Saturday, October 15, 2016

Cake Business License, Bank Account, & Insurance!

Ok, so as of now we have talked about cake pricing and cake tastings (see past few posts!).  Now, let's chat about some business legalities:


 I know it is VERY common for cakers to run their businesses without a business license.  However, if you are serious about running a professional business this piece is very important.

In the past, California (this is where I live!) didn't even allow you to obtain a license for a home-based cake business.  But things have change and now they do!!  It seems more and more states are embracing the home-based food concept in our new digital (and less brick-and-mortar) age.  

But yes, I recommend obtaining your Cottage Foods License if you want to enjoy the benefits of being a real business.  Hiding under the radar and stressing about crossing the line between legitimate and illegitimate business making isn't much fun.  And not to mention your much deserved tax write offs at the end of the year!

So here are my tips for obtaining your Cottage Foods License:

* If you or your business partner were/are part of the military check if it your fee can be waived for you!  It is in California at least:).

* DO NOT stress out about feeling watching or just not being "good enough".  The truth is the department wants you to succeed because your success is their success (at least from my experience!).  Just do what you are required and make sure you follow the regulations to the best of your ability.

* DO NOT worry that it is difficult.  Registration requires forms, an online safety class, fees, and an initial inspection.  Just make sure to obtain all the information you need and fill out the paper with the items they require.

After you obtain your Cottage Foods License you are ready to get your actual business license!!

Your local at-home business license is really not expensive AT ALL especially since you might be just starting out.

Bank Account

I absolutely recommend that you keep your business finances separate from your personal finances.  This makes it super easy to keep track of your income and expenses.  Try adding your business account along with your personal checking in order to try to get a deal and make transfers a cinch.  And, like with the Cottage Foods License, look into military discounts to try to lower fees if you can!

ALSO look into your business bank options for payment options for your customers.  For instance, I bank with Chase and they have what they call Chase QuickPay.  Their QuickPay let's your customers make you quick, easy, and free online payments/deposits by just using your email!  This works seamlessly if they are Chase customers.  It also works if they are not, however, I believe there are some additional account verification steps for them.  WellsFargo has a similar service called SurePay so check it out if your bank has any similar type of feature!

And since we are on the subject of customer payments check out Venmo, a PayPal meets Facebook if you will, for quick and easy payments!  Just make sure your customer has your email or user name right when they submit their payments!


Then there's I didn't have insurance when I first started.  However, I quickly learned that as I was going to more established and reputable venues, that some locations required insurance.  So that's what got me there at least, but really it is a good way to protect yourself. 

Being a sole proprietorship can really expose you to crazy law suits so it is good to play it safe!:)

For my business, and likely for other similar businesses, you might pay in the $300-$500 range.  HOWEVER, check out this link first!!  This is where I SHOULD have gone first instead of going through a specialty insurance broker.  They seem to give the best rates for just this sort of work!:)

Check these guys out for your insurance first!

Thanks for reading and that's the legality bit for now!!
Have a cakey weekend!


Monday, September 26, 2016

Steps to Perfect Cake Tastings

Early in my cake making career I really struggled to secure clients.  There are a number of factors involved, however, the MOST important factors include a great tasting cake and a promising portfolio.  This blog post attempts to address these and other important areas.  Please use this input to help you in your quests!

1. The Cake

Make sure to perfect your cake flavor and texture.  You might be ok here however, for myself (since I don't like to bake! It sure was a challenge LOL).  Also, using your home as a 'test kitchen' make sure you know just how to prepare your cake samples ahead of time and preserve them for when it is tasting time.  Here is exactly what I did and the cake samples were ALWAYS perfect!!:)

I prepared a batch of cupcakes in the most popular flavors that I offered (if the couple wanted a specific flavor they would request it but mostly I prepared these most popular flavors).  For me this was Chocolate, Vanilla, Red Velvet, and Lemon.  Then I stored them in a VERY airtight sealed container in my cake-only freezer.  I would do this for maybe up to two weeks but much more than that I would worry about dryness (always test it when you are worried).  Then I would take out two cupcakes of each flavor and let them come to room temperature in (a different) dry, and clean airtight sealed container.  The thawing incorporates amazing moisture!!
Take out the cupcakes a few minutes before the couple arrives along with a plate of the fillings you are offering (I liked preparing the fillings plate with little tasting spoons).
With the cupcakes and fillings given separately, mixing and matching flavors was very easy for the couple!
NOTE: Each tasting lasted mostly about one hour.  And whenever possible I tried scheduling them somewhat close to each other in time/day so that I wouldn't have to duplicate as many preparation steps.

2. To Charge or Not to Charge

When I first started my cake business I did not charge for cake tastings.  If you are just starting out and have yet to build tasting experience and your portfolio this might be a good option:).  However, soon after I started booking tastings and cakes much more routinely and I found just how much time tastings involved I began to charge.  This is also a way to see if you client is really serious about booking with you.

By the third year of running my business my cake tastings were $40 and if a multi-tiered cake order was placed this fee would apply to their order.  If the client wanted a cake tasting, however, a lower cost cake option (this is where I would utilize the 'Just the Cake' rate) then the tasting fee did not apply to the order.

