mommyto4 Posted 6 Sep 2012 , 2:27pm
post #1 of

I occassionally do cakes for friends and family, but since I'm not a legal bakery I don't want to get in trouble for selling my cakes so when asked how much I would charge I don't know what to say. I have always told them, "Since I'm not a legal bakery I can't set a price, but the cost of the ingredients are $xx." I then pray that they give me a "gift" for my time. However, the last 2 times I've done this I have only received the reimbursement for the ingredients...the first time the cake took me 14+ hours! The second time it was two half sheet cakes with one having a pregnant belly on top. No compensation for my time and energy at all is not acceptable to me and this is from friends from my church! I know it has to be a problem with the words I'm using that makes them think it's okay. What words should I use instead? I need some serious help or I'm going to have to start saying no icon_sad.gif Please help!

27 replies
debidehm Posted 6 Sep 2012 , 2:33pm
post #2 of

If you can't sell legally, you'll just have to say no unfortunately. icon_sad.gif

valerieInga Posted 6 Sep 2012 , 2:44pm
post #3 of

I understand totally. I bake for family/friends/coworkers and look at it as a way to cover the cost of my hobby. Some people give a " gift" but not all, and ones that think it's terrible that people don't pay me for my time never ask for a cake. Sometimes though I feel worse when they give you $10 for your time- usually 10+ hours. Cakes for my sisters and families are always a gift from me icon_wink.gif

Apti Posted 6 Sep 2012 , 3:35pm
post #4 of

Your phrasing doesn't need to be re-worked. But YOU have to decide if you are going to "sell" without a license or remain a hobby baker who does NOT get reimbursed for your time and talent. Unfortunately, this is an expensive hobby. Unless you plan on selling "under the table" as is done by many, many people; all you are going to get is the cost of ingredients/supplies. If you want to sell cakes and get paid for your talent and time, you need to investigate and see if your State/County allows a legal Cottage Food option for home bakers, or what is required to be legal.

Selling non-licensed cakes is a VERY hot topic here on CC because those bakers who have gone thru the considerable time and expense and business preparation/marketing to sell cakes legally are offended that new cake decorators can undercut their business by up to 90% with no investment of time or overhead before selling cakes. With that said, there are a TON of people who sell cakes without a license all over the USA.

As far as friends and people at church not compensating for your time and energy, it's not going to happen. Don't take it as a personal affront or slight, they have ZERO clue what it takes to make a custom cake. You gave them a $$ number ("Since I'm not a legal bakery I can't set a price, but the cost of the ingredients are $xx."), and they happily pay it and think you are happy to receive that amount.

If you did not provide a $$ amount for the ingredients, they would think it costs you about $15-$25 MAX for the ingredients and supplies. Ask a couple of neighbors who have seen your cakes and who have NOT been quoted a price for ingredients. All of them will give you a massive "understatement" of price. Then ask them how long do you think it takes for me to make this cake? They'll probably say 2-3 hours.

Good luck with your decision.

Sparklekat6 Posted 6 Sep 2012 , 4:34pm
post #5 of

Aren't you busy enough giving cakes away to friends/family/co-workers?? I said no to a friend of a friend the other day and it felt great. It was one of those "My one year old is having a first birthday and we think it would be great if you could make her these SUPER COMPLICATED cupcakes for next to nothing!! So could you just, get right on that? Thanks!"

I said, in these exact words "Hi XXX, I only make cakes for super close friends. I am sure there are many bakeries that would be able to accomodate you. Have a great day!"

Still LAUGHING.

jason_kraft Posted 6 Sep 2012 , 5:21pm
post #6 of

A good response for this type of question is to just say that you can't legally accept any money for cakes made out of your house, but you can give the person the cake as a gift (if you are so inclined). This gives you the opportunity to control the scope of the cake so it doesn't get out of hand.

Another response would be simply saying that you don't have enough free time to make the cake, but you can recommend another reputable baker in the area. This also works if you get push back about increasing the complexity of the cake.

Apti Posted 6 Sep 2012 , 8:02pm
post #7 of

Quote:
Originally Posted by jason_kraft


Another response would be simply saying that you don't have enough free time to make the cake, but you can recommend another reputable baker in the area.




It would be fascinating to hear back from you if you refer people to another custom baker in the area. Custom cake price sticker shock should elevate your personal status considerably. (It will also enhance your status in the local custom cake community to refer potential business to others.)

