3 Reasons Cake Businesses Fail and How to Avoid Them
Pia Cato is a cake business mentor who is passionate about helping lovely cake
entrepreneurs build and grow their businesses so they can really enjoy the life they
want. Pia works mainly on a 1:1 bases but shares lots of great cake business tips
and advice on her weekly Make Money With
Cakes blog. Keep reading this post for a very special Knead to Dough reader
Starting a cake business is so exciting and the last
thing on your mind is failing. You are looking forward to sharing your cake passion
and creating wonderful cakes for people’s special celebrations. However, it is so
important you do not ice over the nuts and bolts of being a business owner.
Running a cake business is like running any other
small business and that means taking time to get to know your business inside and
out. It is a sad fact that just over half of UK small businesses survive their
first three years and only 40% reach the five year mark! (Office of National Statistics)
I know you don’t want to become one of those
statistics so I have put together three common reasons cake business fail but more
importantly how you can avoid them.
Bad Pricing Model
Reason: The number one reason why
cake businesses fail has to be pricing. Often cake makers turn from hobbyist to
business owner. This is fantastic but they often neglect the pricing aspect. As
soon as you make that decision to become a business owner you have to pay attention
to how you are pricing your cakes.
How to avoid it: Take the time to
properly work out your costings. Look online and read blogs on how to price, talk to
experienced cake makers, look at how other industries charge, seek mentors, join
business forums. Do whatever it takes but make sure each cake you create is covering
your costs and more.
Lack of Vision
Reason: When you start your cake
business you are all fired up and excited that members of the public actually want
to pay real money for a cake that you have made! But as time goes on and this
becomes the norm, it can be easy to lose sight of why you started the business in
the first place (more so when the first reason hasn’t been implemented).
How to avoid it: When you start
your business write down what you want to achieve in your first year of business,
your second year and third year. Then every month or at least every six months
review this. Are you on track to meet your goal or has it changed. Your goals are
personal to you and nothing is set in stone so you can tweak it. But it is important
to have a crystal clear vision as without it you are in danger of floundering and
becoming frustrated with your business not going anywhere.
Fearful of Marketing
Reason: You hate putting yourself
out there, you’re embarrassed and fearful. You just want the customers to come to
you! I hate to say it but this is one area that you will need to learn
(or outsource). Without telling the customers how and where they can
find you, they won’t. Word of mouth is great and as your business grows you will get
more and more of it. But in the beginning you need to promote your business, and
promote it hard!
How to avoid it: Build up the
courage to attend networking events in your local area. Exhibit your cakes on stalls
or at fairs. Carry business cards wherever you go and drop your new business into
conversation. Drop flyers into local cafes, venues and leisure centres. Develop a
social media strategy. Create a website. Research marketing ideas online and get
your cake business known.
I hope you have found this post interesting and helpful, for more ideas on
how to boost your cake business take a look at this free guide 7 Steps To Starting Your
Cake Business. If you are looking for more comprehensive 1:1 support then
schedule a Free
Discovery Call to see how Pia can help. Mention Kneadtodough.net and receive 10%
off on any 1:1 mentoring package you sign up to.