Originally Posted by luvmykids2bits
Apti - I know. I'm hobby toying with business, but I struggle so much with the business side of things. I KNOW that I underprice my cakes, but I just can't bring myself to charge more, so it ends up being the cost of ingredients and a pittance for my time. That's why I'm not sure I could do this as a business....and that's why I'm thinking I should push myself and ask for the full amount rather than just "letting the $5 slide". The easy way out for me would be to let the $5 slide, but that's not good business sense, because next time it might be a bigger amount.
I need big girl cake panties and I don't know where to find them.
If your talent lies with the artistic side (baking and cake decorating), then I say again, LET SOMEONE ELSE HANDLE THE MONEY SIDE. Getting this $5 back is just a symptom of a HUGE problem. You already know that. Is there someone among your family or friends who is good with business matters? Ask them to help you. Show them this thread.
If you can't handle the "un-fun" side of a hobby "toying with becoming a business", you already know you cannot succeed as a business. (this is probably why the $5 is bothering you so much)
Here are some excellent articles/threads:
(notice the superb response by Leah_s from 4/3/12.) I LOVE her last line: "Then of course there is the baking."
Write down every single thing you needed to make the exact cake you mentioned in your original post. Paper towels, hot water, toothpicks, flavoring, frosting, filling, cake boards, fondant--EVERY SINGLE THING you had to touch in order to make that cake. Then, assign a cost to every single item. (Not fun is it......) Then, write down exactly how long it took you to shop and buy the supplies and ingredients, the gas/mileage to get to and from the store, put up the items, bring out the items, store the excess, and breakdown the amounts used for the recipe and figure out if you can use up the excess ingredients on a "future order". (Not fun is it......)
You are not allowed to "guess-ti-mate". If you didn't keep track by writing all this down when you made that cake, then make a second, identical cake. (You can always freeze it for a "future order.) Write down EVERYTHING. Then, after the cake is done and setting on the kitchen table, ready for "pretend" delivery, the dishes are done, the supplies are put up, and everything is restored to order and cleanliness..... Take the number of hours that you spent, probably between 4 and 15+ and multiply those hours and minutes by the prevailing minimum wage. [the federal minimum wage of $7.25 per hour, which translates to just $15,080 per year for a full-time worker.]
Let's suppose your COST of ingredients and supplies was $23.20 for the cake. (Total guess on my part.)
Let's suppose your time to do everything related to the cake was 4 hours. (Total guess on my part.)
4 hours at $7.25 per hour = $29.00
$23.20 + $29.00 = $52.50
$52.50 is your COST if you are only paying yourself minimum wage. (Total guess on my part.)
Let the $5 slide. The $5 is not the problem. The problem is to figure out if you paid this person "$xxx" to "take your cake". Chances are you did.