Hi all- I'm trying this out (business-wise) and had to find a kitchen to rent. For all of you that rent kitchens, do you just add that hourly rate into your overhead cost for each order? My kitchen is 19/hr for reg oven and 21/hr for combi oven. I'm just planning on doing reg oven, but even if I would just do a little cake, til I mix, bake, cool, frost/decorate...that's already 40-50 on the cost. Sorry, rambling a bit now, but just wanted to see what to do. Thanks
You can add it to overhead, but I find it easier to tie it to the labor cost, since every hour you will be working on the cake you would also need to pay rent. So if you pay yourself $12/hour and your rent is $19/hour, you can just pretend your wage is actually $31/hour. If the kitchen charges a fixed monthly fee for storage then that would be allocated among all your orders as overhead.
You'll probably find that the numbers are not favorable when you first start out, but once you get busier you will be able to multitask and fill in slack time in your process.
You'll also have storage rent for your equipment & ingredients storage. Here in Illinois all my ingredients & equipment must stay in the commercial kitchen. I pay $25/hour for use and then $5 linear foot for dry storage and $10 for refrigerator & freezer storage. I add these costs in my overheads costs as Jason stated.
I forgot to mention I also add in my insurance & sanitation licensing costs too.