Sparklekat6~~Your work and designs are AWESOME!!!!! I looked at your photos and sighed with deep and avid appreciation. (I laughed at your post about your family saying, "How many hours will it take for the carousel cake?"
Hours??? HOURS???? ha ha ha ha ha ha ha ha ha ha ha ha
"Umm... about 50".

If your family doesn't even "get it" after all this time, sure as heck nobody else has a clue.

Quote:
Originally Posted by Sparklekat6

I said no to a friend of a friend the other day and it felt great. It was one of those "My one year old is having a first birthday and we think it would be great if you could make her these SUPER COMPLICATED cupcakes for next to nothing!! So could you just, get right on that? Thanks!"

I said, in these exact words "Hi XXX, I only make cakes for super close friends. I am sure there are many bakeries that would be able to accomodate you. Have a great day!"

Still LAUGHING.




Let us know if your friend "XXX", gets a quote from a bakery for one of those SUPER COMPLICATED cupcakes.

jgifford Posted 6 Sep 2012 , 8:49pm
post #8 of

"Since I'm not a legal bakery I can't set a price. It would cost you $942 if you were to order it from a custom cake shop - so you decide what's fair."

Apti Posted 6 Sep 2012 , 8:55pm
post #9 of
Quote:
Originally Posted by jgifford

"Since I'm not a legal bakery I can't set a price. It would cost you $942 if you were to order it from a custom cake shop - so you decide what's fair."




GOOD ONE!!!

Sparklekat6 Posted 6 Sep 2012 , 10:38pm

@Apti: Oh I am sure he won't. People think they can act dumb, like we don't know they called us because we are hobby bakers and they think they can get a huge break on the price. I personally find it really insulting. My time is just worth too much. Especially when compared to how much I make in my actual job.

cakesdivine Posted 7 Sep 2012 , 3:22am

If you don't live in a state that allows you to bake legally from your home kitchen you should not take a dime, not even for ingredients. Even taking funds for the cost of ingredients is selling the cake. End of story.

scp1127 Posted 7 Sep 2012 , 3:59am

cakesdivine is correct. Even barter is considered income. The only amount of money you can legally accept is none. Not even ingredients.

BakingIrene Posted 7 Sep 2012 , 4:27pm

Doing this kind of complicated work when you cannot be paid even the minimum wage doesn't make sense. People who buy cakes this way are doing harm to the ability of all bakers to earn a decent wage.

PLEASE do not let anybody run you around this way. If you want to take a cake to a family/friend party you do so as a gift. Period. No "proper wording" is going to change your status. What you can change is peoples perception that they should get something for nothing.

mommyto4 Posted 8 Sep 2012 , 3:24am

Sorry to open a can of worms. Thanks to all that were kind and those of you that weren't, well.......

cakesbycathy Posted 8 Sep 2012 , 3:35am
Quote:
Originally Posted by mommyto4

Sorry to open a can of worms. Thanks to all that were kind and those of you that weren't, well.......




I don't see how anyone was unkind. The reality of the situation is
a )you can't legally make cakes (even if they are just giving you money for ingredients, that is still illegal where you live) and
b) no one is going to pay you what the cakes are really worth because no one can understand the cost and time and effort involved because (unless they make cakes themselves) they have no clue as to what is actually involved.

It seems you have a few of choices You can:
Stop making cakes for other people.
Become a legal baker and charge appropriately
Continue what you are doing and accept that you aren't going to be properly compensated.

julzs71 Posted 8 Sep 2012 , 4:50am

I think you should have the person wanting the cake buy the supplies, Then they would realize a gift would be warranted. AND it isn't bartering or selling.

BlakesCakes Posted 8 Sep 2012 , 6:47am
Quote:
Originally Posted by julzs71

I think you should have the person wanting the cake buy the supplies, Then they would realize a gift would be warranted. AND it isn't bartering or selling.




We're all welcome to our opinions about how people "should" act, but the facts have to be taken into consideration--and cathy (the previous poster) stated it very clearly.

There are laws in place, at some level, in every locale. If a person provides the ingredients, it is considered a "payment". Bartering is technically a business transaction and can be taxable.

I give away all of my cakes. Recipients give a donation for the retail value of the cake to a charity/non-profit. I have a system in place to make sure that the donation is given, but I NEVER touch any money because I don't want to "muddy" the waters. I don't accept gifts or donations, either. I do carry product liability insurance (and hope to heaven that I never need to make a claim).

Rae

VanillaSky Posted 8 Sep 2012 , 11:07am

Nothing is ever clear cut in the law. There is always a grey area. If someone provides you with all ingredients, you turn those ingredients into a cake, and after the cake is made, you return all unused ingredients, I can't see how you, the baker, received value in that context.

