Are you about starting a custom cake making business? If YES, here is a complete sample custom cake making business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a custom cake making business. We also took it further by analyzing and drafting a sample custom cake making marketing plan template backed up by actionable guerrilla marketing ideas for custom cake making companies. So let’s proceed to the business planning section.
Why Start a Custom Cake Making Business?
If you are a baker or even a caterer, it is easy for you to venture into custom cake making because the same ingredients and processes that are used in making the conventional cakes are the same used in making custom cakes except for the size difference.
The basic ingredients that are used in custom cake making are flour, butter, sugar, eggs, frosting and cake decorations. One thing about custom cake making is that it is your creativity that can stand you out from your competitors.
Beyond every reasonable doubt, a custom cake making business is indeed a profitable business because you can operate the business with your family members from your kitchen thereby cutting operational cost to the barest minimum. So also if you are able to secure a strategic high traffic location to open a shop, you can be rest assured to rake in good returns from your custom cake business.
Over and above, if you have decided to start a custom cake making business, then you should ensure that you carry out feasibility studies and also market survey. This will enable you properly locate the business in a community or city with the right demography and then hit the ground running. Business plan is yet another very important business document that you should not take for granted when launching your own business.
Below is a sample custom cake making business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Custom Cake Making Business Plan Template
- Industry Overview
Custom cake is part of the Frozen Cake and Pastry Manufacturing industry and players in this industry manufacture an array of cakes, frozen sweet bakery products, including soft cakes, cheesecakes, doughnuts, pies and cookies et al.
If you are a close observer of happenings in the industry, you will agree that although the industry began with a chilling start, the Frozen Cake and Pastry Manufacturing industry ultimately expanded over the five years to 2018. Rising health consciousness, changing consumer tastes and competition from fresh bakery items has hampered demand for traditional industry products.
In response to these trends, industry operators have focused on reformulating their existing dessert selections with healthier, higher quality ingredients. Furthermore, operators also experimented with new flavor combinations while launching single-serving varieties that appeal to a wider range of health-conscious consumers.
The Frozen Cake and Pastry Manufacturing industry that custom cake business is a part of is indeed a thriving and profitable industry in most countries of the world. It is a major sector of the economy of the United States of America and they generate over $6 billion annually from more than 228 registered and licensed frozen cake and pastry manufacturing companies scattered all around the United States of America.
The industry is responsible for the employment of about 21,719 people. Experts project that the industry will grow at a 0.8 percent annual rate between 2013 and 2018. The establishments with the lion shares of the available market in the industry are Conagra and The Schwan Food Company.
A recent report published by IBISWorld shows that the Frozen Cake and Pastry Manufacturing industry experienced challenging operating conditions over the past five years. Shifting food trends and preferences have increasingly diverted consumers away from frozen or otherwise processed foods and toward fresher alternatives.
Concerns over unhealthy ingredients and the naturally high caloric content of cakes and pastries further hampered industry performance. Nonetheless, frozen cake producers have reacted quickly to changing consumer tastes by churning out dozens of new dessert varieties and flavors to appeal to a broader range of health-conscious consumers.
Some of the factors that motivate aspiring entrepreneurs to venture into the custom cake making business is the fact that you can start the business on a small scale from the comfort of your kitchen without purchasing heavy duty equipment. All you have to spend is on cake baking ingredients and relevant supplies.
As a matter of fact, you can start by supplying your custom cakes to household around your community or you can even open a small shop/kiosk in front of your house and start retailing your custom cakes. If you are hardworking and lucky enough, you can secure contracts from the start to start supplying to events (parties and wedding ceremonies et al). That is why it is important to network and enter into strategic business alliance with event managers and wedding planners.
If you are contemplating starting your own custom cake making business in the United States, you should ensure that you carry out a thorough market survey and feasibility studies. But over and above, custom cake making business is a profitable business especially if you are creative and ready to take on the available market in your location.
Custom Cake Making Business Plan – Executive Summary
Sandra Langton™ Custom Cakes, Inc. is a standard cake business that will be based in Medford – Oregon, USA. Although we intend starting out from a small in-house bakery, but that does not in any way stop us from maximizing our potential in the custom cake making business.
Our business goal is to become the number one choice in all the communities where we intend retailing our custom cakes. We are extremely creative which is why we will come up with cakes in different designs, themes, flavors and packaging just to appeal to our target market.
