Hi! This is my first time posting on CC even though I have been following the site and forums for a long time... you guys are all so talented!
A little about me before I explain my situation... I have been baking as a hobby for a while (well, not too long, ~5 years... but I'm only 22) and since starting, I always dreamed of having my own bakery... Recently (after the birth of my daughter in August), I decided that I want to pursue my dreams and I am getting as much info on baking as a business and trying to learn as much as I can... I am certainly not as good as most of you on here, but I am learning and I am practicing as much as possible... I bake every chance I get!
Anyways, over the past few months I have been bringing in cakes for coworkers birthday (I work in banking) and "just because" (for practice since my husband isn't much of a fan of sweets and I can't keep them at home or I'll gain even more weight-still 50lbs to lose after my daughter was born). Everyone was raving about the great taste and the presentation and even suggested starting my own business, which I informed them of my "services"...
After this, I was having lunch with one of my good friends who works with me and she was telling me about her twins' birthday party coming up. So, I offered to do the cake for her and she was excited that I would do it. I am only charging her the cost of making the cake since I did offer it and it will give me more practice...
Well, another coworker overheard my conversation with my friend and a few days later he told me about his daughter's birthday party coming up (mickey mouse club house themed). He started talking about the cake and I gave him ideas on what I could do for him. Then, he said, "well I am going to try to do this myself"... The following week I was talking to his assistant and she casually asked me if I was doing his cake and I said, "well, I think he is going to do it himself" and he came over and said "well, I am only doing the topper" (which, I found out after, he just bought a toy version of the clubhouse and plans to just place it on top of a sheet cake AND RETURN IT AFTER...) "maybe you could do the sheet cake?"
I agreed to do it, but after thinking it through, I am sure he is expecting me to do the cake "at cost" and I really don't want to do this... I would like to charge him the regular price of a cake (I will be using the matrix from CC to make sure I include all the "little things") because I don't want people to start assuming that I will do this for everyone. Also, it bugs me because he is REALLY cheap... don't get me wrong, I enjoy getting a good deal, but he is plain old CHEAP!!! I can name numerous occassions that prove this, but I am already writing a novel here, so just put it like this... he has a bounce house that he rents out on the side... he rented it to a coworker (that we are both VERY good friends with) for full price!
I am thinking that if he expects everyone to pay full price for his "service" than he should pay full price for my cake!
Anyways, I know I should charge him full cost (which is still really cheap since I'm a beginner), but what should I tell him? I am planning on talking to him later today to get the # of servings and give him the price, but I am sure he is going to bring up the fact that I am doing the cake "at cost" for someone else... I don't want to lose him as a client since I'm still new at this but I don't want to get ripped off either... ahhh I'm confused!!!! 
Any suggestions???
Thanks!!!!!!!!
Annie
Tell him that you and the other co worker are close friends and that you are only charging cost because you offered to do it for her. He will be charged full price because he asked you.... or don't explain and if he doesn;t like your price then tough luck for him.
Clients pay full price. Only spouses get a discount for all the crap they put up with. If you are going to be in business, put on your big girl pants and charge a fair rate. Otherwise keep doing them for free. I make cakes all the time for my wife to bring to work for free. She gets requests all of the time for me to charge for someone's birthday party or something. I would charge $75 for my simple double layer half-sheet. It's a lot of work. I only do it so my wife can score points and ease her job as a supervisor. She gets them for free! 
Starting up a business means putting on those big girl pants. (My family always wants a cake at cost) I just did my sisters 5 teir wedding cake and she only had about 50 people there but when she learned that I was going to make here a cake as my gift she quickly changed from a simple three teir to five teir and was very specific where before she was all about keeping it cheap. Best to discuss with him now then start at cost with him, if he gets upset explain you are only doing the other at cost because you offered to do it first. Just my two cents. If you don't stand up now they will all expect it before long at work.
Give him your price and if he dares to tell you that he overheard you offer to make someone else's at cost just remind him that she's a very good friend.
If he brings it up you could always make a deal with him and trade your cake for the use of his bouncy at your daughters birthday party!!
