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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sat Aug 23, 2008 12:02 pm |
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Mike1394
Forum Fanatic
Joined: Feb 20, 2008
Posts: 1301
Location: Michigan
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Sat Aug 23, 2008 12:26 pm |
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I know I'm going to get it for this BUT. I never understood the idea of paying yourself an hourly wage. Do you think Bill Gates gets paid per hour? Now before everyone jumps, here's why. How do you know someone is willing to pay you that amount? You are always worth more than someone is willing to pay. Remember you are no longer an employee. This is a very hard thing to forget. It doesn't matter to your customer if it takes you five minutes to do a cake, or five hours.
Whenever I figure a price it's through what competition charges, my ability, what the market will bare, and cost of a certain item. I have a basic idea of how much profit I need to make on a certain item. The minimum profit after cost is 100% that is the very bare bones minimum.
Mike |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sat Aug 23, 2008 3:00 pm |
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| Mike1394 wrote: | | I know I'm going to get it for this BUT. I never understood the idea of paying yourself an hourly wage. Do you think Bill Gates gets paid per hour? |
I totally get your point on this one. i guess that's why when my DH said dont count your hourly wage as a profit I was kinda confused...  I thought the same as you. I'm not an employee, i'm the boss. Even if i have to do the work essentially it's money in my pocket wether i want to call it my hourly wage or profit doesn't matter. When he said that ultimately i would make 11.00 on that order I kinda said, 'what, that doesnt' sound right."
I can't wait to get more feedback and opinions on this one. Thanks for your advise. Any help i can get understanding everything is so much appreciated.
Suzanne |
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Gingoodies
Forum Addict
Joined: Aug 24, 2004
Posts: 655
Location: New Jersey
Birthday: Nov 28
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Sat Aug 23, 2008 3:17 pm |
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I am not sure I am seeing this correctly.. You are costing out 1 dozen cannoli and you come up with a figure of $48.97... that equals out to $4 per cannoli, not $2 |
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liapsim
Regular Member
Joined: Jul 06, 2007
Posts: 167
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Sat Aug 23, 2008 3:19 pm |
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I'm with Mike on that one. Maybe once you get on your feet and know how much you make as profit a week on average...then you can cut yourself a check every week....and keep the rest of the profit for your company.
$2.00 doesn't sound high at all for a cannoli to me. I live in Georgia and they run about $2-$2.50 a piece here. I would pay it and I have paid it.
Good luck with everything and I hope you get on your feet quickly! |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sat Aug 23, 2008 3:57 pm |
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| Gingoodies wrote: | | I am not sure I am seeing this correctly.. You are costing out 1 dozen cannoli and you come up with a figure of $48.97... that equals out to $4 per cannoli, not $2 |
That's the cost for two dozen cannolis. I was wondering if i should just set a two dozen minimum on them...they aren't all that big. I'm not sure if it will shy away people from ordering. In my family that will go in no time.  |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sat Aug 23, 2008 4:08 pm |
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| liapsim wrote: | I'm with Mike on that one. Maybe once you get on your feet and know how much you make as profit a week on average...then you can cut yourself a check every week....and keep the rest of the profit for your company.
$2.00 doesn't sound high at all for a cannoli to me. I live in Georgia and they run about $2-$2.50 a piece here. I would pay it and I have paid it.
Good luck with everything and I hope you get on your feet quickly! |
On Thurs i went all around town pricing and i only saw one place that had them on for 2.00 CAN a peice. It was a pathetic looking cannoli too.  I didnt' even want to spend the money to taste test it. Honestly, and i'm not just bragging but every single person who has tried my cannolis go on and on about them and these are some of the biggest italian critics. It's my filling they love. It's not all that compllicated..just white choco mousse but people go nutty over it. I want to guard it like a golden secret but eventually i will have to tell someone if they ask about the ingredients due to allergies or something. One of the most popular bakeries in town has cannolis but when we tried it, the filling was gross. This is probably what others have experienced when they've eaten it to. I figure if i can get the word out they could be a huge seller for me.
I would love to get 2.50 per cannoli but i wonder if people would pay it. You say you've paid it, so maybe i have a chance. Should i just price them at 2.00 and see what happens? If they don't balk at the cost increase it promptly. I'm sooooo new to this. 
Thanks for all your input. |
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indydebi
Forum SuperStar!
