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Setting up a Cake Design Studio Business

All you need to know about starting and running your business

Business guides » Setting up a Cake Design Studio Business

What is a Cake Design Studio Business?

A cake design studio is a specialist cake business that makes celebration cakes for a range of different occasions and events. Unlike other cake businesses and bakeries, a cake design studio focuses particularly on the decorative aspect. Not only will the cake need to taste delicious, but it will also need to look impressive. Many cake design studios consider their work to be edible art.

A cake design studio can design, make and decorate cakes for special occasions, such as:

  • Weddings.
  • Graduations.
  • Birthdays.
  • Christenings.
  • Congratulations, e.g. new job, promotion or engagement.
  • Anniversaries.
  • Christmas.
  • Baby showers.
  • Religious events, e.g. Diwali, Holi or Eid.
  • Bar Mitzvahs.

 

A cake designer and decorator is a baking arts professional who designs and decorates cakes (and sometimes other baked goods). In your business, you will use icing, buttercream and other decorative toppings to create intricate decorations and unique designs. The majority of the cakes are created specifically to fulfil an order so will incorporate specific customisations for customers.

There are many different flavours of cake you could offer to your customers, with the most popular choices being chocolate cake, lemon cake, Victoria sponge, carrot cake, fruit cake, coffee cake and red velvet cake. Some cake design studios also provide cakes for people with specific dietary requirements. For example, they may make gluten-free cakes, vegan cakes or diabetes-friendly cakes.

Cake design and decorating is an art form that requires many different skills and techniques.

There are many different responsibilities associated with running a cake design studio, including:

  • Sourcing ingredients and stock.
  • Creating or following baking recipes.
  • Consulting with customers about their requirements and vision and making recommendations.
  • Designing the cakes and planning design and decorative features to create custom-made orders.
  • Providing customers with price estimates.
  • Preparing ingredients and baking cakes.
  • Applying fondant, icing, buttercream and other bases.
  • Creating tiers of cake and ensuring they are steady and symmetrical.
  • Using cake decorating techniques, such as piping, fondant work, hand painting, sugar work, airbrushing and mirror glazes.
  • Applying decorative items, such as patterns, words, pictures, flowers and shapes using cake decorating equipment and edible and non-edible decorative items.
  • Packaging completed orders carefully to ensure they do not become damaged.
  • Tracking inventory and ordering supplies.
  • Adhering to deadlines.
  • Purchasing, cleaning and maintaining equipment and machinery.
  • Ensuring the cleanliness of your premises and avoiding cross-contamination.
  • Creating professional and beneficial relationships with suppliers, vendors and wholesalers.
  • Complying with all legal guidelines and health and safety requirements.
  • Providing accurate allergy information and best-before and use-by dates.
  • Maintaining accurate records.
  • Handling payments, receipts and invoices.
  • Handling customer collections and deliveries.
  • Marketing and advertising.
  • Completing business and administrative tasks.

 

Starting up a cake decorating studio business can be both financially and personally rewarding. To help your business succeed, there are specific skills and qualities that can be advantageous, particularly a passion and a talent for baking, a flair for creativity and strong fine motor skills. You will also require attention to detail, to ensure that each cake is flawless and the finished product is in line with the design, and excellent time management skills to ensure that each order is completed by the deadline. An ability to communicate effectively (with your customers, suppliers and other people within your business) and strong organisational skills are also recommended. You will also need a solid business plan and be willing to dedicate the required time and effort to make your business succeed.

Types of Customers

Cakes and other baked goods are popular with people of all ages and demographics and as a business making celebration cakes, your business could be popular with any person who is celebrating a special occasion. However, by identifying a more specific typical customer base and determining the types of customers your cake design studio is likely to appeal to, you can plan your advertising and marketing strategies more effectively, focus your business and maximise your profits.

Multiple factors can determine your typical customer base, including:

Whether you specialise in a specific type of occasion cake

Some cake design studios choose not to specialise and will make any type of cake the customer requests for any type of occasion or event. Other studios choose a speciality, most commonly wedding cakes, and will primarily design, bake and decorate this type of cake. Choosing a speciality can be beneficial, as it can allow you to perfect your skills, grow your reputation (for example, as a wedding cake decorator) and charge higher prices. If you opt to focus on a specific speciality, consider how this could affect your typical customer base.

The types of cakes you make

What flavours will you specialise in? Will you offer multi-tiered cakes? What types of design and decoration will you offer? Will you offer shaped cakes (i.e. cakes shaped like different items, such as a bottle of champagne)? The types of cakes you create will have a significant impact on your typical customer base.

Your price points

Although occasion cakes are generally more expensive than other types of cakes, many of your potential customers will likely still consider your pricing before purchasing your products.

Customers can typically be separated into three pricing categories:

  • Budget: Price will be the most important factor for this type of customer. They are likely looking for the lowest-priced cakes and may be less concerned with intricate, complicated or custom designs.
  • Mid-range: Mid-range customers are looking for a combination of quality and affordability. Although they don’t want to pay premium prices, they don’t look for the cheapest option and will likely want a cake that is decorated to a high standard.
  • High-end: Price is not an important factor for high-end customers. They generally want the highest quality, best-tasting and most unique cake and are willing to pay a higher price. More important than price are the ingredients and flavours, the intricacy of your designs and decorations and whether you are able to create a showstopper cake.

 

Where your business is located

The location of your business will also be a major factor in determining your typical customer base. Customers tend to choose a cake studio that is conveniently located to them or offers a delivery option. Consider your location when determining the types of customers you are likely to attract.

Your branding

Your branding will include the design of your studio, your business story, your business name and logo, your packaging and your website. Because occasion cakes are usually unique, premium products, your customers will expect your packaging and branding to reflect this. Your branding will also affect your typical customer base.

Your reputation and reviews

Because occasion cakes are expensive and are generally the focus or centre point of the special occasion or celebration (e.g. cutting the cake at a wedding and blowing the candles out at a birthday party), many potential customers will conduct research before choosing a cake design studio. They may speak to family members, friends and colleagues to ask for recommendations and look at your reviews online.

Wedding Cake Cartoon
Cake Cartoon
Birthday Cake Cartoon

Equipment You Will Need

The type of equipment you require depends on the type of cake design studio business you set up, the size of your premises and the number of orders you plan to accept at one time. Choosing the appropriate equipment is imperative as without it you will not be able to run your business.

Although your equipment requirements can vary, below is a list of the equipment typically required by cake design businesses:

Cake Preparation and Baking Equipment

Stock and ingredients

This is an important ongoing purchase that can take up a large percentage of your business’s running costs. Many of your stock and ingredient requirements will be used regularly and will need regular replenishment, e.g. flour, eggs, chocolate and fondant. However, some of your other ingredients may be ordered specifically for a custom order, e.g. if your customer requests an unusual flavour of cake or decorative items that you don’t usually make.

