Hi, I'm new to Cake Central but I've been doing cakes for family and friends for awhile. I'd like to start doing it as a business and I'm having trouble with my pricing. It seems like if I start out with a base price, say $2 per serving and the person needs 30 servings, by the time I get finished with the cake it seems like I've undercharged. I'm thinking of just doing a flat price on the sculpted cakes and saying it serves, say, 50 people and if they need more cake than that I'd just offer a sheet cake for cutting. I'm confused about how to go about the pricing and not lose money. Any advice would be great!
I'm mostly just working everything out on paper before I get serious about looking into opening a shop and getting licensed and all that. If it doesn't look like I'm going to make a profit then I might stick to family. If any of you who have shops could give me some insights on whether it's worth it to run a cake shop, please let me know before I get in too deep! Thanks ya'll!
I can't help you on the business side of things as I'm a hobbiest, but I noticed where you live - I was born in LaFayette, GA (well, Ft. Oglethorpe but we lived in LaFayette). I still have lots of family there. Welcome to the board!
It sounds like you pulled the $2/serving out of the air. And that's normal for when folks are just getting started.
But what you need to do is make a DETAILED list of everything you need to make a cake. Right down to the paper towels and the dishsoap. Don't forget to add in the gas to go get supplies and the KFC you had to order for your family's dinner because you were busy in the kitchen.
The first time you do this, I guarantee you'll look at it and have a face like this ----- >
That doesnt' even include your time, which I recommend should START at $25/hour. you're not baking a cake. You're creating and designing a sugary piece of art that they can NOT get in a grocery store. Your time doesnt' start when you turn on the mixer and it doesn't stop when you drop off the cake. It starts when you answer the first phone or email and it stops when you get back home and kick your shoes off after delivering it.
Once you figure how much it costs you to make, let's say, a 2-layer 8" round cake, plus your labor expense, then take that total and divide by 24 to get a per-serving price.
Another good idea when first starting out with pricing is to make a list of "minimum cake requirements". You will ALWAYS need ... with every single cake ..... 8 eggs (but you have to buy the whole dozen), 2 cake cardboards, foil to cover the boards, a cake box, 2 cake mixes (using mixes as an example ... if you're a scratch baker, then substitute basic flour-b.powder-milk, etc.), oil, dishsoap, a roll of paper towels, a roll of parchment paper, dowel rods or some kind of support system for tiered cakes, 2 lbs p.sugar, shortening/butter, 3 packs of dream whip (would be on my list); vanilla .... etc. No matter WHAT cake you're baking, you need this stuff. What does that total? That's what kind of investment you have for every single cake .... and that's just to start.
Never ever EVER take a paid cake order that will put you in the red. It is better to say no up front. Just. Say. No.
If your pricing isn't covering at least ur costs and your wage then you are undercharging.
Have you sat down an counted everything that goes into the cake?
Most people have a base price for regular cakes, and then a higher base price for carved cakes. The point of a base is to give you something to add all the extras on to. The trick is often learnin not to just do a quick sum and give it to the client, but say 'i will get back to you to confirm details and cost' - give your self time to price each cake properly.
Thank ya'll so much for the advice. I had a list of items for the cakes but it wasn't nearly as long as what it needs to be. I didn't really think about soap or paper towels or any of that stuff. I worked for a grocery bakery for eight years and everything was done quite differently than how I do it at home. I didn't even think about paying myself.