I have a terrible delimma I need some advice on! I've been taking cake decorating classes and will finish up around the end of October. My family & friends know I've been taking the classes and they have all been very supportive and complimentary. I've been rolling the idea around in my head to start a small home cake decorating business when I finish but here's where the problem comes into play. A large number of my family & friends have been asking me for free cakes. I've always made cakes here & there for them for several years now (with an average of maybe 1 or 2 per year per person for people other than my immediate family) but I've had 4 people this week to ask me to make them a cake for free for 'the practice.' If they aren't asking for a free one they are asking me if I'm going to give them a great deal when I start selling cakes since we are such close friends. What should I tell them when they say this? I wanted to start the business to earn a little extra money, but no one has offered to buy a cake at regular price so far (I've not gotten to the point to where I've set any prices yet, but no one has even asked.) It almost makes me want to give up the cake business idea before I start. I think I'm gonna hyperventilate. Help!!
Well you could try explaining to them that you are starting a business and although you would love to give them all cakes for free or at cost you really cant afford to as you have start up costs to cover and need to organize your price list etc. For your immediate family who should understand your position the most maybe you can tell them that for every customer they send your way you can give them a discount on THEIR next cake. Just make sure they understand the cake has to be for them not a friend of a friend or an inlaw or such. Just my thoughts hope this helps but whatever you decide pls dont give up before you even start. 
Well, for starters I would tell them that things have changed now that you are running a business. If you had decided to go into real estate you wouldn't give them a free house! Okay, not the same, but still.....
Just be gentle yet firm. You gave away all those cakes in the past to 1) Get experience and 2) Build a reputation. And now that they know how great you are you need their help (people LOVE to help) to build your business with referals and word of mouth.
Not to say that you can't give them any discount. I do all the cakes for our office. My boss always pays me cost of ingrediants + $10 for a basic sheet cake, $20 for a stacked cake and I charged her $30 for her carved hippo cake. (It's in my photos if you want to see it)
That is less than I would charge the general public, but I am still new to this and need more practice. That way it is a win-win for both of us.
Hope all of that helps!
I think its rude for anyone to ask for a free cake (and actually expect you to follow through!) -- If you do a free cake, it should be your own idea!!
I think you should hand out or e-mail price lists to these friends so that they will know that you are serious about starting up a small business. You could even attach a note saying thanks for being such great taste testers-- but now you're open for business :O)
WOW! Thanks for the advice! Darcat, I'll have to memorize what you said so I can tell my friends/family that the next time they ask for a freebie and hockeygirl658, the real estate comparison was great. I never thought of it that way. Your advice was right on the money. Thanks to you to Elvis! I thought asking for a free cake was bad manners too. I don't know why I couldn't think of things like this to say before. I would just stand there like a deer in headlights!! Thanks again!!
Elvis,...that's a GREAT idea...it sounds tactful, and I can't imagine that ANYONE would be insulted...if they are, they are only looking for a freebie! Heaven knows, I given my share of free cakes before I got serious with charging...I figured it was the only way to get the word out that I was starting a small business...but that's the thing...I OFFERED them for free! NO ONE has EVER asked me for a free cake! That would really put me off! If I offer, that's one thing! If THEY ask, that's just plain rude.
Wow! I can see how you would be ready to hyperventilate!! You definitely need to charge something because even practice costs money, something most people don't think about. It's up to you and the ideas these others have offered is great! Tell your friends and family that you at least need something to cover your ingredients, that's just curteous!!!
If they're looking for a freebie, ask them what they'd be willing to barter. Do they type? Great!---they can do your fliers! Do they babysit? Cool--they can watch your kids (if you have any) while you bake for paying customers. If they're looking for a freebie for your business, don't be shy about tapping into their's! If they don't want to barter, then they'll probably stop asking for freebies. Maybe.
Wow....the NERVE of some people!! 
I wonder how many of those same people would be all cheery if asked by their boss to put in an extra 8 hour day at work and NOT get paid for it. I can guarantee that wouldn't go over so well. They shouldn't expect something of you that they aren't willing to do themselves...easy enough? 
I am not doing cakes for business, but even my mom will never ask me for a cake, she usually sends me regular baking ingredients (a few bags of flour, sugar, powedered sugar, etc.), if I bake her anything and she's constantly buying me gifts as payment. (I refuse to take $ from her, i'm not quite professional yet.) My brother is a CPA and the only ones who even get discounts are my parents and his in-laws. It's not fair for people to expect you to work so hard for free!!
I totally understand! I'm not even going into business, but now that everyone knows that I'm teaching myself to cake decorate they all want me to test one on them! I'm not ready to do that. I'm still pretty intimidated each time I approach a new cake and it takes me 2 weeks or so to get from the idea, to the baking, to the frosting, to acutally deocrating the cake. If I charged by the hour my cakes would cost $2,000!!
I agree with the previous posters....just be kind and honest and I'm sure that they'll understand. Thank them for their confidence in your work and ask them for a written tutorial to put with your fliers. I would also offer a 25% discount to immediate family members or something like that to single them out!
The way I do it is that if they ask they pay at least some to cover ingredients. Otherwise I generally give the birthday cake as a gift to the birthday person with a card. Of course, I'm not really in the business so not sure how I'd do it if I was.
I have just started decorating cakes and have been giving away cakes and cupcakes to the neighbours in my building and some friends.
A friend came over on Sunday night and offered to give me butter and buy eggs etc. because she felt bad always eating cake and having me buy the supplies. I thought that was very nice of her, and I will take her up on her offer when I need more supplies 
I am hoping to make birthday cakes for the neighbours kids and if I volunteer/am asked to make the cakes I will ask for the cost of supplies so that I am not always out of pocket. If they want to pay me for my time, that is fine but not expected for now.
It is RUDE to expect anything for FREE much less as for it!!!
I am here to tell you once you give them away they will always expect them to be FREE... DON'T DO IT!!!
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