A friend of mine recently graduated college and landed a great job in the IT industry only to discover that her passion was baking. She sent me an email requesting my advice. I ended up writing a pretty lengthy response that I believe is filled with information any new entrepreneur can use… so I decide to share it with you; my favorite reader! I apologize in advance for any spelling errors. I like for my my emails to have character.
So…you want to be an entrepreneur? This is a big decision. I’m glad you have job now to support you while you build this dream. Since you want to become a baker lets hop right in to it.
Start Small and fill a Niche
I would start by baking cakes at home and selling them to friends and family while you save money and prepare for your bakery. You may even want to get access to a commercial kitchen at a church if things really get rocking. Most churches have underutilized kitchens and would be happy for an extra $100-200 a month. I recommend choosing a niche (wedding cakes, cup cakes, etc) and getting really good at it You can make a pretty good living off of wedding cakes.
Build a business Plan – Most people say start here. However, if you’re a procrastination you will never get started. My advice is to simply get started and but build your plan before taking on too many customer.
Next, you will need to build a business plan with a good financial forecast. This means you will need to start pricing everything you need as if you were going to open the bakery tomorrow. (Location, oven, city inspection and tax fees, baking ingredients, credit card machine, etc). It wouldn’t be a bad idea to work part-time with a local baker and watch how the run their business.
There are many FREE biz plan templates online http://bplan.com/ is one.
Get Support – Business is a team sport. Lone Rangers are punished harshly
Review your plan with several people who have been successful in business (The keyword is “successful”) and who you trust will give you honest feedback and won’t be a dream stealer. Look around your city for an SBA approved Small Business Development Center or other Free or low cost start-up support centers like SCORE.
I would also become a regular at chamber of commerce, non-profits, and other business/social related meetings. Make friends and lots of them and keep up with them on Facebook and with Christmas cards, etc. They will eventually become your customers. It’s not a bad idea to find out what the top charities are in your city and start volunteering when you can. This will get you noticed by the big players in your city.
Confidence is King – If you don’t have it now read motivational books take seminars and execute on your plan like crazy to build it.
When people ask what you do tell them by you own a cake decorating company and you specialize in_________cakes. Even if you’re baking them in your apartment.
Part of becoming a business leader means acting like one until you believe you really become one. Hence, the phrase from the movie “Boiler Room” Act as If. Customers absolutely love confidence and will pay a premium for it!
Save Your Dough – Most business owners fail because they go broke before they learn how to make money. Don’t be this guy. Additionally, I would caution against taking out large loans on your first enterprise. There is nothing wrong with growing your business with the earnings from your success. Business loans are still loans and have to be repaid (Unless you’re like Trump and you go bankrupt every year).
While you’re doing all of these things keep your expenses way low and start saving like a maniac 25-35% of your pay. You will need at least 6-12 months to live on plus whatever your business plan dictates you will need monthly to run your business until it becomes profitable. Starting home-based bakery can help with this transition.
Be willing to Fail – Because chances are you will
Most businesses fail in the first year. Don’t be afraid of this. Business is 90% mental. If you do the things in this email you will increase your odds by 1000%. Nearly every Millionaire has failed their way to success. In fact, most millionaires fail on average 16 times. Since this is your first business you should be prepared to take at least 15 more shots.
If you don’t want to become a millionaire thats ok but the same rules apply. However, you should plan to make a lot of money at what you do otherwise it’s not worth the risk, worry and sleepless nights.
Oh…and you must learn to Sell, Sell, Sell yourself. If you’re uncomfortable asking for money get over quick there are several seminars and training programs to help you with this.
Finally make sure you read the book “The E-myth Revisited”….this book is critical reading for all entrepreneurs according to nearly every business consultant in America and its core example is built around a bakery concept.
What would you have included in this email to my friend?