However, if you keep any ingredients, you would be recieving value. And that runs afoul of the law, even if you only kept the two eggs left over in the carton that was dropped off for you by the person asking for a cake.

Of course, this doesn't help the OP any because she wants advice about actually getting paid for cakes as an unlicensed baker in a non-CFL state, which is illegal. As someone said above, there are tons and tons of illegal bakers out there, in every state receiving compensation, including profits, for their work. They do this because in most locations, they are able to fly under the radar (no advertising other than word of mouth), and if they do get noticed (usually because someone turned them in), authorities usually just warn them to stop (or if there are fines, they would have been less than what they would have paid to be fully licensed and insured). Again, this is illegal, but many perceive the risk of getting caught and suffering dire consequences to be low, which is, unfortunately, why there are so many unlicensed bakers out there.

kelleym Posted 8 Sep 2012 , 1:09pm
Quote:
Quote:

Nothing is ever clear cut in the law. There is always a grey area. If someone provides you with all ingredients, you turn those ingredients into a cake, and after the cake is made, you return all unused ingredients, I can't see how you, the baker, received value in that context.



This. Most laws are not written this way: "You may not sell a cake. You may not have someone buy ingredients and make a cake for them. You may not barter a cake." In Texas, I have people ask me things all the time like "Show me where in the law it says I can't make cheesecakes." Or "show me where in the law it says I can't sell at Farmer's Markets." Well, that's not the way the law is written, with a laundry list of what you can and can't do, encompassing every possible situation.

Usually* the best course of action is to call your local HD and ask them these questions, because they have usually* been trained in the law, and can help you follow it. Getting opinions of law from an internet message board is a sure way to get frustrated and confused.

* Except in Texas post-SB 81 icon_rolleyes.gif

FACSlady Posted 8 Sep 2012 , 1:15pm

I'm a teacher and I make cakes and cupcakes for department luncheons and showers for colleagues I know pretty well. Staff members ask me all the time to make cakes for their events. It goes like this: " I loved the ( for example) tiki cake that you did with the flowers and the bamboo. Would you make me one like it for my daughter's graduation? I can't spend much, only about $ 30." The cake, of course, took me twelve hours and $50 worth of ingredients. It's so nice to be able to say, "Gee, I'm sorry, but I'm not licensed, so I can't." That will be followed by some sort of wink wink, "We won't tell", or "I'll pay for ingredients", or "I'll just slip you a gift card". If I do agree to make a cake or cupcakes or fondant figures for someone, it will be for a friend and it will be a gift. I can always say no if I don't have the time or if I just don't feel like doing it. I never feel taken advantage of and I never break the law. I do take the time to casually inform people about how much ingredients cost and how much time it takes to make these things. I also tell them how those cakes they see on TV cost. BTW, I especially like watching "Fabulous Cakes" when it's on because they tell you how much the cakes cost.

LoveMeSomeCake615 Posted 8 Sep 2012 , 4:35pm
Quote:
Originally Posted by cakesbycathy

Quote:
Originally Posted by mommyto4

Sorry to open a can of worms. Thanks to all that were kind and those of you that weren't, well.......



I don't see how anyone was unkind.




I don't either. Which post or posts are you referring to that weren't kind? Some may have been more direct or to the point than others, but nobody said anything mean or derogatory.

If you do feel that you received more "negative" reactions than you were expecting, it's probably because, as a pp said, those of us who have invested time and money (some of us LOTS AND LOTS of money) to be legal/open a storefront bakery, etc. get kinda ticked off when someone wants to skip over all of that and sell cakes under the radar. And because some of us literally depend on selling cakes for our livelihood.

LoveMeSomeCake615 Posted 8 Sep 2012 , 4:36pm

Duplicate post

BakingIrene Posted 10 Sep 2012 , 4:46pm
Quote:
Originally Posted by mommyto4

I have always told them, "Since I'm not a legal bakery I can't set a price, but the cost of the ingredients are $xx." I then pray that they give me a "gift" for my time. However, the last 2 times I've done this I have only received the reimbursement for the ingredients...the first time the cake took me 14+ hours! The second time it was two half sheet cakes with one having a pregnant belly on top.

No compensation for my time and energy at all is not acceptable to me and this is from friends from my church!

I know it has to be a problem with the words I'm using that makes them think it's okay. What words should I use instead? I need some serious help or I'm going to have to start saying no icon_sad.gif Please help!




NO NO NO it's not how you are asking. Once they hear "since you are not a legal baker" they stop listening.

