Any Advice On Pricing???

Decorating By Flourgirls2010 Updated 3 Aug 2009 , 1:00am by indydebi

Flourgirls2010 Posted 3 Aug 2009 , 12:16am
post #1 of 3

I live in a small town of less than 3000 in Central Illinois. My Best Friend and I started decorating cakes just over 2 years ago through a club in our school. We are both seniors in high shcool, and we plan on attending culinary school. Decorating cakes is a way for us to earn a little extra cash.
Since then, we have been asked by people in our community for everything from 9x13 sheet cakes to 4 tier wedding cakes. In the beginning, we simply told our customers that whatever they were willing to give was what we would take. We began having the issue of people over-paying... and therefore began creating a price list of around $1 - $1.25 a serving. Basically, this became neccesary for a consitency in our pricing. During Graduation season, we did 18 cakes and charged $25 for a 12x18 sheet cake.
This past January, I contacted our local Economic Developing Office because, like many others, we didnt want to be doing anything illegal. She advised us that because we are only 17, and that we do this from our homes, as long as our customers are aware of this and agree that they are ok with it, then we were fine.
Our problem now is we don't know how to price our products properly. Because we are not licensed, we keep that in consideration. Currently, we are asking $30 for a 12x18 sheet cake and $50 for a double layer 10" and 6" 2 tier cake (with fondant). Any advice would be wonderful.. we can use all the help we get!

2 replies
Lenette Posted 3 Aug 2009 , 12:30am
post #2 of 3

My first suggestion to you is to contact your county health department and they will advise you on the regulations. Trust me, they do not care if you are 17 or 70 if you are not falling within your local guidelines for selling food to the public. Unfortunately, I think you were given some well-intentioned but misguided advice.

Good luck at culinary school! icon_smile.gif

indydebi Posted 3 Aug 2009 , 1:00am
post #3 of 3

Lenette is correct. A 10-year girl in Indiana was spotlighted by her local paper for running a cake business. Health Dept came in and shut her down.

And $25-$30 is way too cheap for a 12x18. That's a 54 serving cake, which breaks down to $0.55/serving. I think Walmart cakes are priced higher than that ..... and there is no way you have the buying power of walmart for your ingredients.

Here's your lesson in numbers:

A 6/10 cake serves 12/38 = 50 servings so you're charging $1/serving for fondant tiered cakes. Heck, when I buy the small container of fondant, that costs me $12.50! If we assume costs for 3 cake mixes, a dozen eggs, a smidgett of oil for the cake .... 4 lbs of psugar plus butter or crisco and flavoring, plus carboards & supports. Let's assume you can get all of that for around $10. Plus $12.50 for the fondant = $22.50. (Oh, if you're doing fondant you may not need as much BC, so take a couple of bucks off of that total.) Assume it takes you 2.5 hours mixing, baking and clean up for the cake. THen assume another 2.5 hours to decorate and clean up.

$50 - $22.50 = $28.50 divided by 5 hours labor = $5.70/hour.

And this doesn't include your time to pick up the ingredients, and misc costs (paper towels, soaps for clean up, use of utilities for oven, mixer, dishwasher).

Min wage just went to $7.25. You'd be better off to get a job at McDonalds.

This is not meant to discourage. We ALL hate the pricing part of this business. It's meant to help educate you on how to set pricing and what should be covered.

Keep your questions coming! THere's lots of great expertise on here and lots of folks willing to help you get started! thumbs_up.gif

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