I'm getting prepared to meet with a local gourmet catering shop in my town to talk about bartering use of the kitchen. I was going to suggest I make a certain number of gift box cakes (with a bow, small flower, polka dots -- all in fondant) maybe in a 8" square 4" high. Using the Wilton chart that would be 32 servings. In my area, fondant cakes easily go for $5 per serving but $160 for that cake just seems a lot. I know the bow is extra work as well as the flower (would be a super simple flower though), but I was thinking a more palatable price for the entire cake would be $75. I would give him maybe 3 to four a month in exchange for use of the kitchen. I'm nervous about meeting with him but want to move forward with my business. One point of note is that we actually spoke once about me renting his kitchen -- I asked the landlord to tell the new tenant that I was interesting in renting space and so this new tentant called me when he moved in to the space and was interested in a deal. I just haven't gotten back to him yet since I wasn't ready. I appreciate any advice you can give!
Have you read CakeDiva's post about the issues she had trying to offer her products in exchange for use of a kitchen (sorry I'm not sure how to link the thread)? The whole thing turned out to be a disaster!
I work out of my home, but I think you are better off negotiating an hourly rate for use of the kitchen. If they want to buy your product then they can do so at the regular price and mark it up themselves.
Ditto on that last thought. Work out an hourly rate deal or something along that line. I am so new to the cake world, but I did spend over a decade in the restaurant industry, with the last 3 years of it operating multiple restaurants in several states. Keep your deal as straight foreward as possible, with no room for future misinterpretation. When your business is taking off and you are busy, the last thing you want to deal with is a squabble with your kitchen owner. Best of luck to you!!
I would not GIVE away those cakes for $75! Have you made one? Do you know how long it takes YOU to make one?? That's the most important thing before you start reducing the rate! I would tell him how much they cost and if he baulks or it's a deal breaker, maybe there is another cake you make that he'd prefer instead that's more within his budget. I would not cut the cake price in half though........maybe offer a 10% or 20% discount at the most and allow him to mark it up that much.
Thanks Jeniwin for chiming in..
Also Thanks KHalstead for your words of advice -- I plan to make one to take to him when we meet. I checked out similar cakes online and they are very pricey. Like I said, I needed to firm my spine. I was waffeling and didn't like it!!! I don't have problems standing firm with wedding cake pricing since it's such a special event but have more problems with birthday style cakes. I haven't started selling yet so want to get confidence in my pricing but not overprice either. I've checked the pricing in my area (northern NJ) which ranges from $5 to $15 for fondant cakes.
keep it simple, after you drum up some business you will PREFER paying cash instead of trading.
Good luck to you Lisa. One question: is it legal in NJ to do cakes from home, or do you need a commercial kitchen?
And we're pretty close so if you need an intern someday when you're swamped let me know and I might just take a day off and learn from you. your cakes are awesome..
Hi rosiecast -- it is not legal to do cakes from a home kitchen in NJ, hence I'm looking to rent commerical kitchen space. Thank you very much for the kind words. I'm in Oradell. Where are you? Thanks for the intern offer. I'll definitely consider that!
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