sweetbeesbakeshop Posted 21 May 2011 , 3:03pm
post #1 of

I am just starting my little business adventure and only selling my "classic" cupcakes for now, to get my recipes fine tuned and get people actually liking the cupcakes themselves before I start the fancy decorating.

I am wanting to know how much to charge??

I am making a standard size cupcake and just icing and sprinkles for now.

I was thinking $1 a cupcake... $12 a dozen if you buy two dozen I knock off two dollars $22..

THEN I started pricing the BOXES (which I am having a hard time deciding what kind and where to buy) ...I'm going to have to buy bulk or I'm going to be loosing money.

suggestions?? I told everyone that prices are subject to change and obviously special flavors, fancy cupcake liners, decorations would up the price.

Just wanting to know a reasonable price for a basic bakesale type cupcake!

35 replies
Paperfishies Posted 21 May 2011 , 4:46pm
post #2 of

I think most of the people here sell their basic cupcakes from $2.50-$3.00 each. That seems to be the average price. Then add on an amount for each cupcake if it's a specialty cupcake or if it has a filling or a gumpaste/fondant design.

scp1127 Posted 22 May 2011 , 6:20am
post #3 of

If you plan on paying taxes, state and fed, on them... and insurance, boxes, electric, etc, this is not even close. You need to look into what is required to be legal in your area before you decide pricing. You also need to know where you fall in the market based on your competitors.

LindaF144a Posted 22 May 2011 , 1:42pm
post #4 of

At $1.00 a cupcake you will lose money, whether out of your home or not. You still have all the overhead to consider, it is just conveniently being paid for out of your home expenses. But more baking means you use more electricity. You should be charging at least 2.25, as you have discovered exploring the cost of boxes. Just because it is not an ingredient that goes into a cupcake does not mean it is not an expense.

sweetbeesbakeshop Posted 22 May 2011 , 10:20pm
post #5 of

ah yeah, I am working full time and going to grad school full time so I doubt I'll be filling enough orders to pay taxes on them ...at least for right now. I am also not becoming a full blown business--just a hobby right now. So insurance, etc. I haven't even looked into it..,but I do agree just the electricity etc WOW! I am def short changing myself.

LindaF144a Posted 22 May 2011 , 10:56pm
post #6 of

Uh, that thinking can get you in trouble. You are required by law to pay taxes on all income, minus expenses. You can not set it up on the side and expect to collect so little that you don't have to pay income taxes. You are setting up yourself for big trouble for very little money.

What you should do is at least set up some rudimentary books. It needs to be nothing more than a spread sheet with all your expenses and income. At the end of the year, take it to an accountant. And unless you are already paying at least 90% of your income taxes through another means, you will need to file quarterly taxes as set up by law from the federal government. There might, and say this hesitantly, be a line where if you only make so much you don't have to do quarterly payments. But I am not an accountant.

What you are saying in your last message is that you are going to set up a side business illegally. I'm not talking about getting a license for your kitchen or anything like that. I'm talking collecting an income and not reporting it. Different legal thing, but probably more dangerous than not having the proper kitchen. The fed govt has no soul. They will do what they want to get the money they want. And right now they need a lot of it. I would not go around boards advertising that this is how you intend to do business. You never know who is reading these places.

scp1127 Posted 23 May 2011 , 3:46am
post #7 of

Also, if you don't keep proper records, the IRS will be happy to make up an appropriate number and assess you the interest and penalties accordingly. You will have to work for years just to pay the attorney to dispute the number, as tyour interest and penalties grow. You must prove your business did not make enough money. And at some point, it must become profitable.

Business licenses, following the health department requirements, and paying taxes are the law. Someone will eventually turn you in. The longer it takes to get caught, the higher the penalties.

sweetbeesbakeshop Posted 24 May 2011 , 12:07pm
post #8 of

I work FULL TIME...I pay my taxes. I've worked on the side before. I'm a personal trainer and if you make under $500 you don't have to file a 1099, I'm not slow.

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if:

Your net earnings from self-employment (excluding church employee income) were $400 or more, or

I don't plan on making THAT much money right now... wow, a simple question asking how to price some cupcakes because my coworkers LOVE them turns into a lesson in fraud. I work for the government icon_smile.gif

Thanks for the concern everybody!


PLUS, I am planning on keeping books. I've already got them set up-just so that I can keep tabs on my expenses and income so that if I do need to file taxes.