Don't tell him anything. A week or two before his party hand him over an invoice(no words need to be spoken other than "Here's your bill for the cake). Tell him when it's due. When he pays it, you'll make his cake. Nothing there to explain. It was silly of him to assume that you would do it at cost. Why would he? Just because he over heard a conversation to your good friend that doesn't mean it was an open invitation.
Thanks for all your advice. You are right, he is crazy to think that I would do it for him at cost. I went by his desk to talk to him but he wasn't there so I sent him the following e-mail:
Hey! What date is the birthday party? And how many servings do you need? I know you mentioned that it needs to be big enough to accommodate the club house bank that you want to prop on it.. Can you give me the measurements so I can see what size cake would be necessary? Have you decided on a flavor? Let me know so I can start getting ready.. Thanks
Once he responds I will quote him my price and see what he wants to do... I really appreciate your input and I will definately put my big girl pants on from now on!! LOL... I know I shouldn't, but I tend to think that no one is willing to pay up for a quality cake... I gotta repeat to myself: If he want's Costco price, then he can go pick up a Costco cake!
Thank you all... and I will keep you posted on what happens...
I'm a hobby baker for family and friends. My general rule is that if I am asked, they pay for it. If I offer then it is free. And when I do a free cake they don't get much of a say on it. It is my choice how big and what design it gets, not theirs.
When it comes to selling cakes I think you have to make a decision across the board. Either do everyone at cost cause you want practice or charge everyone full price. You run into issue when you do it for one person you know and not another or one co worker and not another. Even if there are good reasons for it, and who you charge what is your business, when you are in a work situation it could make things get sticky.
If you do offer discounts, then you need to have a rule in place for who gets them and when. A discount is my choice to offer, not something everyone deserves. And if someone does get a discount you need to make it clear to them what the cake would cost that way when someone else ask they will get the normal price and you won't have the well you charged so and so $20 for that cake why are you charging me $40.
What about doing an at cost (make sure you charge for the support of the toy and everything) this time, and tell him that this is his first time pass, every cake after that is going to be $XYZ. That way he realizes he is getting a deal and not that you are cheap.
I know it isn't the popular opinion, but I wouldn't blame him for wanting the cake at cost if he did over hear you tell someone else you would do theirs at cost for practice. In his mind he is thinking what is the difference, it is another practice cake. (I'm not saying give him what he wants, but that I can understand him asking about it.)
If you do decide to charge him full price then be firm about your decision. You don't have to explain anything. If he doesn't like it then he can go buy a sheet cake somewhere else.
And if you haven't rented the bouncy house from him and paid full price for it, then I wouldn't even bring that up. Isn't that the same thing you don't want him doing? Questioning why you are changing someone else something else?
I just did my sisters 5 teir wedding cake and she only had about 50 people there but when she learned that I was going to make here a cake as my gift she quickly changed from a simple three teir to five teir and was very specific where before she was all about keeping it cheap.
The rule in my family is that I will do the cake as a gift for nieces/nephews. But if I start getting a bridezilla attitude, then you get an invoice! And by the way, that includes any mothers, sisters or other family members who want to make comments "on your behalf", so reel 'em in now before I bill you later!
Sis would have been told, "I said I'd make a simple 3-tier cake for you. If you want bells and whistles, then you're paying for the bells and whistles."
I just don't deal well with people who TELL me what I'm giving them for free! 
TexasSugar, I completely understand where you are coming from which is why I was so confused in the first place... And as far as the bouncy house is concerned, I just mentioned it to highlight his "cheapness" and the act that he expects full price for his services for everyone else and wants a discount from me... I would never bring it up to him but I keep it in my head when dealing with him... I am planning on just telling him that I am charging my other coworker so little as I am returning a favor and that normally I would have charged her $XYZ... that way he will know that I am not cheap.
Anyways, he said he is going to measure the topper tonight and will let me know how big of a cake will be needed. From his description, I am thinking a full sheet cake...
