We’ve all heard that 9 out of 10 businesses fail. So you may be thinking why should I even bother about starting or being in the cake business.
For the brave ones who still go into this business, you might be wondering when can you expect to finally be making some money out of it?
Before I answer that, let me point out that your first thing is to work out what “some money” actually means. Financially speaking we all have different goals – for some, enough money to pay for family extras like schools fees and holidays in Dubai.
For others, enough money to support an entire family. You’ve got to work out HOW MUCH money you need and want to earn as a first step. If not, NO amount of money will ever be “enough” because there is no definition for what “enough” is.
So let me give you an idea of how a 5 year plan to money making looks like for a home based cake business:
- Year One:
You hardly will make any money in the first year as you will be plowing every Naira you make back into the business to grow it. This is the year you’ll invest in your business (such as websites, training, marketing etc) so the year is about putting in and not taking out. Your pricing is probably also not the best but it covers the cost of ingredients.
- Year Two:
You will make some money, but you will still need to plow back very money you make back into the business to grow it. This is the year you start to get more serious about things. Your skill has improved, your pricing is more structured, which will probably cover your goods, overheads and your labour costs.
- Year Three:
You may be getting frustrated at the point and may feel like quitting, because you feel you are not making enough money. You may be asking yourself, ‘Why am I working so hard for so little?”.
So you start to bring some strategy on how you do business. Your cake decorating skills have improved, you’ve learned to speed up you orders, and you’ve started to feel the pain of working for no money – so you start to take some money out of the business and pay yourself a salary. HOORAY!
By this time, you would have determined your niche (or are working on it) and you’re starting to feel like you control your business as opposed to the other way round and you’re starting to think about scaling up or out.
- Year Four:
You’ve been getting paid for a while, you’ve started investing a bit heavier into your business (business coach, business classes, , more heavy-duty equipment or maybe getting a small cake shop) and you’re starting to see how you can make this thing work.
You’ve started to build profit into your prices, you’ve got a niche (or several), you may have an employee or helpers of some kind who are also paid and profits are starting to appear in your balance sheets.
- Year Five:
This is when things start to feel like you can breathe a bit because you’re getting paid, your employees get paid, you’re seeing profit, this whole thing is starting to feel worthwhile.
Those cycles of business might take you a shorter or a l longer to meet, it really depends on how much time and investment you put in but invariably those things will happen.
Business is a process. How long it will take you to be successful depends entirely on your definition of success, how much time/effort/money/marketing you’ve got to invest, and your ability to keep on keeping on each time you feel you want to give up.
Are you ready to finally start making serious money in your cake business, so that you can get more orders!
(Just fill in your details below and we shall contact you when the E-Course is launched)