Income Of A Small Cake Shop Or In Home Cake Shop?

Business By Katied75 Updated 3 May 2008 , 2:05pm by FromScratch

Katied75 Posted 3 May 2008 , 12:56am
post #1 of 7

I'd like to know how much of an income a small cake shop (either in home, or a one person outside the home shop) can earn each year? I'd consider income to be the total amount earned after all expenses (rent if applicable, gas and car costs if you deliver, ingredients, etc).

I am trying to decide if this is a career I can pursue over my other viable career that I just don't love that much (but which will give me summers off and allow me to earn between $40,000 and $60,000 per year). If it seems that enough of you/ us are earning in the $30,000 to $40,000 category then I might feel a bit more emboldened to get the proper training and set off on this adventure.

BTW, for those that do this full time, how long did it take you after you opened up shop to make that type of income... or at least a good full time income? And how many cakes do you make each week?

Thank you so much for sharing. This information will be invaluable to me.


6 replies
ccr03 Posted 3 May 2008 , 2:02am
post #2 of 7

I'm no expert, but I'll tell you this much - you'll earn as much as you put in it.

From what I have gathered on this board, ff you are willing to charge what you are worth, wake up at the crack of dawn and not go to bed until 2-3 hours before you have to do it all over again, market yourself properly, have good business sense, than you will stand to make tons!

However, if you are fickle in your pricing, unsure of yourself and don't have a good concept of time management, than you are in for a long and bumpy ride.

One thing that has stuck to me like bees on honey, is something that indydebi has said over and over, is that if you are wanting to start a business than you need to have a business mentality. Talent is only a small portion of it, business is business and you need to approach it as such. (I hope I did indydebi proud icon_smile.gificon_smile.gif

I hope this helps.

leily Posted 3 May 2008 , 2:11am
post #3 of 7

I have to suggest doing a business plan. Every cake store/shop is completely different depending on so many things.

1) How much you charge per serving/cake
2) What is your rent & Utilities
3) Do you have to be licensed and what is the annual cost?

How many cakes you makes will depend on whether you are doing 20 serving cakes or 200 serving cakes. The best advice I have seen is to figure out how many servings you will need to sell in order to make the profit you want.

I know indydebi will step in here i'm sure. But business plan, business plan, business plan.

SweetConfectionsChef Posted 3 May 2008 , 1:05pm
post #4 of 7

You could probably reach your goal if you take some business management classes (unless you already have that experience), charge what you are worth (no $20, $30, or $40 cakes) and look for big ticket items at every turn. I started doing corporate catering and that increased my personal paycheck 4 also increased the value of my business tremendously! I work from 8am-2pm Tues-Fri and various hours on Saturday.

costumeczar Posted 3 May 2008 , 1:43pm
post #5 of 7

Forget about taking summers off, those are prime wedding months! I work out of my home doing pretty much only wedding cakes, and it took me about 3 years to get to the point where I make somewhere in the area of $30,000 a year after taxes depending on how much I want to do. If I took the summer off I'd lose out on about 25% of my business, if not more. It's good to have the flexibility of working from home if you have that option, but it brings its own complications. You have to approach it like a business, as others have already said, or you won't be able to make anything on it.

something_sweet Posted 3 May 2008 , 1:44pm
post #6 of 7

The other thing that you will want to consider with starting a new business is that it takes time before you have a steady income. If you are purchasing or renting a shop for your business, it could be 1-3 years before your business is steady enough for you to have a regular paycheck. And it takes time to build up your business to the reputation and status that you want. You also have to consider the area that you live/work in to see if you have people who would be willing to pay big money for a nicer/more reputable cake. It is true that the more you put into it, the better off you will be. Cake decorators work hard, put in a lot of hours, and in the begining may not make a very much money off of their cakes.
In the area I live in, I think most of the "from home" decorators make $15k-$25K a year, or maybe less. It seems like they under price themselves. The businesses with store fronts may make more, but they have employees and other expenses, so I would have no idea what their income would be. I know they charge a high price. The from home decorators start their prices around $1.50pp for wedding cakes, and the storefront business start theirs at $4.00pp.
There are a lot of things to consider in starting a business, much more than just what you will be doing (talent), but the business sense as stated before. Hope this helps! icon_smile.gif

FromScratch Posted 3 May 2008 , 2:05pm
post #7 of 7

A lot of homebakers do underprices themselves.. I refuse to do that. I charge $4/serving for BC and $5 for fondant. Don't be afraid to charge what you are worth, and if you are going to start off offering discounted decorating to portfolio build.. make sure that you make that completely clear to your customers. Invoice them for the full price stating your discount and then what their final costs will be so they can see what they are getting. Have it printed on your website andyou invoice that when you are comfortable with your skills your prices will be going up. Make sure you don't pigeon hole yourself into the cheap cake market.

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