Stand mixers

A stand mixer is a heavy-duty electric mixer that sits on your countertop. It is used for heavy-duty mixing, whipping and beating. It features a mixing bowl with a motor and a rotating wire whisk. Stand mixers can help to save you time and effort when preparing the ingredients for baking and decorating the cakes. Because your mixers will experience excessive use, it is recommended you purchase an industrial mixer, as they are more durable and more reliable. When deciding the type of mixer that is best for your business, consider the size and capacity of the mixer.

Mixing bowls, whisks and spoons

As well as a stand mixer, you will also require mixing bowls, mixing spoons and whisks for manual mixing by hand. Some recipes feature ingredients that are too delicate for electrical mixing (e.g. folding in egg whites), making these items essential for your business.

An industrial oven

The type of oven you purchase will depend on the types of baked goods you plan to make. Most cake businesses opt for a convection oven, which uses internal fans to circulate the air to create even browning and uniform baking.

An industrial fridge and freezer

A fridge and freezer are essential in your kitchen. You will need to store any perishables and fresh stock or ingredients in your fridge or freezer. Consider how much you will need to store when considering what size you will need. If you have the available space, you may opt for a walk-in or industrial-sized fridge and freezer. Ensure both the fridge and freezer are set to the correct temperature.

Cake tins

Cake tins are essential for baking the cakes you want to decorate. Because different customers will have different requests and designs, you will need cake tins in a variety of different shapes, sizes and moulds. You will also need cake tins with different depths. To make it easier to remove the cakes from the tins without damaging the sponges, choose cake tins with removable bottoms. Ensure your tins are made of aluminium for good heat conduction and optimal baking.

Weighing scales

Weighing scales are necessary to ensure you follow a recipe exactly and to ensure cakes and other baked goods are consistent. Weighing scales are particularly useful for measuring flour, as flour can be easily mismeasured using a measuring cup (because it can clump or flatten in the cup). You may choose micro weighing scales, which measure your ingredients more specifically.

Cooling racks

If you are baking large quantities of cakes at one time, a sheet pan rack allows you to cool multiple sponges at the same time. You could also choose a tiered rack, allowing you to conserve space and a rack that is on wheels, enabling you to transport your products around your studio more easily.

Flour sifters

Flour sifters or sieves are used to separate clumps of flour, baking powder and other dry ingredients. They help to ensure your ingredients are an even consistency and that your measurements are more accurate and can prevent your cakes from being densely textured or sinking in the middle.

Ventilation

Commercial kitchens require more complex ventilation, as kitchens are commonly filled with smoke, steam, odours, high heat and potentially harmful gases.

Some ventilation you could install includes:

  • Ventilation hoods.
  • Exhaust fans.
  • Make-up air systems.
  • Fire suppression systems.

 

An industrial dishwasher

A dishwasher is a necessity, not only because it will help you to save time in the kitchen and reduce your kitchen duties, but also because it will demonstrate the hygiene standards and cleanliness of your cake business. Choose an industrial-sized dishwasher to allow you to clean more dishes at the same time, helping your kitchen to run more efficiently.

Stainless steel worktops or worktables

The majority of your food preparation will be done on your worktops or tables. Your worktables should be stainless steel as this material is non-porous, meaning it is resistant to most bacteria and germs. It is also easier to clean and will help you to maintain high standards of hygiene.

Other equipment

Some of the other baking equipment you require includes:

  • Rolling pins.
  • Weighing scales.
  • A temperature probe.
  • Measuring cups and/or spoons.
  • Spatulas.
  • Stirring spoons.
  • Baking paper.
  • Graters (e.g. for shredding lemon, carrots and spices into the cakes).

 

Design and Decorating Equipment

A revolving cake stand

Also known as a turntable stand, a revolving cake stand is a necessity for icing and decorating cakes. The stand rotates to give you easy access to all sides of the cake for icing and decorating. It allows you to ensure icing or buttercream is smooth and uniform. Choose a turntable with a non-slip base to ensure your cake doesn’t move and one that is your required height. You may opt to purchase multiple cake stands of different sizes.

Piping bags and nozzles

Piping bags are essential to cake decoration. They are cone-shaped bags with pointed open ends that are filled with buttercream, melted chocolate or another ingredient. The bag is twisted to force the ingredients to come out. If you plan to pipe buttercream into different shapes and decorations or use pastry cream, jam or chocolate in any of your creations, you will require piping bags. Piping bags are available in different sizes and will come with a variety of different piping nozzles that each produce different decorative effects e.g.:

  • Plain tips.
  • Flower tips.
  • Star tips.
  • Swirl tips.
  • Leaf tips.
  • Basketweave tips.
  • Ruffle tips.

 

Icing spreaders

Also called a palette knife, an icing spreader is used to spread icing onto a cake. It looks like a thin spatula and helps to ensure the icing is smooth and blemish free and that your cakes look professional. Ensure your icing spreaders are made from stainless steel to make them easier to clean.

Icing smoothers

Once the icing has been spread onto the cake, you will then need to smooth it. An icing smoother creates a smooth professional finish to your cake and ensures your cakes are finished to an extremely high standard. Icing smoothers are available in different lengths and different materials (e.g. plastic, acrylic and stainless steel).

Cake levellers

A cake leveller is a great tool to ensure your cakes are straight and level. It slices off the dome or top of the cake to ensure you have a flat surface for stacking or decorating. Choose a cake leveller with adjustable cutting wires to allow you to cut the cakes to different heights.

Ganache plates

A ganache plate is a special type of tool made from acrylic that helps you achieve a flawless ganache finish. You put one plate on top of the cake and one underneath and use them as a guide when you are smoothing the ganache around the edges of your cake. They help to ensure the ganache is flat and smooth and the edges are sharp. Ganache plates can also be used for buttercream.

Decorating brushes

Brushes can be used for painting the cakes, applying glazes and glues and decorating with glitter and other edible decorations. Brushes are available in different sizes, e.g. for finer detail and specific application and for covering large areas. Silicone brushes are recommended as they are easier to clean.

Pastry brushes

Pastry brushes are used to spread butter, egg wash, water or oil onto food to give the end product a golden-brown finish or crust. They can also be used to quickly grease baking tins and pans.

Moulds and stencils

Moulds and stencils can help to save you a lot of time and effort, particularly if you require a lot of decoration and you want it to be uniform. There are thousands of different moulds and stencils to choose from so consider what shapes and designs are likely to be most popular.

Cake combs

A cake comb is used to make designs in the icing of the cake. It has a straight edge or ridges with which you can apply patterns and designs, e.g. a wavy pattern or a honeycomb pattern. Cake combs are typically made from stainless steel, plastic or acrylic.

Dowels

Dowels are cylindrical rods (usually made of plastic or wood) that are inserted into cakes to distribute the weight more evenly and prevent the cake from leaning or toppling. They are particularly recommended if your cakes feature heavy decorations or are multiple tiers or layers.

Cake boards

A cake board is a specially designed piece of hardboard made from strong material and covered in foil. It supports the base of your cakes, allows the cakes to be transported more safely and easily and can also be used to display your cakes. Depending on the material of your cake boards and how the cakes are cut, you may be able to reuse the boards multiple times.

