First off, let me say I am not a professional by any means. I started cake decorating about 2 months ago and have just started making my own cakes about a month ago, all for fun, and had no intention of selling anything. But last week I was selling some games to a lady off of CL and we started talking about Christmas, etc, and I mentioned I'd just gotten a KA stand mixer because I was getting interested in baking. She mentions that she hates baking and is awful at it, and would I bake her a cake for Christmas? She'll compensate me, of course. I thought, sure, why not, I like baking and it'll give me practice. Well, that one cake turned into 3 different kind of cakes (not tiered or anything, just regular cakes) and 2 different kind of cookies, 3 dozen each! I was kind of into it, thinking it would be great practice, if a bit time consuming.

Then I went shopping for the ingredients. We never actually discussed how much these cakes would cost her or anything, and I certainly didn't realize how much it would cost to make this stuff. Around $65-70 for all the ingredients, and that's not including the cake boxes I have to get to deliver them! Now I'm pretty sure she wasn't wanting to pay $85 for these cakes (the extra $15-20 would cover the hours I would spend baking these) so what do I do? I've already bought everything and I have to deliver them tomorrow. How much do I charge her?

And it never crossed your mind to discuss the price BEFORE accepting the order?

Can you even legally sell cakes and cookies? Are you licensed/inspected/insured?

Costing out your products and setting a price with the customer before taking an order is part of being a *business* person.

I think perhaps you should be prepared to have a customer refuse to pay. If she does pay for your ingredients, count yourself lucky on this one. If you get a tip all the beter.

However, you need to look into getting legal - whatever that means in your city or state.

Good luck with this one. There is another current post about this situation, most made about it don't end up good. Chances are she has a figure in her head and it isn't going to be anywhere close to where it should be. And why are you only allowing yourself $15-$20 pay for hours of time away from your family baking for her because she doesn't like it?

Before you sell another cake please do three things.

1. Read as many threads as you can in the business forum, and through out the other forums that involve pricing and selling cakes.

2. Find out the laws in your state and county on selling cakes out of your home.

3. Never, ever, ever, ever buy or bake for a cake with out discusing the price first.

I realized I had most of the ingredients already and it wouldn't be too hard to whip up what she wanted. She called later adding on more cakes and cookies, and honestly I didn't think it would cost that much, but mostly due to the strawberries and pecans the price rose drastically. I know it was stupid to accept without knowing how much she was paying me or how much it would cost, but I didn't want to turn her down. She was so sweet and is handicapped so she can't really get out much to go buy stuff, she was buying all her Christmas stuff for her family on line. At this point I think I'll just ask for what I put into the cakes and cookies and call this one a lesson learned.

All I can say right now is you have really stuck your foot in it.

First and foremost, it is probably illegal to sell cakes from your home kitchen. Check the sticky at the top of the cake business forum that tells you which states allow home bakers, and even those states generally require you to register and pay a license fee to be legal. Most require kitchen inspections too.

Second...you should always know what your costs are going to be, and know what you need to charge to make it worth your time and effort BEFORE you accept even one order from a customer. They should be quoted a price BEFORE you even purchase the first ingredient.

Third...you should always collect the payment BEFORE you turn your oven on or at least charge a 50% deposit, and you should have 100% of your money PRIOR to delivery.

Fourth...Don't undersell yourself! It will cause you more issues in the longrun to undercut prices than to just charge what you should in the first place. You are not Walmart no matter what level baker you are! Don't price yourself as such! You will never do the volume necessary to justify such low prices.

But honestly, if I were you I would cancel the order since it sounds like at this point you don't have the time necessary to bake everything she is asking for, and either take the supplies that you can return back and get a refund, or put it in your cabinet for future use.

I don't really want to get 'legal.' I've never wanted or planned to sell any of my cakes, it's just a hobby. And I wouldn't have even asked for anything more than for her to cover the ingredients in the first place if it were just one cake, but for 3 cakes and 6 dozen cookies?! That's ALOT of time spent baking. I should have just told her I couldn't do it in the first place, but I felt so sorry for her and it sounded like so much fun at first. Again, lesson learned. No more baking for other people.

River, even if you have the ingredients at home that is coming out of your household. You will have to replace it, so it still costs you.

You have to do what you feel comfortable with. And only you can decide that.

Personally I'd call her now and give her the amount that you want, and let her decide if she wants to pay that or not. Please do not wait until she picks up the cakes for you to tell her, even if you are only asking for supplies.

Thanks for all of your advice. I didn't realize it was illegal, since I didn't really think of it as a business, more like a one time thing. I realize that I definitely should have thought this through a little more carefully.

River, please understand that everyone said that so you would be aware of it.

I can be honest and say that I only do cakes for family and friends and in my state you are not legally allowed to do that out of your home. I feel comfortable doing it for them because I know them. I don't like and will not do cakes for people I don't know.

Most people start off with a friend or a neighbor asking them to do a cake and next thing they know they are charge very little that they aren't even covering supplies. If it is a one time deal then finish it out how you feel comfortable. if you decide to make your hobby more then be sure to look into the laws and to sit down and figure out your prices in a realistic manner.

Also understand this post is appearing in the business section, so people that do and sell cakes for a living are going to the be primary people to answer your questions, and will do so from the business perspective, even if you just see it as a one time deal to help a nice, sweet lady out.

Any time you accept money even if it is only for the costs of the ingredients you are making a sale...

I think indy said this...The IRS doesn't care if you are a good business person or a bad business person, if you accept money for your product you are in business. A bad business person loses money or undercuts themselves on each sale, a good business person charges what is necessary to succeed!

Wow, just did a quickie call with her to tell her how much everything cost, and ask if she still wanted the cakes or just wanted the original cake since I didn't know what her budget was, and it turns out she's totally fine with it and actually expected to pay about $100. So I'm still going to make her cakes since I hate going back on my word and she really wants them, but I'll NEVER do this again. Only my family and friends will benefit from my sporadic 2am baking fits. : ) Thanks everyone!

And NO more selling for me. : )

Oh and if you really want to assist this lady, next time make the cakes for her as a gift, or have her buy the ingredients and you make it for her as a gift. She can give you the ingredients, just not the money to purchase them...very thin line that differentiates a business transaction from a gift. You can accompany her and/or give her a list of what is necessary. That way she can see how much she is going to be out, and you are gifting your time and no money has exchanged hands.

WHEW!!!! That worked out. You've just completed Cake Business 101.

Yeah, no one got too pissy. Strange.

Hey River...

Well, you did make a mistake by not discussing all of the cost and ingredients with her first. There's nothing you can do about it now... If you had discussed it before, you would have known what her budget is before you went and bought anything... So really, nothing you can do now but call her to ask how much she was looking to spend... and let her know how much you spent on ingredients.. if she's nice, she'll pay you the cost of ingredients and extra... but honesly, I wouldn't fault her if she said something like "i only expected to pay X amount money".... but then again, it's her fault too for not discussing cost with you.

So I would just advise you to tell her what you spent and tell her that you regret not discussing cost with her beforehand... just be honest!..

As for legality.. some people might jump on me for this.. but I don't think there's any problem with someone asking you for a cake, and you doing it for them for some money.. wether you want to practice or whatever, it's your business. Although yes, it is "illegal" to have a home bakery and sell cakes in most states... I don't see any problem with your situation here... I don't think you have any reason to fear being raided by the feds because you made and sold a cake to someone!... lol.. could you imagine?

I think the legality line is crossed only when you are establishing a buisiness.. as in advertising, flyers, website..etc... or if your selling more than a cake or two a month.

Just my opinion folks!