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Things To Consider Before Starting Your Cookie Business

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With all the baking TV shows being shown globally, the art of baking and decorating has become a very popular hobby. When you watch beautiful things being being made on TV, pick up a cookie decorating book in a store, or see some beautiful cookies online, it's very easy to get inspired to try decorating yourself. Once you start, you realise that it is a lot of fun to do, and people really admire and appreciate what you have achieved. Many people start out having no intention at all to launch an actual food business; they are just excited by the idea of making something fun and edible. Before they know it, people are asking them if they make cookies for people other than family and what they charge, and suddenly they find themselves going into business without really meaning to.

If you're at the stage of loving the craft of cookie art but not really sure if you should go into business, there are some things you should think about before taking the leap. If you are already finding yourself in business, it's not too late to look over these things and think about whether or not you want to stay on the path you've started down. There is no shame in choosing to keep your hobby as a hobby, or to take your business back to a hobby if you found yourself accidentally there without really wanting to be there.

The first thing to think about is this: do you really have a dream to own your own business, or have you been seduced by how fun cookies are to make and the idea that someone would pay you to do something you love? Many people who go into business don't really have the entrepreneurial dream; they're simply talented people who were pressured into business ownership by other people encouraging them. One thing to remember is that the more successful you become, the less time you have to dedicate to your craft. The more clients you have, the more inquiries you get, and the more responsible you must be for things like responding to emails, dealing with suppliers, and taking care of marketing your business. You become more responsible for the business of cookies rather than the cookies themselves! For many people, the harsh reality of being the boss and not having as much time to be the creator is what brings their cookie business dream crashing back down to earth.

Once you've established that you really do want to be in business, it's time to get real about what that might mean for you. Speak to other business owners about their experiences and the paths they took to get to where they are. Often, hearing how others have done things helps you avoid costly mistakes and better define what you would like to do with your own business. Hear what they have to say, and take the good with the bad, because you need a realistic picture of what it means to be a business owner on a day-to-day basis. Speak to people in different situations, too – perhaps one whose business is run from home, one who has a shop front, and so on. Perhaps some only do it for relatives (but charge proper prices) and others do it only for relative strangers. There are many, many different ways you can choose to run your business.

Next, take the time to speak to your family or partner, as those people often get pulled into the business to help. Are they supportive of your ideas, keen to see you succeed, willing to help if needed? You are going to need their support emotionally as much as anything else, so it's really important that they are included in your plans.

Lastly, take a really good look at the numbers. When you start your business from home, doing a couple of orders for friends and family, the majority of the costs are hidden in your normal family expenses. Sit down and work out what it really costs you to create your cookies, and start to make a list of other business expenses that aren't in your product. For example, businesses have costs such as website hosting fees, registration fees, advertising costs, and insurance that can't be hidden in household expenses. One of the biggest challenges small business owners face is money – how to make it, where to spend it, how to ask for it. Starting out your business with a business mindset will serve you really well in the long run as you negotiate the up-and-down finances of a business. Business needs to be about business more than about the cookies themselves. In some later articles, I'll get into more detail about pricing, but before falling down that rabbit hole, it's a good idea to be thinking about costs and expenses. [EDITOR'S NOTE: More about business expenses and building a cost model to capture those expenses can be found here.]

Running a baking and decorating business can be such a rewarding experience. Sadly for many, the reality is nothing like the dream, and they find themselves wishing they had kept their hobby as a hobby. As a cookie maker, you know that the time you spend preparing your cookies has a direct impact on the quality and outcome of the finished product, and preparing to be in business is no different. It's the effort and preparation at the beginning that often defines what happens at the end. I encourage you to take these starting steps so your business path runs more smoothly and successfully.

Michelle Green is the author of The Business of Baking, the blog that inspires, motivates, and educates bakers and decorators to pursue their sweet business goals.

Photo credit: Michelle Green

 

 

 

Note: This article expresses the views of the author, and not necessarily those of this site, its owners, its administrators, or its employees. To read more Cookie Connection business posts, click here or here.

