As many of you know, I'm a big excel nerd. So I made an excel sheet to show you don't have to double your prices to do half the work. My assumptions are probably wrong, so you can change those by changing the blue cells in D1, D2, and D3. (I came at the $50 overhead assuming you are paying rent and electricity and dishwashing soap, etc..... and divided all of that into the cost of the cakes too)

So I figured you can for 100 servings to make a PROFIT of $3000 do
10 cakes for $3.75 a serving
12 for $3.25
13 for $3
15 for $2.75
24 for $2.00

I was astonished when I figured that. By raising prices by $1 a serving you can do HALF the work...... whoa!

The point of course being that you would lose some jobs by having higher prices, but if you make the same money for less hours.......

Girl... your excel program is going to explode.

Still working my way through the cookie matrix!

Thanks for this one too though!

Thanks, Alice, you're my very favorite excel nerd

alicegop, you come up with the coolest!! Thanks! We should talk about a catering spreadsheet....

Excel is my weakness... I love love love making excel spreadsheets. Any opportunity I get to make one I do. Luckily I am a math teacher and have lots of reason to make them (heck I make a custom one per test to automatically grade each test on a rubric scale )

So if you want one.......... email me, I'm always looking for a new project

You may have forgotten a variable..not always are you able to make the same cake for the same amount..

in other words..10 cakes for 3.75 a serving..

but, most specialty cakes are priced by the cake..

in other words..

for me to make a monthly 3,000.00 I would have to sell..60 cakes a month, 15 cakes a week..or 2.14 cakes a day if I open 7 days a week..2 1/2 cakes if I open 6 days...3 cakes if I only want to open 5.

but, if I ever do tiered or wedding cakes...I can keep your figures in mind!!

RisqueBusiness: I certainly understand multiple variables......... this is what is making estimating my business income soooo difficult!

it gets super complicated and I certainly simplified it waaaaay down. I'm just trying to point out to all my friends who undervalue their work how they can charge more. Some of us feel bad when someone says no, you're too expensive, and stress about it. Maybe we don't need to.

Would be nice if everyone was so simple wouldn't it he he

I love when someone else does mathy stuff for me. I'm horribly confused by spreadsheets and all that. My husband just giggles at me.
Thanks for the info, Alice.

All I know is I have raised my prices 10-15% as of this past January, and if anything, I have MORE requests and prospects. The prices are still modest compared to many areas, but they seem to be "on the money" for this area.

Here is how I do my figures:

How to figure out Food Cost and selling Prices
Prices will vary on what each individual pays for their ingredients.


Lets work the figures with a SWISS MERINGUE BUTTERCREAM

Recipe yield is 5 pounds
INGREDIENTS  WEIGHT  VOLUME  COUNT   AsPurch   YIELD  TOTAL
Granulated Sugar  1 ½ pound  or 24 ounces  5#s @ purch price  .03/per oz    .72

Egg Whites  1 ½ cups or 12 ounces  1dz@purch price  .06/per oz    .72

Butter  3 pounds or 48 ounces  1#@purch price  .09/per ounce    4.32
            
TOTAL COST            $5.76

  Weigh empty bowl; then weight again when you are done making your recipe for your yields.

So, if this recipe costs $5.76 to make a 5 pound yieldthen you would divide that $5.76 by 5 to get the price per pound.

$1.16 per pound or .06 cents per ounce. (if youre working with ounces, you should break every thing down to the same unit of measure.)

.06 per ounce

It takes me 1 pound of this Swiss Meringue butter cream to decorate a ¼ sheet cake.

Soto the cost of a ¼ sheet cake you would add the cost of 1 pound of this butter cream.

(Then you work on pricing your time, if you want. so much per hour/you must time yourself; but you must have everything in place before you start to decorate! This is harder to figure out
How long does it take you to decorate a ¼ sheet from start to finish? You add those hours at the end, when you have figured out your selling price)

Im not the greatest Math person and these are very old notes so feel free to use them and correct them.)


