How to start a Cake Decorating Business

How to start a Cake Decorating Business

Published : 06/10/2019 - Categories : Learn , PME Blog | Trade PMECake

How to start a cake decorating business:

First things first, if you want to be successful it’s important that you have a niche.

Achieving this will allow you to understand your target market and while allowing yourself to get to the top of your game without taking on too much work. No pressure!

For example: if you know your skills lie in creating stunning celebration cakes, then your target market could be the wedding industry.

Even within the wedding cake industry there are a thousand other niches that you could tap in to, selected options being traditional tiered fruitcakes, or a contemporary angled or a modern quirky wedding cake.

In the early stages it may feel like you’re leaving out potential customers by focusing solely on your niche, but don’t worry! There’s plenty of room to branch out to other industries when your business is up and running.

For now it’s best to understand your customer and market directly to them.

 

So now you need a name for your business...

 

Step 1: Choosing the right name

Once you have your niche, the natural next step is to decide on what you want to call your new cake business.

When thinking of a name it’s important to remember that the name of your business is the first method of contact with a new customer and you therefore want to choose a name people will remember.

Here’s a few dos and don’ts to consider:

Dos:

·         Make it clear what your business does:

It may sound obvious but a lot of people make the mistake of using their first name or surname as the title for their business – this can be a great place to start – but unless your surname is Baker then you might find it hard to attract new customers.

But wait, what you can do is combine your name with a relative word such as ‘Bella’s Baking Boutique’, this way you’re using your name but you’re also making it clear what your business does to attract new clientele.

·         Give yourself room to grow!

This is key, especially if you want to branch out to a new target market in the future.

Calling your business ‘Wendy’s Wedding Cakes’, may sound tempting but you could be shutting the door to your future customers. Don’t limit your business’ future possibilities by choosing a name that’s too specific.

Ever noticed how thecakedecoratingcompany.co.uk – they started off by selling a few decorating products but now they sell icing, sprinkles, cookie cutters, rolling pins, cake boards, etc and rank highly on google.

Whereas a company that has one specific product word in its title – e.g. cupcake cases or sugarpaste – is possibly limiting its customer base, especially if that company is selling more than just the above.

Don’ts:

·         Don’t choose a name that could potentially be associated with somebody else’s business:

So important – it doesn’t matter if the other company is doing well or not or if it’s in another city. To make sure you avoid this, you’ll need to do lots of market research.

Think of it this way... being associated with someone else’s name would mean that the success or failure of your business is part-dependent on the other business performing in the same manner commercially – never a good idea.

·         Don’t confuse people:

‘Victoria’s Victuals’ may sound cute but who really uses the word victuals anymore?

Remember you want your business to attract everyone so don't use words that some people won't recognise!

·         Be careful with puns:

Punny names can get old really fast; remember that you will be using this name every time you answer the phone so you want to keep it professional.

Don’t use informal spelling:

‘Suzy’s Cupcakez’ might sound nice but if your customers can’t spell your company name then how are they going to find your website?

Newsflash, if it sounds like a Myspace name it’s probably not a good idea to call your business it.

Use our template below to give yourself some inspiration:

Object

Product

OR

 

Rocket Doughnuts

Geographical indication (street name, city)

Business type

OR

Product

Notting Hill Doughnuts

Flower name

Business type

OR

Product

Daffodil Cake Decorations

Baking term

Business type

OR

Product

Wooden Spoon Bakery

 

Step 2: Register your kitchen

We recommend that your first step is to get in contact your local Environmental Health Officer or Government Officials to seek advice and guidance before committing to any major investments as this will save you time and money!

In addition to registering your kitchen, you may need to get permission from your landlord or mortgage lender to run your business from your home. These laws and regulations are dependent on where you live and the nature of your new business – so make sure you get in contact with your local governing body before selling anything!

As you would expect you need to maintain a high standard of cleanliness in your kitchen or work space in order to qualify for the appropriate license to allow you to sell food products (this may also include obtaining a Food Handlers Certificate).