Strong cake boxes

Whether your customers collect their cakes or you offer a delivery option, you will need high-quality strong cake boxes. The boxes will need to be strong enough to withstand the weight of the cake and to ensure the cake is stable. You may invest in reusable plastic boxes or strong cardboard boxes. You will likely need boxes of different sizes to suit different cakes.

Other Equipment

A delivery van

If you offer cake delivery (which many of your customers will likely request – particularly if you make wedding cakes) you will need a van or another vehicle. Your vehicle will need a large flat surface to ensure the cakes are level and secure when being transported. To help your business gain exposure, it is recommended that you install adhesive door and body panels onto your van with your business name and logo, your contact information and the typical services you offer.

A counter

If your customers visit your studio to place their orders, you will need a counter. It will likely include an area for you to stand behind and may feature display cases and shelves, your till and a menu or portfolio that shows previous cake designs.

A meeting area

If your customers visit your studio and you hold consultations and discussions on-site, you will need a meeting area where you can discuss design plans, listen to your customers’ requests and give recommendations. You can also show photos of your previous work and show sketches of your designs. Your meeting area should feature comfortable chairs and a table.

Storage racks and shelving

Shelving creates a safe and organised area for storing non-perishable ingredients (such as flour), as well as equipment, accessories and utensils. Shelves also allow you to maximise the space in your kitchen. You will need enough shelving to keep stock separate and keep your kitchen well-organised.

Storage containers

Storage containers can be used for safely storing any opened stock, to prevent spoilage or contamination. You can also use the containers to store any pre-prepared food, such as shaped fondant, to keep it fresh for longer. Ensure your storage containers are strong and airtight.

Some storage containers you could opt for include:

  • Food storage containers in different shapes and sizes.
  • Dough containers.
  • Kitchen canisters.
  • Large ingredients bins (for storing larger amounts of dry ingredients).

 

Date labels

These are necessary to label when ingredients were opened and when certain items were prepared or baked. It ensures that all stock, ingredients and food products are completely safe to use and that your business is operating in line with food safety and hygiene guidelines.

Equipment and handwashing sinks

Equipment sinks should be used specifically for cleaning or disinfecting food and baking equipment and utensils and should not be used for handwashing. You must ensure the sink has both hot and cold running water. You will also need separate handwashing facilities that are used solely for washing hands. As well as hot and cold running water, your handwashing sink should also have sanitising products (such as handwash) and a means for drying hands (e.g. a hand dryer or paper towels).

Rubbish bins and a waste disposal system

You will need rubbish bins in all areas of your cake design studio. You will also need different bins for different items to ensure you are disposing of rubbish correctly and following recycling guidelines. Colour-coded bins are the easiest way to ensure your waste disposal system is operating correctly.

A computer and Wi-Fi system

A computer can be used for running your studio’s website and social media. You can also manage your online orders, organise deliveries and advertise your products. A computer can also be used for business and administrative tasks, such as ordering stock and doing your accounts. You will also need a Wi-Fi system to enable you to use your computer or laptop online.

A business phone

A business phone allows your customers to call to make orders or can allow you to contact customers directly to discuss an order. You could opt for a landline or mobile phone and could advertise your business phone number on your website.

A website

A website is useful for advertising your business and could also act as your primary ordering strategy. It should contain photographs and descriptions of your cakes (including the possible flavours and design ideas). It should also show the areas and locations you offer delivery to and your customer reviews. Your website will likely feature an option to order online. Design your website to include your business logo and to reflect your branding.

A payment system

The type of payment system you require will depend on your primary selling strategy. For example, if you accept in-person sales, you will likely require a Point of Sale (POS) system with a cash till. If you accept orders online, you may require an online payment system and a way to track payments to your business bank account.

Safety equipment

Some of the safety equipment your business may require includes:

  • Fire extinguishers.
  • Rubber floor mats.
  • Wet floor signs.
  • A fully stocked first aid kit.

 

A CCTV system

Because you will be storing expensive stock and equipment and may have customers visiting your premises, CCTV can protect your business from potential break-ins and theft. CCTV can also protect your business in the event of an injury or accident and can provide vital footage to the police if a theft or incident occurs in your studio. You can choose the specification of the equipment and how many cameras you require.

A safe

If your business accepts cash payments, you will need a safe as a way of safely storing the cash from your till at the end of the day. You can also keep extra change in your safe in case your cash register runs out of change during the working day.

Personal Protective Equipment (PPE)

PPE is a necessary purchase for all food businesses, as it helps to protect your food from contamination. PPE can also protect you and your staff from harm. Some PPE you may require includes hairnets, gloves, anti-slip footwear and aprons.

Cleaning equipment

Keeping all areas of your premises clean is imperative. Food preparation areas and food storage areas are particular areas that should be cleaned regularly throughout the day, to avoid cross-contamination and the breeding of bacteria. You will likely need different cleaning materials for different areas of your studio. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser, dishwashing soap and a sweeping brush and mop.

Décor items

You will need to design your studio to fit your business’s brand aesthetic. Adding décor items is a key way to make your business more attractive to customers. However, any décor items should not clutter your shop or detract from the products you are selling. Some things you could use to decorate your shop are artwork, lights and plants.

Design Cake Studio Business

Typical Costs

If you are starting up a cake design studio business, an important consideration you will need to make is the approximate costs associated with setting up and running this type of business. Calculating your typical costs allows you to estimate your initial investment requirements, any monthly and annual costs, your pricing strategy, your profit goals and your acceptable profit margins.

There are multiple costs associated with setting up and running a cake design studio. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.

Although typical costs can vary, depending on the type of cake design studio you set up and the size of your business, the typical costs you can expect to be responsible for include:

Your studio premises

Your premises will likely be your biggest expenditure. You will need to rent your premises on a monthly or annual basis. Rental prices can vary significantly, depending on the location and the size of the premises. City centre locations usually have the highest rental costs. Rental costs are often calculated per square metre. They can range significantly, from £500 to £15,000 per square metre annually. Your rental cost may be higher if you are renting an already established, refurbished or equipped cake business or bakery.

Refurbishment and installation costs

Unless your premises previously operated as a cake design business or a similar food business, you will likely need to refurbish or convert the premises to install the equipment and furniture you need for your business and make the area fit for purpose. You will also want to refurbish and decorate your premises to fit the aesthetic of your business and make it attractive to customers. If your premises doesn’t have an established kitchen, you will need to set one up, which may include installing the necessary water, electricity and gas lines. Renovation costs can vary, from £5,000 to £50,000 depending on the level and scale of work required. As part of your renovation costs, consider how you can ensure all areas of your premises are easy to clean and are safe and in line with health and safety regulations.

Stock and ingredients

This is an ongoing cost you will need to factor into your budget and will be a major monthly expenditure. Many of your ingredients will need to be purchased regularly (e.g. eggs and butter). Dry, non-perishable ingredients can be ordered in bulk. You can reduce the cost of your stock by buying wholesale, buying in bulk and shopping around. To maximise your profits, your ingredients and stock costs should be as low as possible. The higher the return on each cake, the higher your profits will be.

