When No One Will Pay Your Prices And They Aren't That High

Business By cakenovice2010 Updated 20 Jan 2011 , 1:28am by rere0726

cakenovice2010 Posted 16 Jan 2011 , 7:25pm
post #1 of 27

I am trying to start up my own business. In order to operate here I have to rent a commercial kitchen or build my own addition to the house with certain specs from the health department. I priced my cakes at $75.00 minimum. I would love to work in a commercial kitchen/my own place just for cakes.

My husband wants me to make cakes out of the house and just do it quietly, I disagree and want to do everything by the book. He feels until I'm to the point of completing a nearby cake school there is no point in investing money in renting a commercial kitchen or making expensive renovations to our home.

I decided to test the waters and put my info out to family and friends. I have had 3 inquiries this week, all which said no because my $75.00 price was too high. There are no local bakeries here and no one buys elaborate birthday cakes unless they are severely underpriced (one woman does this out of her home locally and charges whatever the client wants to pay - not joking and it's usually $40-50) or from the grocery store/Costco. Each one said, "Your cakes are beautiful but I just can't afford it."

Should I just throw in the towel and accept that the chances of succeeding in this business for my area are dismal? I have put out over 10 calls to local kitchens inquiring about renting the space after hours and every single one has been rude/hanging up on me or saying no and an abrupt click. I have four more calls to make and waiting to hear back from my real estate agent before I'm left without an option to rent.

I'm so frustrated that I'm trying to do things the legal way and I'm getting so much resistance. I didn't think $75.00 was too expensive, I drove two hours and paid over $100 for custom cake, I cannot be the only one around here to appreciate a custom cake?

Maybe my cakes are just not as good as I thought. I certainly don't want to be the person with horrible looking cakes asking for too much. Should I lower the price to just cover the cost of my ingredients and not pay myself? I don't think so but several friends have said that they make home made items and don't pay themselves because they'd have no business otherwise. Isn't that sort of backwards? How can you stay in business then?

Sorry for the long sort of vent, I'm just feeling really discouraged today.

26 replies
aliciam Posted 16 Jan 2011 , 7:46pm
post #2 of 27

Patience is key to this type of thing. I am not too sure where in ontario you are but where I am I have similiar problems when it comes to pricing. Most of my clients are ok with pricing but I do get the odd one where they will want this spectacular looking cake for $30. That is when I say sorry I can not accomodate them. Dont be discouraged it takes timeicon_smile.gif

Ruth0209 Posted 16 Jan 2011 , 7:51pm
post #3 of 27

Your family and friends are very seldom your market for custom cakes. You need to develop a strategy to reach the people in your city who WILL pay for custom cakes. If you have any wedding shows you need to invest in a booth, make some dummy cakes and get your name out there. Start networking with wedding planners and other wedding professionals.

If you don't want to do wedding cakes, then you'll need to figure out how to reach the wealthier people in your area to make celebration cakes for birthdays, anniversaries, showers, etc. You might have to spend some money on print advertising.

You have to distinguish yourself from Costco by showing customers that you have a product they can't get there both in terms of design and taste.

Good luck! I hope you find your niche and have great success!!

ashley_devine Posted 16 Jan 2011 , 7:54pm
post #4 of 27

Im going through the exact same thing right now! So frustrating when someone wants a cake, and they want it cheaper than costs us to make! I finally had to just say no, even though i wanted more customers. I have found latley that im having more people willing to pay a good price, you just need to find a few people willing to pay, and then the good word gets spread, just takes time i guess! Just stick to your price, and if they dont like it tell them to go to dairy queen or grocery store haha.

Bakingangel Posted 16 Jan 2011 , 7:56pm
post #5 of 27

Cakenovice, your cakes are fantastic looking! I don't think there is anything you could benefit from, skill wise, from taking classes somewhere. I don't think you price is too high either. Something to consider...maybe the demand for expensive novelty cakes isn't high in your area. Perhaps, getting into the wedding cake arena would be the answer. Don't give up. You are very talented! You need to find the "need" in your community and fill it.

thumbs_up.gif

Texas_Rose Posted 16 Jan 2011 , 8:02pm
post #6 of 27

Your work is lovely, very neat and clean and you have your own distinctive style. I think it's just a matter of finding the right customers. When you focus on your friends as customers, they figure they're going to be getting the hook up, as far as pricing goes.