OHMY... He just told me the party is for next Saturday the 27th! So, I need to hurry and get him an invoice so he knows what I am charging... AND he is asking for samples...(he has tasted my baked goods a few times already)... I have some chocolate and orange in the freezer and I don't mind bringning them in since they have already been "expensed", but he wants a flavor I don't have handy (believe it or not... VANILLA!)... should I proceed to bake a batch tonight? (BTW - I do my samples as mini cupcakes) is it worth it to bake samples for his wife? I mean, it's only a sheet cake! I mentioned to him "well if you enjoy my chocolate and orange, I am sure you will like the vanilla just as much"...
Sorry for all the questions, but he has me soooo confused!!!
THANKS EVERYONE!
I only provide tastings for wedding cakes and orders over $100.
Tell him you need to know the dimensions no later than tomorrow so that you can give him a price. Then make sure you get a non-refundable deposit (mine is 50%).
And if he complains tell him "I understand if you want to order a cake from somewhere else."
End of discussion.
Do not get into a conversation about why the price is what it is.
Starting up a business means putting on those big girl pants. (My family always wants a cake at cost) I just did my sisters 5 teir wedding cake and she only had about 50 people there but when she learned that I was going to make here a cake as my gift she quickly changed from a simple three teir to five teir and was very specific where before she was all about keeping it cheap. Best to discuss with him now then start at cost with him, if he gets upset explain you are only doing the other at cost because you offered to do it first. Just my two cents. If you don't stand up now they will all expect it before long at work.
How do you make a 5 tier cake that only serves 50? How do you even make a three tier for only that many? Were some dummy tiers? Or did she think she'd have more guests and only 50 showed up?
... AND he is asking for samples...(he has tasted my baked goods a few times already)...
You gotta give him Indydebi's line : "My vanilla cake is just like my chocolate cake except it tastes like vanilla"
(Hope I quoted correctly!)
No samples - he's tasted your stuff already - he knows you can bake.
annieluz, I totally get where you're coming from. I am also a new baker ( well, a new cake decorator anyway!) and I've already felt the' OMG what do I say about price' worry. So far I'm just charging cost also because I feel my practice is important. Also, I suppose I'm hoping this will help get the word out. But I'm doing a birthday cake for this weekend that my neighbour wants to pay me for and I don't know what to charge. She originally brought up having a cake made but I followed up pretty vigorously. Now is that pestering or marketing? 
Anyhow maybe I'll figure out the cost and add a small percentage or just charge 2 or 3 bucks per slice. It's a 9x13 chocolate with BC filling and a fondant ocean theme. Sorry to hijack your thread, it just seems like a pretty familiar tune!
... AND he is asking for samples...(he has tasted my baked goods a few times already)...
You gotta give him Indydebi's line : "My vanilla cake is just like my chocolate cake except it tastes like vanilla"
(Hope I quoted correctly!)
No samples - he's tasted your stuff already - he knows you can bake.
Dito! No sample at all. He knows you can bake and baking is what a tasting is about, not trying every flavor to pick the one you want. If he wants to try your white cake tell him sure, I will bake you a 8in cake for $xyz for you to taste.
It doesn't matter what you charged someone else. That is between you and her. Just let him know what price you would charge him. He can take it or leave it. I would be careful because I have a feeling what he is thinking and you are thinking are going to be two different things. I agree if I offer no charge, if someone ask me then I give a price or depending upon the event I just tell them to get me a gift certificate to michael's so I can get more crafting stuff. So far it has all been good.
I am amazed people want tastings for party cakes. if you do a tasting you should absolutely charge him full price..that is ingredients and your time not going towards an actual order. As a newbie and reasonably hobby baker, I don't charge as much as I should but I don't do tastings either...if people want me to do a cake they know two things...it will be one of my favorite flavors (they can choose from about 4) and it will be better than what they are paying for because I always want to try some fancy new technique
Don't start the discount thing at work...it will only get worse...Good luck and I'm sure the cake will be adorable.
sorry, i don't have much advice but the bank is roughly 10x12...that way you can arm yourself with some numbers before you see him tomorrow...Good Luck!
