What Is The Average Profit You Make On A Cake? Can I Ask??

Business By gingersoave Updated 22 Sep 2009 , 6:04am by annisa523

gingersoave Posted 22 May 2009 , 7:18pm
post #1 of 45

I just finished up with a cupcake order of 150. I charged $2 per cupcake. I spent $91 on supplies which leaves me with $209 profit. This is the first time I have actually sat down and figured up the profit. Is this enough profit, is there a rule of thumb on this????

44 replies
-K8memphis Posted 22 May 2009 , 7:37pm
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I don't know if there's a rule of thumb. I like to invest less than one third of the amount in ingredients and supplies. That's a big margin because I generally don't buy wholesale--it could be a lot tighter. But if we're buying retail it's gonna cost. So we're close (to each other) with the figures you posted.

It's hard to judge because I just have random projects because I will have some supplies already on hand and I will have some leftover from what I had to purchase. I don't have a continuum to see how anything really flows.

But I schedule my payments (to come into me) in thirds and then I take one of those thirds and spend it mostly on the cake but I buy a new toy or something too. Actually for the project itself--my goal is to keep it at one sixth but I go over.

Now we need to get Indy Indy on here with her spread sheets and percentages. She'll tell us straight up!

alanaj Posted 22 May 2009 , 7:42pm
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How long did the cupcakes take you? It's hard if you're at home because you have to figure out the utilities you use, etc. So tough to figure out the real profit.

__Jamie__ Posted 22 May 2009 , 7:45pm
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Figure your time and utilities and paper towels and things you don't think of usually....bet that number comes down realllll fast.

-K8memphis Posted 22 May 2009 , 7:53pm
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Yeah but she's talking about what you actually spend out of pocket to make something--out of pocket on the front end--that's what I thought she meant. Hand x amount of cash to cashiers.

That's why I try to keep it at one sixth of my asking price so that the other things can't take it up over the one third mark--which again is a huge margin--but it's mostly retail so...wha da yah gonna do.

But if I need it I'll toss in (into the grocery cart) the paper towels & dish soap whatever (box of cheezits for the decorator icon_biggrin.gif private stash icon_lol.gif ) --but I don't use it all on that cake either--well there's not too many cakes actaully get the dish soap anyhow...you know what I mean!!

__Jamie__ Posted 22 May 2009 , 7:57pm
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Ohhhhhh...lemme see. Hmmm, I have yet to keep all of my dang receipts together from one individual order. Debi's gonna come in here and wag her finger. Where is that embarassed emoticon???


Oh, I go thru so much dish soap in a month...it's amazing! And paper towels...holy moly.

-K8memphis Posted 22 May 2009 , 8:01pm
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Ok I'm wrong--the subject does say average profit. But then the way I took it was how much cash do you fork over.

I mean like I said, how much you fork over sans Cheezits is not the correct gauge either. You have to do the math and determine how much you actually used of each container and put that focus in there. Not to mention how much stuff you already had on hand.

I just try to suck it up and not spend more than one sixth to one thrid--then there's tons of some of that leftover.

edited to say but please God don't let me run out of anything! If I full on forget an entire ingredient ok I can survive but if I run out of something, like only have half enough it ruins my entire cake karma.

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littlecake Posted 23 May 2009 , 12:35am
post #8 of 45

to me the profit would depend on how much labor it took...were they kinda plain, or was there a drawing of the mona lisa on every one?

the cake on your avatar is darling.

yamber82 Posted 23 May 2009 , 12:54am
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i have been trying to put together a price list of expenses. when i figure cost to make a cake i can figure ingredients per recipe, how many recipes, etc. i usually go by the pound on gp and by the recipe on fondant than i have listed how much each size of cake board is, add like 50 cents per color for small decorations and $1 per color for each layer etc. i am still working on it. adding to the list each time i do a cake. hopefully i will eventually be able to figure the exact cost to make each cake. as far as utilities i have no clue so i add like $10 usually. i also count in a small amount for shortening and flour to grease and flour the pan etc. it is really hard to figure all that! the hot pink and black cake i did with the feathers on it, i just came up with a rough figure and it was around 70. of course i also buy a lot of stuff with coupons but figure in the full price. i try to over estimate rather than underestimate.

