The Unrealistic Client

Business By cakesdivine Updated 10 Feb 2013 , 8:39pm by howsweet

Annabakescakes Posted 3 Feb 2013 , 7:41pm
post #31 of 157

AI think $15 is rather low for some of the talented cakers, I know that a lady on here who does high end items pays herself $40 an hour, but I don't know how fast she is. My poor hard working husband makes $14 as an unskilled laborer, so we need to make more since we buy our own tools, pay for our own training, do all the buying, research, and not everyone possess the skills to do it right.

I still have a hard time estimating my times, and I still put most of my money back into the bakery in the form of cake toys, but when I pay myself it is $25 an hour.

And the $8-$15 an hour is for an employee, not a business owner. Walmart may pay $10 in the bakery, but the owners don't pay themselves that!

costumeczar Posted 3 Feb 2013 , 8:43pm
post #32 of 157

The woman who cleans my friend's house earns $40 an hour. Just saying.

jason_kraft Posted 3 Feb 2013 , 9:19pm
post #33 of 157

AThe $8-15/hour wage reported for cake decorating jobs on salary surveys is skewed toward entry level positions, since most cake decorating employees don't have a lot of experience and generally work for businesses that compete on price. There's no reason you can't exceed that if your skills and productivity warrant it, but I find it's a good starting point for beginners who are still working on improving efficiency. As you become more efficient, your effective hourly wage will increase organically since you will be able to make more products in less time.

Plus, as the owner of a cake decorating business, if labor is (e.g.) 50% of your total cost you can double your markup percentage and add that to your effective wage. I find it's helpful to separate your hourly wage from markup, so if and when you're ready to hire a decorator you'll know exactly what they should earn.

$40/hour is a lot to clean a house, when we hire maids it usually works out to $15-25/hour for each team member fully loaded (meaning that includes the costs of materials, overhead, and markup, not just labor). The hourly wage is probably in that same $8-15/hour range.

klhoward42 Posted 3 Feb 2013 , 9:37pm
post #34 of 157

I believe if you were to do this then have a section for hobby decorators who don't feel that their cakes are worth the same as a more experienced decorator. I don't  feel right charging some one $100 for a cake because I am not worth that much. I am an amateur and not afraid to admit it. I am not trying to take business from someone else. I am a SAHM who likes to decorate and I feel as long as I make enough money for my supplies then I am doing great. Not everyone is in it to make money and what's wrong with enjoying a hobby and making some money. Do you really think us hobby SAHM decorators are taking away from local bakeries. If anything we are taking away from the supermarkets. Most people I am doing cakes for want something nice but can't afford to pay $3 a slice for a cake but they can pay $1 to $2. I just am not sure where that should factor in for pricing and comparison. People think I am trying to do better than our local bakery but I am not I am just having a great time being creative!!!

jason_kraft Posted 3 Feb 2013 , 9:44pm
post #35 of 157

A

Original message sent by klhoward42

I am a SAHM who likes to decorate and I feel as long as I make enough money for my supplies then I am doing great. Not everyone is in it to make money and what's wrong with enjoying a hobby and making some money. Do you really think us hobby SAHM decorators are taking away from local bakeries.

Yes. If you are accepting money for your cakes you are operating a business, and charging below market rates hurts all other businesses in your market.

There's nothing wrong with pursuing cake decorating as an amateur, but the very definition of an amateur is that they do not get paid. So if you want to keep your hobby, charge $0 for your cakes.

klhoward42 Posted 3 Feb 2013 , 9:54pm
post #36 of 157
Quote:
Originally Posted by jason_kraft 


Yes. If you are accepting money for your cakes you are operating a business, and charging below market rates hurts all other businesses in your market.

There's nothing wrong with pursuing cake decorating as an amateur, but the very definition of an amateur is that they do not get paid. So if you want to keep your hobby, charge $0 for your cakes.

Wow that was super rude!! The definition of an amateur doesn't speak of money at all, so hmmmm. I guess if someone wants to be a professional they just start out being that way never having to work their way up or start as a hobby!! 

