Cake supply shops are a type of specialty retail business that focuses on offering customers cake pans, decorations, flavorings, colorings and ingredients. Many medium and large cities across the nation can support the growth of more than one cake supply shop, but those who live in smaller towns can start this type of business via the Internet. If you have a passion for baking or cake decorating, and are looking to become an entrepreneur, starting a cake supply business may be the perfect venture.

Target a niche for your cake supply business. For instance, you can focus on selling professional-grade supplies, organic cake ingredients, gluten-free or vegan supplies. Alternatively, you can simply commit to offering a wider, better quality selection of supplies than can be found in local grocery stores.

Obtain the permits necessary in your state to operate a retail business, which may include a fictitious name certificate, resale permit or Employer Identification Number. If you plan to manufacture any of the supplies you sell, you may also need a food enterprise license from your state's health department.

Pick venues to sell your cake supplies. Options include an e-commerce store, brick-and-mortar storefront or renting a space in an existing complementary business, such as a bakery. Though starting online is cheapest, you will have to consider how you'll bring traffic to your website and how to effectively ship your merchandise.

Keep current on the latest cake decorating trends to help choose your inventory and better serve your customers. Reference publications, such as American Cake Decorating, to see what the latest products are.

Offer incentives for customers to shop with you, instead of visiting a competing cake supply store or supermarket. For example, you can offer cake-decorating classes, sell finished cakes in addition to supplies and provide customers with free recipes they can use.

Join an association, such as the International Cake Exploration Societé, to connect with professional cake decorators in your area. They are a large segment of your potential customer base.

Promote your cake supply business. Launch a website and blog, open social-networking accounts or place coupons and fliers in complementary businesses, such as craft-supply stores and culinary-arts schools.