post #1 of 26
Thread Starter 

for those of you that have an actual store front, how did you know when you were ready to take that step?  part of me wants to have an actual store front......i just don't have the space i need in my kitchen to do everything i'd like to do....yet when i go check out vacant locations i get overwhelmed and feel i can't do it.....i have a full time job that pays the bills and at times it requires a lot of overtime.....i wonder how would i be able to make that transition....i go back and from from thinking i can do it because it's what i really want and thinking i can't do it; i'm not ready.....

 

then i wonder isn't it just like having a baby.......are you ever really truly ready to have a baby or do you just have one and make it work?

post #2 of 26
Quote:
Originally Posted by shugababie View Post

 

then i wonder isn't it just like having a baby.......are you ever really truly ready to have a baby or do you just have one and make it work?

 

It has to be a calculated risk...literally. We just saw a business open down town and within less than a year, they were closed, found that they were selling their car, house and nearly begging to rent their space on Kijiji (the other Craig list). I don't know the details, maybe one of them got a new job, baby, were actually moving but long story short, I can bet that when they closed that they had more dept than they would want.

Make sure your business is established first (if you can, we do) then do the move... the math will be easier too.

We have a 1 month old so now is not a good time for us.

post #3 of 26

You need to have A LOT of start up capital. A LOT. I'm not exaggerating. You should not expect to be able to support your family from the storefront for at least a year, if not more. Which means you not only need the money to build out the space and get the business going, but you need enough to cover your personal expenses for that time. 

 

It used to be that you could get a small business loan for start up costs, but that's really hard to get these days. Not to mention that it's really better if you just have the capital and don't start out with a bunch of debt. 

 

Other than that, you need to realize what a huge commitment of time and energy this will be. You know the time and energy you now devote to your full time, sometimes overtime job? Double it. At least. It's A LOT of work, and you don't usually have a lot of employees at first to help you (if any), which means you have to be there every time the doors are open. 

 

It's not just about your ability as a baker and decorator. It's about the business aspect, the not-so-fun part. 

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post #4 of 26
I was talking with a restaurant owner recently. She grew up working in her parents restaurant and had decided to open a place of her own. She said that a lot of people will comment to her about how lucky she is to own her own business, especially because she does have staff. They seem to think she is just sitting back collecting money! She said that having a restaurant (and I think a cake storefront would be much the same) is very much like having a newborn. You have to give it all of your time and attention. If you try to give it less than it needs it will die.
post #5 of 26
Quote:
Originally Posted by shugababie View Post

for those of you that have an actual store front, how did you know when you were ready to take that step?

When your business plan tells you it's time, and you have both the available time and the available money to do so. When I put together the business plan for my bakery, I realized that a retail storefront would bring in much more revenue, but the relatively small increase in profit would not be worth the much higher capital investment and operating cost. So we ended up renting an existing commercial kitchen instead with no retail storefront and custom orders only.

Starting a business is only like having a kid if you were required to pay for all the kid's expenses for the first 18 years of their life before they are born.
Edited by jason_kraft - 7/15/13 at 3:03pm
post #6 of 26
Thread Starter 

thanks for your responses!  i think money has been the biggest obstacle....i've looked into local commercial kitchens and they are just way out of our price range at $40-$50/hour......since i don't get big orders i would be losing money if i went that route....i guess for now i'll just keep it as a hobby.....i have seen too many small food related businesses start up and shut down within a couple of years and i don't want to be one of them....

 

on a side note.....anyone in hampton roads know of a reasonably priced commercial kitchen?

post #7 of 26
Again, not a cake business, but my husband was talking to an optician who just moved out of the mall into her own building. She said it was far more affordable for her to own her space than to rent it. Just thought I would put that out there as another consideration!
post #8 of 26

Owning your own space comes with another set of problems - property taxes, repairs and maintenance, insurance.  When you have your money tied up cash flowing your business, it can be an advantage to rent and let the landlord worry about all that.  Of course, that all depends on your market, and rental and occupancy rates.

 

The biggest determination of if your business will make it past the first year is 'working by the numbers'.  In our restaurant, labor costs have run 25% of sales for the week.  Food costs have to run 30 to 35%.  (And those are high for our industry, but our menu includes lots of fresh/scratch items which require a lot of prep).  If either of those run higher, it comes right out of our profit.  Run either of those higher for any length of time and you will drive yourself out of business.  We have had some very smart employees who still didn't get that it all boiled down to numbers.  They thought just taking care of customers was enough, and it isn't.  We aren't accountants, but keep a close eye on where we are at in any given week (our POS system is where employees clock in, so that is tracked automatically), and if we need to send someone home to keep costs down, we have to do it.

