OK guys here's my story. I'm basically a stay at home dad. My wife works during the week and I'm home with the kids, and then I work weekends. I have all week to do cakes. Ever since i made my sons first birthday cake and saw how my family reacted i was hooked. I always had a nack for art and this is something i would love to do. I've researched all the at home bakers and bakeries in my area to get an idea of prices. I've sent pictures of my cakes to get quotes from bakeries and was pleasantly surprised. My question is, what is the best to figure how much money you have in a cake? Do you literally have to break it down to the last 1/4 tsp of salt? For now I've set my prices within the parameters of all the locals so I'm not undercutting anyone. Should setting my prices that way be adaquate enough? I'm not going to be able to charge more than what locals are charging anyway correct? So I figure just stay competitive and price just as they do. Am I wrong for thinking this way?
Yes to the last teaspoon of salt, to the last squirt of dish soap to the last minute of cleaning up time (your hourly wage for all the tasks involved).
Friends and family always gush over our cakes because they rarely pay for them, or at least pay market value for them.
If you can get onto the business section on here (I couldn't yesterday) try and go back about a 100 pages to research the answers to questions such as yours.
The old timers who really knew what business was about have all but gone but the advice is as true today as it was then.
There can be a small livable income for the lone home baker after taxes and insurance/licences and ingredients have been paid once your name is out there and you get a customer base.
Every primary carer of young children is looking into this business which is saturated and I cant see it ever getting back to the days of the high end discerning client forking out hundreds and thousands for a bespoke cake.
Anyone making money at this is teaching, selling cake related utensils or making paid tutorials.