Sweet_Guys Posted 23 May 2009 , 12:58pm
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I think we end up spending about 20-25% on buttercream cakes and around 30-35% on fondant covered cakes. We make everything from scratch except the fondant. Of course, there is all of the overhead costs associated with the project, too.

Paul (& Peter)

Lenette Posted 23 May 2009 , 1:17pm
post #11 of 45

I am curious as to how much time it took you to make, decorate and possibly deliver (?) them.. Your time is worth something too.

And yes, figure an amount for paper towels, water, detergent, electricity. Even internet and phone if you use those to communicate with clients. It's all part of the cost of doing business

Did you use liners you had? Salt? Baking powder? Even the things you already had on hand have a cost associated with them.

If you can make a huge profit then that's great. I think once you factor in ALL of the costs it's not that much. And if that is truly your profit then remember cakers should enjoy some nice money for all that we do.


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indydebi Posted 23 May 2009 , 2:00pm
post #12 of 45
Quote:
Originally Posted by gingersoave

I just finished up with a cupcake order of 150. I charged $2 per cupcake. I spent $91 on supplies which leaves me with $209 profit. This is the first time I have actually sat down and figured up the profit. Is this enough profit, is there a rule of thumb on this????




If you operated as a business, what would you pay for:

- rent for the kitchen space to make the cake?
- utility bill at the end of the month for those cakes
- payroll to cover EVERY SINGLE MINUTE that an employee (or you) put in to make these cakes (from taking the order thru buying supplies thru delivery).
- Insurance to cover your car (now used for a commercial use, which is MUCH higher than personal insurance)
- Insurance to cover your liability and risk. (Note: My annual insurance expense costs me $10 every single day).
- Gas expense to buy supplies and deliver. Most people don't count this because the gas is already in the car so they don't see the money they're actually spending. Keep track of your mileage sometime ... allocate $1 a mile, and you'll be REAL surprised at the veh expense.
- The cost to buy KFC for dinner because you were too busy and the kitchen was in use, so you couldn't make dinner for your family.

As I've said in another thread, what is considered "good money" as a home baker is barely breaking even as a shop baker. Not starting the home vs shop debate but just pointing out the different mindset. I know .... I've been there .... I've done that.

-K8memphis Posted 23 May 2009 , 3:20pm
post #13 of 45

Not to mention anti-depressants, sleeping pills and intravenous caffeine. icon_biggrin.gif

costumeczar Posted 23 May 2009 , 9:19pm
post #14 of 45

At the end of the year I pretty consistently have 2/3 left out of all of the money I took in that year. That's after paying for all expenses, insurance, office supplies, blah blah blah. It's been around that for the last 10 years, so that's what I try to aim for. I'm a sole owner, though, so that would include my "salary."

Yankie Posted 23 May 2009 , 9:29pm
post #15 of 45

I do this for fun not really for profit..but I will say, I have a friend that has been doing this for about 25 years..and she is yet to be rich. There's alot of expenses. Even those poeple on the food network challenges that are famous go nuts for just $10,000.

I think that you can make ok money but nothing big where you can retire at 40. People don't want to pay what cakes are worth, not only the ingredients, but the time..the electricity..insurance..you can go on and on.

en-passant Posted 23 May 2009 , 9:48pm
post #16 of 45

Many people don't count in their overhead when they say 'I made $209 on that cake'.

rent
electricity
payroll
exterminator (health department rules... must have contract with exterminator whether one has vermin problems or not [we don't])
street sign (fees to city planning office)
insurance
telephone/internet
service and upkeep of machines (cake fridge, espresso machine/grinder, fridges, freezers, big mixer, dishwasher, display cases [this goes under electricity as well....])
non-food items: trash bags, paper towels, office supplies, cleaning supplies (dish detergent, ajax, floor stuff, window stuff, laundry detergent) boxes/boards/parchment, uniforms, shoes, etc
garbage service
health department fees (ca $350/year)

Note that I didn't even write the cost of raw materials or anything about taxes (or, for that matter, my TIME).....