In the state of NC I cannot be a bakery business out of my home unless I have a permit and health inspection. Our requirements are NO ANIMAL shall come into your home, even over night. I have two dogs. I cannot commercially sell my cupcakes in the state of NC as long as I have animals in my home, unless I find a commercial kitchen.

Which is why I am for now, hobby baking. I cannot however GIVE my cupcakes away to people...that would take a hit!

scp1127 Posted 24 May 2011 , 12:23pm
post #9 of

sweetbeesbakeshop, you should have included in your post that the license required for all other people in your state did not apply to you. There is a reason why the HD does not allow DOGS in the kitchen. You missed another point. The law DOES NOT STATE that you can do any illegal activity as long as you don't go over $400.00 per year. If you are going to provide information vs. ask for information, it would be nice if you didn't present it in a way that suits you, but isn't necessarily legal. There are people that come to this site to get information. Your insinuation was that as long as you sell under $400.00, you are ok.

Maybe you should give us a break. You want information from business people on how to price your unlicensed cupcakes.

WeeSooz Posted 24 May 2011 , 12:38pm

sweetbeesbakeshop - I can see why people are getting hot under the collar. Aside from the financial tax side, you are unlicensed, and selling cakes from a kitchen which you yourself state would not meet requirements in your state. Most people (I am assuming) on this site are business people who have gone to great measures to be licensed and legal - and they are giving you advice.

I'm in the UK, our laws are different, but you should maybe give some thought to the issue of health and safety, eg in the event that someone (god forbid) gets sick from one of your cakes, or even complains that there is a foreign body, eg a dog hair in their frosting. How would you stand then?

sweetbeesbakeshop Posted 24 May 2011 , 12:48pm

I understand where you are coming from and everyone else at that. They are just trying to keep me out of trouble, which I appreciate greatly! I guess I should have posted in the "I'm a hobby baker..baking for my friends and coworkers" forum. I would LOVE to make my business legit, just can't afford to do so. I don't advertise for my cupcakes, it's all word of mouth. I guess I shouldn't have called it a business adventure, because in all actuality I am not trying to make this a lucritive business at the moment. I am just making cupcakes for my friends birthdays, our office parties, etc. I do however charge the cost of the ingredients plus my time, which I think is reasonable. As you can see, I don't even charge people enough for me to make a profit! I wanted to see what cupcakes go for in the REAL BUSINESS market-for when I do get to that point.

I guess I got defensive because I didn't expect to be jumped on like that...

leah_s Posted 24 May 2011 , 12:51pm

Sweetbee,
"In the state of NC I cannot be a bakery business out of my home unless I have a permit and health inspection. Our requirements are NO ANIMAL shall come into your home, even over night. I have two dogs. I cannot commercially sell my cupcakes in the state of NC as long as I have animals in my home, unless I find a commercial kitchen.

Which is why I am for now, hobby baking. I cannot however GIVE my cupcakes away to people...that would take a hit!"

THAT's our point!
1. Where you are located you can not have a licensed home kitchen for selling baked goods.
2. You have stated that you plan to sell baked goods from said kitchen, but will try not to make more than $400 from this endeavor.
3. You stated you can not give your cupcakes away to people, therefore you will be selling them.
4. Selling them = business. Period.
5. You are not allowed to have this business under the laws of your state.

Therefore, you have asked for our advice in pricing a product which we all agree is being made and sold illegally. Hard for a legitimate business to play in that game.

I have a licensed kitchen. I pay for licenses (I have dual licensing) inspections, insurance, payroll and the payroll taxes, income taxes and all other costs associated with producing my product. My standard cupcake with creme filling and a swirl of icing costs $2.75 each.

Valkstar Posted 24 May 2011 , 1:01pm
Quote:
Originally Posted by sweetbeesbakeshop

I understand where you are coming from and everyone else at that. They are just trying to keep me out of trouble, which I appreciate greatly! I guess I should have posted in the "I'm a hobby baker..baking for my friends and coworkers" forum. I would LOVE to make my business legit, just can't afford to do so. I don't advertise for my cupcakes, it's all word of mouth. I guess I shouldn't have called it a business adventure, because in all actuality I am not trying to make this a lucritive business at the moment. I am just making cupcakes for my friends birthdays, our office parties, etc. I do however charge the cost of the ingredients plus my time, which I think is reasonable. As you can see, I don't even charge people enough for me to make a profit! I wanted to see what cupcakes go for in the REAL BUSINESS market-for when I do get to that point.