In order to maintain a:

75% food cost, multiply the total cost of the item by 4

30%...................................................by 3 ½

33 ½ %.........( industry standard)............................by 3

40 %.....................................................by 2 ½

50 %.....................................................by 2

60 %.....................................................by 1 2/3

Example: item costs you $1.66 per pound
( Swiss meringue butter cream)
75% rate x 4
--------------------------------------
Selling price 6.64

This is a BASE for you to price your cakeThere are 3 ways to determine the price of your product.

1. You can figure out your food costs and decide what % you want to earn.( from the chart above. thats like taking your costs and multiplying them by 2, 3 or 4)

Or

2. You can figure out your selling prices with the above figures, since you already know that you will be using approximately one pound of butter cream to decorate your cake, lets price a RUM CAKE

Cost to make a ¼ sheet RUM CAKE is $8.14

Cost to make rum cake  Multiplied by  Percentage  Equals  Price
$8.14  X  4  =  $32.56
$8.14  X  3.33  =  $27.11
$8.14  X  3  =  $24.42

To whatever total youre happy with you add the selling price of your butter cream, lets say we go with industry standard of 3.33%

$27.11
+ 6.64
$33.75 would be the minimum selling price on your RUM CAKE w/Swiss meringue butter cream.

A lot more math than you guys bargained for, I know, but you should have all your recipes broken down to the last ounce! This is a very simple way of figuring out your pricing.

or

3.  Adding all the costs or figuring out the selling price or your itemone or the other, not both; you then add the hourly wage that you figure youre worth. At least what is minimum wage in your area!

DO NOT FORGET TO ADD THE COSTS OF YOUR BOARDS, BOXES, and RIBBONS, TOYS or ANYTHING ELSE YOU USE TO PUT YOUR CAKE TOGETHER!!

Good information RisqueBusiness!

RisqueBusiness, question... I wasn't trying to make a business plan with the spreadsheet, I just thought it was interesting how you can make the same money for significantly less work by just increasing the price a little bit. But now you got me thinking..... you are totally right about all the variables, so to keep it simple, do you think we could figure out an AVERAGE of what all the cakes you make come out to per serving? So then you would charge more for wedding cakes and less for the sheet and party cakes, but do you think you could come up with what you think might be your AVERAGE price per slice...... and then how about an AVERAGE of materials per slice and an AVERAGE of overhead per slice...

so I guess that would take mental guessing as to how many SLICES you make a month (HA... that sounds easy to estimate, not) and then what your monthly costs are (cake costs seperate from overhead costs... or maybe it doesn't matter if we seperate it)

So anyone, want to guess at average costs per serving you do?

I'll start..it's soo hard for me to judge the money I make per slice, because each of my cakes is custom designed and even though the cake is is there, it's secondary to the "artistic interpretation" of my subject..lol

I try to start any 2-d or 3-d cake at 75.00...does that help you?

see, charging by the slice or piece actually just works out for things that are sold by the unit, or slice like a cookie , cupcake or tiered cake.

It works best on a "traditional" cake like a

carrot cake
chocolate cake
german chocolate
Sacher torte

cakes like those.

and of course, wedding type cakes ( tiered )

Again with all the variables, you just like to complicate things don't you RisqueBusiness I hate it when you are right... no I don't, I love it!

So... I updated that pricing spreadsheet. This is of course 100% FOR FUN and not intended for anyone to make any rash descisions off of he he

I STILL find it interesting that a $1 increase in "per serving" (how ever the heck you want to define that!!!!!!!) will get you the SAME PROFIT for HALF the work.

I don't own a bakery so the numbers I threw into this thing are 100% fake! So everyone, your job is to put your own numbers into the blue boxes and see what price you would charge to do half the work.

If nothing else you can marvel at my algebra skills.

Have I proved my nerdy status yet?

I am surrounded by a cloud of smoke created by my brain when I tried to comprehend what was being said. After reading a couple of bouts between math wizards I came to the conclusion that I need to go play a game of solitaire and try to forget what I just read.


erase. erase. erase.

Who knew there were other math teacher/ cake decorators out there. I'm prolly gonna end up changing my major to business, but it's good to know there are people I have things in common with out there.