So you then go and bake for people who do not believe that you deserve even the minimum wage for your skilled work. Did they hold a gun to your head? Did they kidnap your child until the cake was delivered? Did they fire your husband because you refused to break the law?

Grow a spine and say "sorry, no" to such demands. You remain free to make cakes as gifts and with kids in the house you will not lack for people to eat up your practise work. When the kids are old enough, you can plan and get licensed and make a REAL wage for your real effort.

shanter Posted 5 Jan 2013 , 5:19am
Quote:
Originally Posted by cakiemommie 

Oh good grief.. 

 

     Don't listen to the negative people on here.  If you want to sell a cake to someone who knows you and wants to buy, then go for it!  Just because it's "illegal" doesn't mean it's wrong.

 

Yes, it does mean it's wrong.

 

Jason posted this in another thread:

"the IRS does consider converting ingredients into cake in exchange for money to be reportable income, regardless of whether or not it is done at a loss or break-even."

cakiemommie Posted 5 Jan 2013 , 5:49am

No, it doesn't mean it's wrong...  Sorry, but I completely disagree. 
 

cakiemommie Posted 5 Jan 2013 , 5:50am

Oh good grief.. 

 

     Don't listen to the negative people on here.  If you want to sell a cake to someone who knows you and wants to buy, then go for it!  Just because it's "illegal" doesn't mean it's wrong.  I can't believe that people are actually telling you that you can't even accept cost for ingredients because it's "illegal"!  That is just silly nonsense and don't listen to it. No one is coming to arrest you because someone gave you money for a cake. No one is coming to fine you because you've sold someone a cake.  If people at your church or work or wherever know you do cakes and want to get one from you.. go ahead and tell them what you'd charge for your time.  You'll have to come up with prices on your own based on how good and how professional you think your work is and what other people charge in your area. 

 

The only thing I think you should watch out for as far as legalities go is if you start doing many cakes and you advertise, have a website, are handing out biz cards... At that point I would be careful as the county could catch wind and ask if you are licensed.  You could potentially be fined, but normally the county would just tell you, "you can't sell cakes here without a license.. so stop".  But that's ONLY if you've become so big that everyone in the county knows you do cake.

 

As far as your wording..  There's no need to say, "I'm not a legal bakery".  I think everyone you talk to will know that you don't have a store front and are baking out of your home kitchen.  Just make sure that indeed they know you'll be making the cake in your home kitchen as most will assume anyway.  And then do whatever anyone else would, see what kind of cake they want, how many servings it would be approximately, estimate a cost for ingredients and then estimate how much time you think it would take to make.  You could mentally set a price per serving to give you a ball park.  For example, someone says they want a cake for 25 people..  and your base price is $2 a serving.  Mentally you can ball park this cake at $50.  At that point you could tell them, "ok, well I would charge between $40 and $60 depending on what type of cake you want"     

 

Again, if you're just selling cakes to people from church, work, family n such...  My rebel self says GO FOR IT! 

 

No government will EVER tell me that I can't sell a cake to someone if I want to.. PERIOD! 

 

If I were ever fined I'd take it to the news and get "7 on my side!" and struggle to get the laws changed.  But fortunately I live in a state that has cottage food laws and am very lucky.

 

Please take my advice, because I'm right.  There are people that will twist my words and try to make it sound as if I'm suggesting you go sell crack...  We both know that is not the case. 

 

Since when is cake illegal?  lol  Makes me shake my head and wonder and laugh.
 

cakiemommie Posted 5 Jan 2013 , 5:56am

I also understand that Uncle Sam wants his cut of the action...   But that's if she's doing hundreds/thousands of dollars in business per year...   Uncle Sam is not going to give two figs about the 4 cakes she sold last year for $50 each... 
 

jason_kraft Posted 5 Jan 2013 , 5:57am

A

Original message sent by shanter

Yes, it does mean it's wrong.

Jason posted this in another thread: "the IRS does consider converting ingredients into cake in exchange for money to be reportable income, regardless of whether or not it is done at a loss or break-even."

That was a discussion about whether or not you need to report income received from selling cakes to the IRS, income tax compliance is a completely separate issue from health dept compliance. In some cases there are thresholds where you do not have to report if you make below a certain amount, but that's a discussion for your accountant and not random strangers on the internet.

If your state's food safety laws do not allow food made outside an inspected commercial kitchen to be sold, then you can't legally sell food from your home kitchen, even if you break even or take a loss. Your chances of being caught are directly proportional to your volume and visibility in the marketplace.

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