Cake Decorating Blog

Cake Inc: Tips for Writing a Business Plan

You’ve baked dozens of beautiful cakes and cupcakes for friends and family that were met with rave reviews, you’ve saved up a whack of cash and you’ve been dreaming of taking your love of baking, cake decorating and design to the next level — but how do you dive in?

Small Chocolate Cupcakes Photo via Coco Cake Land

First of all, you’ll definitely want to start by writing a business plan. A business plan is an exercise in helping you work through every last detail of opening your cake business. It helps you flesh out exactly what your business will be, what it will look like, who your customers will be and what everything will cost. It is also an essential part of applying for business loans from investors or banks. Yes, you can bake a mean red velvet cupcake and you’ve got a secret sugar flower up your sleeve, but take precautions and be smart about starting your cake business and you might just see your profits multiplying like mini cupcakes!

Before you even think about opening your doors, offer a top quality product.

Cake shops are a dime a dozen, yet new businesses are constantly opening all over the world. The macaron, the doughnut, the cronut, the cronut hole — nothing has been able to touch the cupcake empire’s blob-like sprawl of shops worldwide. I think it’s because no other pastry says party time quite like an individual pink-frosted mini cake with rainbow sprinkles.

Since there are oodles of cupcake bakeries out there, this makes it crucial to start with one thing: an exceptional product. If you’re just trying to make a quick buck by tossing together some cake mixes and premade icing, you may lure in one customer but you won’t create a loyal following that will keep coming back.

Pride yourself on becoming the best baker you can be, and truly stand behind your product as delicious. If you have a good product, that’s half the battle.

Cake Drawing and Completed Design

Photo via Anna Elizabeth Cakes

Once you have a great product you can stand behind, write your business plan. Here’s an overview what your business plan should include:

1. What exactly are you offering? What is your product?

Your product is your business. Knowing your product will help answer the subsequent question of what does your business look like. Describe what you are going to offer your clients and how it is unique. Include adjectives or descriptions for what you want your business to be.

For example, perhaps you want to be a modern, chic cake business catering to a high-end clientele, or you want to start a cottage industry cake business from your home and offer rustic homemade cakes for birthday parties. Write it all out! This will help distill your vision and strengthen your eventual brand.

Cupcakes Forming Smiley FacePhoto via Coco Cake Land

3. Research and know your market.

Chances are there are several if not dozens of bakeries in your hometown. Do some research on their pricing, customer base, cake flavors, look, feel and design of their businesses — not to copy them, but to see what’s out there.

Who will your target market be? Try creating a marketing survey that can help answer your questions. Send your survey out to friends, family and ask them to pass it along to their network, as well. You will want to include all of this information in your business plan. It will also help you figure out who you want your clientele to be. By knowing your market, you’ll be able to figure out what your customers want and how you’re able to give it to them.

4. Be realistic about your budget and figure out your costs. What will you need to open a bakery or cake business?

Create a budget for your business. Be realistic with your numbers. You’re doing yourself the best favor by being detailed with your expenses and realistic with your revenue. Anticipate all the details/roadblocks before you run into them. Don’t simply go to the most popular cupcake chain and think, “oh, they are charging this and making this much a month — I’ll be doing the same.” Remember you are just starting.

Think about what a realistic amount of money you can make in a month. What’s your best-case scenario? What’s your worst-case scenario? What’s your contingency plan (extra money squirreled away if things get rough)? If your budget and numbers work and you can be profitable in your worst-case scenario, it’s a good indication that you’ll be able to be successful. Think about what you will need down to every detail.

Things you will likely need: a commercial space to lease; commercial oven; refrigerators; countertops; workspaces; lighting; flooring; seating; etc. You may need to hire contractors and people to help install equipment, plumbing, and lighting. You’ll need a logo for your business, signage for your shop, you’ll need a cake web site and you may need to hire staff. You’ll need cake boxes, cupcake liners, cake boards and all the perishable supplies needed to create cakes such as butter, cream, and eggs. Before you sign the lease, figure out what your monthly costs will be and ensure you’ll be able to make all of that back!

You might also enjoy our post on pricing cakes like a pro.

5. Have a good plan for marketing and promotion.

Don’t underestimate the need for getting your name out there. Put some time and money toward marketing yourself! If a tree falls in the woods and nobody hears it…

6. Most of all: work hard.

Like any successful business, you’ll need to work your butt off for a good long while to achieve success. Put your nose to the mixer beaters and get ready for carpal tunnel piping wrist syndrome — you’re about to jump in to what can be a very exciting, exhausting (but fun!) ride. Don’t forget about the importance of your social media presence, either – a successful online presence can translate to a successful cake business.

For more on how to start your own cake business, check out Craftsy’s online cake business classes here.


Delores Lewis

Thanks for mentioning this valuable insight! I’m in the process of starting my own bakery catering business as well and these are all valid points that I’ve encountered along the way. I especially vouch for researching your market segments to develop a solid focus on who you want to target. Additionally, establishing a comprehensive financial plan is a must. From personal experience, a good portion of my expenses went to catering equipment suppliers, so conducting research in this area is very critical. I’ve found a reliable supplier to help me fulfill my equipment needs from:

Lyndsay // Coco Cake Land

Delores, I am so happy that the article was of use to you, and that you took the time to comment! Wishing you all the best in your bakery catering business! Take care.

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