Equipment

Your equipment will be another major expenditure. Your equipment is an essential purchase, as without it you will not be able to operate your cake design studio. The cost of equipment can vary depending on the type of equipment you choose and the amount of equipment you require. You may choose to purchase less equipment initially and expand your equipment as your business grows. Equipment for your business can cost between £5,000 and £50,000.

Maintaining, repairing and replacing equipment

Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment and machinery will come with warranties, repairs and replacements are inevitable – particularly because food preparation and cooking equipment typically experience heavy use. Correctly cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.

Running costs

These are the day-to-day costs associated with running your business. Some running costs are paid monthly, and others are paid quarterly or annually. Your running costs can include electricity, gas, water, council tax and insurance. To maximise your profits, try to keep your running costs as low as possible.

A vehicle

A van will likely be the most convenient type of vehicle for your business, although a car with a large boot area could also be appropriate. The price of a van can vary significantly, depending on the make and model and whether it is new or second-hand. The cost of a van can begin at £5,000 (for a second-hand vehicle). For a new van, expect to pay at least £30,000. You may also need to pay additional costs to apply adhesive panels to your van to advertise your business.

Vehicle running costs

Your vehicle running costs include your vehicle insurance, petrol, MOT, services and the costs of any repairs. These costs can vary significantly, depending on the age and condition of your vehicle, the level of insurance you choose and the amount of travel you need to do. Typically, you can expect to pay between £50 and £200 per month.

Staff

To allow you to fulfil more orders at one time, you will likely need to hire staff, such as bakers, cake decorators, front-of-house staff and cleaners. You will need to pay any staff you employ at least the national minimum wage and account for other expenses such as holiday pay, sick pay, maternity/paternity pay, National Insurance and any company pension contributions.

Branding

When creating your brand identity, consider how you want your business to be perceived by potential customers. When creating your brand, consider the type of business you are setting up, the types of cakes you plan to make and your typical customer base. Branding can include creating your business’s visual identity, design and aesthetic, your business name and logo and your website. You could hire a professional to help you with branding or do some or all of the work yourself. Branding can cost between £500 and £10,000, depending on the level of work required.

Advertising and marketing

To ensure your cake design studio attracts customers and creates maximum profits, you will need to spend money on advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £100,000, you should spend between £1,000 and £3,000 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business. To reduce your costs, capitalise on free marketing strategies, such as on social media or in your local community.

Training

You and your employees will need to obtain food hygiene training before you open your business. You will also need to refresh your training regularly (at least every three years). You may also opt to undertake other training courses, such as manual handling, first aid and electrical safety. You can expect to pay approximately £20 + VAT per training course per person.

Business insurance

There are multiple coverage options available for a cake design studio business. Some types of coverage are optional, whereas others are mandatory.

Your coverage options include:

  • Public Liability Insurance.
  • Employers’ Liability Insurance.
  • Product Liability Insurance.
  • Building and Contents Cover.
  • Stock Insurance.
  • Personal Accident Insurance.
  • Food Contamination Insurance.
  • Business Interruption Cover.
  • Goods in Transit Cover.

 

Prices can vary, depending on your insurance provider and the level of coverage you choose. Prices typically start at £15 per month.

Typical Pricing for Customers

Once you have calculated the typical costs associated with setting up and running a cake design studio, you can then create your pricing strategy.

It is likely that every cake you make will be priced differently, with the price of each cake depending on factors such as:

  • The size of the cake.
  • The complexity of the design and decoration.
  • The ingredients required.
  • Whether the cake is for collection or delivery.
  • The time required to complete the order.
  • Whether the cake is 2D or 3D.

 

Some other factors that can impact your pricing include:

  • The types of cakes you specialise in (e.g. wedding cakes).
  • Your reputation.
  • Your experience, skills and qualifications.
  • Your customer reviews.
  • Your location.
  • The demand for your services.
  • Your competitors’ pricing.

 

The cost of a custom-made occasion cake can vary significantly, ranging from £60 to £600.

Safely Running a Cake Design Studio Business

Safe practices in your cake design studio can help to protect the health, safety and well-being of you, your staff and your customers.

Some ways you can safely run your cake business are:

Safely store food and ingredients

All food (regardless of whether it is perishable or non-perishable) must be stored safely to prevent contamination and to ensure it is of good quality and safe to consume.

Some safe storage practices you should follow include:

  • Storage areas should be kept clean and tidy.
  • Food deliveries should be checked to ensure they are safe and of good quality before accepting them.
  • Follow the First In First Out (FIFO) stock rotation system.
  • Pay attention to use-by and best-before dates.
  • Fridges and freezers should be set to the correct temperature.
  • Follow the storage instruction on pre-packaged food.
  • Foods containing allergens should be stored separately.
  • Chemicals should be stored away from food.

 

Ensure proper ventilation

To reduce exposure to smoke, steam, high heat and harmful gases, you will need to install a proper ventilation system.

A ventilation system can:

  • Improve your indoor air quality.
  • Reduce the temperature of your kitchen.
  • Reduce odours.
  • Remove grease from the air, your surfaces and equipment.
  • Reduce your energy bills.

Your ventilation system will likely also include fire suppression equipment, which can help reduce the likelihood of a fire occurring in your kitchen.

Ensure the personal hygiene of all staff

Good personal hygiene is essential when working in the food industry.

Good personal hygiene can include:

  • Implementing handwashing procedures.
  • Tying back hair or covering hair.
  • Not wearing false nails or nail varnish on your fingernails or any jewellery or watches when preparing, baking or decorating the cakes.
  • Not wearing strong perfume or other chemical products that could contaminate the cakes.
  • Wearing Personal Protective Equipment (PPE).
  • Following good habits, such as not coughing or sneezing near food and refraining from touching your hair or face.

 

Follow guidelines on foods that may contain traces of gluten or allergens

The Food Standards Agency has provided voluntary guidelines on labelling products that may contain traces of gluten or another allergen. For example, if the foods were prepared in the same area as gluten or an allergen, you should label your products accordingly or inform your customers so that they can make an informed decision.

Examples of the labelling terms you could use include:

  • May contain traces of gluten.
  • Made in a kitchen that also handles eggs.

 

Implement pest prevention and control methods

Pests can be a major issue for food businesses and can result in contaminated food and your business being shut down by an Environmental Health Officer (EHO).

Some ways you can prevent pests are:

  • Fill any gaps or holes in your building.
  • Keep your external areas free from food, rubbish or vegetation.
  • Dispose of food properly in closed bins.
  • Keep your premises clean and tidy.
  • Store food in sealed containers.
  • Use fly screens on open windows or doors.
  • Check your deliveries for signs of pest damage.
Birthday Cake
Cake Design Studio

Ensure correct baking temperatures

All cooking and baking businesses must ensure they are cooking/baking at the correct temperature. This is to reduce or eliminate the risk of food poisoning. Ensure your oven or other cooking equipment is set to the correct temperature and use a food thermometer to ensure food is thoroughly cooked.

