I found a place today to rent kitchen space from. It is an entire room that they dont use. We talked about everything. but we could not figure out an amount to charge. She suggested a % of my sales until I get up and running. Since when I first start I probably wont have much business. She asked me to come up with a fair %. She is only worried about recouping the costs of the electricity and water I use. Please tell me what you think!
I would do an hourly rate instead. I pay $15 an hour for my space. That way I only pay when I have cakes to make. I also do mostly wedding cakes as small cakes are profit killers. If you plan on doing mostly smaller cakes, then maybe a profit % would work for you. In that case you have to sit and figure the numbers of how much time it takes you to make a cake and how much of you think should go back to her.
Man, I wish I could have a whole room just for my stuff! I have to cart all my stuff back and forth because the caterer that I rent from just doesn't have the room. She is looking for a bigger place, so maybe I might in the future (one can hope).
Good luck, and I'm so happy that you found such a great place to rent from!
Wow! Thats really cool! How do you even go about finding someone to rent space from? That would be the best thing that ever happened to my dining room table LOL
But really how nice is that going to be- Congrats on the exciting news!
Thank you for the encouragement! I sure do need it! This exciting and scary at the same time! I was thinking about the per hour charge, but I am not really efficient on time. Actually I am not sure how long things take me cause I have never paid any attention. I do know that I have gotten a lot quicker then I used to be!! Anyway, if I do party cakes then giving her 10 or 15% would not be to bad I dont think. I will do the % on the profit, not the total sale of the cake. So on a $65 cake say it costs me $25 to make it, then I would only have to pay her $6 for that cake. But on the other hand if I do a wedding cake that is 1200 and it costs me 190.00 to create it then I would have to pay her $151.00 so I am just not sure. Maybe I could put a cap on it. Like if I make more than such and such amount then I pay a flat rate of $350.00. ????????
How does that sound?
I pay a flat rate of $300 per month. I'd much rather have a set amount to pay. That way I'm covered in the event that I might over bake a cake etc and I don't have to rush. IMO f you were paying hourly and something like that happened it would eat all your profits.
Secondly i would rather pay a set amount each month that way i know what to budget for
Congrats! I like the idea of a % of the profits up to X amount. What ever the monthly amount would be once you get established.