A Legit Cake Business… What’s involved?
So, you love to bake, and you love to design & create and contribute amazing cakes for all of your family & friends’ special celebrations? Me too! This is exactly how my love for creating cakes began…
I originally started baking several years ago, when I was diagnosed with some pretty annoying food intolerances, and at the time, there were very few options for sourcing treats like cupcakes & cookies. I figured then, knowing that life without treats would be pretty dull, that I just had to go and work out how to make these things for myself. Through trial and error, I slowly managed to tweak recipe after recipe, to modify them so that they were safe for my sensitive tummy!
It was quite the hobby - I would bake something different every weekend, and had no shortage of family & friends who would happily taste my recipes for me. Over the years, I commiserated with fellow owners of sensitive tummies (I wasn’t the only one who had dietary restrictions!!), and experimented with zillions of recipes (with plenty of failed attempts - oh so many fails!), and along the way I also taught myself how to do fancy things like use a piping bag and tip to create buttercream rosettes (I honestly thought I was SO fancy when I made my first rosette piped cake).
I made hundreds and hundreds of mini cupcakes for my friends, family & colleagues. I made birthday cakes, house warming cakes, engagement cakes, even a couple of wedding cakes (back when it was all the rage to have a small single tier to cut, with hundreds of mini cupcakes on a tiered cake stand). Everyone would tell me that I should sell these cakes, and that I’d most certainly make a success out of a cake business, not that I believed them. Curiosity got the better of me though, so I started to research what was required to open a legit cake business anyway…
Hint: It’s not as simple as starting an Instagram account and waiting for the orders to roll in…
Step 1: The Business Plan
This was a long and painful process, as I just wanted to get to the fun bits - all of this boring & sensible stuff really isn’t my forte! I downloaded a Business Plan template from the Australian’s Government’s Business Support Site and began the excruciating task of completing it. Take the time to complete the template, as there will be factors that you may not have even considered prior to starting this process! It's worth the time, I promise!
Step 2: The Business Name
Surely it’s not too difficult to think of a cool business name, register it via ASIC, and move on to the next step? Nope. I started by brain storming a bunch of words that were related to cakes, sweets & baking, then I combined these words to create some names that I liked the sound of… I had about 10 different names chosen, and went to ASIC to check their availability… All 10 names were unavailable! D’oh!!
So I started again. I wrote an even longer list of words, and created another list of potential names, and out of the list of about 25 names, only 3 were available. So I ran those 3 names by a bunch of my mates, and it was voted that “Elegantly Frosted” was THE one - it was a bit of a play on the title of a badass INXS album released in 1997 - “Elegantly Wasted”… I’m a little too old now to get #elegantlywasted, so from now on I will be #elegantlyfrosted instead. So I locked in my business name with ASIC, and while I was at it, registered my Domain name for when I went to set up my website down the track.
Step 3: The Food Business Licence Application
This section is quite long and serious, so strap yourself in… Did you know that if you accept any form of payment in exchange for any food item if you don't have a Food Licence, that the Food Police may issue a fine worth THOUSANDS for breaching the Australian Food Safety Act?! I know!! It's massive, but the Food Safety Act is there for exactly that - it is in place to regulate food production and ensure public health & safety… Would you eat at a cafe or restaurant if you knew that the staff were not trained in practicing safe food handling procedures? Me either - and the same goes for selling cakes - you must have a licence to be legal!
The Australian Food Safety Act 2006, requires that all Food Businesses must be licensed, and operate in a manner that ensures that food is safe & suitable for human consumption. There are procedures to follow, to satisfy the rules, regulations & responsibilities associated with holding a Food Business Licence. The minimum requirements vary between local City Councils for kitchen fit-outs, with some Councils allowing Home-Based Kitchens to be licensed.
Your local council will usually have plenty of information for requirements of Food Licensing on their website, including a list of all fees applicable. If you are planning on operating from a Home-Based Kitchen, you will need to check with your Council regarding the zoning of your property prior to submitting the Food Business Design Application, to ensure that you are permitted to operate a business from home. Once you have the all clear with zoning, the Design Application includes paying a fee and submitting an accurate diagram of your kitchen layout, including the location of fittings, sinks, appliances & storage, and descriptions of all surfaces (benches, sinks, splash-backs, stovetops, walls & floors).
You need to be able to demonstrate that all surfaces in your kitchen are non-porous and therefore able to be cleaned & sanitised effectively, and you’ll also need to create a Cleaning Schedule (to be signed off as each task is completed), Temperature Log (for all fridges in use, signed off regularly) and a Stock Control Register (to record use-by dates & rotation of consumables). The Food Business Licence Application is completed (and another fee submitted) in addition to the Food Business Design Application.
The Applications are received by Council, and assessed by an Environmental Health Officer (also known as the Food Police) - your EHO will then make an appointment to inspect your kitchen, and provide an assessment that is then subject to criteria to be approved. Your EHO is trained to facilitate and implement safe food practices, and will work with you to ensure that your business complies with all aspects of the Food Safety Act. Expect a visit from your EHO every 6 to 12 months, depending on your council, and the level of your Food Licence - for example, in Logan City Council where I am based, I have a Food Licence with a 5 Star Eat Safe Rating, so I have an annual inspection. If I was a 3 Star or “unrated”, council would keep a shorter chain on me and I would be inspected more frequently - again this is to regulate and check that businesses are complying with the minimum Food Safety Standards.
Step 4: Insurance
Now that you have a Food Licence - hooray! - you need to get yourself insured. If you’re in Australia, the Australian Cake Decorating Network (ACDN) & Australian Cake Artists & Decorators Association (ACADA) have some fabulous affiliations with Indemnity Insurance Providers (RedStar & Elder’s), or you can apply for insurance via your Home & Contents Insurer (NRMA, Suncorp, AAMI, Allianz). This process is fairly straight-forward, and you will need to provide evidence of your ABN & Food Licence to be eligible for coverage.
Now that we are legit, and can start on the fun parts of setting up the business!!
- Website - to display your portfolio and convey information to your potential customers.
- Email address - so that your customers can contact you!
- Social media - Instagram and Facebook, because if you didn’t post it on Insta, it didn’t happen!!
- Business cards - I started with an order of 500 basic cheapies and gave them to everyone…
- Logo - we all need a cute logo - mine has a flamingo who is about to eat a cupcake!
- Price List & Menu - including a spreadsheet or structure for quickly calculating quotes.
- Quote & Invoice system - chat to your accountant about this. I am currently in the process of converting to new accounting software - please send help!! I should have set this up from the beginning though! Don’t be like me - get your account procedures streamlined BEFORE you end up flat stick with orders!!
- Suppliers - find your best local suppliers for cake supplies, boards, boxes, cake toppers, embellishments & flowers - I have a handful of local suppliers that I have a fantastic working relationship with, and source different items from each.
- Cheerleaders - a bunch of family & friends who will talk you up to their family & friends, because word of mouth is EVERYTHING!