Be aware of food hazards

Food hazards are any contaminants that could enter food and cause harm to consumers.

The main food hazards are:

  • Biological: These hazards are microorganisms that contaminate food, usually during the cooking, chilling or storage processes. Biological hazards can also occur through cross-contamination. Examples of biological hazards are bacteria, fungi and viruses.
  • Chemical: Chemical hazards occur when naturally occurring or human-made chemical substances contaminate food. For example, chemicals from cleaning products, toxins produced by animals, plants and microorganisms or chemicals that are added to food and drink.
  • Physical: This refers to foreign materials or objects that enter food or drink during preparation or handling. Physical hazards can include natural hazards, such as shells and pips, and unnatural hazards, such as hair, fingernails, plastic and wood.
  • Allergenic: Allergenic hazards can cause an allergic reaction or anaphylaxis in people with allergies. Allergenic hazards can occur through cross-contamination, such as the foods being prepared in the same workspace.

 

Cleaning and washing of equipment and surfaces

Although not a legal requirement for businesses with fewer than five employees, risk assessments can help to eliminate risks and ensure safe practices in your studio.

As part of your risk assessments, you should:

  • Identify hazards.
  • Determine who could be at risk.
  • Evaluate any potential risks.
  • Implement relevant safety measures.
  • Record the results of the risk assessment.
  • Review the risk assessment regularly.

 

You should keep physical records of your risk assessments as evidence of your commitment to safe practices.

Keep clear and accurate records

When you are inspected by the EHO, they will likely request to see up-to-date records of your business’ cleaning schedules, risk assessments, health and safety policies, allergen information, and temperature checks. Keeping such records not only helps to protect your business and improve the likelihood of you receiving a higher score, but it also ensures procedures are followed at all times.

Implement safety measures

Safety measures can help to protect your business, your employees, your customers and your equipment.

Some safety measures you should implement include:

  • Install a CCTV system.
  • Install an alarm system and secure and reliable locks.
  • Keep a fully stocked first aid kit on site.
  • Other safety equipment, such as fire extinguishers, should be easily accessible.
  • Wear Personal Protective Equipment (PPE).

 

Obtain health and safety training

Obtaining health and safety training can ensure that you and your employees follow safe practices at all times.

Some training courses you could opt for include:

  • Assessing Risk.
  • Health and Safety for Employees.
  • Fire Safety Awareness.
  • COSHH Awareness.
  • HACCP.

Legal Requirements

Complying with legal requirements is essential when setting up and running your cake design studio.

Some legal requirements you should be aware of are:

Follow the Food Standards Agency guidelines on labelling

If you produce and sell any type of food (including cakes) in the UK, you must follow the guidelines set out by the Food Standards Agency regarding the information that must be included on a food label.

Some of the information you must include on your label includes:

  • A complete list of ingredients.
  • The allergen information.
  • A quantitative declaration of ingredients (QUID) – i.e. the percentage of each ingredient contained in the food.
  • The storage conditions.
  • Date labelling, i.e. ‘best before’ or ‘use by’.
  • Name and address of the manufacturer.

 

Comply with allergen regulations

If your products contain any of the 14 named allergens:

  • Celery.
  • Cereals.
  • Crustaceans.
  • Eggs.
  • Fish.
  • Lupin.
  • Milk (cows).
  • Molluscs.
  • Mustard.
  • Nuts.
  • Peanuts.
  • Sesame seeds.
  • Soya.
  • Sulphur dioxide.

 

…you must clearly state them on your packaging (e.g. the cake boxes) and this information must be clearly highlighted (for example, in bold text or underlined). If your food contains other allergens, these must be clearly listed on the label, although they do not need to be highlighted.

Register as a food business

Any business in the UK that sells food (including cakes) must register as a food business with their local council. You must apply for your food registration business at least 28 days before you begin trading. You can apply for your registration on gov.uk, and it is free of charge.

Display your food hygiene rating

Once you have registered your business, you will receive an inspection from the Environmental Health Officer (EHO) to determine your food hygiene rating.

The inspector will assess your:

  • Food storage.
  • Food handling.
  • Food preparation.
  • Food cleanliness.
  • Food safety management system.

 

Once you have received your food hygiene rating, this information should be clearly displayed on your premises.

Comply with the Food Safety Act (1990)

Under the Food Safety Act, you have several key responsibilities:

  • Don’t add any ingredients that could cause the food to become harmful.
  • Don’t treat the food in any way that could cause it to become dangerous.
  • The nature, substance and quality of the food must be to the standard that customers expect.
  • Your labelling and presentation of the food should not be false or misleading.

 

Comply with the Bread and Flour Regulations (1998)

The Bread and Flour Regulations must be followed by all baking businesses, even those that don’t make or sell bread. The regulations state the nutritional value of flour that must be adhered to.

These regulations also cover information such as:

  • Essential ingredients.
  • Iron powder specifications.
  • Non-permitted ingredients.
  • Composition of flour.

 

Obtain food hygiene training

Food hygiene training must be obtained by all employees of food establishments. When your business is inspected by the Environmental Health Officer (EHO), a food hygiene certificate is the most ideal way of showing you have obtained training. Demonstrating a strong understanding of food hygiene can improve your probability of being granted a five-star food hygiene rating.

Comply with the Food Safety and Hygiene Regulations

These regulations specify the standards relating to the control and management of the steps that are critical to food safety, including the cleanliness of your premises and equipment and temperature control in food preparation, storage and serving.

The regulations differ depending on where in the UK your business is located:

  • England: The Food Safety and Hygiene (England) Regulations 2013.
  • Scotland: The Food Hygiene (Scotland) Regulations 2006.
  • Wales: The Food Hygiene (Wales) Regulations 2006.
  • Northern Ireland: The Food Hygiene Regulations (Northern Ireland).

 

Implement a Food Safety Management System (FSMS) based on HACCP

The Hazard Analysis and Critical Control Point (HACCP) framework should be used in your cake design studio to create a food safety management procedure. An FSMS is a systematic approach to controlling any food safety hazards.

It should include:

  • Identifying any points in your processes where food hazards could occur and identify which of these points could be critical.
  • Identifying and implementing monitoring and control procedures at all critical control points (CCPs).
  • Regularly reviewing and analysing food hazards, CCPs and control procedures.

 

Implement a waste management system

Food businesses should have appropriate provisions for the separation, storage and removal of waste.

Some guidelines you should abide by include:

  • Have appropriate bins inside and outside your premises which are sufficient in number and are specified for different types of waste.
  • Do not allow waste to accumulate.
  • Use bins that have fitted lids and foot pedals.
  • Have a specific waste disposal area.
  • Do not dispose of food waste in the sink.
  • Use commercial sink strainers to prevent fat, oil, grease and small bits of food (e.g. cake crumbs) from entering the sewer network.
  • Apply for a waste carrier registration if you transport any waste.

 

It is also recommended that you clean and disinfect bins regularly.

