Starting a cupcake shop
- Thread starter startingacupcakeshop
- Start date
Take a look at this post courtesy of @Clinton
https://www.ukbusinessforums.co.uk/...es-who-didnt-take-professional-advice.400664/
@Chris Ashdown why do have a feeling the OP will heed @Mr D 's advice??
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E
Ecomccountant
Hello,
So a lot of back and forth here. What is the business idea, to get industrial units to make cakes and deliver them via your own couriers or something like uber eats?
Or a traditional shop focusing on footfall?
In both cases I would look for a leasehold first, if you buy a freehold , you are stuck with a potentially unproductive asset. I would keep your options open until you know everything works. I know it sounds negative but you would feel worse if it doesn't work out and you are stuck with a mortgage and an asset rather than an onerous lease.
If you want to deliver, I would base yourself around areas likely to buy, local offices or an affluent area. Thus reducing delivery time and cost.
When you look for a property it would also be a good idea to look at what business rates you need to pay, half the reason the high street is going down the pan is silly business rates.
So a lot of back and forth here. What is the business idea, to get industrial units to make cakes and deliver them via your own couriers or something like uber eats?
Or a traditional shop focusing on footfall?
In both cases I would look for a leasehold first, if you buy a freehold , you are stuck with a potentially unproductive asset. I would keep your options open until you know everything works. I know it sounds negative but you would feel worse if it doesn't work out and you are stuck with a mortgage and an asset rather than an onerous lease.
If you want to deliver, I would base yourself around areas likely to buy, local offices or an affluent area. Thus reducing delivery time and cost.
When you look for a property it would also be a good idea to look at what business rates you need to pay, half the reason the high street is going down the pan is silly business rates.
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Have you looked at starting out smaller? A stall in a market, for example? It will let you test the market and if it goes well you can commit to a shop.
From what you said earlier you have the money to buy a freehold shop without a mortgage? Have you had a look at retail commercial property for sale on rightmove and Zoopla and checked which are freeholds?
I think you need to read up on commercial property. There are different types of planning permission, and terms of leases are very different from those on residential property (for example, you will probably be responsible for repairs as far as I know).
The negatives matter. Why do you think a lot of people who are in business or advise businesses are being negative? If you do not consider the risks and the problems you are unprepared if something goes wrong, and then you end up in a situation like this: https://www.ukbusinessforums.co.uk/...ted-company-using-the-spongbob-method.401391/
I am going to add one more negative. Even shops opened by big brands everyone take an year or two to build up business. I imagine an entirely new shop will take longer (I do not actually know for sure, but it seems likely, maybe other people here do know?).
From what you said earlier you have the money to buy a freehold shop without a mortgage? Have you had a look at retail commercial property for sale on rightmove and Zoopla and checked which are freeholds?
I think you need to read up on commercial property. There are different types of planning permission, and terms of leases are very different from those on residential property (for example, you will probably be responsible for repairs as far as I know).
The negatives matter. Why do you think a lot of people who are in business or advise businesses are being negative? If you do not consider the risks and the problems you are unprepared if something goes wrong, and then you end up in a situation like this: https://www.ukbusinessforums.co.uk/...ted-company-using-the-spongbob-method.401391/
I am going to add one more negative. Even shops opened by big brands everyone take an year or two to build up business. I imagine an entirely new shop will take longer (I do not actually know for sure, but it seems likely, maybe other people here do know?).
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Negative, yes. But wrong? I’m certainly not the only one saying it.
Please read some books or find out the things you need to find out before you dive in head first. And also please keep us updated with what happens as I would be interested to see how this turns out
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The products are part of the business. A very important part, but one part only.
Location, marketing, staffing, learning how to run a business - all also important.
I've been running various own businesses for over 2 decades and still learning stuff pretty much daily.
Many of us have seen businesses open up then close as they cannot cover their ongoing bills or get sufficient custom. Or mistakes are made that look like ignorance or carelessness caused to happen - usually costing the business.
Those who desire to succeed, those with ambition, are not necessarily put off by challenges. They learn and rise to the challenge. Creating a business others say 'was by luck' whereas they know themselves twas by hard work and determination.