Our in-house bakery and delivery network will be customized to fit into the kind of ideas we have of how a standard custom cake making business should look like. When it comes to hygiene, we have put plans, process and structures in place that will ensure that we are always at the top of our game when it comes to that. We have been able to secure permits from all relevant departments in the State of Oregon.
We have put plans in place for the continuous training of our staff and also liaising with stake holder in the industry to contribute our quotas in the way baking equipment and accessories should be designed to meet the ever changing demands of the industry.
The demand for custom cakes and other baked foods is not going to plummet any time soon, which is why we have put plans in place to explore all available markets around the communities where we intend retailing our custom cakes. In the nearest future, we will ensure that we create a wide range of distribution channels via franchising.
Our strongest selling point at Sandra Langton™ Custom Cakes, Inc. is the unique taste of the different flavors of cakes we sell. There is hardly any customer that will taste our cakes who would not want to come back and make more purchase.
Sandra Langton™ Custom Cakes, Inc. will at all times demonstrate her commitment to sustainability, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely.
Our plan is to position our custom cake making business to become the leading brand in the whole of Medford – Oregon, and also to be amongst the top 2 custom cake brand in the whole of Oregon within the first 5 years of starting our business.
This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are confident that Medford is the right place to launch this type of business.
Sandra Langton™ Custom Cakes, Inc. is established by Ms. Sandra Langton. She has a robust experience in the food and confectionaries industry in the United States having worked for some of the leading brands in the industry prior to starting her own custom cake making business.
- Our Products Offering
At Sandra Langton™ Custom Cakes, Inc. we deal in all forms and flavors of cakes. We will bake and retail custom cakes made in different designs, themes, different flavors and different packaging just to appeal to our target market. Here are some of our unique custom cakes products;
- Pastries (e.g. Danish, French)
- Sweet yeast goods
Our Vision Statement
Our vision as a standard custom cake making business is to become the number one choice in the whole of Medford and also to be amongst the top 2 leading custom cake making companies in the State of Oregon before our 5th anniversary.
- Our Mission Statement
Our mission is to build a custom cake making business that will grow from an in – house bakery to a standard bakery whose products can be found all around Oregon and neighboring states.
- Our Business Structure
As part of our plan to build a top flight custom cake making business in Medford – Oregon, we have perfected plans to get it right from the onset which is why we are going the extra mile to ensure that we hire competent employees.
The kind of custom cake making business we intend building and the business goals we want to achieve is what informed the amount we are ready to spend to ensure that we build a standard in-house bakery, hire dedicated workforce and build a robust distribution network. Below is the business structure that we will build Sandra Langton™ Custom Cakes, Inc. on;
- Chief Executive Officer (Owner)
- Bakery Manager
- Sales and Marketing Officer
- Drivers / Distributors
Roles and Responsibilities
Chief Baker / Chief Executive Officer – CEO (Owner):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results and developing incentives
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Accountable for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for overseeing the smooth running of the bakery
- Part of the team that determines the quantity and design of custom cakes that are to be produced daily
- Makes lists and budget for bakery supplies
- Oversees the entire bakery process
- Responsible for training new bakers
- Makes sure that quality in maintained at all times
- Maps out strategy that will lead to efficiency amongst workers in the bakery
- Responsible for training, evaluation and assessment of the workforce
- Ensures that the steady flow of both raw materials (flour, sugar, and other packaging materials et al) to the bakery and easy flow of finished products (custom cakes) to the market
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that the bakery meets the expected safety and health standard at all times.
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Recognizes, prioritizes, and reaches out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with customers
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing different flavor and style of custom cakes, and other bakery products
- Responsible for carrying out all casual or unskilled jobs in the bakery
- Responsible for operating sealing and packaging machines
- Handles any other duty as assigned by the bakery manager
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Distribution Van Drivers:
- Delivers customer’s orders promptly
- Runs errand for the organization
- Any other duty as assigned by the bakery manager
- Responsible for cleaning the bakery facility at all times
- Guarantees that toiletries and supplies don’t run out of stock
- Any other duty as assigned by the bakery manager.
Custom Cake Making Business Plan – SWOT Analysis
Due to our drive for excellence, we were able to engage some of the finest business consultants in Medford – Oregon to look through our business concept and together we were able to examine the prospect of the business and to access ourselves to be sure we have what it takes to run a standard custom cake making business that can compete favorably in the industry.