My sisters cake sizes were 14, 12, 10, 8, 6 and there was so much left over (as I knew there would be), I made sure to take boxes with me to finish cutting it up and place and deliver to others in the family. What really sucks is I'm a hobby baker so I did this with my full time job and a two tier baby shower cake for the same day. She also wanted this sparkle gel icing on the side for the top tier, I had to drive an hour to deliver this cake and it started melting and I was so upset that the time I had in on the cake just didn't seem to matter because it just looked so bad. (pictures will be posted in a few days) I felt like nothing I could do was going to be good enough anyway so maybe I didn't put so much of my heart into it anyway.
I am still looking for a lot of backbone myself. LOL.
No more freebies for me.
Arghhhh!!! I caved and brought him a sample (3 mini cupcakes -1 each of choclate, vanilla, and orange) and a little cup of BC... I was doing boxes last night to bring to my previous boss as a gift for her birthday and I figured since I was already up doing it, I might as well just set some aside for him. When I brought it to him today, he was suprised and said "Wow you didn't have to get all fancy" (which IMO it was NOT close to fancy... i'll post up pics tonight so you all can see). Ughhh I am soooo annoyed at myself right now! 
Based on the measurments of the bank (thanks to rharris524!), I am thinking the smallest I can go is an 11" x 15" cake, anything smaller would look disproportional... According to the cake matrix I downloaded from one of the forums, I got $86.21, which is $1.44 per serving plus a delivery fee of $9.27(I used the IRS reimbursement rate of .55/per mile)... I am giving him a 13% discount to make it $75.00 even... Does this sound about right?
butterfly831915 I can only imagine how you felt with all that pressure on you... I was up til 1AM just doing mini cupcakes and boxing them up... you must be EXHAUSTED after all of that!
CountryCakery4.. we will get better at it with time!!!!! good luck with your neighbor!!! keep us posted...
Based on the measurments of the bank (thanks to rharris524!), I am thinking the smallest I can go is an 11" x 15" cake, anything smaller would look disproportional... According to the cake matrix I downloaded from one of the forums, I got $86.21, which is $1.44 per serving plus a delivery fee of $9.27(I used the IRS reimbursement rate of .55/per mile)... I am giving him a 13% discount to make it $75.00 even... Does this sound about right?
$86.21/ $1.44 = 60 servings. Is this a double layer cake?, because an 11x15, when cut in 2x2x2 pieces, serves 35. A double layer, cut in 1x2x4 pieces, serves 70.
So to use round numbers (based on your figures above) of $1.50/serving, a single layer would be $52.50 (35 x $1.50) and a double layer would be $105 (70 x $1.50). Plus delivery.
The IRS reimbursement rate has NOTHING to do with your delivery fee. The IRS rate is a reimbursement for wear and tear on your vehicle and vehicle expenses (like gas). It does NOT cover insurance to cover said vehicle, the payroll for the person driving the vehicle (whether it's you or an actual employee, it's a payroll expense), the loan expense to even OWN the vehicle. I charge $1.25 per ROUND TRIP mile.
And it's round-trip because if you had to actually pay an employee to deliver this cake, the employee wouldn't clock out once the cake was out of the van ... you'd still be paying them to get back to your shop and you'd still be using gas to get back to the shop. (Whether you have a "shop" or not, the premise is the same.)
I wouldn't worry about losing customers. The further you get into caking you realize that there are A LOT of people out there looking for quality, custom cakes. With a little bit of marketing (and sometimes you don't even need to do that, word of mouth will do most of it) you will have more customers than you can handle. It's not worth bending over backwards for one or two. Remember, your customers are lucky to have you. By discounting your product for no real reason, your insulting your own product and your own work.
you guys are right... I think I'm going to cut this one lose if he doesn't want to pay my price... THANK YOU ALL...
I've heard of people asking for samples/tastings for wedding cakes not for b-day cakes...
He sounds like a person that will drive you crazy...he already is!! if I was you I'd send him stright to Wal Mart!
I'm also a 'hobby baker' and do all my cakes for free for close friends and family, but I'm with Indydebi on this: -- I just don't deal well with people who TELL me what I'm giving them for free!
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