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Like a house purchase, do not look at it as it is but as you can make it.
Would suggest get electrics and heating checked. Weather pundits forecast a cold winter so install a fridge for the cold drinks.
If leasing get a solicitor experienced in commercial leases to read before you sign. If buying you will need a solicitor anyway.
And double check everything - a seller is not on your side and can make claims that turn out to be less than honest.
Business owners do not get same protection consumers do. If you sign something it's a lot harder to impossible to get out of any agreement.
Business can be your baby, can be the work of a lifetime, can be long hours, poor pay, frightening, terrifying, annoying, exciting, enjoyable, satisfying and there are few things that will cause you to grow as a person so much.
I would suggest, and several of us have this ourselves, the business for dummies book. Not greatly detailed in any one aspect but does give some overview.
It's one of the more recommended books for new business owners on the forums.
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If you want some real hard learned advice and I mean this sincerely that could save you a lot of heart ache and stop you losing all your money could you do a 5 bullet point overview of your business plan and I don’t mean something like ‘open shop sell cakes’
You will then get a lot of advice based on your plan and you can then possibly if you want to weigh up the advice and make a informed decision if this really is for you.
I can help you with your number one if you like as I am sure you have this one nailed anyway.
1. Done market research
You will then get a lot of advice based on your plan and you can then possibly if you want to weigh up the advice and make a informed decision if this really is for you.
I can help you with your number one if you like as I am sure you have this one nailed anyway.
1. Done market research
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As has been stated above, give a market stall in your local town a go, this will give you some idea of footfall if nothing else.
I sell cakes for a living - it’s a hard slog. They take hours to make and hours to sell.
In our first year we made nothing. Granted the business didn’t lose anything but we still had no income.
Now (coming to the end of year 2) me and my partner are earning less per hour than we would manning a checkout in Tesco.
And next year we’re hoping that we may at least be able to match those checkout staff.
For me the reason behind running our own business is that we don’t want to work for someone else. We’re not going to get rich in the near future selling cakes and neither will you.
If you have the money to purchase a freehold property then you have the money to sit down and get some proper advise.
I’d rather spend a grand or two getting some good advice and not going ahead than spending £165,000 and being stuck with a commercial unit that isn’t making you money.
I sell cakes for a living - it’s a hard slog. They take hours to make and hours to sell.
In our first year we made nothing. Granted the business didn’t lose anything but we still had no income.
Now (coming to the end of year 2) me and my partner are earning less per hour than we would manning a checkout in Tesco.
And next year we’re hoping that we may at least be able to match those checkout staff.
For me the reason behind running our own business is that we don’t want to work for someone else. We’re not going to get rich in the near future selling cakes and neither will you.
If you have the money to purchase a freehold property then you have the money to sit down and get some proper advise.
I’d rather spend a grand or two getting some good advice and not going ahead than spending £165,000 and being stuck with a commercial unit that isn’t making you money.
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Three pages in and nobody has answered the question!
@startingacupcakeshop if you want to find typical cost of freehold shop premises, try Allsop or one of the other commercial property auctioneers. Search recent sales for vacant shops. Investment sales come with a tenant, which is not what you want.
https://auctions.allsop.co.uk/prope...cb27b0-60f8-11e9-9bea-0242ac110002&view=table
@startingacupcakeshop if you want to find typical cost of freehold shop premises, try Allsop or one of the other commercial property auctioneers. Search recent sales for vacant shops. Investment sales come with a tenant, which is not what you want.
https://auctions.allsop.co.uk/prope...cb27b0-60f8-11e9-9bea-0242ac110002&view=table
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Zoopla and on the market are portals, not agents. The properties listed there will usually be with an agent. Zoopla will not give you the information you need. You have to get to the agents themselves.
I think I would probably not bother with the portals. I would track down local commercial property people and go and see them.
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Did you?
Was yours something along the lines of:
“Spam a forum with pointless and often meaningless comments.”
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Rules need to be broken to warrant a ban. It’s not a Minority Report kind of situation where punishment precedes the crime
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If you buy land you will need to get permission to build a shop premises - even Tesco run into problems with that - there will be so many hoops to jump through for the local planning authority.
