Deciding When to Add New Items to Your Business

Have you ever thought about adding a new type of product to your business in order to diversify your income? Maybe you could do dessert cakes along with custom decorated cakes, or you could add some small desserts for buffets at weddings.

How do you know whether it's a good idea or not?

Sometimes the only way to do it is to do some research to see three things: What kind of demand is there for the product, how long does it take to make, and how much profit can you make on it?

The last question about profit is the most important, but if it's something that takes a really long time to make, or it's something that you would only be selling occasionally, it might not be worth making even if you'd be making a high profit. The reason being, if you have an order for something that's going to take you a large percentage of the time you have available, it might prevent you from taking on other work. So if one order for something is going to make you a $500 profit, but it prevents you from taking on two orders that had a total of $600 profit, you're losing out on $100. You have to look at the big picture.

Let's think about the little individual cakes that were (supposedly) popular a few years ago. As soon as you make those for one wedding you'll jack the price of them up to about 5 times higher than what you originally charged, because those take A LOT of time. And they take a lot of storage space, transportation space, setup time, etc etc. Most of the people I know who made them once refuse to make them again because the effort required isn't worth it.



I ran into this recently when I decided to look into adding hard plastic molds to my website. I ordered some plastic sheets and the setup to make them to try it out, and guess what? The results are unpredictable, the plastic sheets are expensive so the profit margins are small, and on top of that, they smell like toxic gas when they're heating up. It's definitely a "windows open" type of activity, and since you can't get a 100% guarantee that the mold will work perfectly, there's a lot of wasted material.



After weighing my options, I decided to go with a different type of flexible silicone instead of the plastic. I still have some sheets that I'll use up, then that will be it. I've put the molds that I've made on my website and will sell those at low prices just to clear them out, but I won't be adding more of them! I think my lungs will thank me, because they really do smell terrible!



So before adding a product, do a few test runs to see whether it's a good idea or not. Just because it's something that other people are selling doesn't mean that you should...They might not be making a profit at all, you never know. Test it out for yourself before adding things to your product line!

Click here for the molds


Kara Buntin owns A Cake To Remember LLC,  online cake supplies at  www.acaketoremember.com and www.acaketoremember.etsy.com

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