To Frequent Forum Ccrs Eek And Question In Last Paragraph

Decorating By mookamoo Updated 14 Aug 2010 , 6:19am by mookamoo

mookamoo Posted 21 Jul 2010 , 11:42pm
post #1 of 15

(Preface to fellow CC's) Ok I will try to make this short as possible...This could be a couple of threads but I feel like I am posting more than my share and I don't want people to see my post and say..."not her again". I have grown to love this website very much in the short time that I have been a part of it. I am so thankful for how nice and willing everyone is to help and share. I hope to learn enough to be answering threads to offer help instead of always asking everyone for help. I feel like I am talking/learning more than I am offering icon_redface.gif and I hope for that to change soon. Before the last couple of weeks I was soaking up info by pouring through these threads. I have learned so much from just reading other people's posts.

(Optional to read just an FYI of My story)(I just put this on here in case anyone wants to know) My fiancee's family has a couple of local restaurants where I live so I have access to their kitchen a couple of days a week. I am trying to do this legally...Really because of what I have read on here. I am working on how do get a kitchen at a separate area in my house.
I went to an attorney that I know personally (family friend) who is an attorney for the health department. I asked him how to be a legal baker (at this point I did not know you could be legal here by having a separate kitchen from your home kitchen exc..... He said to just go ahead and do it and if there was a complaint it would go to him anyway... Ok I think he was trying to be nice...he is a nice man. That just feels wrong in my gut and makes me nervous. So I want to do it right anyway, and I am trying to figure out business plan, breaking even icon_eek.gif and I AM HAVING THE MOST DIFFICULT TIME PRICING MY CAKES!
Question it seems to be a sensitive subject...I have looked at and called bakeries all around the area. i get size charts and sizes but not pricing. NO ONE HERE HAS there prices online.
the main bakery here i called yesterday
an 8' cake for 16 people is 60 + $25 for fondant covered in fondant is $85
10' cake 83.95 and covered in fondant is 113.95
So thats the local prices that I got. So I dont know where to go from there?/? I am trying to make a price chart and price these cakes not too much and not too little... does any one have any tips...I hate pricing...I is so hard for me...

14 replies
lardbutt Posted 21 Jul 2010 , 11:53pm
post #2 of 15

The very first thing you need to know is how much (exactly) it costs you to make a cake. You have to think about everything from eggs, butter and paper towels, dowel rods and saran wrap!

BTW, It's my understanding the health inspector in my area has told home bakers to just lay low and not advertise. But I get mad, because I see this van around my town ALL THE TIME , who advertises her illegal cake business on her windows! It's just not worth the risk in my opinion. I do wish it wasn't so hard to bake from home in my state!

mookamoo Posted 21 Jul 2010 , 11:56pm
post #3 of 15

no kidding its so should not be so hard for small business to open icon_sad.gif

malene541 Posted 21 Jul 2010 , 11:57pm
post #4 of 15

Well, first off, I love that cake!! Very beautiful.
Second, I live in the middle of nowhere Oregon and am licensed to make cakes from home. I would charge $250-$300 for this.
The end! icon_wink.gif

Melvira Posted 22 Jul 2010 , 1:01am
post #5 of 15

First of all, I'm glad you're here!! I'm sure you'll be the one answering questions as quick as a wink! We love people with your kind of giving attitude!

Second, kudos to you for trying to keep it all above board and legal. That speaks well of you. Not to say that someone who doesn't is a bad person, but it's good that you are doing what you're doing!

Third, that cake is gorgeous. Point blank. Please make me one! Hahaha.

Ok, I can quit numbering now, right? *snork* I cannot really give you any pricing advice because I have no idea where you are. All I know is that I'm in Iowa, and an 8" cake doesn't cost $85. (I WISH I could charge that! I'd be so happy!!) I know, NOT helpful to you! But if there is anything I CAN help you with, I'm happy to. thumbs_up.gif

mookamoo Posted 22 Jul 2010 , 1:51am
post #6 of 15

thanks for your reply...thats what is SOOO confusing...I am in Mobile, Al. WE are quite in the middle of oil spill fiancee's family's restaurant are seafood restaurants...on the water here...they are still doing well (thank god) but they have more than just seafood.
Anyway locals are hurting here. And that is the only bakery that I know is legal. (Not saying that is the only one..some of the home ones may be) There is one other one but there business is less custom. They don't really like to customize cakes...not a bad thing...that works for them with all the baked goods they sell + they have the best location in the city. icon_smile.gif
The other bakerys are not nearly that much, but I am not sure if they are legal are not.
What I have read says not to underprice the local bakeries too much. But everyones prices seem to be all over the place icon_eek.gif
Here is another example of a home bakery:..and there cakes are beautiful...but so cheap???