 

Liz

Follow me on my Twitter handle: @Sugar_Iowa

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Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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post #9 of 26

I think it's important to have worked in multiple food businesses (cake decorators or bakeries) and be fully skilled in running all the different positions involved, plus be a knowledgeable business person. The people whom have opened cake shops in my area did so when they found themselves and their spouses unemployed from their regular jobs. It's the people who should question themselves about their skill level and experience that don't. They jump into businesses with-out any professional experience in that field.                                               On the other hand I'm friends with many talented professional chefs and none of them are willing to risk everything opening their own place.

post #10 of 26
Quote:
Originally Posted by liz at sugar View Post

Owning your own space comes with another set of problems - property taxes, repairs and maintenance, insurance.  When you have your money tied up cash flowing your business, it can be an advantage to rent and let the landlord worry about all that.  Of course, that all depends on your market, and rental and occupancy rates.

 

The rental space in my area tend to be triple net. Of which (to the best of my understanding) means your paying property taxes and repairs, etc... The building owners pass every cost onto the tenants.

 

I'd love to buy a shop. I think of it as owning your own home verses renting....in the end hopefully you will have made a profit on your investment instead of having nothing to show.

post #11 of 26
Quote:
Originally Posted by as you wish View Post

I was talking with a restaurant owner recently. She grew up working in her parents restaurant and had decided to open a place of her own. She said that a lot of people will comment to her about how lucky she is to own her own business, especially because she does have staff. They seem to think she is just sitting back collecting money! She said that having a restaurant (and I think a cake storefront would be much the same) is very much like having a newborn. You have to give it all of your time and attention. If you try to give it less than it needs it will die.

I hate when people say someone is "lucky" to have a business, good job, blah blah..no...lucky is winning the lottery...success comes from hard work. I remember when my kid opened her restaurant and was happy the day their receipts were up to $160....lol. That was 4.1/2 years ago and they are always busy and have about 6 employees. They WORK WORK WORK constantly. Their one day off a week is spent ummm..working..lol. . My daughter was back at work 2 weeks after her C section and my granddaughter spent her first year in the restaurant 

post #12 of 26
Quote:
Originally Posted by Stitches View Post

The rental space in my area tend to be triple net. Of which (to the best of my understanding) means your paying property taxes and repairs, etc... The building owners pass every cost onto the tenants.

 

I'd love to buy a shop. I think of it as owning your own home verses renting....in the end hopefully you will have made a profit on your investment instead of having nothing to show.

 

We rent in an "up and coming" area (which is code for a really crappy neighborhood that is just starting to be revitalized).  While it would be nice to have a building to sell if you decide to close up shop, in my area there aren't people lining up to buy buildings.  It would be a risky investment at best.  Instead we decided to both work in the business, make enough to pay ourselves back in the first 5 years, and then if we need to sell, we can either part it out, or sell it as a successful business.  No worries about selling a building or renting it to pay off a mortgage, and we come out with what we put in, plus some.

 

I am also renting space for my bakery in our new indoor farmers market that will open in a few months.  The biggest positive about this space is that there will be traffic - which is just what a retail bakery needs.

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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post #13 of 26
Quote:
Originally Posted by shugababie View Post

for those of you that have an actual store front, how did you know when you were ready to take that step?

 

Think about why you want to "take that step" and move to a store front. If you are not happy with your current situation, there are other ways to make changes. Moving to a store is not your only choice. If you want to have a retail store, think about the reasons. You need to consider a few things. First, look at your business plan to see if your idea is financially viable. And look at your commitment to hard work. This business will take more hours and pay you less than any employer who demands a lot of overtime.

 

I started as a home-based bakery, then moved to a small neighborhood shop, then bought a building to house my all-scratch bakery and cafe. If increasing your income is a prime motivator, I can say that I grossed more during those retail years, but netted more when I worked alone, at home.

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post #14 of 26
Quote:
Originally Posted by liz at sugar View Post

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

As a fellow storefront owner, I will say YES, this is SO true! Absolutely by far the biggest challenge! 

 

We are in a pretty good location, at the beach in a fairly busy shopping center, but even so we struggle to get noticed. We have people come in every day asking if we just opened, even people who are in this shopping center every day! They just get tunnel vision to where they are going and don't notice a new place. 

Before you ask- I'm licensed, inspected, insured, and all that jazz.
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Before you ask- I'm licensed, inspected, insured, and all that jazz.
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post #15 of 26
Quote:
Originally Posted by liz at sugar 

 

 

Although most people don't think about it, getting someone to walk in your front door is one of the biggest challenges of running a standalone business.  You have to be a destination worth traveling to, parking for, and getting out of the car for.  That is a huge challenge, especially if your product is an impulse buy (talking of retail bakeries here, not custom cakes).

 

Liz

I've heard this over and over....it really scares me because in order to be in a high traffic area it's premium dollar rents (in my area). There is a spot I've been eyeing that is right behind the main downtown shopping street at 1/4 of the price the main street rentals are. I want it soooo bad, but the fear that no one will walk around the block to me stops me from renting it.

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