In view of that, we were able to take stock of our strengths, our weakness, our opportunities and also the threats that we are likely going to be exposed to in Medford – Oregon and also in other cities that we intend retailing our custom cakes. Here is a preview of what we got from our SWOT Analysis Sandra Langton™ Custom Cakes, Inc.;
Our strength lies in the fact that we deal in all forms and flavors of custom cakes. We have a state of the art bakery facility that has positioned us to meet the demand of custom cakes even if the demand tripled over night or if we have a massive order to meet and an emergency need.
Another factor that counts to our advantage is the background of our Chief Executive Office; she has a robust experience in the industry and also a pretty good academic qualification to match the experience acquired which has placed her amongst the top flight professionals in the United States of America.
The fact that we are setting up a custom cake making business in a city with other custom cake businesses might likely pose a challenge for us in breaking into the already saturated market. In essence our chosen location might be our weakness. But nevertheless, we have plans to launch out with a big bang.
The opportunities available to us are unlimited. Loads of people consume custom cakes on a daily basis and all what we are going to do to push our cakes to them is already perfected.
The threat that is likely going to confront us is consumer health concerns over cakes and pastries which have affected the industry. In other to combat that, we will continue to sustain sales by experimenting with new flavors and of course, experiment with natural ingredients in response to rising health consciousness.
Another threat that we are likely going to face is unfavorable government policies and economic downturn. Usually economic downturn affects purchasing/spending power.
Custom Cake Making Business Plan – MARKET ANALYSIS
- Market Trends
It is common trend in the bakery and confectionery industry to find bakers trying to outsmart one another. No doubt, those in custom cake line are known to be extremely creative which is why they can come up with cakes in different designs, themes, flavors and of course different packaging just to appeal to their target market.
With the rate at which people are becoming health conscious, custom cake makers have experimented with natural ingredients in response to rising health consciousness. In the face of this rising challenge, the trend is that operators will continue to sustain sales by experimenting with new flavors. External factors such as Per capita disposable income and healthy eating index would impact industry performance and trend.
- Our Target Market
One thing is certain, there are no restrictions to the demographic and psychographics composition of the target market for custom cakes. Adults and children all consume cakes; the demography is all encompassing which is why you can find custom cakes been served in wedding receptions, birthday parties, children’s parties, school graduation parties, baby showers, and a whole lot of events.
This goes to show that the target market for custom cake is wide and far reaching, you can create your own niche yourself to serve a specific purpose. We are in business to retail a wide range of custom cakes to the following groups of people;
- School Children
- Corporate Organizations
- Churches and other religious centers
- Event Planners and Wedding Planners
- Everyone who resides in our target location
Our Competitive Advantage
First and foremost, the fact that anybody with baking skills can decide to start a custom cake making business means that the business is open to all and sundry hence it is expected that there will be high – level competition in the industry. There is hardly any busy community or even street that you won’t find one or more people retailing cakes.
As a custom cake making business, we know that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers. Hence we will not hesitate to adopt successful strategies from our competitors.
We are going to be one of the very few custom cake making businesses in Medford – Oregon that can boast of product differentiation, ability to adapt to change and supply contracts in place of key inputs.
Another competitive advantage that we have is the vast experience of our management team. So also the wide varieties of cakes et al that we produce, our large robust distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
One thing is certain, we will ensure that in future, we open our outlets in various cities in the United States of America and also sell our franchise.
Custom Cake Making Business Plan – SALES AND MARKETING STRATEGY
- Sources of Income
Sandra Langton™ Custom Cakes, Inc. is established with the aim of maximizing profits in the industry in the United States of America and we are going to go all the way to ensure that we do all it takes to retail all forms and flavors of custom cakes. As part our strategy to create multiple sources of income in line with our core business concept, we will also make and supply;
- Frozen baked goods (except bread and bread-type rolls)
- Frozen cake
- Frozen doughnuts
- Frozen pies
- Frozen pastries (e.g. Danish, French)
- Frozen crullers
- Frozen knishes
- Frozen sweet yeast goods
We are well positioned to take on the available market in the U.S. and we are quite optimistic that we will meet our set target of generating enough profits from the first month of operation and grow the business beyond Medford – Oregon to other states in the U.S.
