Am I Making A Smart Business Decision In Declining This?

Decorating By Kandykin Updated 23 Aug 2010 , 3:01am by kansaslaura

Kandykin Posted 17 Aug 2010 , 8:48pm
post #1 of 28

I was recently asked if I could provide cakes for office birthdays (30 per yr) in a firm. They are going to be 1/2 sheet cakes with no filling for $45.00. Not worked out the delivery yet - with delivery would be ridiculous I think.
I'm so tempted to accept just because "it'll keep my name out there". At the same time I don't bake on a regular basis, so it doesn't make sense to me to spend a couple of days on something that'll just get me $45.00 and no creativity to show at the end of it.( I don't want people getting used to a detailed cake from me for that price or I'll get stuck with cheaper prices.) I was told it doesn't have to be elaborate, they just want a single layer sheet cake(1/2 sheet size). Just when I'm leaning towards accepting it, I swear I hear Indidebi saying " heck, I wont even turn my oven on for that price!"

So...what do y'all think? I need some sage advice from cc. I've been worrying about this for a while now thinking I will figure it out myself. Obviously I need help. icon_confused.gif

27 replies
ChilliPepper Posted 17 Aug 2010 , 8:51pm
post #2 of 28

If you are hesitating and having to think about it then you already know you do not want to do this.

Decline! x

idgalpal Posted 17 Aug 2010 , 8:53pm
post #3 of 28

I agree, the Indydebi voice is giving you good advice!

GL79 Posted 17 Aug 2010 , 9:01pm
post #4 of 28

I guess it depends, is the business close to you?
If I was asked to do those cakes, I would accept it. Wal-mart 1/4 cakes run around $17 in my area, layered. I think you can do it for way less since they asked single layered, and I don't think it will take days to make it.
But if the location is far, then don't accept it.

live2create Posted 17 Aug 2010 , 9:06pm
post #5 of 28

So you would for sure turn down $1350.00 ? I think you have to take into consideration the area you live, your business and just getting your name out there. So they don't have to be fancy. OK You don't have to spend a couple of days on any sheet cake, bake one night tatefully decorate the next. Perhaps you are busy with your cakes and the $$ doesn't matter I'm not sure. 30 in a yrs time really isn't that many to me anyways. I would do it for sure knowing I am making $1350. in the end. If they want more detail tell them up front it will cost more and let them make that choice, and if you get extra orders off of a cake istn't that worth it. Just my thoughts I am sure some think it is not worth your time but the area I live in $45. for 1/2 a sheet is good. Best of luck with your choice.

leah_s Posted 17 Aug 2010 , 9:10pm
post #6 of 28

IDK, do you want to be the "go-to" person for $45 1/2 sheet cakes? Is that what you meant by "keeping your name out there"?

Suzycakes Posted 17 Aug 2010 , 9:16pm
post #7 of 28

I totally agree with live2create! I would jump on that order in a heartbeat. It all comes down to where you live and what your customers will pay. I have seen decorators on CC say they charge the same price for sheetcakes as they do wedding cake -- there is no way I would ever get an order for a sheetcake if I charged that here in SE Missouri!

Of course - lots of bakers refuse to make a sheetcake to start with -- but then again - here in SE Missouri that is the norm. I have managed to sell more layer cakes this year than in any of the other 3 years I have been doing this. But most customers swear they don't know how to cut any style of cake other than a sheetcake - and trust me by the time they quit asking me questions on how to cut the dang cake - I believe them! These are smart, intelligent people -- and most of them can cook like nobody's business -- but they do not do homemade cake/desserts at all!

For $1,350.00 - I'd be turning the oven on right now . . . .


WykdGud Posted 17 Aug 2010 , 9:21pm
post #8 of 28

I love the big, elaborate wedding cake orders... but for most bakeries, it's the boring sheetcakes that keep their doors open. I would definitely do them, because your name will be the one they think of when they need something bigger, and you will have a built in clientele with the employees who have tasted your cakes.

jason_kraft Posted 17 Aug 2010 , 9:26pm
post #9 of 28

If you have significant fixed costs (such as annual licensing fees, insurance, health dept fees) I would take the order. If not, I would pass.