Comply with the four steps to food safety

The four steps to food safety (known as the Four Cs) can help to reduce contamination and reduce the likelihood of hazards coming into contact with your products.

It includes:

  • Cleaning: Cleaning helps to prevent harmful bacteria from contaminating food. Clean your hands and surfaces often. You should wash your hands for at least 20 seconds with soap and warm water before, during and after preparing food and after handling certain foods. You should also wash surfaces and utensils after preparing each food item.
  • Cooking: All cakes should be baked thoroughly to destroy any harmful bacteria and ensure they are not raw. Check all cakes are cooked to a safe internal temperature.
  • Cross-contamination: Cross-contamination can occur when harmful bacteria spreads between surfaces, equipment, hands and food. To avoid cross-confirmation, keep different types of food separate (e.g. raw eggs and cooked cake), keep cooked food separate, store foods correctly and thoroughly clean surfaces.
  • Chilling: Chilling food correctly prevents bacteria from growing. Refrigerate perishable stock (e.g. milk) as soon as it is delivered and ensure your refrigerator is set to the correct temperature.

 

Comply with premises regulations

Multiple regulations apply to your commercial premises to ensure your cake design studio is in good condition, clean and maintained and encourages good hygiene practices.

  • Handwashing facilities: You will need separate handwashing facilities that have hot and cold running water and appropriate materials to allow hands to be washed and dried hygienically.
  • Ventilation, lighting and drainage: Your premises must have adequate ventilation, lighting and drainage in all relevant areas.
  • Food preparation areas:
    – Floors and walls must be in good condition, easy to clean and frequently disinfected.
    – Ceilings must be in good condition, easy to clean, free from condensation and mould and free from flaking paint or plaster.
    – Windows and doors must be easy to clean and disinfect and if they open to the outside, fitted with removable insect-proof screens.
    – Surfaces should be maintained in good condition, easy to clean and frequently disinfected.
  • Equipment: Any equipment that comes into contact with food must be in good condition and cleaned and disinfected frequently.

 

Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013

RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve employees or customers.

Comply with the Control of Substances Hazardous to Health (COSHH) Regulations 2002

The COSHH regulations state that you must control any substances that are potentially hazardous. You should also assess, control and reduce any risks or potential hazards and protect people from harm.

Some hazardous substances you should be aware of are:

  • Flour dust.
  • Improver dust.
  • Protein dust.
  • Concentrates of flavour, citrus oils and spices.
  • Cleaning substances.

 

Comply with the Manual Handling Operations Regulations 1992

Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high and repetitive movements. You will likely be performing manual handling activities when performing tasks such as mixing batter, applying decorations, rolling fondant and when handling large or heavy equipment.

Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998

PUWER regulations apply to you and any employees you hire. You must ensure any equipment in your cake studio is fit for purpose and is maintained and inspected regularly. You must also ensure that health and safety risks are minimised to an acceptable level, that you have the correct knowledge and training to use the equipment, and that protective measures are put into place. Equipment should also only be used under appropriate conditions.

Comply with the Electricity at Work Regulations 1989

The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT). This includes any electrical equipment in your kitchen, such as your stand mixer and refrigerator.

Comply with gas safety regulations

If you have a gas boiler you will need to have it inspected by a gas-safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate. You will need to display your gas certificate clearly for your customers to see.

Comply with fire regulations

As the business owner, you are responsible for fire safety measures in your studio. There are multiple fire regulations you must ensure you comply with.

For example:

  • Perform a fire risk assessment.
  • Comply with the Regulatory Reform (Fire Safety) Order 2005.
  • Implement any necessary fire safety measures.
  • Implement emergency procedures and ensure these are clearly displayed.

 

Appoint a competent person

A competent person should be appointed to help your business meet your health and safety legal duties. You can act in this role yourself or appoint another person to fulfil this role. The competent person should have the skills, knowledge and experience to identify any hazards in your business and put controls in place to protect people from harm.

Prepare a health and safety policy

The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your business and who is responsible for specific tasks and how and when these tasks are completed. Follow the recommended tips from the Health and Safety Executive when creating your health and safety policy. You should make your policy easily visible to any visitors to your business.

Appoint a first-aider

All workplaces in the UK must have an appointed first-aider. In the event of an accident or injury, you will then be able to administer the necessary first aid. Although a first aid qualification or certificate is not legally required, it is the easiest way to demonstrate your first aid training.

Comply with employment legislation

If you employ any staff, you must ensure you follow employment legislation, including the Employment Rights Act (1996) and the National Minimum Wage Act (1998). You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.

Comply with the General Data Protection Regulations (GDPR) and the Data Protection Act (DPA)

If you take orders online, you must comply with both pieces of legislation when storing or sharing personal information, such as your customers’ personal information, contact details and banking information. You must also apply for a Notification to Process Personal Data Licence. You will also need to apply for a licence with the Information Commissioner’s Office and renew your registration every year.

Register your business

You must register your business with HMRC before you begin operating. You can register as a sole trader or as a limited company. You will need to register your business name and any other relevant information.

Register for self-assessment tax

This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.

As part of your tax responsibilities, you must:

  • Record all forms of income and expenses.
  • Complete an annual self-assessment tax return.
  • Register for VAT if you earn above the threshold (currently £85,000).
  • Pay National Insurance contributions.
  • Keep a record of your business accounts for the previous five years.
Baby Shower Cake

Positives of Owning a Cake Design Studio Business

Starting up a cake design studio business can be rewarding in many ways.

Some of the main pros associated with this type of business are:

Creative freedom

If you are a creative or artistic person, cake design and decorating can be extremely rewarding. You will have complete creative control to create your own recipes and designs, think of innovative and attractive ways to decorate the cakes and be creative with the flavours, textures and ingredients. Having the creative freedom to design new and different cakes for every customer can be very rewarding.

Work in an industry you are passionate about

If you are passionate about baking and love cakes (particularly special occasion cakes), setting up your own cake business can be extremely rewarding. You can do something you love every day and will have the opportunity to create your own recipes and designs and be creative with your cakes. Profiting from your passion can be very rewarding.

Be part of special occasions

Because your business will specialise in occasion cakes, you will get to be a part of the special events and celebrations in your customers’ lives. You can help them celebrate weddings, birthdays, graduations, anniversaries and much more. You may also find that many of your customers return to your business for every special occasion, meaning you can really get to know them and become an important part of these events.

Low barriers to entry

Although formal training and qualifications can be advantageous, they are not required. There are no formal requirements for opening a cake business, as long as you have the necessary skills and knowledge to make your business succeed. You won’t need to go to university and can learn the necessary skills while still getting paid. Starting your career with no debt can help you to begin building your personal finances early.

Every day is different

Every day you will be working on different recipes and flavours, new creations and different designs. You will encounter new challenges and have the opportunity to make exciting new cake inventions. You will also be working with different customers and planning for different events. A varied workday can help to keep your work interesting.

Start small and grow your business

If you don’t have an external investor or a large capital with which to start your business, you can start smaller and grow your business in time. Instead of setting up a cake design studio, you have the option to initially start small, for example, by opening a home baking business. As your profits and your customer base grow, you can then expand your business by opening a studio. This gives you flexibility and makes starting your own business more accessible.

