With rampant competition from supermarket and the big time commercial cake sellers, you must be prepared to meet the demands of customers with the same convenience and professionalism as other baking retailers but with higher quality.
To achieve and maintain success in this demanding industry, your cake business must be thoroughly be prepared well to be of the standard and even better standard as other bakers.
Because what stops a customer from going to the numerous bakeries down the road to order a cake. In order to attract that potential customer, your business should and should appear to be of a proper structure.
Here are the essential bits you should have in place to have a structured cake business. I will not be able to cover all of them in this post so will continue next week.
A legally registered business
This is the first step to be taken seriously in your cake business. Luckily, there are smart advisors that can look at your situation and help you. We recommend that you have a conversation about your options with a lawyer to know the pros and cons from a legal and a tax/financial perspective so you’ll be able to make the best decision for your personal situation.
Your main options are:
- Sole proprietorship
- Limited liability company (Ltd)
- Public limited liability company (Plc)
- Company limited by guarantee
For a small retail business like a bakery, your choice will most likely be between the first three on the list.
However, from a legal perspective, only the last three will protect your personal assets because they structure your business as a legal entity separate from you as an individual. In other words, the liabilities of your business will be separate and limited to the amount of capital you invest in the business entity.
Business Bank Account
This is very important: Open a separate bank account for your business.
Having a separate account for your business will certainly make things easier for keeping your business and personal finances separate.
Do not mix your personal account with money earned from your business. It is vital to keep your personal finances and business finances separate.
You can easily open a business account with any bank as long as you have a registered incorporated business.
In any case, most people will always prefer to pay money in a business account rather than a personal one. This will build trust and will make you appear more professional.
Do not pay your personal expenses out of this account. If you need money from your business for personal expenses write yourself a check or transfer the money into your personal bank account.
If you do write a check from your personal account and deposit it into the business account, that becomes a personal loan to the business. In accounting this is known as owner’s equity and is reflected in your account.
Food Safety Safeguards
Food safety is critical to your business – if you make someone sick, your business may never recover. Food safety isn’t hard, but it requires diligence in the kitchen. It is also recommended to keeping your kids and animals out of the kitchen during prep time.
In Nigeria, the National Agency for Food and Drug Administration and Control, NAFDAC, has been in the forefront of ensuring food safety standards in the country. As a home based baker, you do not need NAFDAC approval but NAFDAC requires all food businesses have and maintain food hygiene standards.
These are areas you should be looking at:
- Your premises are very clean and in good repair
- Your premises must have suitable and hygienic facilities for the preparation of food
- Your work area has walls and surfaces that are easy to clean and sanitise
- Your working procedures do not expose foods to the risk of contamination
- Your ingredients are not stored in a way that allows the risk of cross contamination
- Your fridge must be at a correct temperature and offers no risk of cross contamination
- You should have adequate facilities to wash and prepare food and cooking equipment
- Good supply of water and drainage
- Hygienic waste disposal
- Have implemented measures to protect against vermin
- Have sufficient lightening and ventilation
For a full outline of NAFDAC Guidelines, please go their website: https://www.nafdac.gov.ng/food
One unfortunate reality of the bakery business is that it is, in fact, a business. You can be the greatest baker in the world, but if you don’t also run your business well you’ll be in trouble pretty quickly.
You’re probably going to need help with some of the practical details of running your business, and that help, at least in the beginning, will typically come from outside. You’re going to need a lawyer during the startup phase, and periodically afterwards. You’ll also need an accountant to help you with your books and tax matters, and maybe someone to help you with marketing and promotion on social media.
Over time, as your business grows, it may eventually become more cost-effective for you to recruit employees for one or more of those roles.
The heart of your bakery is the production bakers, the people who actually make your cakes.
In the beginning, that might be only you, but you’ll need more, if you plan to grow, or if have the luxury of getting sick occasionally. Ideally, you’ll always have one or two who are experienced or formally trained, or both.
Depending on the range of baked goods you offer, you may need to have bakers with different skills: Pastry and bread making is very different from making cakes, for example.
If you know how much product you need to create so that you can pay the bills and make your company profitable, you can calculate how many production staff you’ll need to get the job done.
Dedicated Office Space
You should try and set up your office area somewhere in your home which is away from possible distractions- Even if it is just a small table and chair in one corner of your parlor.
You do not want you be talking to a customer and they can hear the TV or sound of children.
It is good to have an area no matter how small that is all about your business so you can deal with all your business administrative matter there which is separate from your house matters.
Dedicated office line
If you can afford it, it is a good idea to have a separate mobile line for your business. So this way you will know that any call coming through that mobile is a customer. That’s the number you will put on all your marketing campaigns. You don’t want to be gisting with your friend and then miss a potential customer’s call.
So I have covered the first basic 6 structures you should have in your cakes business. So how many out of the 6 do you have in place right now.
And what measures are you now going to do to implement those things you omitted.
Will love to hear from you. Just comment below.
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.
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