ChRiStY_71 Posted 17 Aug 2010 , 9:29pm
post #10 of 28

I wouldn't do a 1/2 sheet for that price. thumbsdown.gif Decline!

Kandykin Posted 17 Aug 2010 , 9:35pm
post #11 of 28

If $45 included delivery (dont know yet), I will have a 20 min drive plus the hassle of parking in the city.

live2create, its the $1350 that is tempting and the fact that it's a set of solid orders, but I still have to earn it one cake at a time. And I wont have that rush of decorating the cake the way I want to. I don't mean to sound a snob, but I want to market my cakes to niche group, and I worry that I'll sell myself short doing grocery store sheet cakes. While Indy's in my head I also hear people say(I hear too many voices in my head - is that a problem?.......... icon_eek.gificon_biggrin.gif ) that sheet cakes are the bread and butter of this business and not to turn my nose up at them.......... What to do, what to do?

And Leah, I hear you - while I want them to remember me, they are not getting to taste my best flavors because there's no filling in them. I don't think I want them to contact me for sheet cakes when they have a party in their homes!

jason_kraft Posted 17 Aug 2010 , 9:44pm
post #12 of 28
Originally Posted by Kandykin

If $45 included delivery (dont know yet), I will have a 20 min drive plus the hassle of parking in the city.

If the $45 includes delivery that's definitely not worth it.


I don't think I want them to contact me for sheet cakes when they have a party in their homes!

The market for people who want something better than a grocery store cake for things like birthday parties at home is surprisingly large, especially in affluent areas. This market is severely under-served, simply offering delivery (for an extra charge of course) would be a significant value-add.

It all comes down to how much you would have to pay yearly if you didn't make any cakes...more sales = more orders to spread overhead cost = greater profit for you.


they are not getting to taste my best flavors because there's no filling in them.

Perhaps you could include the option to upgrade the cake for an extra fee, if the recipient really enjoys a specific flavor.

multilayered Posted 17 Aug 2010 , 9:59pm
post #13 of 28

A friend gave me a good bit of advice when I first started that I think may apply here.....

When I made my first batch of business cards I had the tag line "custom designed cakes at competitive prices" well my friend ( who works in marketing) insisted that I get rid of that line asking

"Do you want to be Tiffany or do you want to be Walmart?"

I opted for Tiffany and dropped the line... you need to decide what you want to be known for...making plain sheet cakes will not showcase your talents and may lead to just more $45 cakes. If you are content with that go for it, if you are not then you may want to thank them for the offer but decline gracefullyicon_smile.gif Good Luck

live2create Posted 17 Aug 2010 , 10:28pm
post #14 of 28

It sounds like you need to clarify details. Think out of the box #1 if your dropping off a cake just do a little cake of your specialty cake with filling as an extra treat for all to enjoy. #2 have a flyer printed up of what you can do with pictures of cakes you have done and prices options you offer.
After reading your post it sounds like you may not have all 30 it may be less. I do agree 20 miles is a ways to deliver a sheet cake. I guess you can talk yourself into it or out of it. #3 Also I would never limit myself to a "Niche Group" a paying customer is a paying customer. Sometimes the ones who look like they do not have the $$ to spend have it and your Niche Group may be the biggert pains in the A-- you may ever have. Like I said to me a paying customer is a paying customer not matter what group they come from. #4 I also decorate the cake the way my customers want them decorated not the way I want to decorate, it is their event not mine. I will how ever offer suggestions and I build on their thoughts and together we have came up with some great ideas. And if you do it right they will come to you for ideas then you can express your creativity.
Best of luck

costumeczar Posted 18 Aug 2010 , 2:53am
post #15 of 28

For $45 they would be able to get the bargain-basement one-layer 7X11 cake with no decorations on it from me. If I did those, which I won't because it's so not worth it. For a half-sheet that would serve 48 it would be a heck of a lot more (especially if they expected it to be iced and decorated icon_rolleyes.gif )

The_Caketress Posted 18 Aug 2010 , 3:04am
post #16 of 28

Only do what you love! It's not just a business but a career so only do what makes you happy. Trust me , it's totally worth it.

cakesdivine Posted 18 Aug 2010 , 3:06am
post #17 of 28
Originally Posted by Kandykin

I also hear people say(I hear too many voices in my head - is that a problem?.......... icon_eek.gificon_biggrin.gif ) that sheet cakes are the bread and butter of this business and not to turn my nose up at them.......... What to do, what to do?