Joined: Jul 07, 2006
Posts: 15102
Location: Indianapolis IN
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Sat Aug 23, 2008 4:09 pm |
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| Mike1394 wrote: | | I never understood the idea of paying yourself an hourly wage. Do you think Bill Gates gets paid per hour? |
This can be a confusing issue, especially if you are talking a one-man-show vs. a company or a corporation.
No, Bill Gates doesnt' get paid by the hour. But he does get a paycheck like everyone else, be it a salary per day, per week, per month, whatever. He can't just pull money out of the company coffer whenever he wants. His salary is part of the company expense and whatever is leftover is company profit. Being the major stockholder, he reaps the benefit of those profits.
If you are ready to start thinking like a business, then you have to always consider "what if I had to pay someone to do this"? If you are doing the work, then you need to look at yourself as "hired help" and you are part of the cost of making that item. So you should count "payroll" ... be it yours or someone you hire ..... as part of the expenses before you can call it profit.
It differs from a sole proprietor vs. LLC vs. "S" corp, etal, but writing yourself a paycheck can make a difference on the taxes you pay personally and thru the business.
Sometimes this whole thing is transparent if you are doing this as a hobby or even as a sole proprietor. But when you start moving toward a business, then you need to think and function like a business. |
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Gingoodies
Forum Addict
Joined: Aug 24, 2004
Posts: 655
Location: New Jersey
Birthday: Nov 28
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Sat Aug 23, 2008 4:19 pm |
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Sweetcravings, the pricing makes much more sense now. $2 per cannoli is not an outrageous price at all.  Great minds think alike though, I have been mixing white chocolate mousse with my ricotta to make my cannoli filling for a long time now. It is so creamy and yummy. I even passed this recipe on to a "pastry chef" and she loved it. Says she will use it all the time now. Good luck with your venture. I hope it all works out for you! |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sat Aug 23, 2008 4:28 pm |
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Mike1394
Forum Fanatic
Joined: Feb 20, 2008
Posts: 1301
Location: Michigan
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Sun Aug 24, 2008 6:29 am |
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More on the hourly thing. This doesn't mean your not going to get paid. You have to figure in some sort of salary. OR. Take loans from your company at the beginning. Pay them back with interest. This will build fast.
One other thing, equipment. Set up a separate leasing company. Heaven forbid something happens, but this is a lil umbrella. Your decorating company actually ends up leasing the equip from your leasing company. If things don't work out, or you get sued you won't lose everything. Nobody ever wants to hear that something bad could happen. This is a very hard business to compete in, and actually make $$$. There has to be a contingent plan to fall back on
Mike |
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PinkZiab
Forum Addict
Joined: Feb 14, 2007
Posts: 886
Location: North Jersey
Birthday: Oct 29
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Sun Aug 24, 2008 11:42 am |
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[quoteOhhh i've never put ricotta with it..just the mousse.[/quote]
Totally outside the point of this post, but how can you really call it a cannolli without ricotta? lol Guess I'm just a purist for some things lol. |
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KoryAK
Forum SuperStar!
Joined: Apr 07, 2007
Posts: 2394
Location: Anchorage, AK
Birthday: Sep 03
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Sun Aug 24, 2008 11:54 am |
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And darling, who told you to mark your costs up 30%... I think the canned answer is usually 3x cost. It will be hard to get that price tho when your cost is so high from buying everything retail. Can you look into bulk options for at least the items that don't expire? |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sun Aug 24, 2008 2:38 pm |
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| KoryAK wrote: | | And darling, who told you to mark your costs up 30%... I think the canned answer is usually 3x cost. It will be hard to get that price tho when your cost is so high from buying everything retail. Can you look into bulk options for at least the items that don't expire? |
Dh told me to put it up to 30%, that's what they do at his workplace..not bakery but tool and mold Like apple and oranges i know.
I have heard of the 3x the costs so i will try and figure that out as well. We were just discussing tonight about possibly getting the pastry in bulk quantity and we can just keep it frozen till needed, as well as the pudding etc.. So much to think about..my head is spinning. I don't want to undercharge..i keep saying to myself, "i will not undersell myself", i've done that before on my cake and i felt horrible afterwards. |
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sweetcravings
Forum Addict
Joined: Apr 25, 2007
Posts: 516
Location: ontario, canada
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Sun Aug 24, 2008 2:41 pm |
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I try not to think about all the butter in that pastry. 
