Part #3: Setting Up Your Business
There are some things about being in business which need to be done no matter what size or kind of business you are running. You’ve got to do the official paperwork for a business in order to be properly set up as a business. Step one is to check with your local government agencies to see what is possible in your area. This is especially true if you decide to run a home-based business. Some municipalities are very happy to support home businesses and don’t require much from you in the way of paperwork, whereas other areas do not allow home based businesses at all. The laws change from area to area, state to state and country to country, so before getting too invested in your business it’s best to ask the local authorities what the rules and regulations are. Sometimes it can be extremely difficult to get this kind of information, because home based cake business may be something which is not yet common in your area. It can get frustrating because you can spend hours on the phone being passed from person to person and nobody gives you the same answer twice! In that case I recommend that you persevere and keep good records of who you spoke to, when you spoke to them and what they advised you. If you are running your business from a commercial premises, the rules are different again so it’s still a necessary step to check with local authorities as to what is possible. Once that process of securing a premises (home or otherwise) is under way, you also need to decide on a business name. You can then set up the rest of your business record keeping. Here are some financial, legal and practical things to do when setting up your business:
- Register your business name with the appropriate authorities
- Register your business for tax purposes where required
- Reserve all the online places you would like your business to be – purchase the domain name, set up the social media accounts (even if you do not yet start using them), set up the email address.
- Insure your business. You will need to insure the business and it’s assets but also have public liability insurance as you are dealing with the general public.
- Set up proper record keeping process for financial and tax purposes – for example, a place to keep all your business records and your receipts from purchases.
- Secure the services (or get some recommendations for) people like lawyers, bookkeepers and accountants. Depending on your own skills you may need them a lot or a little, but having professionals who are familiar with your business is an invaluable resource.
- Invest in education on how to run a small business. It can be very tempting to only take cake classes, but nothing about those teaches you how to run a business.There are some great classes about small business skills available, and some specific to the baking industry. You are going to need to spend time investing in learning about marketing, pricing, record keeping, tax issues and the like so invest in educating yourself about those things.
- Start gathering information that will serve you later: investigate wholesale suppliers in your area, look into equipment sales which might come up, research if there are similar products to yours available in the area and so on. Start to think like a business owner more than a cake maker or macaron baker.
Setting up your business correctly from the very start can save you a whole lot of trouble later, and while it might seem expensive and frustrating, it’s the kind of thing you really cannot afford to do incorrectly. Consumers and venues are also getting a lot smarter and are beginning to ask questions about insurance and registrations, so it’s best to set yourself up to be able to answer those questions rather then scramble around for it later. All of this might seem rather daunting and a whole lot of hard work when all you really want to do it sit and make gum paste roses or figurines, but it’s getting these things done correctly at the start which enables you to make those roses in the first place.
Written by Michelle Green 2014, Copyright The Business of Baking
- Part 2: What Kind of Business Do You Want?
- Part 3: Setting Up Your Business
- Part 4: Basic Principles of Pricing Your Cakes