I guess I got defensive because I didn't expect to be jumped on like that...




In other words you're selling them...which is illegal for you to do!

scp1127 Posted 24 May 2011 , 1:04pm

Your "reasonable" equals illegal no matter how you word it. You keep trying to re-phrase the post but it is all the same. You just don't get it. Actually you do. You just think re-wording it will somehow trick us into going along with your scenario... as if we will reconsider and you will be redeemed.

I think you need to quit asking the question, as your justifications are a little insulting to those of us who respect the law. Make sure they pay you cash... wouldn't want to share any of that "reasonable" profit with Uncle Sam.

sweetbeesbakeshop Posted 24 May 2011 , 1:21pm

okay, I wasn't trying to trick anyone or do anything illegal. I didn't realize it would all get this serious..I GIVE UP! wow. I was just trying to figure out how to price a cupcake to cover my electricity cost, the cost of goos, etc without going into the negative. There was not any profit to be made for selling cupcakes for $12 a dozen..believe me.

I'm not going to argue anymore because apparently everyone in this forum has too much time to pick apart my posts and rearrange my words to turn me into some fradulant monster.

scp1127 Posted 24 May 2011 , 1:23pm

Still the same message worded differently. We are just not as dumb as you would like for us to be.

sweetbeesbakeshop Posted 24 May 2011 , 1:51pm

The only point I want to make---if you HONESTLY thought that I knew all the ins and outs of self employment as far as running a food service business, you're mistaken. This is all new to me, I am reading and learning new things everyday. I posted the original message before I even spoke to ANYONE about the NC laws, etc.

I would never POST on a public forum something that I knew was potentially illegal. If I was going to intentionally do illegal activity, I wouldn't make it public. I had no idea that doing a small hobby baking business on the side for friends, family, and coworkers could get me in so much trouble.

I DO appreciate the constructive advice and information that some posters gave me..it lets me know that I have to approach this from a different angle and maybe rethink starting this until I can afford to do it the right way.

I DO NOT appreciate those who took the less contsructive approach and started attacking me and accusing me of trying to make everyone look stupid, etc.

Like I said, I do appreciate those who tried to help me. I've learned a lot during this discovery process of self employment (I'm used to working through agencies that already have all the insurance, permits, etc in place for me..I just work and fill out my little tax forms). Everyone has to learn...it's not like I've STARTED baking or have been doing this for years. I was just trying to get all of my ducks in a row.

I now know that if I want to make this happen, I need a commercial kitchen-or to give my pups the boot (not likely). So for now, I will continue just to bake for my friends (let THEM buy the ingredients) and donate my time.

I honestly wasn't trying to make this a huge business right now. I don't have the time for that. I just know that I make killer cupakes, people want them, and I was like "hmph..maybe something can come of this" but after seeing, reading, and learning all that goes into just the intial start up-I will def have to hold off.

My hat goes off to those who do this as a living, running a business is no joke. I hope to continue to be on cakecentral and learn as much as I can from those who have been a success-so that when the time is right I can continue with what I have invisioned.

LindaF144a Posted 24 May 2011 , 1:54pm

"getting jumped on"

"fraudulent monster"

Wow, those are harsh words. What in fact is happening is we are telling you the real truth and you are interpreting through a filter in your head that is not allowing you to see this.

You want to sell cupcakes and earn some extra money. On the surface it sounds like a valid thing to do. Then reality hits that it is not as easy at it seems. What all of us here are doing is giving you true sound advice on how to HELP you, not jump on you or call you a "fraudulent monster". You gave no location and you have made 7 posts to CC. You are new and have no idea how we as business people conduct things. We have no idea of where you live, your background or your business sense. For all we know we could have been telling a 16 year old who "likes to bake" how to run the business.

Because we knew nothing about you, we cannot just give you a blanket answer. Because we CARE is why we gave the advice we did. Had we not CARED about the consequence of your actions, we would not have taken the time to read your question, think about it and then type a lengthy answer. All this takes time that I could be doing something else. Instead of appreciating the reality of the truth, you kill the messenger because it is not what you want to hear.

This is the reason why I barely answer newbie questions any more. And especially ones like this.

And BTW, if you had one clue of all the taxes, fees, expenses involved in doing any small business legally (whether it is food relate or not) you would go kiss the feet of every small business owner in your area. I just had this conversation with some one yesterday whose wife tried to make a go of her own business. He told me that once he found out just how much we pay her in NY for being in business he went around thanking every small business owner he visited. Trust me I was not this kind of person before I went into business. And don't get me started on unemployment insurance.

