I wanted to attach the spreadsheet that I use for costing out my recipes. I am in no way saying this is the right way, but this is my way. and It may be the long way lol.
I use this sheet and cost out how much each recipe cost me for each size cake (6", 8", etc etc) at this time I do not make cakes bigger than 12".
The first column will be the Quantity of unit (1,2 etc)....the second is the unit (ounces, cups)
A quick example. IF your recipe calls for 5 ounces of flour, and your container you purchased from the store contains 10 ounces and you paid $2. Then your "cost per recipe" would be .20 per ounce of flour.
To get your extended cost you would multiply .20 times 5...which is $1. Thats how much you pay for flour for that one recipe.
The Q factor is for things that are really too small to measure. I do this for things like Water. It is normally anywhere from 1-3%
After you have done all these calculations, you now have the cost of that recipe! Please note that this is just one factor of the pricing; there are other things you have to calculate to find out how much to actually charge the customer.
There is a really good rational thread going right now, started by Delicious Desserts thats discussing prices. The more experienced people on this website really have alot to offer. I did not want to post this on that thread, because I did not want to take the focus away from what she was trying to do. Heres the link: http://cakecentral.com/t/764674/a-serious-rational-discussion-about-pricing
I hope that this helps some of you, who may not be able to quite get in your mind how to price the cakes. I like this sheet because it provides a little structure. I am a scatter brain and need things like this to keep me focused :)
Along those lines, there are several websites that will convert teaspoons etc. to ounces. This will make calculating costs much easier.
For my sheet, I made one long (very long) list of ingredients & calculated the cost of each ounce.
I then plug & chug. Cake calls for 1 ounce of salt, the sheet automatically multiplies it by the cost of salt.
The tricky, and frustrating part, for most people just starting are the hidden costs.
Sure you spent $50 on hand towels. How do you price that in a single cake?! Especially when you have no idea how many cakes you will make.
The second year, you can estimate based on the previous year....but that first year is hard.
What I suggest to ANYONE accepting money for cakes or starting a business is to keep good clear records. Tally every single dime you spend. Bought a bag of flour? It cost you the whole bag not what you used. Then, subtract what you really make for a cake. Constantly review it to see when/if you make a profit.
very very very good advice. Constant review is a necessity, if youre interested in doing business correctly
That was very nice of you to share; thank you so much. It will help give me an idea of what you pros have to do in order to be in business. I am forever in awe of the cakes that are made; amazing talent and lots of hard work.
No problem, I had alot of help from people when I started. I want to help as much as I can :)
AIf anything I said was unclear or you just have a question just pm me and I'll try to answer.