 
 

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TRUTH.  If only I had a dime for every time someone told me I should start a cookie business, I'd be rich! I would be curious to hear from others how they keep the cookie romance going even after they commercialize their craft.

Originally Posted by Bakerloo Station:

TRUTH.  If only I had a dime for every time someone told me I should start a cookie business, I'd be rich! I would be curious to hear from others how they keep the cookie romance going even after they commercialize their craft.

It's hard for me to keep the romance going, honestly, as I hate repetition and some admin tasks - like answering the never-ending stream of repetitive email questions . . . And I am even free to make exactly what I want when I want, as I don't serve customers any more . . . imagine if I had to repeat designs for clients, which is largely why I closed my shop, BTW! It's especially tough now because my workload never ends. Between the site, classes and videos, I have little time for breaks. But, I try to enforce them when I can; otherwise, I lose creative energy and interest. When I do bake, I also always try to challenge myself with something new. And I am saying "no" more often, while trying to come to terms with the fact that some opportunities will go un-seized because I am just one person . . .

Last edited by Julia M. Usher
Wow, thanks so much for your honesty, Julia.  These are the sorts of things people never tell before you jump into something!  (Like having children lol!)
 
Originally Posted by Julia M. Usher:
Originally Posted by Bakerloo Station:

TRUTH.  If only I had a dime for every time someone told me I should start a cookie business, I'd be rich! I would be curious to hear from others how they keep the cookie romance going even after they commercialize their craft.

It's hard for me to keep the romance going, honestly, as I hate repetition and some admin tasks - like answering the never-ending stream of repetitive email questions . . . And I am even free to make exactly what I want when I want, as I don't serve customers any more . . . imagine if I had to repeat designs for clients, which is largely why I closed my shop, BTW! It's especially tough now because my workload never ends. Between the site, classes and videos, I have little time for breaks. But, I try to enforce them when I can; otherwise, I lose creative energy and interest. When I do bake, I also always try to challenge myself with something new. And I am saying "no" more often, while trying to come to terms with the fact that some opportunities will go un-seized because I am just one person . . .

 

Good article.  As I'm starting out my business and renting a separate place, it is very expensive.  Just to rent and pay utilities, it is costing me $19.04/day but, I don't work 7 days a week, so if I figure 5 days per week, it is $26.74 per day x 5 days = $133.70/week.  Then add ingredients, time to talk to client, mix, roll, cut, bake, decorate, package, cleanup, and meet/deliver.  A simple undecorated cookie is $2.93 for a batch of 24 but it should be even higher because that's not including doubling the cost of ingredients, tools, appliances, yearly licensing fee, insurance and advertising.  I figured $15/hour for my time.  Things to bring the cost down will be finding wholesale ingredients, making bigger batches and freezing dough so I'm not spending so much time per order, finding cost saving techniques, and speeding up which hopefully comes with experience.  I decorate cakes as well and is the same scenario.  Two different ladies have told me that in order to make it, you have to have regular store hours with daily walk-ins.  I didn't believe them at first but after doing the math, I think they are right.  One of these ladies makes 60 dozen very simple sugar cookies/week along with her husband making donuts.  She also makes cakes.  Remember we also have to pay income and sales tax too.  Training customers to include sales tax is very important.  At first I wasn't too concerned but it all adds up and is money out of your profit you will have to pay if the customers don't.  I've thought about doing workshops to help with the expenses but I live in a rural area, so it would be teaching people to be my competitor, so haven't had workshops.  Maybe workshops would be more profitable though!!!!   This series will be interesting to read and hopefully I'm missing something and will find answer to make it profitable!!