High profit margins

Occasion cakes usually have a high profit margin and can retail for hundreds of pounds. Although ingredients can be expensive and each cake can be time-consuming to create, the high cost of the cake can result in a high income. A high profit margin can help you to increase your profits and your business’s income.

A scalable business

A cake design business can have a simple business model, making it easy to set up this type of business. If you want to grow your business, a cake design studio is highly scalable, as you will already have established strong business relationships with suppliers and wholesalers and will already have created a consumer base. There is always demand for baking businesses, giving you great opportunities for growth.

Unlimited income potential

There is no fixed income or limit on how much money your cake design business can make. If you operate at maximum capacity (e.g. the maximum number of cakes you can make per week), this allows you to increase your profits. As your business grows in popularity, you can also raise your prices, extend your premises, hire more staff and even open additional franchises of your business in other areas. A cake business has a high income potential and, with a solid business plan, can be extremely lucrative.

Create a positive work environment

You will be responsible for hiring staff and creating staff policies. This gives you the opportunity to create a positive work environment. You could hire staff that you know will bring positivity to the studio and will be an asset to your business. Your staff will also likely be like-minded people who are also passionate about baking. You can make your studio a positive place that your customers enjoy visiting and want to return to again.

A rewarding career choice

Running a cake studio can be rewarding in many ways. You can have a positive impact on your community, connect with other people and see your business grow and succeed. If you love food and have a passion for baking and the food industry, running a successful cake business will not only be financially rewarding but also personally rewarding.

Create your dream business

You will have complete control over all business decisions, allowing you to set up your dream business, in line with your business goals and vision. You can decide the type of cake business to set up, the cakes you will specialise in, your brand and the design of your premises – the opportunities are endless. Owning your own cake studio gives you the opportunity to be creative and set up your ideal business.

You can offer a personalised customer experience

You can offer customer consultations where you discuss what your customers want and offer advice and insight. Your customers will receive a personalised experience and are more likely to receive the perfect cake. With a personalised experience, the customer is likely to be more satisfied with your service and recommend you to their family and friends.

Customer loyalty and recommendations

If your customers are happy with the cakes you create and have a positive experience working with you, they are likely to return time and time again for other occasion cakes. Not only does this give you the opportunity to get to know your customers, but customer loyalty can also help you to grow your profits. Loyal customers may even recommend your business to other people which can help you to grow your customer base.

Face-to-face interaction

If you are an outgoing person and you enjoy speaking to people from all different walks of life, you will likely enjoy working in a customer-facing business. You can get to know your customers and spend time talking to them every day.

Free advertising on social media

You can easily gain exposure on social media by posting photos or videos of your creations. Your customers may also post pictures to their own social media accounts which will be seen by their followers. This can help you to gain exposure and be noticed online. Social media is a form of free advertising which can help you to grow your customer base and increase your income.

Choose your own schedule

You can choose which days your business opens, the hours you want to work and the number of orders you accept at one time. You can choose the opening hours, based on your busiest days and your own preferences. As your business grows, you can also work fewer hours and allow your employees to handle the day-to-day running of your business.

Connect with other people in the industry

You will have the opportunity to build connections with other people in your industry, other people who are artistic and creative and other local businesses. Building both professional and personal relationships allows you to stay up to date with new cake designs and techniques and create useful business connections that can help you to grow your business (e.g. partnering with local hotels that offer weddings and parties).

Be your own boss

You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the type of cake business you open and how you want to run your business. You can make the best decisions for you and your business.

Cake Design Studio Business

Negatives of Owning a Cake Design Studio Business

Although owning a cake design studio can be rewarding, there are some potentially negative aspects to this type of business that you should be aware of, for example:

High pressure work

An occasion cake needs to be perfect. From the bake to the flavour to the decoration, every aspect of the cake needs to be perfectly coordinated and finished to a high standard. Just one small error could result in hours of work and hundreds of pounds worth of cake being ruined. This can be highly stressful and place a lot of pressure on you and your staff.

Physically demanding

Many people don’t realise how physically demanding cake baking and decorating is. You will be on your feet for hours at a time, handling heavy equipment and machinery and spending countless hours carefully applying decoration to each cake. The repetitive movements and strength you will need when making the cakes can also result in strains, pain or even injury. Working in a cake studio can be physically demanding, tiring and have a negative effect on your physical health.

High start-up costs

A cake business has a lot of associated costs including the cost of the premises, staff, equipment, ingredients and overhead costs. The high initial investment that is required can make it more difficult for you to start up a cake design studio. Not only does this mean you may need to source outside investment, but it also makes your business high-risk. Having a large initial investment also means it will take longer before you begin turning a profit. You will also need to ensure consistent profits to cover your monthly costs, which can also be high.

Time pressure

Every client you work with and every cake you make will come with a strict deadline. Although you may think it is easy to stick to deadlines, something could happen that could cause you to miss a deadline, for example, your order volume being too high, a mistake occurring that means you need to start again or employee illnesses. Missing a deadline or producing a cake that is less than your best work because of time pressure can result in unhappy customers and bad reviews.

Ingredients and stock can be expensive

Cakes require expensive ingredients, such as butter, chocolate, sugar and fondant. Although you can charge your customers a higher price, each cake will take hours and possibly days to create, meaning that the cost of your time also needs to be factored into the price. Expensive stock and ingredients can negatively affect your profit margin.

The food industry is highly regulated

This is a highly regulated industry, with a large number of laws and regulations you must be aware of. You need to ensure you follow all policies and procedures, particularly those relating to health and safety. Not only can it be time-consuming (and sometimes expensive) to ensure compliance, but failure to comply, even unintentionally, could have serious consequences.

A lot of skill, knowledge and experience is required

To run a successful cake business, you will need to be highly proficient in a variety of skills and will need to have a lot of baking knowledge and knowledge of the industry. You will also need to have extensive experience baking and decorating cakes or working in a baking business. It can be time-consuming to gain the appropriate skills and experience to make your business succeed.

High risk of food poisoning and cross-contamination

Many people don’t associate baked goods with food poisoning, However, you will be working with high-risk ingredients, such as flour and dairy. Baking and selling your products means there could be a risk of food poisoning, which can be extremely dangerous, causing illness or, in serious situations, even death. Your business could be held liable if a customer becomes ill after eating your products.

High time commitment

You will be responsible for many different tasks, which can be very time-consuming, Your working hours will not be limited to the hours your studio is open as you will also have additional responsibilities, such as ordering stock, doing inventory, marketing and advertising, handling orders and deliveries and handling other business and administrative tasks. This can be extremely time-consuming and stressful.

Difficult to grow your business

Many new cake businesses fail to succeed because they find it difficult to successfully market a new business and grow their customer base. Successful cake businesses often spend years building up their client base. This could mean you initially receive less custom and earn a lower income. If you have invested a lot of money into your business, this could result in your business failing.