Also, most people who use rental kitchens seem to focus on wedding cakes or other special-event cakes, probably because they have to cover the cost of the rental kitchen and it doesn't take much longer to make a high-priced wedding cake than it does to make a less-expensive birthday cake.

simonpc1423 Posted 16 Jan 2011 , 8:15pm
post #7 of 27

I have a similiar problem. Sometimes though you hit a great design and it flies out of the door. that keeps you going. My real problem is clients lack of imagination. I want to get those big, challenging orders. No one wants to know......how does duff do it???

bobwonderbuns Posted 16 Jan 2011 , 8:22pm
post #8 of 27

Believe me you are NOT alone!!! The public seems to lack imagination, no matter how much we try to educate them. Hang in there kiddo, you will make a name for yourself and they will pay (it just might take a little longer!) icon_biggrin.gif

brincess_b Posted 16 Jan 2011 , 8:31pm
post #9 of 27

have you done your business plan? that should help you establish *if* there is a market you can reach out too. and if there is a market, how you can target it.
it might be the market is further away, so you might need to look at how you can sell your delivery too.
as has been said the cake market is NEVER your friends and family!

the people that make things and dont pay themselves are not a business in the true sense of the word, they just dont want to be out of pocket in terms of money to do a hobby, they dont mind being out of time.

dawncr Posted 16 Jan 2011 , 8:38pm
post #10 of 27

For sure begin making contacts with wedding planners and vendors. If you don't already have a website, be sure to get one. Lots of threads on here about how to do that.

You've got great style, design, and clean technique, but I don't see lots of wedding cake photos in your gallery. Maybe make up a dummy wedding cake, take a photo, then clean it off and try another cool, unique design. If you're interested, you also could market groom's cakes-- What are traditional sports teams, universities, hobbies of guys around you? Maybe make up a few of those.

Hope this helps...hang in there.

cownsj Posted 16 Jan 2011 , 8:38pm
post #11 of 27

You may want to consider donating a cake or two to local fundraising events where alot of people will get to see your work. If your local church has cake and coffee after services, offer them a cake for one weekend.

Put your photos, resume so to speak, on a website that you can send people to, to see what your work looks like. Talk to people when you're in anyplace where you can whip out your cell phone and show photos, or carry a photo book with you.

My husband never goes anywhere without his photo book. He 'picked up' a person in Michaels who was looking at cake toppers and struck up a conversation, then made their cake for them.

Sell yourself, everyplace. Don't count on family because they don't get it.

bobwonderbuns Posted 16 Jan 2011 , 8:41pm
post #12 of 27
Quote:
Originally Posted by brincess_b

have you done your business plan? that should help you establish *if* there is a market you can reach out too. and if there is a market, how you can target it.
it might be the market is further away, so you might need to look at how you can sell your delivery too.
as has been said the cake market is NEVER your friends and family!

the people that make things and dont pay themselves are not a business in the true sense of the word, they just dont want to be out of pocket in terms of money to do a hobby, they dont mind being out of time.




The business plan is an EXCELLENT idea!! Do you have any suggestions on how people approach this?

cownsj Posted 16 Jan 2011 , 8:46pm
post #13 of 27

This site looked promising for making a business plan: http://inventors.about.com/od/businessplans/a/business_plan.htm

bakingpw Posted 16 Jan 2011 , 9:23pm
post #14 of 27

Your cakes are beautiful - no worries there!

I have a suggestion: Instead of saying you have a $75.00 minimum which might turn people off, how about a price per serving cost? That way you could say our "regular" celebration cakes are $3.50 per serving and custom fondant cakes are $4.50/serving with minimum of 20 servings. (Obviously price according to your area.) Just a though - Good luck!

txmommyofboys Posted 16 Jan 2011 , 9:51pm
post #15 of 27

Your cakes are so awesome!!!

indydebi Posted 16 Jan 2011 , 10:09pm
post #16 of 27

Ontario is a pretty big area so I'm confident its large enough to have a big enough market to have folks who recognize the value of the work you do and know that's the price that needs paid to get that kind of quality.

Agree with the above that family and friends are the LAST ones who will (a) encourage you (b) support you (c) actually lay out the money because (1) THEY should get the discount and (2) OTHER people should pay the full price! Dont' survey family/friends. Their opinions don't count. At all.