We have been able to examine the Frozen Cake and Pastry Manufacturing industry, we have analyzed our chances in the industry and we were able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in the United States of America.
Below is the sales projection for Sandra Langton™ Custom Cakes, Inc., it is based on the location of our business and our competitive advantage;
- First Year: $150,000
- Second Year: $250,000
- Third Year: $700,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and the arrival of a competitor in same location as ours within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location to launch Sandra Langton™ Custom Cakes, Inc. and also the kind of custom cake flavors to produce, we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in the cities where we intend positioning our business.
We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time and also for our products to favorable compete with other leading custom cake making brands in Medford – Oregon.
We hired experts who have good understanding of the industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Medford. In summary, Sandra Langton™ Custom Cakes, Inc. will adopt the following sales and marketing approach to sell our wide range of custom cake flavors;
- Introduce our custom cake brand by sending introductory letters to residents, merchants and other stakeholders both in Medford and in other cities in Oregon
- Open our custom cake business with a party so as to capture the attention of residents who are our first targets
- Engage in roadshows in targeted communities from time to time to sell our products
- Advertise our products in community based newspapers, local TV and radio stations
- List our business and products on yellow pages ads (local directories)
- Leverage on the internet to promote our custom cake brands
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
Custom Cake Making Business Plan – Publicity and Advertising Strategy
Regardless of the fact that our custom cake business is a standard one with a wide range of flavors and products that can favorably compete with other leading brands in the United States of America, we will still go ahead to intensify publicity for all our products and brand.
Sandra Langton™ Custom Cakes, Inc. has a long term plan of opening outlets in various locations all around the United States of America and also to sell our franchise which is why we will deliberately build our brand to be well accepted in Medford before venturing out to other cities in the United States of America. Here are the platforms we intend leveraging on to promote and advertise Sandra Langton™ Custom Cakes, Inc.;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our brand
- Install our billboards on strategic locations all around major cities in the State of Oregon
- Engage in roadshows from time to time in targeted communities
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our custom cakes.
- Ensure that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized and well branded.
Our Pricing Strategy
Generally, the prize for custom cakes and similar products like frozen cakes and pastries are affordable hence there is no need to employ any detailed strategies when it comes to fixing price.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 3 to 6 months, our custom cakes are sold a little bit below the average prices. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brands.
- Payment Options
The payment policy adopted by Sandra Langton™ Custom Cakes, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Sandra Langton™ Custom Cakes, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
In view of the above, we have chosen banking platforms that will enable our clients make payment for our custom cakes without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
- Startup Expenditure (Budget)
When it comes to starting a custom cake business, loads of factors influence the amount that will be required to successful launch the business. Factors like the location you intend starting the business, the size of custom cake business you want to start i.e. the number of outlets / shops et al, and of course the state of the economy as at when you intend start the business.
We know that no matter where we intend starting our custom cake business, we would be required to fulfill most of the items listed below;
- The fee for registering the business in the United States – $725.
- The budget for legal fees, insurance, permits and license – $3,000
- The amount needed to build a standard in – house bakery and renovation of the facility inclusive – $30,000.
- The Cost for the purchase of kitchen / baking equipment and gadgets (industrial ovens, fridges, smoke detector, TVs, microwave oven, Pans, Foils, Sound System, tables and chairs et al) – $15,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $20,000
- The Cost for supply of flour and other baking ingredients for a month – $1,000.
- The Cost of Launching a Website – $600
- The cost for opening party – $5,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $5,000
Going by the report from our research and feasibility studies, we will need an average of $100,000 to start a small scale but standard custom cake business in Medford – Oregon, United States of America.
Generating Startup Capital for Sandra Langton™ Custom Cakes, Inc.
Sandra Langton™ Custom Cakes, Inc. is a private business that is owned and financed by Ms. Sandra Langton. She does not intend to welcome any external business partners which is why she has decided to restrict the sourcing of the startup capital to 3 major sources. These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings and sell of stocks
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $20,000 (Personal savings $15,000 and soft loan from family members $5,000) and we are at the final stages of obtaining a loan facility of $80,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
Custom Cake Making Business Plan – Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Sandra Langton™ Custom Cakes, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of custom cakes a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Sandra Langton™ Custom Cakes, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and construction of in – house bakery: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Packaging, Marketing and Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants of cake making ingredients and packaging materials et al: In Progress
- Purchase of delivery vans: Completed