Sheet cakes can only be your bread & butter if you get enough orders of them each week to consider them so. I do fewer small cakes than I do large orders. I turn many of them away basically because my half sheets start at $65 for a basic cake, it goes up if a kit or custom design. My quarter sheets are $45. And most in my rural area would rather spend the gas money and pick up a Wally world cake not realizing the amount of money they spend in gas would be equal to the difference of the yuck cake they are purchasing than getting a great quality cake from me. And this area is notorius for waiting until the last minute to order so I can't squeeze them in my limited schedule. I had 4 small cake orders that I had to decline this week because they called yesterday for Saturday cakes. I will be out of town this weekend and I only have Thursday & Friday to bake, plus one person wanted a kit cake that I didn't have the kit for and they weren't willing to pay the rush fee to get it here in time.
Also, Never let a corporate company tell you what your prices are going to be. 30 cakes at $45 may seem like a large amount of money but once you factor in your actual costs you might realize your actual profit is not enough to warrant the aggravation of 30 deliveries and parking fees.

And are you 100% sure they are going to order all 30 cakes? I fell into this trap once low priced cakes that I had to cut and individually package for them to resell in their cafeteria. I had to fight to get my money, and I did 20 8" rounds each week. It got to a point that I finally cut them off because they weren't getting payment to me. I was going 60 days with no pay. I always got the run around.

indydebi Posted 18 Aug 2010 , 4:44am
post #18 of 28

my understanding is that sheet cakes 'dont' keep the doors open' but are loss leaders. Have also heard grocery stores buy frozen sheets, already iced for something like 50 cents.

I had a contract for monthly birthday cakes at a company. They paid my $75 price for a half sheet. I worked there, so delivery was included. Sometimes there were 2 cakes ($150). When they started questioning their budget, they called me (and I totally understand a company doing this.) I told them:

"My price includes delivery. walmart doesn't deliver. When you have a walmart cake, there's still leftovers at 2:00 pm. Since getting my cakes, the late shift people (those who came in at 10:00 a.m.) began complaining that there was no cake left. I understand you have to work with your budget, but if this is something for the employees, do you want to spend the money on a cake they will eat? Or spend the money on a cake you'll throw out at 2 o'clock?"

They continued to buy the cakes from me.

The Tiffany example is a good one. I also like reminding people that Orville Redenbacher was the first to put on his product the words "the most expensive" (popcorn). He also added the word "gourmet" to his popping corn package. The rest, as they say, is history.

kansaslaura Posted 18 Aug 2010 , 5:24am
post #19 of 28

Are they expecting delivery to be included in that price? Honestly when you total up what it's going to cost you for ingredients and gas, parking, etc. I'm not sure you'll do much more than break even.

Like others said, don't let them dictate what you'll accept for your work. If they're looking for a $45. cake they may need to look further. Honestly I think some companies feel like you should be delighted to scramble for the crumbs they toss out.

PS to add: I had to giggle at Indy's senario of the cake being leftover before she started baking the b'day cakes. Same thing here with the school--The janitors started gripin' cause there was no cake left at the end of the day when I started doing them.... Heck, most of the time it wasn't lasting past lunch!!

Kandykin Posted 18 Aug 2010 , 6:47am
post #20 of 28

Here's what I left out: this proposal was brought to me by a friend for his law firm (he was so excited that he got me some business, lol) He does understand that the price is lower than what I would normally charge, but the secretary who has so graciously organized this over the years has a tough time collecting money from everyone - but $45 seems doable(apparently they pitch in $4 a month for birthday cakes). I told him I won't make much money on it but might be a good idea to promote business - this was when I assumed he would take the cake in to work (he's also my neighbor and has tried several of my cakes).
He said the parking is crazy outside his office and he parks at least 5 blocks away and can't see him carrying a cake all that way in winter months, but will try to figure something out like have someone come down and pick the cake up before he parks. Part of me feels bad to turn him down because he is trying to be so accommodating. icon_sad.gif. He did say that if the price doesn't work for me, maybe I can just bake HIS birthday cake for office(of course he'll pay for it) and that I can get some exposure that way.

indydebi Posted 18 Aug 2010 , 7:10am
post #21 of 28

Unless this is a almost-going-broke firm, I had a couple of law firms as clients and they did spend some big money with me. One firm called for a couple of cakes ..... ended up spending over $300 for just 2 cakes that were barely decorated.

