When I started my baking business, I was at ROCK freaking BOTTOM. I had zero money, zero experience, and ZERO credibility as a baker or business owner.
Eddie and I both lost our six-figure corporate jobs in the 2009 recession. We had 3 young kids, a mortgage, 2 car payments, and a sh*t ton of other responsibilities.
We had ZERO income coming in, our marriage was on the rocks, and we had to file for bankruptcy. We were on the verge of losing EVERYTHING.
That’s when my bakery, The Cake Mamas was born: out of PURE NECESSITY, with no MONEY, and my back against the wall.
When I started, I didn’t have anything other than my own experience to learn from. I had to learn to do business the HARD WAY – through trial and error. And I made SO many mistakes in those early years that cost me TONS OF MONEY, simply because I didn’t KNOW any better and I didn’t have ANYONE to guide me in the right direction.
I don’t want y’all to have to go through what I did. So, in this blog post, I’m talking about the 5 BIG mistakes I made when I first started – so YOU can learn from my experience and avoid repeating these mistakes in YOUR own business.
One of the biggest mistakes people make when starting out is not trademarking their business.
Trademarking protects your business's name, logo, and other branding elements. Without it, ANYONE can rip off your business! (And friend, TRUST ME, you don’t want this to happen YEARS into your business and have to deal with legal issues and starting over.)
Here’s why that SUCKS: it creates confusion among your customers, and you might be forced to REBRAND (which will cost a FORTUNE, and you’ll probably lose some customers along the way).
So make sure you protect your brand right from the beginning. To get your brand trademarked, first research the availability of your chosen business name. Then, file an application with the United States Patent and Trademark Office (USPTO), and wait for approval. If you get confused or stuck, reach out to a qualified attorney to guide you through the legal process.
Whatever you do, DO NOT sleep on this, sis!
*BONUS TIP* if you need help naming your business check out my three tips here ▶️ https://www.tiktok.com/@janellecopeland/video/7032032294970019119?is_from_webapp=1&sender_device=pc&web_id=7203043681858930222
Take it from the person who had their fair share of financial troubles!
Keep your business and personal finances SEPARATE at all times.
(Seriously, NO exceptions here)
So often, I see bakers and creators who are just starting out, make the mistake of co-mingling their money, and are stressed and overwhelmed trying to figure out where all their money is going!
Doing this can make it super HARD to keep track of our business income, expenses and profits. And it could also lead to SERIOUS legal and tax issues down the road. And trust me sis, the LAST thing you need is the IRS coming after you 6 months after you open your DREAM bakery.
Most banks offer business bank accounts that are specifically designed for small businesses. Find one that works for you and set that account up ASAP!
I would check out this article by Nerd Wallet if you’re currently looking into setting up a business bank account: https://www.nerdwallet.com/best/small-business/best-business-bank-accounts
Now this one is a good one- Establishing business credit is KEY to the success of any business, no matter how small.
When you establish business credit, you create a separate credit profile for your business. This lets your business qualify for loans, leases, and other financing options based on its OWN credit worthiness, instead of depending on your personal credit score. (This would’ve been SUPER helpful for me, early on because my credit score was severely impacted from when I filed for bankruptcy) And it can be a LIFESAVER when you need to invest in new equipment, hire additional staff, or expand your business.
Most people don’t realize that business credit isn’t JUST about securing financing. Having a separate business credit score also PROTECTS your personal credit score. If your business ever runs into financial trouble, your business credit score may take a hit, but at least it won’t impact your personal credit score!
It’s also great for TAXES and write-offs!
When you’re just starting out, you might think that as long as you’re bringing in money, it’s all going GREAT. But it’s not enough to just bring in the dough, sis. (PUN INTENDED) You also need to TRACK your income and expenses – so you’re able to identify where all your money is going!
Here are 3 MAJOR problems you might run into if you don’t start monitoring your income ASAP:
Taxes will be a PAIN: If you don't keep accurate records of your income and expenses, you will struggle to file your taxes correctly. And this can result in penalties, fines, and other headaches you don’t want to get into.
Poor budgeting: You can’t budget for the future if you don’t know where your money is going. You might overspend, fail to invest correctly, or miss out on opportunities for growth.
You won’t be able to invest back into your business: This could mean missing out on opportunities to purchase new equipment, invest in skill development, hire new staff, or expand your business.
THE HONEST TRUTH- you can monitor your income ANY WAY you like – but you HAVE to do it. Create a separate drawer for business receipts and invoices, invest in some user-friendly accounting software like Quickbooks or Xero, hire a bookkeeper, or just record transactions on a spreadsheet if that’s all you can do right now.
Remember, it doesn’t have to be PERFECT, it just needs to be DONE.
If you don’t know anything about my start-up story then you may not know this but I actually started, The Cake Mamas, with my husband's EX! (Yup, you read that right!)
Don’t get me wrong – a business partnership is exciting and rewarding in many ways. BUT it does come with unique challenges. And without CLEAR, transparent communication, a great partnership can quickly turn sour and lead to conflicts that negatively impact your business.
If you’re entering into a partnership of ANY kind (even if it’s with your partner, spouse, or BFF of 20 years), make sure you discuss financial contributions, responsibilities, goals, and other expectations UPFRONT.
If you're partnering with a wholesaler, establish CRYSTAL CLEAR expectations regarding payment terms, delivery schedules, and product quality from the beginning- I also recommend getting a contract in place ASAP!
Now, if you’re thinking about offering your OWN products at wholesale, (WHICH I DON’T RECOMMEND), make sure you have the capacity and wherewithal to make it beneficial to you!
Wherever possible, draw up a written agreement outlining each partner's responsibilities and expectations to make sure EVERYONE is on the same page and RE-EVALUATE often!
Remember, strong partnerships THRIVE on clear communication and mutual understanding. DO NOT shy away from difficult conversations – addressing issues early, before they snowball into GIANT conflicts, can be a LIFESAVER for your business and your relationship.
So there it is, friend – the 5 BIG business lessons I learned the HARD WAY.
While I hope you can learn something from my mistakes and AVOID these pitfalls in your own business, remember that running a business is ultimately a LEARNING PROCESS, and you ARE going to make some mistakes along the way.
The ONLY thing you can do is work towards covering ALL your bases and building a ROCK-SOLID FOUNDATION so that if and when business does challenge you, your business will be strong enough to withstand and continue to keep growing.
If you’re READY to build an unbreakable foundation for your business, sign up for my FREE 5-DAY LIVE business workshop, Back To Basics, and learn the 5 secrets every successful entrepreneur KNOWS and applies to their businesses (that YOU should be doing too!).