Traditional butter cream icing with fondant or buttercream decorations. Also comes in three layers.
1 Tier -  $30  8 inch round feeds 8-14  SMALL 1 Tier -  $20  6 inch feeds 6-10
2 Tier -  $55  6 & 8 inch feeds 18-24  SMALL 2 Tier -  $35  4 & 6 inch
3 Tier -  $80  4, 6 & 8 inch feeds 26-34

quilting2011 Posted 22 Jul 2010 , 2:19am
post #7 of 15

Your cake in new york would be work over $250. Your cake is gorgeous. I love the color of the cake.

cakeprof Posted 22 Jul 2010 , 2:43am
post #8 of 15

Honestly you seem to be going about this the wrong way. You seem to want to set a price in comparison to what others are doing and are worrying about undercutting them too much. But how do you know you would undercut them if you do not know how much it costs you to produce a cake?

So what is the cost of your ingredients? Are you baking from scratch, a mix, or doctoring mixes (scratch tending to be more expensive)?

Do you have any overhead costs that have to be calculated in terms of baking a cake? Are you going to have to contribute to utilities of the businesses you are using (even if they are family)?

In addition what is your level of skill? What techniques are you able to do? Can you produce sharp corners on your tiers? Are your cakes perfectly smooth? Can you pipe scroll work freehand? This all relates to how you should make an hour--which is also factored into the cost of your cake--these being your labor costs.

What options do you plan to offer? Are you only doing basic flavors? What kind of fillings do you plan to offer? Are you planning to offer bc and fondant?

I am sure there are some things I am leaving out, but until you ascertain your costs you really cannot determine a viable price point. What if you decide well not to undercut I will sell an 8 in round for $30 but your costs do not make that a viable price for you?

Also keep in mind that within any given community there are varied levels of income. Some bakeries may have lower prices because they are targeting people who are unable to afford the higher prices of higher end bakeries. So for instance I have done some looking around in my area and I know that within 30 miles there are two professional bakeries. One offers cakes that start at $5 per serving, the other starts at $2.00 per serving. The only other bakeries in this area are grocery store bakeries which folks here will tell you will not be your competition.

Is one undercutting the other? Not likely as there are factors that influence the price per serving. Looking at the quality of work, one is far superior to the other (I would not pay $5.00 per serving for the quality of the work that is done at the other). One is a legal home bakery (less overhead), the other has a store front with employees. In addition they are marketing to different income levels. If the store front (which is ther higher end of the two) let the home bakery set their price point they would be quickly out of business. Thus while they market to the same area they are not competitors and thus their prices are not set by what the other is doing.

In short, you cannot base your pricing decisions based solely on what others in the area are doing. It can help you determine if you will be competitive but they cannot set your price (at least without knowing what your costs will be). Once you figure that out including how much you should be compensated for your work, you will be in a better position to determine how much you should charge.

mookamoo Posted 22 Jul 2010 , 2:52am
post #9 of 15

oh i am sorry...its not my cake i did not realize it sounded like that...a bride wants this cake and wants to know what It would cost and I am trying to figure it out...sorry for the confusion!

Ruth0209 Posted 22 Jul 2010 , 3:05am
post #10 of 15

It looks like some of the difference in pricing is because some cakes are a single layer and some are a double layer. A 2" single layer 8" may serve 8-14 (although I think it's more like 10-12); a 4" high double layer 8" cake serves 20-24.

Most people charge by the serving and not by the cake. I'm in Idaho and I charge $3.25/serving for buttercream; $4.00/serving for fondant; $4.50 for carved cakes. That's the going rate for custom cakes around here. You have to calculate your costs, decide what you're willing to work for, and determine what the market will bear. Then you'll know what to charge.

Good luck!

Melvira Posted 22 Jul 2010 , 3:07am
post #11 of 15

cakeprof just gave you a mouthful of fantastic advice and this is where you MUST start. Like it was noted, you can't sell a cake for $1 a serving if it costs you $.90 a serving to make, because that's like donating your time.

Best of luck to you, I hope that you are able to work it all out quickly and as painlessly as possible!!

mookamoo Posted 13 Aug 2010 , 6:03am
post #12 of 15

Im legal!!!!! just had to let out the excitement.! I am so excited. It should be completely final in paper in the next f business days. the health dept lady hav=s to come look, and am going in with a lady who already has a business..she makes candy. Never uses her oven, only the stove. we will be working on our set up organization in the store this weekend. I am so happy to be legal.. It feels so so so good!!!!!!!

mookamoo Posted 13 Aug 2010 , 6:05am
post #13 of 15

Im legal!!!!! just had to let out the excitement.! I am so excited. It should be completely final in paper in the next f business days. the health dept lady hav=s to come look, and am going in with a lady who already has a business..she makes candy. Never uses her oven, only the stove. we will be working on our set up organization in the store this weekend. I am so happy to be legal.. It feels so so so good!!!!!!!

Melvira Posted 13 Aug 2010 , 2:32pm
post #14 of 15

You go girl!!! I am SO happy for you!!! party.gif

mookamoo Posted 14 Aug 2010 , 6:19am
post #15 of 15

thank you1 such a relief!

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