Now, don’t get us wrong… you don’t need to buy a new kitchen but you do need to be registered.

But don't worry!

Once the formalities are done, you will be provided with a hygiene rating which will allow customers to be more confident in buying from you!

Most importantly, confidence from consumers in your set-up allows you to get your business on the map that much quicker! 

https://trade.pmecake.co.uk/img/cms/Captain%20Cupcake/Captain%20Cupcake-Let%20me%20teach%20you.jpg

 

Step 3: Registering your business

Yes you read that right, its one thing to register your kitchen and entirely another to register yourself!

Exciting stuff huh!

This registration is how you ensure that you’re paying the right amount of tax. To do this, we suggest you get in touch with your local Chamber of Commerce and pay a small fee to become a fully registered taxable business. Go to: britishchambers.org.uk

Once you've completed this you will have a small window of time to tell HMRC that you’re now self-employed. As there are a few different ways to do this, we suggest getting in contact with HMRC to ensure you’ve chosen the right option for you. Whatever your employment status; HMRC will need to recalculate your tax to accommodate any extra income that you may receive through your new business. Being registered as self-employed will also mean that at the end of every tax year it’s up to you to declare your income – whether you’ve sold one or one hundred cakes, you are still liable to pay tax!

For help with registering as self-employed go to www.gov.uk

The boring part is nearly over!

 

https://trade.pmecake.co.uk/img/cms/Captain%20Cupcake/Captain%20Cupcake-%20Desk_1.jpg

Step 4: Home baking insurance

We all know how important insurance is, whether it’s our car, our home or cake decorating business!

It’s important to set up public liability insurance and product liability insurance as these types of insurance will cover you from being sued by a member of the public.

It’s not expensive, but it is important.

For example, if a customer has become ill after eating one of your cakes or if you’ve accidentally knocked over an expensive ornament when delivering someone’s cake, it’s better to be safe than sorry!

For help with this go to simplybusiness.co.uk

 

Step 5: How to make your cake decorating business stand out…

But wait, there's more! Back to thinking about your target market…

Rewind back to the beginning and remember when we introduced the idea of basing your business around a niche; this is because if you focus on a niche it is easier to direct your content to a particular type of customer.

Figuring out your potential customer will allow you to understand your competition which will give you a good indication on what the market is currently demanding.

Whatever your niche is, you need to look at what the other companies are offering… then offer more!

In order to make it in the competitive cake decorating industry, you need to have a unique selling point (USP):

Do you use locally sourced, organic ingredients?
Do you cater for vegans and gluten free customers?
Are you an expert at baking fruitcake or are you an all-rounder?
How do you like to decorate your cakes and is there something that stands out that you do?
Do you prefer to use Sugarpaste or Royal Icing to decorate and what great examples can you give of this?

When considering your USP it’s important to also consider what is popular in cake decorating and where the trends are heading next.

The simple truth is if you’re stuck for inspiration then do some market research by visiting tea shops, bakeries and browsing

websites of other players in the sector!

All you need to do is look at how many people watch The Great British Bake Off to know that the UK is a nation of dessert lovers. This is great as your new cake business will have tonnes of potential customers, however it also means that competition will be steep.

Remember, market research is a must!

https://trade.pmecake.co.uk/img/cms/Learn%20Images/cupcakes-are-beautifully-decorated-clear-lighting_29007-45.jpg

 

Step 6: Build your online following

Yes, you read that right!

In order to make great content and build a following on social media you don’t need to be a computer genius, you just need to be creative and have access to the internet.

Here are a few pointers which will help start building your online presence:

Let’s start with Instagram… Look at other company profiles and decide upon a few things;

·         Make sure you’re passionate about your niche!

Most successful influencers start as a hobby before they begin to think about generating an income from their online brand. Remember that social media is about being able to interact with an audience that you potentially wouldn’t find otherwise, so don’t be afraid to make an impact!

·         Colour scheme...

Some companies like to keep working within certain colours – this can be great as your customer will associate those colours with your brand, however it can have its restrictions.