Big pat on the back for wanting to move forward legally!! thumbs_up.gif Not sure why hubby thinks you need "schoolin'!" to do this. icon_confused.gif YOu have the talent. Tell him *I* said you could TEACH the class, and I'm sure there are others on here who would agree with me.

You dont' have a website listed and that's the first thing someone needs in this day and age. Even if it's just a Flickr page, a site designed for photographers so it has lots of space for photos. But the sooner you can get a "legit" website, the better.

As you move forward, watch the background of your photos. You have super professional looking cakes that are diminished by (blueberry pie cake) kid's hand in the background with the sink full of dishes and (taffy apple cake) bottle of water smack dab in the center behind the cake. Hang a sheet or a cloth or something for a clean background that does not detract from the professionalism of the cakes.

Start a blog. Educate your well meaning family and friends with photos AND details of what's involved in making these cakes. On a blog, you can point out the hours and days it took to make the fondant figures, the drying time, why you need to make 3 of them in case 2 of them break, etc. Educate them when butter pricing jumps 58% and how "as a business person, my choice is to raise my pricing 58% or eat the cost and lose money on each cake I make." Even a few step-by-step photos so they can see how many cakes you have to start with before you carve them down to the shape of the cartoon character they are wanting .... and oops! carved it wrong, so in the trash it goes (with a photo of it in the trash!) and now we start over!

These subtle lessons that they can read about casually will slowly penetrate their brain until they get to the "I had no idea!" stage in their thinking. Subtle ..... and effective.

For ANY biz venture, a biz plan is a must. I'm happy to share mine as a sample. Just send me a a regular email (not a PM .... a regular email) and I'll send you a copy.

jason_kraft Posted 16 Jan 2011 , 10:10pm
post #17 of 27

A business plan is a must before you commit to creating a business. Kudos to you for insisting on doing business the right/legal way...but you need to make sure your area will support the business model you've chosen before you proceed. One way to do this would be talking to local venues for weddings and other events, as well as wedding planners. You may need to focus your marketing in a different, more affluent area (income stats are available in the US by zip code, similar stats should be available in Canada).

Another possibility is entering the wholesale market with lower end items like gourmet muffins, cookies, and cupcakes. Retailers like Whole Foods (and even local supermarkets) often feature local vendors. Gluten-free is also a big market if you're willing to commit to carefully following procedures to avoid cross-contamination.

cakenovice2010 Posted 16 Jan 2011 , 10:34pm
post #18 of 27

Oh my goodness, thank you all so much for responding! And you're comments are very flattering, the majority of the cakes were done at a cake class and I have a really awesome teacher. I really want to go to the cake school here as it teaches courses on how to do tastings, how to price appropriately, etc... Since I'm self taught I thought it would give me confidence to go forward and have a little credit attached to my name. Here is the school program I'm looking at: http://bonniegordoncakes.com/pages/classes/cap/cap.html

It's just a huge undertaking with three children at home and I would be staying in the city during the week while I attended. My husband is super supportive and doesn't think I need it but I think he definitely wants me to be 100% sure for more than 6 months that I want to do this.

Here is a website I made last week to get started: www.cakesthatmakeyougommm.ca

I am currently experimenting with gluten free and vegan recipes and making sure I have separate pans for each. I'm trying out cupcakes as I donated a cake to a charity event to have a booth set up and they have requested 200 cupcakes. Oy! I will definitely take your suggestions to expand on the smaller baked items.

Business plan has been started, I feel like I'm constantly tweaking it but I know how important it is. Thank you so much for the links and suggestions on those! IndyDeb I feel like I'm talking to a celebrity - love your insights I will definitely email you about your business plan! Thank you!

I have ordered some dummies and will do up some samples for sure and take some better pictures. icon_smile.gif I've never worked with cake dummies before so hopefully I can do them nice and neat.

I sent out an email to some local photographers and a couple of banquet halls hoping to find out when some local shows are, they are not widely advertised for some reason that I have seen for this year. Toronto shows are big time so I'm not quite there yet. lol

I cannot tell you all how much I appreciate you taking the time to answer this post and giving me such great advice and direction! Thank you so much. I am taking it all in and applying it immediately icon_smile.gif

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annie84 Posted 16 Jan 2011 , 10:59pm
post #19 of 27

Your cakes look fantastic! I am also just starting out and I find the whole process a bit overwhelming.

