Starting New Business...need Some Advice On Pricing

Decorating By lovenintheoven Updated 10 Jul 2010 , 12:23am by tavyheather

lovenintheoven Posted 9 Jul 2010 , 2:11am
post #1 of 22

Hello All..I took the plunge just today and going into business. I need some advice on pricing. Having just sent out mass emails today of the "ovens" officially being on "after much prodding from MANY for years now", I have already received 4 orders! Literally in 15 minutes. I have been baking for school events, personel events, and everything else in between for 10 years now, so I do somewhat have a "fan" base icon_smile.gif. I am in a very tony town of Southern California, where the local cupcake shop charges almost $5.00 for a cupcake, and the popular bakeries charge 115.00 for a 1/4 sheet cake, 75.00 for a 10" cake, which I have already quoted to 2 people, and plan on using this line of pricing. That is w/o any custom decorations. How is this in line for any of you home business bakers? I plan on charging 6.00 per person to start with event cakes. Thoughts? Thanks!

21 replies
KoryAK Posted 9 Jul 2010 , 3:33am
post #2 of 22

OOoooh lordy, prepared to get skewered for not having this all figured out already before turning on the ovens! lol

How did you price the 4 orders you already got?

Mainly you have to look at the local pricing and your skill level compared to that. If you are still perfecting things, maybe a bit lower. If you are a master, then the sky is the limit. Of course, as a BASE line you need to be covering all your overhead plus a decent profit.

lilmissbakesalot Posted 9 Jul 2010 , 3:55am
post #3 of 22

You have to think too that in California... home bakeries are not allowed by the state. icon_sad.gif

tavyheather Posted 9 Jul 2010 , 4:17am
post #4 of 22

a very tony town? u mean tiny? where? I'm in SD...

and PP was correct...u have to do it in a certified kitchen, get licensed, permitted, etc. I'm going through the process right now.

And the pricing thing is something to figure out long before taking orders..I'm hiring a financial adviser to figure out pricing...too little and you're stuck in those prices for a while when all the referral-based clients start ordering...You need to do a lot of homework!!!

I wish u the best of luck but it sounds like your jumping into this a little hastily! I've been researching CC for 6 months now for business/pricing advice, u should start! There are TONS of threads with pricing Q's

LoveMeSomeCake615 Posted 9 Jul 2010 , 4:17am
post #5 of 22

When you say you "took the plunge", what do you mean exactly? Are you registered for taxes? Did you register as an LLC or other type of business? Do you have your business license? Is the kitchen you are working out of inspected? Do you have insurance? There's a LOT more to being in business than just saying "I'm open for business." Not trying to discourage you, just wondered of you had thought of all this.

step0nmi Posted 9 Jul 2010 , 4:19am
post #6 of 22
Quote:
Originally Posted by tavyheather

a very tony town? u mean tiny? where? I'm in SD...




I use to live there icon_lol.gif I was just waiting...waiting...waiting.... icon_lol.gif

tavyheather Posted 9 Jul 2010 , 4:21am
post #7 of 22
Quote:
Originally Posted by step0nmi

Quote:
Originally Posted by tavyheather

a very tony town? u mean tiny? where? I'm in SD...




I use to live there icon_lol.gif I was just waiting...waiting...waiting.... icon_lol.gif




LOL, for what, someone to call her out? Or to be gullible enough to assume tony is an actual adjective to describe a town........LOL

step0nmi Posted 9 Jul 2010 , 4:25am
post #8 of 22
Quote:
Originally Posted by tavyheather

Quote:
Originally Posted by step0nmi

Quote:
Originally Posted by tavyheather

a very tony town? u mean tiny? where? I'm in SD...




I use to live there icon_lol.gif I was just waiting...waiting...waiting.... icon_lol.gif



LOL, for what, someone to call her out? Or to be gullible enough to assume tony is an actual adjective to describe a town........LOL




THAT I did not notice icon_lol.gificon_lol.gificon_lol.gif

but waiting for this thread to get crazy...and it already did icon_rolleyes.gif

JanH Posted 9 Jul 2010 , 4:25am
post #9 of 22

..moving to the Cake Decorating forum. icon_smile.gif

lovenintheoven Posted 9 Jul 2010 , 4:47am
post #10 of 22
Quote:
Originally Posted by tavyheather

Quote:
Originally Posted by step0nmi

Quote:
Originally Posted by tavyheather

a very tony town? u mean tiny? where? I'm in SD...




