Preheat your oven to 350°F and grease two 8-inch round cake pans really well with butter. Line the bottoms with parchment paper so your layers pop right out without sticking. This step takes about 5 minutes but saves you from cake disasters—I learned this the hard way when I skipped it once.

Cream together the softened butter and sugar in a large bowl, beating for about 3 minutes until it's light and fluffy. Scrape down the sides of the bowl constantly so everything combines evenly. The mixture should look pale yellow and feel almost cloud-like when you're done.

Add your 3 eggs one at a time, beating for about 30 seconds after each addition to incorporate them fully. Add the vanilla extract and lemon zest, then mix for another minute. Don't rush this step because proper mixing gives you the structure you need for fluffy cake layers.

In a separate bowl, whisk together your flour, baking powder, and salt—this distributes the leavening evenly throughout. Alternate adding the dry mixture and coconut milk to your butter mixture, starting and ending with the flour. Begin with 1/3 of the flour, then half the coconut milk, then another 1/3 flour, then the rest of the coconut milk, finishing with the final 1/3 flour.

Fold in the shredded sweetened coconut gently with a spatula until everything's just combined—don't overmix or you'll lose the fluffiness. Divide the batter evenly between your prepared pans and smooth the tops. The batter should look creamy white with little flecks of coconut throughout.

Bake for 32–35 minutes until a toothpick inserted in the center comes out clean or with just a couple crumbs. The tops should be lightly golden and spring back when you touch them gently. Mine usually sticks a little to the sides of the pan and that's completely fine.

Cool the layers in the pans for 10 minutes, then turn them out onto wire racks to cool completely before frosting. This takes about 45 minutes total cooling time, so use that time to make your cream cheese frosting. Once cooled, layer the cakes with frosting between them and on the outside, then press the toasted coconut flakes onto the sides and top.