My husband keeps saying there's no way we could open a shop because we just don't make any money with cakes and yet he thinks it's crazy for me to charge more than 30 or 40 dollars for a sheet cake. I mean, my cost alone is over $20, not counting my time. I have set my sculpted cakes at $250 base price, which I feel is still sort of low. My husband is saying that the only way we'll turn a profit is to not offer sheet cakes. What do you guys think? Is it ok to charge more for the sheet cakes or should I just stop doing them altogether? I love doing cakes and I just quit my grocery store job in the hopes of building my own business but now my hubby is getting cold feet and we haven't even gotten past the pricing issue.
I'm only a hobby baker, but I do have some business experience as my husband and I own our own business. A business only survives if it is profitable.
S,o if you set the cost of your sheet cakes at a price that is profitable then you will receive the orders the market will bear. If the market can not bear your price then you are better off not losing $$$ on your cakes. You might be surprised at what folks will pay for your creations.
I don't think $250 base price for sculpted is bad, I start mine at $200 but they go up from there.
But my base price (buttercream iced with a ribbon, for a wedding) is $3/serving and that's also where my sheet cakes start at. Not many order sheet cakes haha. Anyway, because if they order a sheet cake, they may as well make it into a simple tiered cake because its the same price, and it looks better. So sometimes people will start out wanting a sheet cake and then I talk them into a tiered cake. Because decorating a sheet and decorating a small two tiered cake is about the same amount of work....but the customer will be more inclined to pay for the tiers than the sheet, esp if they find out the sheet costs the same anyway.
Don't stop doing sheetcakes. Sometimes people just need a sheet cake. Make sure to price them comptritively. For example, I tell my customers that for a "non-tiered celebration cake" is is $2.50/serving you can have that round, square, oval, rectangle...etc. I find people will be excited to get something different that's not the Taj Mahal...but maybe later down the road they will need a Taj Mahal Does that make sense? I think I might have confused myself...but what I am trying to say is price competitively.
First, he can't compare your productivity at home wiht productivity in a shop. Here's an over-simplistic example:
At home, I could bake one 12x18 at one time.
At my shop, with double convection ovens, I could bake 8 or 10 of the 12x18's at one time.
At home, I'd make 1 batch of icing (2lb bag of p.sugar) at a time, taking 5 to 10 minutes per batch. To make 25-30 batches of icing to ice those 10 sheets cakes would take me 300 minutes or 5 hours.
In a shop, I can make 8 batches of icing in the big mixer, so to make 30 batches, it would take me under 1 hour.
Let's assume 15 minutes to ice and border each sheet cake (not decorate .... just "slap some icing on 'em!". Time 10 = 150 minutes = 1.5 hours.
I've got 3 hours invested in 10 sheet cakes that I'm going to sell for $75 each = $750 divided by 3 hours = $250/hour.
At home, I've got roughtly 18 hours invested = approx $40/hour
(figures are gross figures and do not take into account COGS.)
And you may tell him that I said if he doesn't understand cake world and cake pricing, then he gets no vote in how much is "too much" for a sheet cake! He needs to start thinking like a business owner and STOP thinking like a consumer. ALL consumers think ALL prices are too high, so "STOP IT!"
As someone who opened my business almost a year ago, I know exactly what you are going through. I think you are dealing with several different issues.
First, why does your husband think it's crazy to charge what you should for sheet cakes? Determine what your cost is for the sheet cake, including time, and go over that with your husband. If you lowball your cost, no you won't make any money so you have to charge what they are worth.
Do you have to start with a storefront? We are renting a commercial kitchen and it is working great for us. I still work part-time at my dayjob (hubby is retired) to keep bringing in money when the business is slow. I want a storefront badly, but I've done the business plan, I'll build my business first.
I don't really want to do sheet cakes either, but they are great filler cakes and don't take a lot of time. I try to make them special but my goal is to eventually have enough business to not make them anymore. My husband didn't understand my desire not to make sheet cakes but he is with me now. In fact, we had no cakes for Saturday of this week ( I was so thankful for the break) and someone called for a 1/4 sheet. He just told them we were booked because it wasn't worth the effort for such a small cake.
I don't know if I really answered your questions because no one can tell you what to do, you have to decide for yourself but I hope I've given you something else to think about.
I love those hourly numbers, Indy....precisely why we home bakers can NOT compete with bakeries!
I don't not do sheet cakes because they are not "good enough" for me...but because it takes me just as long to do a nice sheetcake as it does to make a nice small two tiered buttercream cake. For the most part, anyway...not a big enough difference to offer the sheetcake dirt cheap just because its a sheetcake.
It's not really that he doesn't know how it works; he helps me do the cakes (bakes and makes icing) so he knows all the work that goes into it. It's just that he thinks it's not worth our time to offer the sheet cakes because he doesn't think anyone would buy them priced that high. I like the idea of pricing them the same as a tiered cakes. I'll have to talk to him about that. And I would LOVE to be able to make 10 cakes at a time. When we managed our flower shop that's how we made most of our profit. We made more money in bulk rather than on each individual arrangement. (Does that make sense?) As far as having a storefront, it's illegal in Georgia to operate from a home, even with a separate kitchen, and they just passed a law about renting kitchens so that's illegal now too. Pretty much the only way I can open for business is to have my own shop. If we can get past this pricing issue! Lol. Thanks for the advice ya'll.
Artsy...I'm up in Gwinnett and a 1/2 sheet cake is $30 (give or take) at Ingles/Kroger or Publix. And that is with the icky frosting that grinds your teeth down to numbs if you dare chew!!! Publix started offering fondant but they up charge an additional 15%.
I have quoted base price at $60 for 1/2 sheet cakes (I bake 2 thin layers and fill) since no one offers this in my neck of the woods. That is also what I stress to the client. None of the food chains will fill a sheet.
If you put them in your marketing material, on your website, etc... and no one orders them, what are you out? My guess is not a whole lot. If you leave them out and constantly have to answer questions about do you, how much, why, etc... or even worse- miss out on customers because they didnt see sheetcakes listed, what are you out?
Thanks guys! I guess for now we'll keep doing them but I definitely need to up my prices. I figured out all my cost for a half sheet, not counting time, and it's just under $30. That's just for simple decorations though, buttercream only. I sure wish I could hire someone to do all this for me and all I'd have to do is make cake! Lol. And JerseyGirl, I didn't know Publix offered fondant! I worked for Bi-Lo and we did filled cakes but that was a new thing they had just started offering before I left.
Hope you and your hubby come in agreement, it seems to work best that way/ lol. But, i do thank you for sharing your journey..hope you keep sharing how it progresses for you and your business. Speaking for those who would like to take the plunge as well, sometimes i only see cake...not everything that goes with it. And I too, have owned a business before, but this is my passion.
You need to open a bakery because I've sent a link to your webpage to several family members in the LaFayette area! There aren't a lot of cake decorators in the town and especially those who will do specialty cakes....at least that's the complaint I hear all the time from family members. Oh, and by the way, I LOVE the 2-d sheetcakes that you do. They are so original! If you don't mind sharing your technique, that would be a great tutorial for CC. You do beautiful work!