Hi out there!
I am just starting to start up my home bakery business. I am starting to get quite a few orders and feel like I am under charging but I feel bad for charging any more. I know if I actually start up a "business" I need to make a profit or I need to stop making cakes for others period. I charged $50 for the Sheriff Callie cake (10" bottom and 8" top all in buttercream, customer provided the toys) and $30 for the blue flower cake (8" all buttercream). I am fixing to make a half sheet cake with a matching 6" healthy smash cake and I asked for $65. How close am I on prices? I live in central Texas.
Everyone just starting out always undercharges.
Your first cake is incredibly cheap. Somewhere between $0.80 and $1.11 a serving, depending on what common chart you might choose to use.
You are seriously undercharging. Have you added up all your expenses? If not, take a moment and calculate exactly what one of those cakes cost you in ingredients and materials (cake boards, etc). Then think about the electricity, gas, the time you spent working on them. Then, imagine, when your a legal business, the expenses that will go with that.
Don't feel bad. You deserve to get paid. The clients don't feel bad for you when you make them a cake for practically free.
Definitely undercharging. The last half sheet cake I made sold for $95 (Vanilla Bean, Raspberry Filling, Vanilla Bean frosting with very simple decoration), and the next one I have on my docket is going for $165. For comparison purposes, I'm in northern California, in a somewhat rural area. ("Somewhat rural" means "Not in the middle of nowhere, but I can see it form here.")
I have added my expenses, and have looked at local bakeries. I was trying to price myself under them because I was just starting, but I'm not making anything and alot of the time I'm losing because I'm having to buy tools to finish/ make the cake. I don't know how much to charge for my time and to make it consistant. I've tried googling it but answers vary so much. How do you charge for your time?
The woman I took cake classes and she runs a cake and candy supply store told me that when she was first starting out, she would add up all her ingredients/time for the cake and then tack on enough to buy a tool. It could be either a tool she needed to do the cake or just one she wanted to have and that's what she charged
We always think when we're just starting out we shouldn't charge much and I thought established bakers wouldn't think I deserved the same as them. Then I joined this forum and found out that undercharging is actually undercutting and that devalues everyone's work and seriously pisses off those who are trying to make a living. So for your own sake as well as the industry's please make sure you are charging in line with your area's going rate.
That's a great idea tictac521!
I really am in a fork in the road. I really do want my home cakery to work out but I'm fed up with having a struggle with the pricing and feeling guilty about it.
If yall don't mind what would yall have charged for the cakes I posted?
For 8" round $75.00, for 10" and 8" somewhere around $ 200.00 not counting plastic toys.
Here are 2 excellent threads/articles to read on this subject:
Why do you "feel bad" about making money?
If you were employed somewhete else would you feel bad about accepting a pay raise - or would you decline the pay raise because you would feel guilty about it?
It seems thete are issues at work here which have nothing to do with cake.
OMG girl, you are soooo undercharging! !!
Yes to all ^^^ Listen to their advise or you gonna be burned out and broke in less than 6 months.
Would be a shame because your cakes look lovely!
Take the cheap cake lady cap off and but the business woman one on!!! Do your homework, ignore your "competitors" and up your self esteem - because you can ; )
Why do you "feel bad" about making money?
If you were employed somewhere else would you feel bad about accepting a pay raise - or would you decline the pay raise because you would feel guilty about it?
It seems there are issues at work here which have nothing to do with cake.
Thank you all for the advice. I guess I really need to sit down and start adding uup time and extra supplies I use to see how much actually goes into making a cake. I really liked the cake boss article, it explained alot. Thanks!
Apti do you use the cake boss program?
I'm not Apti, but I do use, and heartily recommend CakeBoss. It's very helpful in calculating all the costs that go into making a cake. I almost did the same thing when I opened a year ago; thankfully I read a lot of the threads here on CC and learned what NOT to do, and I signed up for CakeBossCloud almost the next day. The initial outlay is pricy, but the renewal is super reasonable. I can't imagine working without it, and neither can I imagine creating these reports/databases/spreadsheets/etc. from scratch! A lot depends on your area - the market and demand for custom cakes, but your time is valuable, and you should be compensated!
Don't count Wal-mart bakeries in your pricing research. People expect to pay more for custom work or they go to Wal-mart. Make sure you're at least making minimum wage! I recently bought a custom cake for my little boy (no way was I going to do it with everything else I had to, like diaper changes, lols) and it cost about $110 for a 10"x2" cake with one dozen cupcakes. Minimal decorations. My area is rural, I live an hour from the big city and 30 minutes from hicksville (my friend actually has a neighbor that mows his lawn in his underwear). The income in my area would be great, except it's mostly fixed (retirees and lots of welfare) with lots of empty buildings.
When I go to price my own stuff, I use a spreadsheet program like Excel or Open Office (free). And if you have Microsft Excel, they even have free templates for invoices and such. I've always used a spreadsheet for whenever I needed to break down my costs for anything (crafts, food, gaming, etc).
Bakerblackcat, is the 150 just good for a certain amount of time then? Would it be better to buy the computer version instead of cloud?
No, the $150 is for the first year, then after that first year it's $20 to renew. It's basically the charge for hosting the data on the cloud platform. And there's a 10% discount for being a member of CakeCentral.
I can't answer about buying the desktop version because the desktop version wasn't available to me - I use a Mac, so the Cloud version was the only choice. And it's nice, because I can pull up CBC on my phone when I'm offsite (well, as long as I can stand typing on the itty bitty screen...).
I spent the first month playing with it, watching their help videos, and entering my ingredients and prices. And then I got my first custom order, entered everything in...and never looked back. I'm really happy with it! I can see that perhaps one day I will outgrow it, but hopefully that coincides with the move to a store front, a POS-type system, and a whole host of other problems!
CraftyBanana2, I almost spit my water all over my keyboard reading your response! That's where I live, only we don't mow the lawn, we use a weed-whacker! :)
giraffeflute~~I don't use the Cakeboss software because I don't sell cakes. Since I'm giving them away, who cares about invoicing, cost control, profit, invoices, record keeping, etc.
I have referred 100's (or more) new bakers to the "How Do I Price My Cakes" article because it pretty much addresses everything to be considered when pricing custom cakes.