I've only been at this a few months, but I'm getting more and more requests to do cakes from friends and my DH's co-workers that I'm thinking about charging. I already have 4 "free" cakes booked in the next month for various and sundry.
How do you start charging people? I've had several offer to pay me, but since I see this as more of a hobby/practice right now, I haven't let them. I don't think I'm really good enough or consistent enough to charge yet.
There is also the problem that I don't think people will pay what I want to charge. Local bakeries are charging between 3.50-4.50 for custom cakes like I do and the people I am doing cakes for typically buy from the grocery store. I'm a deal because I'm free.
However, at a certain point, I do want to turn this into a business. How do you go about changing from free cakes to chrging what they are worth?
Thanks so much!
Jenny
You need to stop with the free cakes now. I didn't have to look too close at your pics to come up with that comment, you are perfectly at charging level. And a good fair price too. Indy will be along shortly I would assume, and give some better advice than me, but here's a very important one: Do not ever compare your work to a $20 sheetcake from a supermarket. If that was the level you were at, then trust me, I wouldn't even be in here talking right now.
The sooner you accept that your cakes are worth much more than the average cake, the sooner people will come around and pay up. If it means you don't book much, then so be it. Patience....make beautiful creations, stick to a firm price, and you will be busy in no time. Be exclusive; don't market to the masses!
Think that shall be my new tagline.
You have all ready started a bad habit with current and possible future customers as far as charging goes. You could charge them $5.00 and they would complain about the price being to high. Heck, you could never beat the price of free. I suggest you start charging right now, right here today on any other request you get. Charge what everyone else charges and also consider what you think your worth. People will pay what you ask if thats what they want, and those are the type of clients you want to gravitate to you anyway, not the ones that will complain about having to pay custom prices for a custom cake. And once last thing, I totally get you feeling lack of expierence means you may charge less, but I look at quality of work. I think you do good work and can definetly ask for what other bakers charge! Good Luck! 
You can start by accepting the money from those that are offering to [ay you. If you do continue to do them for free it will become even more difficult to start charging and for them to start paying. You certainly do not want to build up a large base of "customers" who are willing to get a free cake from you!!!
It can be a "hobby" as you say and still charge people. I might venture to say that many people who say they are a "business" are really a money making hobby and I put myself on that list.
They next time someone asks for a cake just say "let me get back to you on a price for that" Don't apologize and be confident about it.
If really "no one wants to pay what you would charge", then you'll have some decisions to make, but you will be surprised - there are people willing to pay! 
My rule is if I offer you a cake it is free. If you ask me to make a cake then you pay for it. I don't have the funds to do cakes for everyone just cause they want a pretty cake and I know how to do them.
Next time someone asks you to make a cake ask them how many servings and get some details then tell them you will get back to them with some cake suggestions including prices. You have to start charging now. The more free or really cheap cakes you do the harder it will be for you to get paid for your talent.
The proper answer is you can start charging when you become a legal, licensed business.
The good news is that you're in Ohio, which has a Cottage Law, so you can get licensed to work from your home. I'm not well versed on what's involved, but hopefully some other Ohioians will pop in here and help you out with that aspect of it.
"Proper answer" out of the way .......
Create a price list and hand it out to your current "client" base. Point out that the ingredients are expensive and you can no longer afford to do free cakes. (I find that inserting a line such as "You guys buy groceries ... you know what' I'm talking about." This turns it into a us-against-the big-corporate-grocery-stores instead of them-vs-you.)
And remember the Big Rule: Family and friends tend to be the least supportive so know it now so you don't sweat it later.
The proper answer is you can start charging when you become a legal, licensed business.
BINGO! Man I kept reading the other responses thinking, nope not the right answer, nope, nope, nope......YES~ finally Indy gives the right advice....as usual 
After you become legal, put up a web site with your photos and pricing, then e-mail a link to all your family and friends. Then they'll realize you're a legitimate business and they need to start paying you.
Good luck!
P.S. Just today I ran into someone I hadn't seen in about 8 yrs at a local art festival. He said "Oh, I hear you're licensed to sell cakes....we usually just do the Sam's thing for our Son's B-day, but I think we'll give you a call instead"
My response........."My cakes cost about 4 times as much as Sam's cakes, but here's my card."
After he picked his jaw up off the ground, he took my card and put it in his pocket. I'll never hear from him and that's fine. I wanted him to know upfront exactly what sort of cakes I do.
There's a market for all price ranges, you just have to get word out to your "target" clientele.
I just started decorating cakes not long ago. I had at least four orders before I had even bought my first lot of fondant. I was speaking to a lady the other day who also does cakes from home. She said "You will always have a lot of friends when you don't charge properly." I know I would rather have friends that like me not just my cakes. You have to remember that a lot of planning goes into every aspect of a cake (flavours, size, decorations, timing) and then you have to actually do it all as well. People don't realise this and they don't realise how much the cake actually costs to make either. My first cake that I charged for was also actually my first cake (Farmyard in case anyone looks). I wasn't sure how much to charge and since it was a friend I asked her how much she wanted to pay. She said $40. That's how much the chocolate in the cake batter cost let alone the 30+ hours I put into it. So when I realised I was good enough to start charging something even close to a good price I told everyone that I was doing my next 2 cakes (which were already booked) at cost of ingredients plus a bit more, then I would start charging properly.
The proper answer is you can start charging when you become a legal, licensed business.
BINGO! Man I kept reading the other responses thinking, nope not the right answer, nope, nope, nope......YES~ finally Indy gives the right advice....as usual
After you become legal, put up a web site with your photos and pricing, then e-mail a link to all your family and friends. Then they'll realize you're a legitimate business and they need to start paying you.
Good luck!
P.S. Just today I ran into someone I hadn't seen in about 8 yrs at a local art festival. He said "Oh, I hear you're licensed to sell cakes....we usually just do the Sam's thing for our Son's B-day, but I think we'll give you a call instead"
My response........."My cakes cost about 4 times as much as Sam's cakes, but here's my card."
After he picked his jaw up off the ground, he took my card and put it in his pocket. I'll never hear from him and that's fine. I wanted him to know upfront exactly what sort of cakes I do.
There's a market for all price ranges, you just have to get word out to your "target" clientele.
Yes, yes yes! If you're legal you can sell legally.
Also realize that a lot of people are like the person who dkelly mentioned...They think that they're doing you a favor by getting you to make a cake for them, then when you tell them your pricing they act all horrified and offended. Of course, they want all of the bells and whistles in the design, but they also think that you should be grateful for the "practice" or whatever their rationale for underpaying is.
You'll need to set some pricing structure, then stick to it. Don't get discouraged and change your prices becasue people complain that they're too high (and they will, considering that you've been giving cakes away for free.) Until the people who have been getting free cakes figure out that you're not going to cave and give it to them for free, or at a discount, you're going to get a lot of flack for charging. Just remember that you're right, and they're wrong!
Don't get discouraged and change your prices becasue people complain that they're too high (and they will, considering that you've been giving cakes away for free.)
In the words of a CC'er who I highly admire:
If no one's complaining about your pricing, then your pricing is too low.
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