During my years as a cake business coach, I observed some common mistakes made by cake business owners. It’s one thing to be a skilled Baker, but it’s something quite different to be the owner of a successful Cake business.
Yes, making mistakes is part of life and it’s only by learning from those mistakes that we become better business owners, but knowing the common mistakes to avoid will make you more successful in the long run.
I remember when I first started and i baked a lovely 12 inch cake covered with buttercream roses. it took days to make and because i didn’t know how to price properly, the customer only paid a very small amount and i was so angry with yourself.
Here are a few of the most common mistakes you should try to avoid as a Cake Business owner:
#1: Not Knowing You Are A Legal Business Owner
Most of us started like this- you make a cake for a few friends and they like it, and tell you to go into business. So you give it a try, make a cake for someone and suddenly you’re in business.
You have conducted your first business transaction. So you are no longer a hobby baker. The thing you have to realize is that the moment you charge for a cake, you’ve moved from hobby to professional.
In most cases, selling your cakes means you’re already a legally registered business. Once you start collecting money for your cakes. The rules become different, and you need to think about things in a different way – even if your cakes are not perfect or you only charged a few Naira for your cakes.
You have to conduct yourself more professionally, you need to have invoices, a dedicated bank account, email address, invoices and receipts, etc.
#2: Working For Free
You need to charge adequately for your time and effort. Even if you are new in the cake business, my advice is to always know what your cakes are worth, and refuse to negotiate below a certain price.
Stop making cakes for free( I know it is usually family and friends that are guilty of this). You are a skilled professional so you should be paid a such. Not only should your costs be covered but also you should be making profit for every cake you sell.
If someone says you should bake a cake for free on the promise of future orders, Don’t do it. If it is for charity, you can decide to do it (maybe twice a year) but for anyone else, they should pay. Will they go to a doctor and tell them to treat them for free? You are providing a service, so you should be paid for the service you are rendering.
#3: Waiting For Customers To Just Appear
Customers do not just fall from the sky. You need to market and get on social media to advertise your cake business. Word of mouth is good and helps bring in customers, but you can’t always rely on that.
The only way you can get business is to market, market, market. Get your business cards and flyers out and go and distribute it to where your customers are. Do Facebook Ads, be active on social media, go to events and tell people about your business.
If you are just home waiting, you will not get customers. You need to go out there and market.
#4: Not Keeping Track Of Your Expenses
Now that you are in business, you should know the cost of being in business. Not only the cost of ingredients, but other things like your stationary, fuel and even phone credit. All these things should be accounted for so you can add them to the cost of your cake.
You are not working for free or using your own money to stay in business.
Every expense should be accounted for and you have to keep track of such monies so at the end of the day you will know if you are making a profit or loss. So having a separate business account and bookkeeping books are essential for your business.
#5: Living In A Cake Fantasy
Running a professional cake business, is not so easy. Many feel you will become a millionaire overnight just by baking cakes.
That is far from the truth.
The reality is that the cake baking and decorating plays a small part.
Not only will you be baking, but you will be doing marketing, social media, customer service, selling, ordering supplies, negotiating with customers and so on. Those business-related tasks are required in running your business so don’t ignore them.
#6: Worrying About The Competition
As a cake business owner, you need to know your competition, like what they charge and what type of cakes they sell. Knowing this is information is vital because it helps you make decisions on how you can improve so that you can stand out from the crowd.
However, if you’re spending the time comparing yourself to the competition and complaining about other bakers is a complete waste of your time.
Spend that time improving your customer service, marketing your business, developing new products, and getting feedback from new and existing customers.
#7: Not Knowing How To Set Prices
You should not just pull prices from the air. It is a calculated process.
It’s important to cost properly. The main reasons why costing properly is very important,
- is because if you do it well, you will make a profit in your business;
- You will be able to know where to reduce your costs and expenses;
- You will know how to give discounts and offers without making a loss.
When pricing your cakes, you should note the cost of ingredients, your profit, your labour, utility and sundry costs.
To know more about pricing register for the Pricing your cakes right to build a money making cake business.
#8: Failing To Have A Business Plan
I know! I know! this can be a hassle, but it is worth doing. When you’ve started your new cake business try to take a break and write a business plan. Know this can be quite boring especially when you not only have to bake, but market, sell and so on.
However, without a plan, you are unlikely to achieve long-term success. A business plan helps you plan your goals and tracks your progress. It provides a continuous frame of reference for your cake business, defining your goals, and making you accountable. So it is worth having one.
So really the Baking is the easy part and it becomes more difficult when you have to deal with the business part. But when you avoid the mistakes we discussed above, you will be on your way to having a successful business.
‘Remember you’re A Cake Business Owner, not just a Baker’
What mistakes have you made while being a business owner and have you learnt what went wrong. Will love to hear about your experiences.
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Hello, my name is Rotimicakelady and I am a cake business coach that teaches cake business owners how to grow and have a profitable cake business so that they have a constant stream of customers buying their delicious treats.
I have been running my own successful home based cake business for some years now. I have also been teaching bakers through my online courses who are struggling with low sales, with strategies on how to market, and price their cakes for profit.
In addition I am also run a Facebook Group where I coach, offer support and help bakers in their businesses.
I have helped over 50 bakers through my online course ‘A comprehensive guide to starting your cake business in 30 days’ with much needed information on how to start a cake business in Nigeria. I also teach close to 4000 cake enthusiasts through my Facebook Group how to run a money making cake business.
I have been featured in ‘Naija Top Baker’ magazine, one of Nigeria’s foremost cake magazines and also been a Guest Speaker at the Bakery World Convention.
If you are struggling with getting customers for their cakes, I can help you solve this problem by showing you how to market, sell, price, plan, structure and brand your business so you are constantly selling to the right people who want your cakes.