Your profits may not be consistent

Certain times of the year are likely to be busier than others, for example, many weddings and other special events take place in the summer. This could mean there are times when you have few or no clients. It could also be that you receive more business at certain times of the year and during these periods you have to turn down potential business. Inconsistent business can make it difficult for you to predict your profits, order your ingredients and plan your staffing.

A competitive industry

Not only will you be competing with other cake design studios, but you will also be competing with bakeries. Even supermarkets now offer attractive and impressive cakes in different flavours (for a significantly lower price than a cake studio). A high level of competition can make it more difficult for your business to succeed.

It can be high stress

As the business owner, you will have a large number of responsibilities. You will be responsible for every aspect of the business, including marketing, ordering ingredients, designing, baking and decorating the cakes and running the business. This can be highly stressful, especially when your business first opens.

High risk of your business failing

Starting up a cake design business can be risky. Many new businesses fail which could result in you losing money or getting into debt. Your business could fail for several reasons, such as high local competition, an ineffective business plan or if the UK encounters another recession or period of financial difficulty. Because a cake studio requires a high initial investment, if your business fails, you will potentially lose a significant amount of money.

Managing staff

You will have a lot of responsibilities in relation to staffing, including hiring and firing, payroll and managing your staff. This can be stressful and time-consuming. It can also be difficult if the motivation of your employees doesn’t match your business values. If your employees demonstrate a poor attitude or don’t complete their tasks in line with your expectations, this can be viewed negatively by customers and can result in negative reviews.

Issues out of your control

This can be one of the most frustrating aspects of running a business, as things that are outside of your control can have a negative impact on your business and your profits. For example, your supplier raising its prices, your stock delivery being cancelled or your equipment breaking can prevent you from properly running your business, which could not only affect your profits but also result in negative customer reviews.

No benefits

As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.

Bad reviews

Although the majority of customers leave honest reviews, some customers are difficult to please and will leave a negative review because of the smallest complaint (even if it is something outside of your control, such as the cake becoming damaged when they were transporting it). Sometimes a fake customer also leaves a fake review, which can be extremely difficult to disprove and remove. Negative reviews can be extremely damaging to your business, particularly if your business is new or you’ve had relatively few reviews.

Planning Your Cake Design Studio Business

An effective and well-designed business plan is essential to the success of your cake design studio. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.

When creating your business plan, ensure it contains information such as:

  • Your company information.
  • Your company description.
  • The services you will provide.
  • Your branding, marketing and advertising plan.
  • The structure of your business.
  • The operational plan for your business.
  • The financial plan for your business.

 

Some of the factors you will need to consider when creating your business plan are:

The types of cakes you will specialise in

This is the first consideration you will need to make when planning your business. You may choose to offer a wide variety of occasion cakes, with a variety of flavours, designs and decorative options. Alternatively, you could choose to specialise your business, for example, by focusing on wedding cakes or children’s party cakes. Even if you specialise in a specific type of occasion cake, you will likely still offer a variety of different flavour options (you may offer cake tasting to your customers to help them decide) and you will likely offer each customer a personalised experience with a specially designed, customised cake. When deciding whether to specialise your cake business, consider the demand and typical pricing for different occasion cakes, your local competition and your own skills and experience (for example, are you particularly skilled at creating tiered cakes?).

Your target market

Determining your target market is a key step to helping your business succeed. Different types of cake studios and different design and decorating styles are likely to attract different customers. Your pricing strategy will also be a key factor in determining your target market. Once you have identified your typical customers, you can then focus on how to attract them to your business.

Your local competition

Being aware of other cake businesses that are located in or deliver to your area of operation can help you decide what type of business to run and how much to charge your customers. If your local area already has several successful occasion cake businesses, you may want to focus on an untapped niche and target different customers or consider how to make your business stand out. For example, you could offer gluten-free or vegan occasion cakes or specialise in model cakes (e.g. castles).

Your business location

Your location will have a significant impact on the types of customers you are likely to attract. It will also impact your premises’ rental costs. If your business is located in or delivers to an area popular with your target market, the increased custom and higher profits will be extremely beneficial to your business. Consider your rental budget and your size requirements when choosing your premises.

Your brand and your unique selling point (USP)

Creating your brand is a key way to ensure you stand out from your competition. Branding can help you to focus your target audience, attract customers and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on your business’s visual identity, considering the designs and types of decoration you will specialise in and creating a brand story. Your USP can also be part of your brand and can help your business stand out from your competitors. Consider what makes your business special and how this fits into what defines your business.

Your marketing and advertising strategies

Marketing and advertising are especially important when you first open your cake design business. Your marketing strategy needs to be effective and budget friendly. Consider your target customers and the best way to reach them.

Some ways you can market and advertise your business are:

  • Partner with local businesses, e.g. hotels, wedding venues and caterers.
  • Build a functional and attractive website.
  • Advertise at wedding fairs and other events.
  • Create targeted online advertisements.

 

Your equipment and stock requirements

Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of cake business you set up, how big your premises is and how many cakes you want to work on at one time. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment and the monthly replenishment costs, e.g. for stock and ingredients.

Your start-up costs and running costs

Consult the list above to help you calculate the approximate costs of setting up and running your business. Determine what equipment you need and the amount of equipment, as well as the cost of your premises, to help you determine your start-up costs and what your initial investment requirements will be. You can then calculate whether you can finance your business yourself. Determining your start-up costs and running costs can also help you to create a budget and predict when you will begin to turn a profit.

Financing your business

Consult the list of start-up costs and running costs above to determine what capital you will require. Can you finance the business yourself or will you need to source outside investment? You will also need to calculate when you are likely to begin turning a profit. If you require outside investment, you could consider a bank or other financial institution, a business loan or an investment partner.

Your sales forecast

How many cakes can you realistically work on at one time? How many orders do you hope to complete each day, week and month? Are there certain times of the year that are likely to be busier than others? What are your weekly, monthly and annual sales forecasts? As your business grows, your sales forecast is likely to change.

Your strategy for growth

Your strategy for growth is the actions you will take to realise your goals for expansion and any potential challenges your business could face and how you will avoid or overcome them. This can help to make your business more successful.

Potential challenges could include:

  • Issues with your suppliers.
  • Less custom at certain times of the year.
  • The time-consuming nature of custom cake designs.

 

Some potential strategies for growth could include:

  • Hire employees to help you fulfil more orders.
  • Expand your advertising and marketing.
  • Change your pricing at different times of the year.

 

Your business summary

Your business plan should include a detailed overview of your business, including the type of business you are setting up, the type of cakes you specialise in, your typical customer base, your staffing and equipment requirements and your business goals.

Your business goals

Your business goals or objectives are an essential part of creating your business plan. Your business objectives highlight the targets and goals of your cake design studio business and help you to create a one-year, three-year and five-year business plan.

Your business objectives should be SMART:

  • S = Specific
  • M = Measurable
  • A = Achievable
  • R = Realistic
  • T = Time-bound

 

Check you have complied with all legal requirements

Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.

 

Download our business plan