3. Show Off Your Work

My favorite ways of showing off my work included display cakes and digital images.  The display cakes that I would take to wedding shows were always around in the room where I held cake tastings.  As for digitally I would maintain all of my cake images on my Facebook and Pinterest accounts.  During cake tastings I would use a laptop (or my cell phone if I had any technical difficulties) to show clients samples of my cakes as well as research what they were looking for.  This saved me a ton of time and money printing images (which is what I originally had done!)

4. The Contract

Simple or more complex, regardless, you should put something in writing.  Personally I preferred a very simple contract.  With a pre-designed printed template, I drew a very rough image of the cake the couple wanted.  In this same document many other details are included such as wedding date and time, delivery time, flavors, fillings, colors, topper(s), stand(s), contact information, etc.  Some people put many other clauses but I liked it nice and simple:).

5. Asking For A Deposit & Payment Terms

It is important to ask for a deposit prior to committing to a large cake order (actually this is true whether you do a cake tasting or not!).  However, I also found that this way I had so many more details and paperwork to manage!  So I also started telling couples that their cake tasting fee acted as a deposit:).  If they did not do a cake tasting then I would definitely ask for a deposit.  Typically my cake order deposit was a simple $50.  I really preferred to keep it simple since it really helped me with the cash flow management:).  However, some do half of the cake order or maybe a percentage.

As for payment terms, for large delivered wedding cake orders, I required payment one week prior to their wedding day.  Cakes that were picked up were paid for at pick up with balance being the quoted amount minus their deposit.  For most bakers that is much too last minute, but for management reasons it was my preference:).  

Just do whatever you feel more comfortable with, however, when it comes to payment terms, always remember that you are in this to make money so ensuring you will be compensated for your work is important!  I made two cakes that I did not receive any money for and collectively spent money and DAYS preparing (time and effort away from my family for literally NOTHING).  The first was someone whom I didn't ask a deposit for (this is when I finally starting asking for a deposit) and the second one was a repeat customer whom always gave me a deposit.  Assuming no issues, and before receiving their deposit, and AFTER confirming their order, they never picked up their cake.  It really does happen!

And that's a wrap for Cake Tastings!!
Hope these steps help you with executing your next great cake tasting!!
Happy Caking!

Sunday, September 18, 2016

5 Considerations for the Per Serving Cake Rate

In the past two blogs we have gone over overall pricing when starting your cake business and in the last blog we went over the 'Just the Cake Rate'.  In today's blog we are going to go over the 'Per Serving Rate' which is a rating system that I used specifically for multi-tiered wedding cake orders.  Here are 5 main areas of consideration:

1. Your Base Rate

Decide on what is your base rate.  If you are new to cake making and still developing your client base try setting your rate slightly less than the market.  For instance, if the going per serving rate at a bakery in your area is $5 per serving try setting yours to $3 or $4 depending on how much experience you have with such orders.   

2. Tastings 

There are various ways you can treat tastings.  At my established cake rate ($5 per serving) tasting rates were included.  When I first started out my cake tastings were free, however I quickly realized how much time cake tastings took and their rates went from $20-$40 as I progressed.  I treated cake tastings as built-into the per
serving rate.  However, there were occasions when folks ordered with 'Just the Cake Rate' and also wanted a cake tasting (which is when I gave them a set rate just for the tasting itself).

3. Flavor Options

When it came to flavor options I quickly noticed that the most common cake flavors always ordered were Chocolate, Vanilla, and Red Velvet.  Because of this I decided to focus specifically on these flavors plus Lemon (to keep it a little more interesting:)).  This is not to say that I didn't at times provide other flavors (for instance occasionally I made carrot cake and had a fair share of funfetti requests).  However, this was the best way to provide my customers with what they wanted and helped keep production costs down and efficiency up.

With the most popular cake flavors AND the most popular filling flavors as part of my standard rates.  Any other exotic flavors were quoted separately and I usually added the difference in time and materials (for instance $10 extra for a special flavor).  

My base rate for the per serving cake rate included one cake flavor AND one filling flavor.  If the cake was super simple I sometimes allowed flavor changes for the same base rate.  However, if the cake decor was quoted accordingly with one cake flavor, additional flavors raised the per serving cost by $1.  

Also, at times I found myself quoted just flavor changes for smaller cakes and each flavor change would be an additional $10.  Also, with wedding orders brides liked adding sheet cakes.  To allow brides to get the different flavors they wanted, preserve productivity, while keeping rates lower, I provided retail sheet cakes in other flavors.  For instance, the tiered cake might be vanilla, and a sheet cake of chocolate and red velvet for no 'additional' flavor-change cost.

4. Delivery Terms

With the per-serving rate I built-in delivery costs for up to 30 miles from my location.  Any additional mileage was an extra $2.  For instance a 40 mile delivery feel would be an extra $20 with the first 30 miles already covered in the quoted fee.

5. Cake Stand Terms

For my 'Per Serving Cake Rate' I liked including the cake stand rental.  There was no extra fee to borrow cake stands.  The terms were to return the stand by the following weekend.  However, with the 'Just the Cake Rate' stand rental did come with a fee.  

And that's it!!  Hope that helps when setting up your wedding cake rates!!:-D