So I made the mistake of doing a "favor" and making a cake for someone that has turned out to be costing ME money! Sigh... I never charge the right amount because I always feel bad .. even though my time and effort should be rewarded.. but I always end up not making much in the end of it all.. for those of you who do this for a living ... how do you usually charge? And do you ever feel bad ?
Don't feel badly for making a profit! Just remember no one goes into business to lose money. Sometimes I underestimate my costs, but I try to learn from each experience.
We run a business in CA, and our products are priced to include ingredient costs, labor costs (time spent * hourly wage), and overhead costs on a per-order basis (licensing fees, insurance, inspection fees, etc.) plus a 20-30% profit margin. Unfortunately CA is one of many states that do not allow people to legally sell food made from their home kitchen, so we must spend extra on renting a commercial kitchen and having it inspected -- that cost is just passed on to our customers.
The tough part is learning to say "no" to customers. We sometimes get customers asking for a lower price, when this happens we give the customer the choice of simplifying the decorations on their cake (to reduce labor costs and lower price), paying the original price for the cake they requested, or buying the cake somewhere else.
Don't feel bad, as you said your "time and effort should be rewarded"!
Just remember that the grocery store doesn't apologize for charging you for your food, and the plumber doesn't apologize for charging you for his time and experience. Why should you feel bad for charging someone for your time and experience? Figure out what you want to make per hour and make sure that you end up making that once all of your expenses are taken out.
Thank you everyone for your responses! I guess I just have to realize that I am providing a service for them.... not the other way around.. lol