ByVeena Azmanov
Cake Business from Home 2 -Business Plan
Well, now that we have spoken in depth about the Legal stuff in Part 1- Cake Business from Home 1 – the Legal Stuff.
Let’s do some business planning for our Home based Cake Business. Shall we?
What a Business Plan? (in case you interested)
Quite simply a Business Plan is a written document that describes in detail how a new business is going to achieve it’s goals. From a marketing, financial and operational point of view.
Make it more simple ? It’s basically; to take all what you need to do and how to do – put it on a paper so it makes more sense to you and those who want to join in business with you.
Now when I was doing my MBA we had to do a couple of project on Business Plan. A normal business plan usually will be something like – Company Description, SWAT Analysis, Marketing Plan, Operations Plan, Management Plan, Financial Plan, Business model, Value Proposition, Executive summary etc, etc.. (you get the point?)
Normally new companies do not have all the money to start a business – they need a bank loan, they need investors to invest. right? A Business Plan is usually what they submit to either get a bank or investor approval. So for normal businesses a Business Pan is big job.
When I wanted to start my business I honestly was not looking forward to getting this done. Guess what? Lucky me again. My husband does this for a living. Yep..
He’s an Entrepreneur and Consultant for start-up companies. Quite often he will head the company as a CEO – make their business plan, do all the legal stuff, often he will hire the right people like R&D and such. He will even help them get the first or first few investment opportunities before he hands over the company and moves on to the next. Honestly quite a stressful job but he likes it.
I Know what you thinking? NO!! He’s not a nerd… or a geek..!
Well, he’s a perfectionist, he’s a very organized and well planned person so…. no; no last minute dates they throw him off – he he. He actually keeps track of all the house bills, family appointments and kids activities… phew
He does have a sense of humor and is a very kind and helpful person so people like being around him very much.
Anyway, so lucky me.. he helped with my Business Plan.
Cake Business from Home 2 – Business Plan
Now we are going to do a Business Plan as well but at a small scale level mostly for self use. Meaning we are going to do it just plain and simple for our self.
Unless of course you need to apply for a bank loan. Then this one won’t work.
You will need a different format – Executive Summary, Product description, Objective, Mission Statement, Target Customers, Management (self or team), Financial structure, Marketing Structure etc. I would suggest you either hire or ask an expert to help you on that.
Here are a few components you need to think and put down on paper for your personal Cake Business from home – Business Plan. (since this is for personal use I’ve added more stuff that would not go on a formal business plan)
Business Idea / Type of Business – The idea is of course “Cake Business”.
Now in part 4 I speak a little more about this in terms of personal planning and picking your niche market. I suggest you read that for a better understanding of how to explore this further.
Business Name ( Domain Name) – On my food blog I wrote a post on ‘ How to start a Food Blog and there I spoke about Business Name and Domain name. I suggest you read that. I have given you some good tips, do’s and don’ts as well as example of my own that I didn’t do right.
Your Target Market / Demographics – For us this is again quite simple. Our cakes are for all age groups. Unless you decide that you want to do a specific segment for example -only wedding cake then you would probably have to leave out some age groups.
Contact management – How are people going to contact you? Do you want to give them your home number / personal number or perhaps get a new business number.
For me I made my mobile number my business number.
Same thing with your email account. I strongly suggest you start a new business email account. That way you will have all your business contact separate. After all you have to put it on your site or business card.
Equipment – Now if you starting a business your probably have or will need to invest in some cake toys. Cake Pan, Cake Mixers, Oven, Camera, extra mixing bowls etc. Some we probably already have and some we may need to consider investing in.
Business Insurance – Yes, you do need to think about Business Insurance. I think it’s best to call your local insurance company and find out what they have to offer. In the beginning it’s best to probably take the basic program and then upgrade as your business grows.
Business Bank Account – It is usually highly recommended that one have a business bank account when they start a business so that they keep their personal account separate. To be honest – I added my business name to our personal account cause we started off small.
But usually as your business grows and money starts coming in, it would be much easier to keep track of payments and expenses on a business account. Especially because now a days most people prefer to pay online thru paypal and e-transfers etc.
Business Cards – one of the first things you will need to do is get your business cards, so you can professionally hand them out to prospective customers. Trust me it does not look nice when you hand out your number on a piece of paper. So get your business cards done as soon as you can.
Business Logo – It’s great to have a Business logo, so eventually people will see the logo and instantly think of your business – make it unique which means spend time and resources that will get you a nice Business logo.
Personally this was not on my immediate list so I did my business logo about a year after I started off and then three years later changed it too! So I think it’s a personal choice of how important it is for you. I preferred to keep it until I could afford it lol.
