Charging For Labor By The Hour

Business By Viviane Updated 26 Jun 2010 , 6:45am by indydebi

Viviane Posted 25 Jun 2010 , 7:51pm
post #1 of 11

Never before have I charge by the hour, but always kicked myself for not doing it, as more intricate cakes take longer to create, thus taking time away from my children.
I know mechanics and hair dressers charge by the hour in addition to the services they provide.
What would be an appropriate amount to chage for my skills and work? I think I've always undercharged and haven't been able to move ahead in my business. Therefore, I'm considering between $15-$20 an hour.
What are you businessmen and women charging?

10 replies
tavyheather Posted 25 Jun 2010 , 8:47pm
post #2 of 11

wow I've never had my stylist charge by the hour.......I suggest not doing it...I think........it'll be interesting to see what everyone else thinks, though!

Kiddiekakes Posted 25 Jun 2010 , 8:49pm
post #3 of 11

I will never charge by the hour as some cakes take me an hour to do and some more...I wouldn't make any money on the one that takes and hour...I charge per serving.

PieceofCakeAZ Posted 25 Jun 2010 , 9:12pm
post #4 of 11

I choose "none of the above". icon_biggrin.gif

Number of years decorating does not remotely equal skill level. There are plenty of people doing this for 5 years that are better than those doing this for 25 years and based on the $5/hr deal someone would have to pay they $150 per hour for a lesser cake from the more experienced person and $25/hr for a better cake from the relative newbie.

Plus some people can decorate 5 awesome wedding cakes in a day and some people can only do 1 every 3 days... why penalize the faster decorator by charging customers by the hour?

Part of doing this professionally is understanding how long it takes you to create a design an charging accordingly. Your per serving or per cake charge should be derived based on your costs, time you expect to spend on the cake, desired profit, and what your market will bear.

Best of luck!

Unlimited Posted 25 Jun 2010 , 9:27pm
post #5 of 11

If you think that your work is only worth $15 - 20 per hour, then that's what you should charge. Most business owners wouldn't work for that. As the owner, you need to be compensated for so much more than an hourly wage to cover all expenses... afterall, businesses are in it to be profitable, not to just barely break even. If that's the case, it isn't a business, it's just a hobby.

If I were to charge $5 per hour for every year of experience (or whatever your poll says), with 37 years experiencethat would be $185 per hour. Business owners can typically make so much more than that, but try explaining to your customer that the labor charge is $185 on top of the other expenses for making something that only took an hour to produce. Yes, mechanics and such can get away with labor charges because it's the norm for that industry. Within this industry, it's typical to charge by the serving. That isn't a bad thing, just figure out how much you want to make and increase your per serving price to reflect the total for the product. I'd suggest seriously raising your prices, and if you don't get any orders, then you'll have more time for your family. Don't do it, if you aren't being paid extremely well for your efforts.

CutiePieCakes-Ontario Posted 25 Jun 2010 , 9:37pm
post #6 of 11

I charge for ingredients, non-replenishables (ie. hydro/gas, washing up, etc.) AND $10/hr for labour. But, that being said, I often don't charge the exact time I spend as I do take longer than I think I should, so I often charge less than that in the end.

cakesbyamber Posted 25 Jun 2010 , 9:50pm
post #7 of 11

I think a great way to charge is to have a base price for a plain cake. I'm a beginner so I usually charge $25.00-$40.00 per tier depending on size. Then I take into account the time I will spend decorating, delivery time, clean-up time, ect. If they want a bow, other fondant decor, piping, etc. then that is extra to cover fondant/ingredient prices. I charge depending on all that. Your time is valuable and you can't get it back so you have to charge for it! I'm also a hairdresser, I charge $60.00 per hour. If a haircut will take 15 minutes I charge $15.00. There's no reason cake decorators can't do that as well. I don't have price list, every cake recieves its own individual estimate.

mamawrobin Posted 26 Jun 2010 , 1:36am
post #8 of 11
Quote:
Originally Posted by PieceofCakeAZ

I choose "none of the above". icon_biggrin.gif

Number of years decorating does not remotely equal skill level. There are plenty of people doing this for 5 years that are better than those doing this for 25 years and based on the $5/hr deal someone would have to pay they $150 per hour for a lesser cake from the more experienced person and $25/hr for a better cake from the relative newbie.

Plus some people can decorate 5 awesome wedding cakes in a day and some people can only do 1 every 3 days... why penalize the faster decorator by charging customers by the hour?

Part of doing this professionally is understanding how long it takes you to create a design an charging accordingly. Your per serving or per cake charge should be derived based on your costs, time you expect to spend on the cake, desired profit, and what your market will bear.

Best of luck!




Agree 100%. I've seen cakes decorated by relative "newbies" that were very professional, beautiful looking cakes. On the other had I've seen cakes decorated by someone with 10 or more years of decorating experience that lacked a professional, polished look. In my opinion the "quality of work" is a BIG factor that is often overlooked or not addressed when discussing "how much to charge". "Charging by the hour" IF you were to do so..should be calculated by the "quality of work" that you're able to produce rather than the "number of years of experience." Just my humble opinion thumbs_up.gif

cheriej Posted 26 Jun 2010 , 1:59am
post #9 of 11

I was actually thinking about this today. Some of the cakes I see on CC look so intricate and I wondered if any of you focused on your real "hourly' rate versus just a pure profit margin. I had talked to my local cake supply store here and she told me that Christopher Guerin (sp) and the decorator who won the challenge on TV will charge for the design, the cake, then if you want him to make you roses etc. he charges $250/hour for his labor. Now I know he won the challenge and became famous etc. but I thought it was interesting how he segmented his business. I bet he doesn't get many people asking him to make them roses at that rate.


It is something to think about. You may think you make a lot of money (e.g. profit margin) but if you factor in your own labor etc. and your real hourly rate is not a lot, well, that may mean you should charge more. Just my opinion.

catlharper Posted 26 Jun 2010 , 2:55am
post #10 of 11

Nope, don't charge per hour but charge per serving. I've figured out what it costs me to make them, including rental kitchen fees, and added in my 25 per hour to that cost and then came up with what I figured was a fair price based on my area. Sometimes I make more money...on the more simple cakes...and sometimes I make less...on the cakes that are more intricate or that I have some sort of problem making. I do have a sliding scale that goes from "simple" cake prices to adding in sugar flowers and figures so I'm usually doing pretty good.

Cat

indydebi Posted 26 Jun 2010 , 6:45am
post #11 of 11

My husband figured out that my time was billable at $100/hour.

I didn't EVER do an invoice showing a labor cost. It's none of their business what I, the owner, profits or makes. It was just a number that I kept in my mind-file when computing pricing updates.

As a business owner, I would NEVER work for a measly $10-20/hour!!! If that's all you think your time is worth, then get a job at Macy's. The work is easier and you get an employee discount.

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