Originally Posted by Cottage Celebrations:

Good article.  As I'm starting out my business and renting a separate place, it is very expensive.  Just to rent and pay utilities, it is costing me $19.04/day but, I don't work 7 days a week, so if I figure 5 days per week, it is $26.74 per day x 5 days = $133.70/week.  Then add ingredients, time to talk to client, mix, roll, cut, bake, decorate, package, cleanup, and meet/deliver.  A simple undecorated cookie is $2.93 for a batch of 24 but it should be even higher because that's not including doubling the cost of ingredients, tools, appliances, yearly licensing fee, insurance and advertising.  I figured $15/hour for my time.  Things to bring the cost down will be finding wholesale ingredients, making bigger batches and freezing dough so I'm not spending so much time per order, finding cost saving techniques, and speeding up which hopefully comes with experience.  I decorate cakes as well and is the same scenario.  Two different ladies have told me that in order to make it, you have to have regular store hours with daily walk-ins.  I didn't believe them at first but after doing the math, I think they are right.  One of these ladies makes 60 dozen very simple sugar cookies/week along with her husband making donuts.  She also makes cakes.  Remember we also have to pay income and sales tax too.  Training customers to include sales tax is very important.  At first I wasn't too concerned but it all adds up and is money out of your profit you will have to pay if the customers don't.  I've thought about doing workshops to help with the expenses but I live in a rural area, so it would be teaching people to be my competitor, so haven't had workshops.  Maybe workshops would be more profitable though!!!!  I have ideas for many new baking tools to help make our jobs easier and faster but that again takes money plus know-how. This series will be interesting to read and hopefully I'm missing something and will find answer to make it profitable!!

I believe it is good idea if you are creating new baking tools.  Many people is buying new things so they could compete with this satured market.   For example if some one is the first using a new cutter that nobody has now...  Well do not see that you are teaching your competitors, many people teach only and sell products, not cookies or cakes. But people that teachs must be in the last trend before all other people, finding new oportunities and ideas.

Originally Posted by Bakerloo Station:

TRUTH.  If only I had a dime for every time someone told me I should start a cookie business, I'd be rich! I would be curious to hear from others how they keep the cookie romance going even after they commercialize their craft.

I often say to people,the more successful you become, the less you get to make what you love. That's the truth of it, that running a business ends up not being about the product at all. There's just so much to do to keep a business going that yes, the craft can sometimes feel like a chore. 

 

Sometimes it can be hard to stick to your guns, but not everyone wants or needs to be in business, and there is NO shame in choosing to keep it as a hobby which does not have money involved (other than what you spent on tools!)  

And those who say "You'd make a fortune!" don't know that the average overnight success takes ten years.

 

MG

Originally Posted by Cottage Celebrations:

Good article.  As I'm starting out my business and renting a separate place, it is very expensive.  Just to rent and pay utilities, it is costing me $19.04/day but, I don't work 7 days a week, so if I figure 5 days per week, it is $26.74 per day x 5 days = $133.70/week.  Then add ingredients, time to talk to client, mix, roll, cut, bake, decorate, package, cleanup, and meet/deliver.  A simple undecorated cookie is $2.93 for a batch of 24 but it should be even higher because that's not including doubling the cost of ingredients, tools, appliances, yearly licensing fee, insurance and advertising.  I figured $15/hour for my time.  Things to bring the cost down will be finding wholesale ingredients, making bigger batches and freezing dough so I'm not spending so much time per order, finding cost saving techniques, and speeding up which hopefully comes with experience.  I decorate cakes as well and is the same scenario.  Two different ladies have told me that in order to make it, you have to have regular store hours with daily walk-ins.  I didn't believe them at first but after doing the math, I think they are right.  One of these ladies makes 60 dozen very simple sugar cookies/week along with her husband making donuts.  She also makes cakes.  Remember we also have to pay income and sales tax too.  Training customers to include sales tax is very important.  At first I wasn't too concerned but it all adds up and is money out of your profit you will have to pay if the customers don't.  I've thought about doing workshops to help with the expenses but I live in a rural area, so it would be teaching people to be my competitor, so haven't had workshops.  Maybe workshops would be more profitable though!!!!   This series will be interesting to read and hopefully I'm missing something and will find answer to make it profitable!!

I think the only way to make it profitable is as you said - to diversify. You've got to be doing more than just the one thing. Don't put all your eggs in one basket (ha!). 

Agree with the point about diversifying - but also think one needs to simplify to scale up. Taking only small, custom orders where the setup costs are a large as for one big cake or more than for several hundred simple brownies, for instance, can be one sure way to be unprofitable. Unless you have a reasonably large clientele willing to pay a price that really exceeds your true fully loaded costs.

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