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Deposits??? Yes or No??

post #1 of 3
Thread Starter 

I am a new small unlicensed business. I am trying to mostly handle cupcakes, but am willing and enjoy cakes as well. I'm sure I already know the answer to this, but is it pretty normal to require some type of deposit on cake orders? If so at what point do you start asking for a deposit, and how much of a deposit do you ask for. I ask this because I just had a customer cancel. And of course I did have someone else contact me today about a couple cakes for this weekend, which I told her I wouldnt be able to do because I already had two cakes booked. I am now trying to get a hold of her to see if she is still interested. Any input would be awesome. Thanks!

post #2 of 3

Yes.  Always get a deopsit, and make sure that you state that it is non-refundable.  I do mainly wedding cakes so my price point and average order are probably more than what you deal with, but I require all orders under $300 to be paid in full to book and orders over $300 required a $200 deposit and the balance to be paid 4 weeks before the event.  Any orders made with less than 4 weeks notice are paid in full to order.  On average cake orders are $600 and up so that works for me.  Many people require a 50% deposit (again non-refundable) and the balance due anywhere from 1 - 4 weeks before the event.  It all depends on what you are comfortable with. 

 

Take in consideration your average order amount and calculate something from there.

post #3 of 3

ALWAYS either get a deposit or payment in full when confirming an order.  I don't consider a job booked until I get payment of some sort.  I find that if I don't get a deposit, there are some people out there who may cancel at the last moment - then all of that time you spent (not to mention product) has been wasted.  For wedding cakes or more expensive custom cakes booked far in advance, I require a 50% deposit with the balance due 30 days before the event.  If I get a birthday cake order within a few weeks of the event, I get payment in full.  

 

When I first started out, I didn't take credit cards.  The deposit/immediate payment thing got a bit tricky, especially if someone only ordered something a few days in advance.  Now I use a Square card reader which I plug into my phone or iPad.  I can immediately run my customer's credit cards and know that the payment is accepted (while they're still on the phone).  There is a charge - I believe it's around 3%, but the peace of mind is totally worth it.

 

In time you'll start to be able to weed out the ones who are truly interested in purchasing a cake and those who aren't.  Good luck to you!

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