Times are changing and it is challenging to keep competitive in the business.
This looks fun and easy! I should do this! You can definitely make a living selling cupcakes, but before you run out and make purchases and investments, take a look at the time and money and commitment you’ll have to make in order to have a cupcake business.
How much money you want to take home from your baking business
Remember this amount is what you want not necessarily what you will make. You’ll have to find out just how many cupcakes you have to make and sell in order to reach your desired monthly income and how many hours you need to work to make that many cupcakes.
Initial Investment of tools, equipment, and ingredients
Is it cheaper to buy in bulk as much as possible to keep costs down? If you buy in bulk to save on per unit cost, you’re stuck with that entire bag of flour even if you only need a cup. Do you have storage for this? You will also have to understand which of your recipes are expensive to make in terms of ingredients as well as allocate the cost.
Tools – Sure you can use your currently owned whisk and bowl to make those cupcakes and icing but at some point you have to invest in tools and equipment so technically you will not be making a profit until you’re able to exceed the amount you paid for the tools
Purchases – Time you spend doing inventory management is considered labour on your part. Driving to, and time spent to buy the ingredients is part of the cost – and so is the fuel you use. Inventory management is a broad sweeping term that includes how you use, record, and acquire inventory including ingredients and paper stock. Will you have space for this?
Delivery and Distribution
Delivery also needs to be included in the cost of your cupcakes. The time spent driving to the delivery and returning from the delivery needs to be expressed in the cost of your product. The Auto-mobile Association (AA) has a Vehicle Rates Calculator that is very useful. E-Toll will also increase the cost of your cupcakes.
You need to plan on how you’re going to distribute your cupcakes. Are you going to sell at farmer’s markets? Baking on orders? Shop owner? – It’s your store front.
You need to get your name out, make sure people know who you are, and give them a reason why they should buy your cupcakes. It isn’t about getting those 1000 cupcakes sold that month. It’s getting those cupcakes sold every month.
You do have to take life into consideration. If you get sick and you’re the only person making those cupcakes how will that affect your business? If you have a sudden obligation to a friend or family member, can you still get your professional obligations completed? How will you handle equipment malfunctions? Just like having a savings account helps you accommodate for unexpected events, a cushion in your business account can prevent many unforeseen events from being devastating.
- Find a cupcake recipe and practise.
- Use the right amount of batter for cupcake cases.
- Learn how to use a piping bag.
- Use simple but effective decorations.
- Experiment with colour and flavour.