 

Also if someone is going to a supermarket to buy a cake and they decide to go to me instead then I am not hurting a local bakery only a Kroger or Publix. 

 

 

I guess the whole world is full of greed and nobody can do something for a friend without charging an arm and a leg!!!

AZCouture Posted 3 Feb 2013 , 9:56pm
post #37 of 157
Quote:
Originally Posted by klhoward42 

Wow that was super rude!! The definition of an amateur doesn't speak of money at all, so hmmmm. I guess if someone wants to be a professional they just start out being that way never having to work their way up or start as a hobby!! 

 

Also if someone is going to a supermarket to buy a cake and they decide to go to me instead then I am not hurting a local bakery only a Kroger or Publix. 

 

 

I guess the whole world is full of greed and nobody can do something for a friend without charging an arm and a leg!!!

Oh please, his answer was 100% correct. And polite.icon_confused.gif

AZCouture Posted 3 Feb 2013 , 9:57pm
post #38 of 157
Quote:
Originally Posted by costumeczar 

The woman who cleans my friend's house earns $40 an hour. Just saying.

Exactly. 

DeliciousDesserts Posted 3 Feb 2013 , 9:59pm
post #39 of 157

ANow Jason, I almost always agree with you but not this time. KLHoward has a point. If someone is truly just starting out, has little experience, & is doing this as a hobby they can't really expect to charge the same. How many cakes can they possibly do?

I understand it perpetuates the silly client who thinks they can get cheap cake. No one wants that. However, If they explain this is a hobby, the funds barely cover costs, etc I say go for it.

When I first left the bakery for whom I worked, I was done. I left to get pregnant & have a baby! So many people wanted my cakes. It got to the point that my husband said it was costing too much. So, I started asking people to cover my cost...just cost. I did maybe one all cake every month. I doubt it impacted any local business. Once word spread, my husband demanded & encouraged more legal avenues & a real business. Still, even without years in the industry, I was new. I set my first 3 wedding cakes at $3.75 per slice. That's a steal in my town ($4 - $8) The rest that first year were $4 per slice.

Oops I guess I ran on a bit about me. I se all the valid points. If it is a hobby & you just like doing it @ want to cover costs, please remember to say so. Educate potential clients for the rest of us.

jason_kraft Posted 3 Feb 2013 , 10:04pm
post #40 of 157

AI'm sorry if you thought my response was rude, I was just sharing my opinion and answering a question from your post.

Original message sent by klhoward42

I guess if someone wants to be a professional they just start out being that way never having to work their way up or start as a hobby!! 

Not at all, if you want to be a professional you can certainly start as a hobby, as long as you don't operate a business (e.g. accepting money for orders).

Also if someone is going to a supermarket to buy a cake and they decide to go to me instead then I am not hurting a local bakery only a Kroger or Publix. 

If you are just as skilled as a local bakery but selling your products at a fraction of the price, you are harming the local bakery as well, not to mention driving down the public perception of what reasonable prices are for cakes.

I guess the whole world is full of greed and nobody can do something for a friend without charging an arm and a leg!!!

Not true, if you want to make a cake for a friend as an amateur you can offer it as a gift.

Annabakescakes Posted 3 Feb 2013 , 10:10pm
post #41 of 157

AI hardly feel greedy when I write all the checks to pay my bills and feed and clothe my family. Truthfully, I thought that cakes were over priced and I started doing my own cakes because we couldn't afford a cake from Walmart, when I was a little girl with my dead aunt's 8 year old Wilton kit. ( it was made the year i was born). After countless sleepless nights and unappreciative "customers" who are cake poor but party and gifts rich, I realized that is a poor mentality and I deserve more money for my labor than .13¢ an hour! Seriously! That was for a 30 serving 3-D shark cake I did, and charged $30 for.

klhoward42 Posted 3 Feb 2013 , 10:10pm
post #42 of 157

So only a professional can make money, all others need to give someone a cake for free!! Wow, hmmmmm, seems very odd to me!!! This just in~CAKES for sale only by professionals, all others don't bother your just an amateur!!

jason_kraft Posted 3 Feb 2013 , 10:14pm
post #43 of 157

A

Original message sent by DeliciousDesserts

Now Jason, I almost always agree with you but not this time. KLHoward has a point. If someone is truly just starting out, has little experience, & is doing this as a hobby they can't really expect to charge the same. How many cakes can they possibly do?