I use to live there icon_lol.gif I was just waiting...waiting...waiting.... icon_lol.gif



LOL, for what, someone to call her out? Or to be gullible enough to assume tony is an actual adjective to describe a town........LOL




From answers.com:
also
adj. Informal, -i·er, -i·est.
Marked by an elegant or exclusive manner or quality: a tony country club.

From Miriam Webster:
Main Entry: tony
Variant(s): also ton·ey \\ˈtô-nç\\
Function: adjective
Inflected Form(s): ton·i·er; ton·i·est
Date: 1877
: marked by an aristocratic or high-toned manner or style <tony private schools

Thanks so much for the help..hope you enjoyed your English lesson for the day.

lilmissbakesalot Posted 9 Jul 2010 , 4:55am
post #11 of 22

Oh snap!! LOL

I live in a very un-tony town, and I start at $5/serving, so you coudl totaly get away with starting at $6/serving. But do check into the legalities in yoru state. From what I hear Cali is strict on the no home baking thing.

sweetiesbykim Posted 9 Jul 2010 , 5:00am
post #12 of 22

So sorry for the immaturity tonight, but there are plenty of us who really want to contribute and help out, so don't let this discourage you from asking future questions. icon_redface.gif

I've been starting my own business now too, but for some time. What have you gotten done or changed from what you had been doing as a hobbyist? I HATE pricing!! I do know each area, even within the same city can be very different in their prices, and menu selections. I had to break down the smallest amounts of everything I use for a cake, then see how much I need to break even. After that, I compare to locals to see if I'm comparable. In my area, about every bake shop does cheaply made cakes, without any gourmet flavors or homemade additions such as scratch pastry cream, Meringue buttercreams, scratch preserves, etc. I do have the upper price point because everything I do is from scratch, using really great ingredients. It also makes me feel good to know I have a reason to back up my higher prices. HTH icon_smile.gif

lovenintheoven Posted 9 Jul 2010 , 5:09am
post #13 of 22
Quote:
Originally Posted by KoryAK

OOoooh lordy, prepared to get skewered for not having this all figured out already before turning on the ovens! lol

How did you price the 4 orders you already got?

Mainly you have to look at the local pricing and your skill level compared to that. If you are still perfecting things, maybe a bit lower. If you are a master, then the sky is the limit. Of course, as a BASE line you need to be covering all your overhead plus a decent profit.




I have quoted 2 as above, 115.00 for a 1/4 sheet and 75.00 for a 10", as both are "basic" in design. The other 2 I will price after we meet and I sketch out their ideas. I am using a price chart of a local fave bakery. I am noooo master, but no novice either.icon_smile.gif. Just was wondering if everyone thought the above prices sound fair. Thanks...and yes, this was a leap of faith. Thank goodness I have a husband who is doing all the paperwork and legalities for me (so not my thing!)

lovenintheoven Posted 9 Jul 2010 , 5:13am
post #14 of 22
Quote:
Originally Posted by sweetiesbykim

So sorry for the immaturity tonight, but there are plenty of us who really want to contribute and help out, so don't let this discourage you from asking future questions. icon_redface.gif

I've been starting my own business now too, but for some time. What have you gotten done or changed from what you had been doing as a hobbyist? I HATE pricing!! I do know each area, even within the same city can be very different in their prices, and menu selections. I had to break down the smallest amounts of everything I use for a cake, then see how much I need to break even. After that, I compare to locals to see if I'm comparable. In my area, about every bake shop does cheaply made cakes, without any gourmet flavors or homemade additions such as scratch pastry cream, Meringue buttercreams, scratch preserves, etc. I do have the upper price point because everything I do is from scratch, using really great ingredients. It also makes me feel good to know I have a reason to back up my higher prices. HTH icon_smile.gif




Thanks so much! And no, I don't discourage easily...think I had my say icon_biggrin.gif

lovenintheoven Posted 9 Jul 2010 , 5:33am
post #15 of 22
Quote:
Originally Posted by CakeMasterSRC