I am surely leaving something out here......

imanah Posted 23 May 2009 , 11:23pm
post #17 of 45

Im so glad this topic came up. The past few days I have been doing some serious online shopping for a couple of my upcoming cake projects. I think I have spent over $250 (which is about a bit more than half of the money I'll have coming in) which really takes away from my profit.

I'm so annoyed becuase now I'm really starting to realize not all cake supplies stores are the same. Some people which I won't mention can sell the same object for $6-$10 more then others. I think this month I probably have spent over $30 on shipping alone icon_sad.gif So I am spending hours online looking for the best deal.

ahhhhhh, oh well. I am buying pans, flower cutters...I guess I have no choice but to suck it up. I was planning on buying a large work table not this time icon_sad.gif

Kitagrl Posted 23 May 2009 , 11:30pm
post #18 of 45

Profit margin for me depends on if its a big or little cake. Big cakes cost a little more to make but bring in alot more "per serving" price.

The perk of being at home is less overhead...the perk of owning a shop is more volume. I max out at 3-5 cakes per weekend, period (3 large or 5 smaller). A shop can do quadruple that or more. I HAVE to make a decent profit on the few cakes I make, or it isn't worth me even doing this.

Kitagrl Posted 23 May 2009 , 11:33pm
post #19 of 45

BTW this is probably not the right way to do it, but I do my profit monthly. Everything I spend goes in one column (labelled of course) and everything I make goes in another. Then at the end of each month I can see how much profit I made. I have a Paypal debit card which makes it easy to make sure I'm spending cake money on cakes, and not any from the regular family budget.

Kitagrl Posted 23 May 2009 , 11:36pm
post #20 of 45
Quote:
Originally Posted by imanah

Im so glad this topic came up. The past few days I have been doing some serious online shopping for a couple of my upcoming cake projects. I think I have spent over $250 (which is about a bit more than half of the money I'll have coming in) which really takes away from my profit.

I'm so annoyed becuase now I'm really starting to realize not all cake supplies stores are the same. Some people which I won't mention can sell the same object for $6-$10 more then others. I think this month I probably have spent over $30 on shipping alone icon_sad.gif So I am spending hours online looking for the best deal.

ahhhhhh, oh well. I am buying pans, flower cutters...I guess I have no choice but to suck it up. I was planning on buying a large work table not this time icon_sad.gif




It does slow down....trust me! The longer you do it, the less often you'll have to buy pans or cutters or something. Yeah, always boards and fondant and stuff but as you go you collect more and more stuff and it really pays off. Unless you then need to buy more storage, like I do. haha.

cas17 Posted 24 May 2009 , 12:38am
post #21 of 45
Quote:
Originally Posted by k8memphis

Not to mention anti-depressants, sleeping pills and intravenous caffeine. icon_biggrin.gif




mountain dew for me icon_lol.gif

jlynnw Posted 24 May 2009 , 12:56am
post #22 of 45

Buying stuff slows down icon_eek.gif When? I have been doing this at home as a hobby and have worked "professionally" for years. I am still buying. DH says if it were drugs I could be treated but this addiction has no recovery program!

Kitagrl Posted 24 May 2009 , 1:03am
post #23 of 45
Quote:
Originally Posted by jlynnw

Buying stuff slows down icon_eek.gif When? I have been doing this at home as a hobby and have worked "professionally" for years. I am still buying. DH says if it were drugs I could be treated but this addiction has no recovery program!




LOL ok well I still buy too haha...but at least I"m not buying a new pan or a new cutter every time I make a cake. Just sometimes. thumbs_up.gif

jlynnw Posted 24 May 2009 , 1:09am
post #24 of 45
Quote:
Originally Posted by Kitagrl

Quote:
Originally Posted by jlynnw

Buying stuff slows down icon_eek.gif When? I have been doing this at home as a hobby and have worked "professionally" for years. I am still buying. DH says if it were drugs I could be treated but this addiction has no recovery program!