If you buy a shop and find yourself in a duff area you will regret it at the expense of everything you own - it will quite simply bankrupt you. For instance: https://www.zoopla.co.uk/for-sale/c...h_identifier=d7fd94fffa608b9d85a3a08d6b96da35 this is a freehold shop for sale but already has tenants in the shop you probably can't move and a tenant in the shop that has 5 years left of the lease. OK - maybe all of that is OK, but what they are not telling you is that this shop was on the route that was designated a few years back to be a new cycle lane connecting to central London - the shop owners were up in arms because suppliers couldn't park, people couldn't stop and park to go into the shops etc. That hasn't happened yet, but its probably not off the cards - I know this because I leased a shop in Enfield and saw the plans for this. The new buyer probably won't.
This one looks really great and affordable : https://www.zoopla.co.uk/for-sale/c...h_identifier=d7fd94fffa608b9d85a3a08d6b96da35 it is being sold as a busy footfall area and it is - but its Bush Hill Park Train Station - the problem is that people are busy going to work (OK you could open early at say 7am) when most people are going to the train, but the problem is that they are unlikely to stop on their way to work and they will be coming come after 5.30pm (ok you stay open late) but the thing is they just want to go home and probably are not going to stop every night to buy a cupcake. I know this about this area because a mate of mine opened a beauty/nail place and told me - people just don't stop, they go to the train - go to work - get off the train and go home, they don't get their nails done. On Saturdays they went to the high streets, not the area where the train station is.
But - in both these cases because the shops are on a high street they will attract very high business rates, calculated on where you are, how big the internal selling space your shop is and how big your frontage is. Business rates can be higher than your shop rent/mortgage so check out with the local authority before you even consider buying (or renting (leasing) a shop.
So the advice here is correct I feel. You really need to lease your shop first rather than buy it to find out how the area is (if you like it you can look around to see if you can purchase one after that) other shopkeepers will start to talk to you about the business rates etc. etc.
Don't bother buying a business unless there is a cupcake business for sale. It will be of no use to you, buying a bridal shop business will mean that they will sell you the links to their suppliers (which is of no use to you) and you get the benefit of their shop having been there for years (which is no use to you selling cupcakes), the shop is fitted out the sell wedding gear (which again will be no use to you since you won't need fitting rooms etc. you'll need cupcake cabinets etc. so unless there is a cupcake business for sale in your area - its no use to you to buy a business. Added to that you are probably buying the end of a lease and you never want to do that because of dilapidations etc
If there is a cupcake business for sale... why? It probably couldn't make it in that place which means you won't either.
So, what you really need is an empty shop with a brand new lease (you never want to buy the tag end of a lease because you open yourself up to having to pay for the dilapidation of the building for the entire length of the lease). But, be aware that from the moment you sign it you will need to find the lease (rent) each month (say £1,000), you will need to find the business rates each month (say £300.00 if you get small business rate relief), electricity etc. say £150.00 a month and then you will have to pay to have your rubbish collected and they will probably insist you get a retail bin (say £40.00 per month), you will start paying this in your first month whilst you are trying to fit the shop and get the decorating done, so you will need £1500.00 straight off. Additionally, some owners as for either 3 or 6 months rent in advice + another 3 months on deposit.
Most leases run for a minimum of 5 years and if your business closes before then you will still have to pay the lease each month and the business rates. The same is true if you buy a shop and go out of business leaving it empty you will then attract full business rates unless you can let it to someone else and then you would need to pay the legal fees to get done.
It's a very stormy area so the other advice on here to do it from home or from a stall where you limit your exposure to costs until you know you have made the right decision on area and got your pricing right for the area is a good one.
I used to run a small jewellery shop and the spend on that high street was about £10.00, people used to ask me why I didn't do more 'statement pieces for the display' as I used to when I first opened - simple - they attract people to the window but they don't sell. The sets for £10.00 sell. That's why people are talking to you about sizes, costs etc. because it's not just your prices that count its what people are willing to spend on that high street.
Hope some of that helps in some way.