When you say you "took the plunge", what do you mean exactly? Are you registered for taxes? Did you register as an LLC or other type of business? Do you have your business license? Is the kitchen you are working out of inspected? Do you have insurance? There's a LOT more to being in business than just saying "I'm open for business." Not trying to discourage you, just wondered of you had thought of all this.




yes to amost all, the rest my husband is handling (YAY! i am horrible at all of that!)...and a good friend who is a caterer is sharing her space with me.

lilmissbakesalot Posted 9 Jul 2010 , 5:43am
post #16 of 22

Well it looks like you have most of your ducks all lined up and that is great. How awesome that you have a caterer friend who is willing to share space with you too! icon_smile.gif

I'd say your prices sound pretty good... I'd ask how basic is basic, because a 10" cake feeds 35 by my chart and that would be just over $2/serving priced at $75 and a 1/4 sheet (a 9x13??.. 1/4 sheet can mean different things to different people) feeds 25 so that would be almost $5/serving. Just be sure that your recipes don't make that $2/serving unprofitable for you. Do you know what it costs you on average per serving to make your cakes? That would be a big piece to make sure you have. That and having a serving chart that you can refer to so all orders are the same and quoting prices is easy and streamlined.

icon_smile.gif

tesso Posted 9 Jul 2010 , 5:48am
post #17 of 22

i have two words for you. CAKE BOSS. some of the ladies on here swear by it. It looks extremely helpful. thumbs_up.gif

okay..just three more words.. BEST OF LUCK icon_biggrin.gif

seriously, congrats on getting your business started and lucky you, having hubby do all the paper grunt work !! icon_wink.gif

lovenintheoven Posted 9 Jul 2010 , 5:35pm
post #18 of 22
Quote:
Originally Posted by lilmissbakesalot

Well it looks like you have most of your ducks all lined up and that is great. How awesome that you have a caterer friend who is willing to share space with you too! icon_smile.gif

I'd say your prices sound pretty good... I'd ask how basic is basic, because a 10" cake feeds 35 by my chart and that would be just over $2/serving priced at $75 and a 1/4 sheet (a 9x13??.. 1/4 sheet can mean different things to different people) feeds 25 so that would be almost $5/serving. Just be sure that your recipes don't make that $2/serving unprofitable for you. Do you know what it costs you on average per serving to make your cakes? That would be a big piece to make sure you have. That and having a serving chart that you can refer to so all orders are the same and quoting prices is easy and streamlined.

icon_smile.gif



Def got lucky with the caterer friend! And the helpful hubby. Anyway.."basic" is they left it up to me to just "make pretty", nothing fancy at all. We looked at some pics online. And the 10" cake is only for a dozen people, but I said 10" myself (cause the difference between that or an 8 or 9 to make is not that much for me, and I know her kids are cake FIENDS!) and quoted that price straight from a popular local bakery's website. I definitely see what you're saying though. Much to iron out and think about. I did tell them NOT to requote these prices to anyone as of yet, since I'm working out the details...and they are people I have known for a long time. Thanks for your help and input!

lilmissbakesalot Posted 9 Jul 2010 , 10:26pm
post #19 of 22

If it's a single layer 10" dessert cake then yeah... I could see it serving 12, but not a double layer. Have you ever seen a wedge cut from a 10" cake? It's MASSIVE... LOL.

I remember ironing it all out myself... such a process. I wish you great success!! icon_smile.gif

JulieMN Posted 9 Jul 2010 , 10:51pm
post #20 of 22

Congratulations on this new chapter. Glad that you have a friend who will share the kitchen with you and a husband who is great at the paperwork stuff.....those are amazing gifts!

tavyheather Posted 10 Jul 2010 , 12:23am
post #21 of 22

Oh I was most definitely NOT being immature...this Q is incredibly redundant...and I really truly believe you will find out more answers in the previous posts than just asking a general and broad Q such as your aforementioned one.

As for "tony"...I am seriously gullible and truly believed that it was a word..and I was correct! yay! And I call myself good with my vocabulary! ha!

tavyheather Posted 10 Jul 2010 , 12:23am
post #22 of 22

NOW...you never answered! I really want to know where this "tony town is"! I grew up in So Cal and am dying to know if you are close icon_smile.gif

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