LOL ok well I still buy too haha...but at least I"m not buying a new pan or a new cutter every time I make a cake. Just sometimes. thumbs_up.gif




SHHH.... don't say that too loud. My DH thinks you NEED to! I have him well trained and he really doesn't need ALL that closet, he can share one with DS right????

cas17 Posted 24 May 2009 , 1:13am
post #25 of 45
Quote:
Originally Posted by jlynnw

Buying stuff slows down icon_eek.gif When? I have been doing this at home as a hobby and have worked "professionally" for years. I am still buying. DH says if it were drugs I could be treated but this addiction has no recovery program!




same here (except the professionally for years part) when i saw this thread and read the op first post i was thinking wow, when will i be able to say that???? icon_eek.gif there's just so many tools/cutters/impression mats/veiners/gel colors/gadgets/agbay/ etc etc and now i want to get my own edible printer and learn how to airbrush. i know if i ever make it to a sugar art convention i will be bankrupt and have to find a place to put even more cake "stuff" icon_cry.gif but i love it all icon_biggrin.gif

Lita829 Posted 24 May 2009 , 1:20am
post #26 of 45

Same here cas17...I might as well have my own private parking space at the local Michael's icon_lol.gif . I hardly ever make a profit because I am constantly buying more cake stuff. Especially since I am just now starting to get really serious about turning this hobby into a means of income.

One day I'll begin to see a profit.....Hopefully.

Denise Posted 24 May 2009 , 3:32pm
post #27 of 45

I read this with great interest. I try to keep a good handle on what I spend on a cake. I have spent the past 3 years buying capital equipment so I pretty much have everything I need but I do have to buy consumables just like everyone else.

I made this cake in April

http://www.cakecentral.com/modules.php?name=gallery&file=displayimage&pid=1355058

and so I figured up the cost on it. I do use Betty Crocker mixes that I add premium ingredients to. I add a stick of butter and 1.25 cups of buttermilk to each mix. I use extra large or jumbo eggs and 1/4 cup oil (new oven demands the extra oil...old oven didn't!) and the buttercream is made with butter and a small amount of shortening. Fondant is made by me with white chocolate and costs me about $25 for 17 lbs so it is way cheaper than commerically made fondant.

This particular cake is buttercream with fondant trims. It is set on 1/2" foamcore boards. It was delivered 10 miles from my site. I made 1 trip to the store and probably bought enough for 2 cakes at that time but I generally make at least one trip to the store for each cake!

I spent approximately $38 on this cake and that included a $ amount for paper towels, press and seal, dishwashing liquid, electricity and water. The cake was $478.

As for my time - I met with the bride once before the wedding. She went to school with my sister and we had a nice little visit for about 1.5 to 2 hours designing her cake and discussing it. I later went to her job to pick up the payment....normally I don't but I did know her personally and it was on my way as I went about my "day job".

Went to the store and got supplies while I was grocery shopping for the family.

Baked the cakes, iced and decorated and made the rose.

Delivered to site and that was a 10 minute drive and I was on site maybe 30 minutes, finding the right room (wedding in one ballroom, reception in another) setting the cake up and putting the ribbon on the board. Taking pictures. I figure that I may have 8 hours into the cake including the consult, baking, decorating, delivery, cleanup.

This particular cake is easy to make and yet is lovely. The reason it took so long to make this cake is the lace was giving me a fit....if it hadn't been for the lace it would have been a breeze to make!!

Lita829 Posted 24 May 2009 , 4:30pm
post #28 of 45

I am beginning to see what all should be factored in to pricing cakes icon_eek.gif . I never though about all that.

BTW: The cake is beautiful, Denise thumbs_up.gif

CanadianChick Posted 26 May 2009 , 3:39am
post #29 of 45

profit is a loaded word - to me, as an accountant, your actual profit is calculated after you take out all your expenses, not just the "cost of goods sold". What you've calculated is the barest of gross margins...

The lists of expenses in this thread are pretty accurate - I'd also factor in depreciation on assets (if you're using your oven every day to bake cakes, that's additional wear and tear which will result in earlier replacement, delivery trips and trips to the store are wear and tear on your vehicle) etc.

Cakebelle Posted 27 May 2009 , 1:08am
post #30 of 45

Sorry to the OP for the hi-jack! icon_smile.gif

So let me get this right.
Is no one making a profit at all! home bakers or stores? All the store owners give you a list of expenses, all legit BTW, but then you must be making a decent amount of profit to be doing this.........right? Store or otherwise. icon_confused.gif
Please enlighten us- non business owners, that is.

TIA
Vickie.

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