If you buy a shop and find yourself in a duff area you will regret it at the expense of everything you own - it will quite simply bankrupt you. For instance: https://www.zoopla.co.uk/for-sale/c...h_identifier=d7fd94fffa608b9d85a3a08d6b96da35 this is a freehold shop for sale but already has tenants in the shop you probably can't move and a tenant in the shop that has 5 years left of the lease. OK - maybe all of that is OK, but what they are not telling you is that this shop was on the route that was designated a few years back to be a new cycle lane connecting to central London - the shop owners were up in arms because suppliers couldn't park, people couldn't stop and park to go into the shops etc. That hasn't happened yet, but its probably not off the cards - I know this because I leased a shop in Enfield and saw the plans for this. The new buyer probably won't.
This one looks really great and affordable : https://www.zoopla.co.uk/for-sale/c...h_identifier=d7fd94fffa608b9d85a3a08d6b96da35 it is being sold as a busy footfall area and it is - but its Bush Hill Park Train Station - the problem is that people are busy going to work (OK you could open early at say 7am) when most people are going to the train, but the problem is that they are unlikely to stop on their way to work and they will be coming come after 5.30pm (ok you stay open late) but the thing is they just want to go home and probably are not going to stop every night to buy a cupcake. I know this about this area because a mate of mine opened a beauty/nail place and told me - people just don't stop, they go to the train - go to work - get off the train and go home, they don't get their nails done. On Saturdays they went to the high streets, not the area where the train station is.
But - in both these cases because the shops are on a high street they will attract very high business rates, calculated on where you are, how big the internal selling space your shop is and how big your frontage is. Business rates can be higher than your shop rent/mortgage so check out with the local authority before you even consider buying (or renting (leasing) a shop.
So the advice here is correct I feel. You really need to lease your shop first rather than buy it to find out how the area is (if you like it you can look around to see if you can purchase one after that) other shopkeepers will start to talk to you about the business rates etc. etc.
Don't bother buying a business unless there is a cupcake business for sale. It will be of no use to you, buying a bridal shop business will mean that they will sell you the links to their suppliers (which is of no use to you) and you get the benefit of their shop having been there for years (which is no use to you selling cupcakes), the shop is fitted out the sell wedding gear (which again will be no use to you since you won't need fitting rooms etc. you'll need cupcake cabinets etc. so unless there is a cupcake business for sale in your area - its no use to you to buy a business. Added to that you are probably buying the end of a lease and you never want to do that because of dilapidations etc
If there is a cupcake business for sale... why? It probably couldn't make it in that place which means you won't either.
So, what you really need is an empty shop with a brand new lease (you never want to buy the tag end of a lease because you open yourself up to having to pay for the dilapidation of the building for the entire length of the lease). But, be aware that from the moment you sign it you will need to find the lease (rent) each month (say £1,000), you will need to find the business rates each month (say £300.00 if you get small business rate relief), electricity etc. say £150.00 a month and then you will have to pay to have your rubbish collected and they will probably insist you get a retail bin (say £40.00 per month), you will start paying this in your first month whilst you are trying to fit the shop and get the decorating done, so you will need £1500.00 straight off. Additionally, some owners as for either 3 or 6 months rent in advice + another 3 months on deposit.
Most leases run for a minimum of 5 years and if your business closes before then you will still have to pay the lease each month and the business rates. The same is true if you buy a shop and go out of business leaving it empty you will then attract full business rates unless you can let it to someone else and then you would need to pay the legal fees to get done.
It's a very stormy area so the other advice on here to do it from home or from a stall where you limit your exposure to costs until you know you have made the right decision on area and got your pricing right for the area is a good one.
I used to run a small jewellery shop and the spend on that high street was about £10.00, people used to ask me why I didn't do more 'statement pieces for the display' as I used to when I first opened - simple - they attract people to the window but they don't sell. The sets for £10.00 sell. That's why people are talking to you about sizes, costs etc. because it's not just your prices that count its what people are willing to spend on that high street.
Hope some of that helps in some way.
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If you have several people working for you then it can get cramped working from home. You could offer them working from home too but remote workers suffer from communication loss and other factors. Once you have enough workers and need the security of a shop then look to gain a premises. Being flexible is a great asset and a shop lease isn't flexible at all.
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Leaving aside the minor point it would get you in a lot of trouble for breaking planning laws (just for a start).
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