I'd put her on the spot by telling her "thanks, but I have friends/family who are not charging me for referrals"... if she has any decency, she'll feel like a heel.
My only response (and last words) to a friend like that...
"R U freakin' kiddin' me??" 
Could it be that she was just trying to find a way to get involved in your business...maybe it seems interesting to her and she wants to be part of it. Or maybe she needs the money.... it wasn't the best way to go about it, but i'm sure its not worth ending a friendship over. 
I agree with everyone else, she isn't a friend if she is trying to pull stuff like this. You will have orders coming from the woodwork because of true friends so tell her no thank you and that they will need to get their cake from somewhere else. Oh and if she wants a cake in the future charge her double for the trouble. Ok maybe not double but she would deserve it.
I think I would do like several have suggested. Tell her that you're just not to the place in your business where you can afford referral fees. As far as her wanting to learn how to decorate, I would charge her for lessons. It wouldn't have to be anything outrageous, but if she's wanting money for just "knowing potential customers" then she would certainly understand that you would need to be compensated for your time in teaching her.
It sounds like she realized that SHE could make some money if she only knew how to decorate cakes herself. Refer her to a cake decorating class (& charge her a finders fee for giving her the class info! 
) and wish her luck!
It sounds like she realized that SHE could make some money if she only knew how to decorate cakes herself. Refer her to a cake decorating class (& charge her a finders fee for giving her the class info!
) and wish her luck!
This is probably true... I have a few friends that have considered trying to get into decorating to see if they could make some money at it... which they weren't doing it out of competition, just trying to find a way to work at home. However it sometimes takes a few years to get comfortable enough with decorating to start charging money so...so far I don't have any friends selling cakes yet. However I do have a few friends that USED to sell cakes.... but have given it up.
Since she came up with this idea after the original call (I think I'm understanding that right, that she called you back with this idea), it sounds like someone else might have influenced her. Maybe she mentioned it to someone and they said "well, you should get paid for helping, blah blah." I would start by politely declining, I love indydebi's response. Maybe she doesn't realize how far out of line she is. As far as teaching her, I would refer her to a Wilton class.
Had you ASKED her to help get the word out, I could see her maybe expecting something in return. It never ceases to amaze me the way people are about cakes sometimes. She is a real piece of work.
As for wanting you to show her how to decorate, give her a price list of all the supplies so she can go buy her own, OR charge her a 'rental' fee to use yours, as well as an 'instruction' fee for showing her anything! 
Gook luck with this one, does not sound like much of a friend to me. 
Odd, my friends have never asked for a % for referring me. I have nearly a WHOLE TOWN (okay, not NYC, but, it is a REAL TOWN in KY) that calls me for cakes because of a FRIEND OF A FRIEND and they have never asked for anything. Consequently, I give them discounts occasionally on cakes and for my "regulars". Sometimes, when I'm "experimenting" I ask them to be my testers and they get a free decorated cake for nothing.
The key is: they have never asked for anything. That's what makes giving so fun for me!
Beth in KY
Well, I'm really honest with my friends and I expect them to be honest with me. I'd flat out tell her she's a nut and if she wants money for referrals then to slide herself on over because you're running a business, not a pyramid scheme. I'd give her a hug after I stopped laughing at her. Of course, you could also let the "$5 bonus for referrals" count toward your $100/hr rate for tutoring her in decorating.
Honestly though, maybe she wasn't being serious - just bringing to your attention that she's helping you out.[/img]
As a former manager in retail and customer service, my policy, learned the hard way, is
Never hire friends or relatives.
Consider making this your policy, and tell your "friend" that this is emotional blackmail, putting the friendship you two have at risk by bringing business into it.
Your next step is to distance yourself from this person. She obviously thinks enough of your work to know it will sell, so just let it sell itself - as was said before, you do not need a sales rep. It may take a bit longer, but if these potential customers really want you to do their cakes, they will find you. Otherwise, it is probably just smoke being blown in your face, to see if you will buckle to her demand.
This is why there are very few people in my life that I call my friends. Been there, done that, burned the T-shirt.
Theresa
I agree with shelbur10, sounds like someone else gave her the idea. Either way I'd be hurt that my "friend" asked that of me and then to teach her how to decorate. I would politely turn her down.
I'm not far from you at all bib!!!
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