Imagine this, your colour scheme is pink and orange and you want to make a blue cake to promote the new ‘Frozen’ film... you might run in to a problem.

To avoid this you could set yourself colour guidelines such as only using pale colours or a border template to promote new ideas.

·         Layout...

You’ll notice that a lot of Instagram accounts post 3 times a day, this is because the main setting on an Instagram profile has a 3 post layout, so posting 3 times a day will ensure that your profile looks neat and your followers know when to expect a new post!

·         Try and be as transparent as you can; this is important, especially when it comes to technique. Make sure you’re interacting with your audience, answering questions; giving advice, recommending products, etc.… all of this will encourage people to place their trust in both you and your brand. Building loyalty equates to retaining customers who come back for more!

Once you have an online following and you’re comfortable with posting regular content it may be time to build a website...

Don’t be scared! It’s a lot easier than it sounds...

Think of it as an online profile a website in 2019 is your brand’s store front window.

So let's get straight to it:

The trick is enticing people to be interested in what your company has to offer, create a positive experience and be memorable. A website used to be the only way for customers to know that you’re now trading online; but now that e-commerce is booming, social media sites have been a particularly popular way for small business’ to grow. So as long as you’re on top of your game with social media sites like Facebook, Instagram and Twitter, then a full on website can wait until you’re ready to expand your business.

https://trade.pmecake.co.uk/img/cms/Captain%20Cupcake/Captain%20Cupcake-%20Delivery.jpgWhen you are ready, there is loads of help online to get you started.

Check out: https://www.create.net/blog/how-to-build-a-successful-cake-website

 

Step 7: Pricing your cakes

When pricing your cakes it’s important to consider a couple of factors.

1. Firstly, will you be delivering them yourself?

If so, it might be a good idea to decide what geographical area you want to cover, otherwise you might find yourself driving from London to Scotland with an 8 tier wedding cake in tow – not a good idea!

2. Secondly, it’s important to price your cakes fairly, both for your business and for your customers.

A key detail to remember is that you are not competing with supermarket celebration cakes, so don’t use these as a guideline for pricing.

New business’ and bakers commonly under-price their cakes because they don’t consider themselves a professional, but if you’re selling cakes then you are a professional, so don’t under-sell yourself!

Follow this guideline to price your cakes fairly:

 

Labour + Ingredients + Utilities = Cost

 

Cost x % = Profit

 

Cost + Profit = Cake Price

 

 Example:

This is a very simple two tier chocolate cake with buttercream, filling and cake drip decoration. 

Let’s imagine this was a 12" cake which could feed 50 people:

·         Labour = This would take approximately take 4 hours and your hourly rate would be £15 an hour

·         Ingredients = approximately £40.00

·         Utilities = £4

·         Profit = start by using the lower end of the scale and work your way up depending on the cake you’re making, your experience and skill level, for this example we will use - 25%

 

 

Cost = £60 + £40 + £4 = £104

 

Profit = £104 x 25% = £26

 

Total charge = £130

 

 

That works out at just £2.60 per slice (certainly cheaper than Starbucks!)

If your customer feels the price is too high, then you may want to consider a few things before dropping the price…

-        Does your customer value your time and appreciate the price for a made to order cake?

-        Could you give them something else in the offer without dropping the price?

-         Have you told them about the price per slice?

 

The reality is most customers will try and get something for as cheap a price as possible, but if you want your business to thrive then you need to be strict with your pricing!

 

8. Finally… Market your business!

It’s time to design your business logo. Yay!


Remember, earlier we spoke about using social media to build an online presence and being able to reach the customers you wouldn’t otherwise reach.

It’s equally as important to make good connections in your local area; this means making business cards; selling cakes at town fetes; asking for referrals… spread the word about your new business and get selling!

Now, hopefully, you have a good understanding of what it takes to make it as a home baking business!

If you have any further questions, please comment below and we will do our best to answer!

 

This blog was written to inspire and advise; not to be used as a direct guide on starting your own cake decorating business – please visit your local authorities and council before starting this process.

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