And it is because I have learned so much about running a small business that I feel strongly every citizen should know just what it costs. I now ONLY shop and eat as much as I can at independent small business owned places. They can use all the help they can get.

sweetbeesbakeshop Posted 24 May 2011 , 2:12pm

[quote="scp1127"]Still the same message worded differently. We are just not as dumb as you would like for us to be.[/quote]

it's comments like these..that accuse me of wording things to make them fit my "cause" which wasn't even what I was stating in the first place.


Not commenting on Newbie questions because "we have no idea" just means that we will never learn!

It's not that 'it's not what I want to hear' it was the way that some people were posting. I understand this is online and you can't hear the tone in the response, but there are ways to get points across.

See, yet again! I try to thank those that helped me and explain the fact that I am new and didn't know when I originally post..and here someone goes making comments about how I'm only hearing what I want to hear, etc etc...can the negative not be left out??

mplaidgirl2 Posted 24 May 2011 , 2:17pm

I'm going to ignore all previous posts and answer the question.

I charge $2 for cupcakes
$2.50-$3 for filled cupcakes
and $3 for cupcakes with fondant toppers.

Fondant toppers could go up depending on detail but thats roughly my pricing.

I also have a 24 cupcake minimum

sweetbeesbakeshop Posted 24 May 2011 , 2:32pm

[quote="mplaidgirl2"]I'm going to ignore all previous posts and answer the question.

I charge $2 for cupcakes
$2.50-$3 for filled cupcakes
and $3 for cupcakes with fondant toppers.

Fondant toppers could go up depending on detail but thats roughly my pricing.

I also have a 24 cupcake minimum[/quote]

Oh okay! Thanks! I think on average here in my general area I've seen $1.50-$2.00 for basic and a dozen minimum. The 24 minimum is great, considering most batches make about that much. I did learn that batter freezes well, which I HAD NO IDEA! Makes me excited because I've had a friend as me to make some for her birthday on Friday but she only wants 12.

scp1127 Posted 24 May 2011 , 3:00pm

You admitted early on that you knew you were in voilation. Then you proceeded to admit it over and over. You understand tax law and that you need a license, but you plan to disregard that. We are commenting on that. Again, You need to go back and read your own posts. I have never seen a member be this bold. And this thread is cached forever. If the IRS takes closer look at you one day, these posts will come back to haunt you.

maulerat Posted 24 May 2011 , 3:07pm

Something else to keep in mind is that as a hobby baker, there are also limitations on the expenses you are allowed to deduct for taxes. So while you want to consider all of the expenses and overhead in your pricing, you may not be able to deduct some of those expenses that are allowed to "for profit" businesses.

I'm not trying to attack you, but its just something you may want to look into.

countrycaker Posted 24 May 2011 , 3:37pm

I think there may be a misunderstanding as to what a "hobby baker" is. It sounds like people love your cupcakes and you love making them. Keep doing it! When you're asked to bring a dessert to an event, bring your cupcakes; when a friend has a birthday, make them some cupcakes; when there's a holiday coming up, celebrate at work with cupcakes. Use every chance you get to get your cupcakes into the mouths of your community. Just don't charge. Once you start charging you're no longer a "hobby baker" - you're in business. Even if you're just charging enough to cover cost of ingredients and not making a profit. Until you have the time (lots of time!) and money and are ready to jump (jump!) through all the hoops, you can be getting your name and cupcakes known so you'll have a customer base ready and waiting when you're ready to start your business. You sound like you're maybe early twenties, late teens? You have plenty of time to practice your art, learn new techniques, maybe develop a unique style of recipe or decoration that will really make your product stand out. The people on CC have tons of great advice - use them as your mentors. Accept constructive criticism and don't be too defensive.
That's my motherly advice icon_smile.gif Good luck and now - go bake some cupcakes! icon_biggrin.gif

scp1127 Posted 24 May 2011 , 3:48pm

By the way, sweetlittlebakeshop, you are already asking where to find wholesale boxes, you have three orders next week and you can't possibly get your boxes at Michael's and turn a profit. Did you know we can look look up all of your past posts?

You are really something... calling us on the carpet and acting the innocent. We have been one step ahead of you from the first post. It is wrong for you to be so defensive when there are others who are watching these posts and really want to learn something. Your posts are misleading and wrong. We are always happy to help except when the illegalities are thrown in our faces. Most people are more tactful and it doesn't come up.