I understand it perpetuates the silly client who thinks they can get cheap cake. No one wants that. However, If they explain this is a hobby, the funds barely cover costs, etc I say go for it.

Cake decorating can be an expensive hobby, so if you want to pursue it you can either wait until you have enough money saved up so you can afford to give away cakes, practice on reusable dummies, or start a legal business with appropriate pricing. It is dangerous to sell food products (even unprofitably) without a license or insurance. Either you have a hobby or a business, it can't be both.

klhoward42 Posted 3 Feb 2013 , 10:14pm
post #44 of 157
Quote:
Originally Posted by Annabakescakes 

I hardly feel greedy when I write all the checks to pay my bills and feed and clothe my family. Truthfully, I thought that cakes were over priced and I started doing my own cakes because we couldn't afford a cake from Walmart, when I was a little girl with my dead aunt's 8 year old Wilton kit. ( it was made the year i was born). After countless sleepless nights and unappreciative "customers" who are cake poor but party and gifts rich, I realized that is a poor mentality and I deserve more money for my labor than .13¢ an hour! Seriously! That was for a 30 serving 3-D shark cake I did, and charged $30 for.

I don't believe all decorators are greedy but this guys post sure sounds greedy! I don't believe for one second cakes are overpriced but I feel at my skill level, I would be over charging!! But if you do amazing cakes and are experienced you have earned that right! I on the other hand haven't and don't feel I should be paid as if I had. Maybe one day but not today!

jason_kraft Posted 3 Feb 2013 , 10:15pm
post #45 of 157

A

Original message sent by klhoward42

So only a professional can make money, all others need to give someone a cake for free!!

Correct, that is the definition of a professional.

jason_kraft Posted 3 Feb 2013 , 10:24pm
post #46 of 157

A

Original message sent by klhoward42

I don't believe for one second cakes are overpriced but I feel at my skill level, I would be over charging!! But if you do amazing cakes and are experienced you have earned that right! I on the other hand haven't and don't feel I should be paid as if I had. Maybe one day but not today!

I see where you are coming from. If you want to be compensated for your cakes, you can set up a legal business and charge according to your skills. The process of starting the business (specifically market research) will help you determine what an appropriate price should be. You would be surprised what people will pay if you target the correct market.

klhoward42 Posted 3 Feb 2013 , 10:25pm
post #47 of 157

Your professional definition works "on paper" but not in real life! Thanks for the help and understanding you have been truly professional , you actually sound insecure and worried about a little SAHM decorator in the middle of nowhere Georgia!!!

jason_kraft Posted 3 Feb 2013 , 10:26pm
post #48 of 157

AYou're welcome! Please try to avoid personal attacks though, and try to keep the thread on-topic. Thanks!

BTW since you mentioned you are in GA you may want to take a look at the recent GA cottage food law, it makes it pretty easy to get licensed and sell cakes legally from home. http://agr.georgia.gov/cottage-foods.aspx

DeliciousDesserts Posted 3 Feb 2013 , 10:27pm
post #49 of 157

A

Original message sent by klhoward42

I don't believe all decorators are greedy but this guys post sure sounds greedy!

Whoops. Lost me & my backing!!!

No need for name calling. Everyone is encouraged to share opinions & disagree. That's a bit far for me.

DeliciousDesserts Posted 3 Feb 2013 , 10:30pm
post #50 of 157

A

Original message sent by klhoward42

, you actually sound insecure and worried about a little SAHM decorator in the middle of nowhere Georgia!!!