Business Order Forms / Receipts – Once you start getting orders – You will need to have an order form ready so that you can make sure you have all the necessary details from the customer before you confirm the order. Things like – Name and contact numbers, Telephone, Cake Design, Flavors. Similarly you will need to give people a receipt that they can take with you when they make payment. Both these forms need to be printed and ready to use. (I will have a copy of mine available for you soon so you can download it and use it as well)
Website building – Once you start a business you will need to send people to a website for more information. Like seeing your cake gallery, flavors, menu etc. In the next post on Marketing and Social Plan I will elaborate on this a lot more. But for the business plan purposes it’s an expense you may need to consider. Weather you use my tutorial to DIY your own website or weather you hire someone there is going to be some cost and some management involved.
Camera / Photography – Some of us learn the hard way about how important having good cake photos are !! Yes, me too. In fact in the beginning I took absolutely terrible cake pictures with my phone camera! So my personal advice would be to invest in a good Camera and a good photo editing software.
You can see the camera and other equipment I have here on my page ‘Tools of the Trade’
Packaging and Shipping – yes, this has a cost involved and needs to be taken care of too! You may want to consider using a generic store bought cake/cupcake boxes or you may consider getting the boxes custom made with your Business Name and Logo printed.
Inventory – When you starting out this may seem not a problem but as your business grows this does add up.
You will need extra space. Yes, you will need to order things for your cake baking – often buying in bulk will make more sense economically. Like I buy a tub of 10 pounds Satin Ice because that is more cost efficient.
I now buy five dozen eggs a week as compared to one dozen I use to buy for my family before. I buy my Powder sugar in bulk too – because it’s more economical.
Get my point?
Ingredients and Materials – Well, this is pretty straight forward right? You need to make sure you can source the ingredients locally or consider buying some from over seas.
For example I have to buy Meringue Powder and Edible lace from over seas and ship it to me. Same with some of my equipment such as Molds and lace mats. This needs to be considered so you can plan to buy them ahead of time or make sure you consider them when taking an order, shipping time is a big consideration when promising a cake.
Order Management – How are you going to manage orders? You need a trust worthy Calendar that you can use all the time. And you have to use it.
Never trust your memory or NEVER EVER say I will write it down later. Dates are important not just because it involves someone’s special day but also because it will cost you your reputation!!
Personally I still use Google Calendar as my master Calendar and a simple pen and post-it pad for everyday! At the beginning of the week – I pen the orders /timeline on a post it pad and stick it on my fridge for reference.
Expense Management – It’s very easy to go spend spend spend only to realize that you are spending more than you are making. So make a strategy on how much you are going to spend and on what.
For example I put 20% of my profit back into my business every year. This could be to buy cake equipment, Adverting, Cake Show, Special Events, (trust me the list is long which makes management a lot more important)
Pricing – What pricing model are you going to follow. Do people in your community or cake decorators in your community charge by ‘Per Cake’ or ‘ Per Slice’ etc…
Now I have a two whole post dedicated to the topic of Cake Pricing here on my blog so I’m going to say nothing here. But I would highly recommend you read these post
Cake Pricing – A Beginners Guide and I bet most of you are under-pricing your cakes.
Recipes – Do you have your own recipes? Get them sorted out. You may need to make sure you have tried and tested recipe before you add it to the menu. No experimenting on cake orders.
Do you know how to calculate recipes? Sometimes it’s best to do these ahead of time so that you do not do them in haste. Or perhaps look into an application that can help you calculate your own recipes or purchase the calculated recipes from a trusted source (such as my online shop).
Education – Yes education! No matter how talented you are, there is always room for improvement. Right? So this means upgrading your skills. Be it with online classes, Online School Subscriptions or even taking a physical class. It does involve cost! and while many of us pride on being self-taught cake artist we must accept that life would be a lot more easier and sweeter if we could spend some of what we earn back into our own self upgrading. So, next time you buy a class/PDF tutorial or pay for an online subscription tell your self – this is not waste of money. Instead be proud that you want to upgrade your skills.
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Now these are some that I can think about – I’m sure I’ll think of something else and update this but you get the idea. It’s about thinking everything before you start so that way you are one step ahead of the game (so to say). But honestly, it will help you a lot if you do consider planning a head of time. It has a way of clearing the head and keep you sane.
Tomorrow we will discuss Part 3 of our Cake Business from home – Marketing and Social Plan. Lot’s to talk about…
I do hope you find this post helpful and this series on Cake Business from home. Please do feel free to share your thoughts and suggestions in the comments below. Would love to hear them.
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Related Articles:
Cake Business from Home 1 – Legal Stuff
Time Management of a Cake Decorator
I bet most of you are Under Pricing your Cakes
Cake Decorator and Cake Decorating Styles
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Veena
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