I looked into taking the professional class at Bonnie Gordons but it was just a bit too expensive for me. I did the professional course at Klara Johnsons (who used to teach at McCalls) in Cambridge instead.

I highly recommend taking a course! I learned sooo much that I don't think I would have been able to pick up on my own. I've heard such good things about Bonnie Gordon, I bet you will love it. I'm going to take a couple of the baking course at BG in Feb. and March, which I hope will be great.

It sounds like you're heading in the right direction. I wish you luck!!!

scp1127 Posted 17 Jan 2011 , 11:37am
post #20 of 27

cakenovice, you have your site up, but you are not legal. That is a good way to get turned in. And sometimes the penalty is not ever being able to have a license. Youv'e gotten tons of great advice. Unfortunately, the business plan and getting legal come before networking with banquet halls and photographers. There is a chance the venues will not be able to use you because you are not licensed. If you are serious, do things in the right order.

cakenovice2010 Posted 17 Jan 2011 , 11:21pm
post #21 of 27

SO EXCITED!!!

I phoned every place in town and no luck renting a commercial kitchen, I couldn't believe how rude people were but I kept calling. Finally I decided to just focus on enrolling in school and seeing where I stood when my course was finished. I got one church that said I could do it when they had spaces in their schedule but I wouldn't be able to be there on a regular basis ie) Thurs/Fri/Sat but I could book the off days when I get orders in the meantime. I was feeling a little defeated.

When I got home DH announced that he will convert a small area of our home into a certified home kitchen for me!!! icon_smile.gif I am so over the moon ecstatic. Tomorrow we meet with the building inspector and then off to the health department to have them approve design. It won't happen overnight but I'm so elated to finally make some sort of progress and do this 100% without having to rent space. We already have most of the requirements in a room at the side of our home with it's own entrance/plumbing and driveway so it's a matter of getting the design/permits and approval to start and then a final inspection.

I've been tweaking the business plan and now I'll have to do some major re-adjustments but I'm really excited when I can start taking orders. icon_smile.gif

I also sent out some emails from the suggestion and have made contact with a local photographer that will set up a few sample cake dummies and cards in her office as well as refer me on her website!

scp1127 - I wasn't taking orders until I was approved either with a rental or having my own location. I made the website a couple of days ago to test out the free hosting site. I'm well aware of the legalities and I feel like you misunderstood my post.

tokazodo Posted 18 Jan 2011 , 1:24am
post #22 of 27

Congrats, Cakenovice! I'm glad this is working out for you.
Your cakes are beautiful!
The only thing I would add to this string is that you can set up a facebook fan page, complete with photos of your cakes, for free.

Good luck with your new venture!

Chef_Stef Posted 18 Jan 2011 , 5:53am
post #23 of 27

I agree; do not listen to anyone who tells you what to charge. You need to decide that, for yourself. Biz plan is hugely helpful but what helped me *get* it, was the p & l statement. Do one. Do it more than once, and really understand the numbers, that will be an eye opener, in terms of what you need to charge. Good luck!

motherofgrace Posted 18 Jan 2011 , 6:39am
post #24 of 27

hehe, you are using the same template as me!

www.sweetheartconfections.weebly.com

costumeczar Posted 18 Jan 2011 , 1:00pm
post #25 of 27
Quote:
Originally Posted by scp1127

cakenovice, you have your site up, but you are not legal. That is a good way to get turned in. And sometimes the penalty is not ever being able to have a license. Youv'e gotten tons of great advice. Unfortunately, the business plan and getting legal come before networking with banquet halls and photographers. There is a chance the venues will not be able to use you because you are not licensed. If you are serious, do things in the right order.




I totally agree with this. Get licensed first, advertise and network second. If someone came to me wanting to get together to talk business but they didn't have their business license in place, I'd tell them to call me back when they did. It wouldn't matter if it was a baker or someone painting my house, I'm not going to refer business to anyone who isn't licensed and insured, so get that in place first.

4realLaLa Posted 18 Jan 2011 , 5:08pm
post #26 of 27

Your work is very clean. I agree with those who suggest making wedding cakes. I wish you the very best.

rere0726 Posted 20 Jan 2011 , 1:28am
post #27 of 27

I know your pain. But one thing I have learn when it comes to business is that you have to find people not in your family and that are not your friends.

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