Wow. Not nice.

klhoward42 Posted 3 Feb 2013 , 10:38pm
post #51 of 157

When you told me I didn't need to charge for my cakes because I am only an amateur you made it personal! I didn't ask if I should charge for my cakes. I merely remarked that I don't think I should charge as much for my cakes! Your remarks implied my talent  didn't deserve any compensation and that was off topic!!!

tdovewings Posted 3 Feb 2013 , 10:43pm
post #52 of 157

 Cost of tools is added to the COGS, I treat it like ingredients, and a % of overhead that I apply to every cake, so yes, at the end of the day I pocket more for a cake than $15.00 per hour labor cost. But like every trade you pay for the level of skill.  And yes, If I decorated cakes like some of the finest work I see on here perhaps I could charge more per hour, I'm just not that skilled, I am a beginner. I just started this a year ago. But I've asked very talented, high skilled decoraters what they pay themselves, everyone seems to go mum. 

 

Last point.  Every skilled trade profession has a barrier to entry. For decorators it doesn't seem like that barrier is to high, so the premium factor on that is slight, in fact entry to the field is quite easy.   There are lots of ways to learn to decorate cakes and acquire the tools. There are lots of people that decorate cakes for fun. Moms make their own birthday cakes. All that factors into the market value of a cake whether or not it is fair or right. I don't think it is ever going to be a high paying profession for most. You can charge more because of your branding, very unique or rare product, scarcity of product, or a very special decorating skill but other than that ,what is the justification for charging more per hour than someone that has been decorating cakes in the grocery store for 20 years.

 

Yes my cake prices are more than $15.00  because my tool prices, overhead per order, time I put into a custom cakes, ingredients are more, but not so much my labor costs. 

 

And perhaps I'm overly anal about costing because that was my job in a previous life.  I have costs for everything.  I understand I am the owner, and a certain percentage of my time is spent being an owner. I pay myself $45.00 per hour for that (also goes to overhead). Sometimes I'm just a baker and when I bake, I cost that out at $10.50 per hour.  When I decorate it's $15.00 per hour. When I clean it's minimum wage. I have a price for shopping and purchasing/billing/accounting too. All this to ensure I'm profitable and if one day I so happen to need to grow I've already costed that into the equation. 

jason_kraft Posted 3 Feb 2013 , 10:45pm
post #53 of 157

A

Original message sent by klhoward42

When you told me I didn't need to charge for my cakes because I am only an amateur you made it personal! I didn't ask if I should charge for my cakes. I merely remarked that I don't think I should charge as much for my cakes! Your remarks implied my talent  didn't deserve any compensation and that was off topic!!!

Not at all, please reread my posts. The reason you should not charge for cakes has nothing to do with your skill level, it has everything to do with whether or not you are operating legally and charging market value.

This ties directly back to the topic of this thread...clients are unrealistic about prices because they see examples in the marketplace where bakers with unlicensed businesses are offering their products for peanuts. If everyone charged a fair price for their products (or gave their products away as gifts if they were not ready to start a business) this would not be a problem.

In fact, the most damage is done by people with the combination of great decorating skills and not-so-great business skills.

jason_kraft Posted 3 Feb 2013 , 10:56pm
post #54 of 157

A

Original message sent by tdovewings

And perhaps I'm overly anal about costing because that was my job in a previous life.  I have costs for everything.  I understand I am the owner, and a certain percentage of my time is spent being an owner. I pay myself $45.00 per hour for that (also goes to overhead). Sometimes I'm just a baker and when I bake, I cost that out at $10.50 per hour.  When I decorate it's $15.00 per hour. When I clean it's minimum wage. I have a price for shopping and purchasing/billing/accounting too. All this to ensure I'm profitable and if one day I so happen to need to grow I've already costed that into the equation. 