One was a german chocolate cake (4 layers of cake, 3 layers of filling, and I think it was a 12" round) and I can't remember the other. They ordered them on Wed and I delivered them on Friday. *NO* work at all, but it was over $300 in just 2 days for 2 cakes.

This same firm also gave me a recipe for some eclairs one of the partners loved (the bakery who made them had gone out of business). I made these eclairs just for them and since the original bakery was gone, I set my own price and they never batted an eye (these dang things took 75 eggs and two days to make!)

The point to my long drawn out story is that law firms are very good potential businesses to target. the only flag I see on this one is the sec'y has trouble collecting money from the employees, whereas my law firm paid for the cakes and eclairs from company funds.

costumeczar Posted 18 Aug 2010 , 11:51am
post #22 of 28

I'd tell your friend that it was really nice of him to try to arrange it, but at that price you can't include delivery. Mention that it would be like you volunteering for him to give someone legal advice but only paying him minimum wage, since that's what it would end up being for you.

If they have trouble collecting money for birthday cakes every month, I'd also suggest that maybe the office is full of cheapos who are going to balk at whatever price you place on cakes that they would potentially call you to do. If this IS just a way to get your name out you can try it for a couple of months, and track to see if any customers for larger orders are coming from the law firm or not. In my experience, you'd probably get more business from your friend just giving out your card at work and telling people that you do good cakes.

cutthecake Posted 18 Aug 2010 , 12:43pm
post #23 of 28
Originally Posted by costumeczar

it would be like you volunteering for him to give someone legal advice but only paying him minimum wage


mombabytiger Posted 18 Aug 2010 , 1:16pm
post #24 of 28

I do all the birthday cakes for a local dentist's office. (For their staff) I do a simple 9" round two layer - Just borders and an inscription for $30. From that, I've gotten three wedding cakes, one shower cake and several children's birthday cakes. So I'd say - go for it!

DDiva Posted 18 Aug 2010 , 1:21pm
post #25 of 28

You've received some excellent advice. Here's my two cents...
When I first started my business almost 13 years ago one of my customers was a local millionaire. His wife told me that (1) I wasn't charging enough and (2) to stop including delivery in the price...unless it really was included in the price. But the words that have lingered, and that I've passed on many times were 'you have to decide who you want your customer to be'. You mentioned that you had already discounted the price of the cakes (I don't discount--my price is already fair). Why are you considering free delivery? How about a contract guaranteeing at least 10 cakes; prepayment required. With the contract and prepayment, you will offer a reduced delivery rate of????. The issue of the staff not paying, etc., etc. is not your problem. As IndyDebi said, it's a law firm. Perhaps the suggestion that the firm pay for the cakes for their 30 employees birthdays should be made to your friend.

cookieelf Posted 18 Aug 2010 , 1:39pm
post #26 of 28

He said the parking is crazy outside his office and he parks at least 5 blocks away and can't see him carrying a cake all that way in winter months, but will try to figure something out like have someone come down and pick the cake up before he parks.

Then how does he expect you to get it there safely? icon_cool.gif That would be the deal breaker right there.
Regardless of the low price, regardless of it being a sheet cake, and etc. If he is your neighbor and he is going to be going to that office every day anyway, then he can haul it to work and in the building himself. If he as a grown man can't handle walking that far then he doesn't need the cakes that badly!

Kandykin Posted 22 Aug 2010 , 9:30pm
post #27 of 28

Thank you everyone for all your replies and advice and sorry my reply is so late.
I decided to turn it down because Delivery was expected and it didn't seem feasible for me to accept it. I don't have to sell an X number of cakes a month to meet my expenses and not accepting it lets me spend more time with my kids and family.

Thank you helping me decide! thumbs_up.gificon_smile.gifthumbs_up.gif

kansaslaura Posted 23 Aug 2010 , 3:01am
post #28 of 28

I'm glad you decided to let it go, it would have been something I would have grown to resent.

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