Edit 744 people have seen these posts and hopefully they are getting the professional information that has been shared.

sweetbeesbakeshop Posted 24 May 2011 , 4:58pm

[quote="countrycaker"]I think there may be a misunderstanding as to what a "hobby baker" is. It sounds like people love your cupcakes and you love making them. Keep doing it! When you're asked to bring a dessert to an event, bring your cupcakes; when a friend has a birthday, make them some cupcakes; when there's a holiday coming up, celebrate at work with cupcakes. Use every chance you get to get your cupcakes into the mouths of your community. Just don't charge. Once you start charging you're no longer a "hobby baker" - you're in business. Even if you're just charging enough to cover cost of ingredients and not making a profit. Until you have the time (lots of time!) and money and are ready to jump (jump!) through all the hoops, you can be getting your name and cupcakes known so you'll have a customer base ready and waiting when you're ready to start your business. You sound like you're maybe early twenties, late teens? You have plenty of time to practice your art, learn new techniques, maybe develop a unique style of recipe or decoration that will really make your product stand out. The people on CC have tons of great advice - use them as your mentors. Accept constructive criticism and don't be too defensive.
That's my motherly advice icon_smile.gif Good luck and now - go bake some cupcakes! icon_biggrin.gif[/quote]

Thank you for that! You're right... that is ALL I'm trying to do right now is just feed people my cupcakes! I don't want a HUGE PROFIT or any profit for that matter. With a tight budget though I can't afford the gas, electricity, and ingredients involved in the baking. I just wanted to make sure that I was asking people enough money to cover all costs. NO profit being made-just don't want to be at a loss...but I can see how that can be taken wrong.

I'll continue to bake because I enjoy it... my cupcakes make people smile! I've went back and read through this entire post. I cant see my statements becoming wishy-washy and people continued to argue and make snide remarks. It happens when people are attacked. I can take constructive critisim, there is a difference.

Like I said before, I do appreciate all that gave me CONSTRUCTIVE crtitism. Considering I haven't even MADE ANY CUPCAKES TO "SELL" TO ANYONE YET..all of this was a BIG waste of breath icon_smile.gif

scp1127 Posted 24 May 2011 , 5:24pm

I'm the "rude" one. You are still on here talking away your self admitted illegal "Business". I am just giving your words right back to you.

Countrycaker did not side with you. She tried to explain the law too. You just won't listen. Again, it is rude of you to so blatantly flaunt your "new cupcake business" in our faces, talk about profits and wholesale supplies, misconstrue everyones' words, and be a very poor example to all of the bakers out there wishing to become legal.

With your blatant disrespect of the law, you are very likely to tick off the wrong person in your area and get turned in. I'm sure you ramble on and on about your "new business" in person as you have on here. No one wants to hear about people who evade the law and don't need to keep tax records. Talk about that too much in public and you will get turned into the IRS also. They would love to hear your new ideas about keeping records and paying taxes. Good luck with them.

Jenniferfrance Posted 11 Apr 2013 , 7:41am

Plenty of people start out doing their cupcake businesses from their homes illegally. So some of you leave the girl alone. I know a woman with a successful bakery that did it under the table for three years in Boston and sold to the Dominican Community. She managed to save enough money to buy a bakery right out. So, if you want to start out that way, do it. Just be careful and only sell to your friends and friends of friends. Don't try to sell it on Facebook or anything else. We set up our businesses because that is what we want. We want to do this for a living and not for a bit of side cash. I think you should sell them for 2 dollars a cupcake. The girl I started with was doing that and making good money.

Jenniferfrance Posted 11 Apr 2013 , 7:47am

Plenty of people start out doing their cupcake businesses from their homes illegally. So some of you leave the girl alone. I know a woman with a successful bakery that did it under the table for three years in Boston and sold to the Dominican Community. She managed to save enough money to buy a bakery right out. So, if you want to start out that way, do it. Just be careful and only sell to your friends and friends of friends. Don't try to sell it on Facebook or anything else. We set up our businesses because that is what we want. We want to do this for a living and not for a bit of side cash. I think you should sell them for 2 dollars a cupcake. The girl I started with was doing that and making good money.

jason_kraft Posted 11 Apr 2013 , 9:53am

A

Original message sent by Jenniferfrance

Plenty of people start out doing their cupcake businesses from their homes illegally.

That doesn't make it right.

Quote by @%username% on %date%

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