That's a great way to approach costing, as long as you have the discipline to diligently track how much time you spend on different activities. I took the lazy way out and averaged out production-related tasks to a single wage while building administrative overhead costs into markup rather than tracking admin time.

tdovewings Posted 3 Feb 2013 , 10:59pm
post #55 of 157
Quote:
Originally Posted by Annabakescakes 

I think $15 is rather low for some of the talented cakers, I know that a lady on here who does high end items pays herself $40 an hour, but I don't know how fast she is. My poor hard working husband makes $14 as an unskilled laborer, so we need to make more since we buy our own tools, pay for our own training, do all the buying, research, and not everyone possess the skills to do it right.

I still have a hard time estimating my times, and I still put most of my money back into the bakery in the form of cake toys, but when I pay myself it is $25 an hour.

And the $8-$15 an hour is for an employee, not a business owner. Walmart may pay $10 in the bakery, but the owners don't pay themselves that!

Thanks! That is useful information. It is interesting to see the range.

Annabakescakes Posted 3 Feb 2013 , 11:04pm
post #56 of 157
Quote:
Originally Posted by jason_kraft 


Not at all, please reread my posts. The reason you should not charge for cakes has nothing to do with your skill level, it has everything to do with whether or not you are operating legally and charging market value.

This ties directly back to the topic of this thread...clients are unrealistic about prices because they see examples in the marketplace where bakers with unlicensed businesses are offering their products for peanuts. If everyone charged a fair price for their products (or gave their products away as gifts if they were not ready to start a business) this would not be a problem.

In fact, the most damage is done by people with the combination of great decorating skills and not-so-great business skills.

I COMPLETELY AGREE!!!

klhoward42 Posted 3 Feb 2013 , 11:39pm
post #57 of 157

So my options are starting a business, which I am not able to do, or stop selling my cakes? I just don't believe that's realistic for tons of bakers on this site. I guess this thread won't apply to many decorators like me. But the initial thought of cakes with prices is a great idea for those who consider themselves professionals!!  Maybe one day I can get there but not right now! Thankfully these threads will be there one day when I need them!!!

tdovewings Posted 4 Feb 2013 , 12:01am
post #58 of 157
Quote:
Originally Posted by jason_kraft 


That's a great way to approach costing, as long as you have the discipline to diligently track how much time you spend on different activities. I took the lazy way out and averaged out production-related tasks to a single wage while building administrative overhead costs into markup rather than tracking admin time.

 

Unfortunately I do, but it is not as bad as it sounds.  In the beginning it was very time consuming, jotting down start times and finish times for everything. But when you don't have the data you have to collect it. For baking times, icing times, covering cakes with fondant, and cleaning times, etc, I think I have enough sample points now where I don't have to track that anymore, I can estimate from previous work. Once upon a time, I was a consultant, so I got use to writing down what time I worked on what, so my company could bill properly. Although I have vowed to audit quarterly to see if efficiency, etc have improved. We will see it that happens, I did it once and things have improved slightly. 

tdovewings Posted 4 Feb 2013 , 12:02am
post #59 of 157

I think I have taken this thread way off topic so I'll stop.

-K8memphis Posted 4 Feb 2013 , 12:04am
post #60 of 157
Quote:
Originally Posted by klhoward42 

So my options are starting a business, which I am not able to do, or stop selling my cakes? I just don't believe that's realistic for tons of bakers on this site. I guess this thread won't apply to many decorators like me. But the initial thought of cakes with prices is a great idea for those who consider themselves professionals!!  Maybe one day I can get there but not right now! Thankfully these threads will be there one day when I need them!!!


 

i can't tell if you mean you are going to continue selling or not and truthfully it's none of my business icon_biggrin.gif

 

but if you or anyone else reading this decides to sell w/o the ducks in a row let me gently mention:

 

that you consider limiting your customer base to close friends and family

 

maybe in your area businesses like yours are winked at--i understand that if that's the case

 

however one can run the risk of getting a cease and desist order at least and all it takes is one phone call to the authorities

 

often as hard to believe as it might sound it's a disgruntled/jealous/mean relative whose fingers 'do the walking'

 

so just be careful

 

consider avoiding advertising because that can bring too much unwanted exposure

 

they do bust little unknowns for this kind of illegal activity

 

take care

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