If You Figure An Hourly Rate Into Your Final Price...
Business By chelley325 Updated 28 Aug 2009 , 3:33pm by indydebi
Even if you don't want to figure out an hourly rate and apply it across the board, figuring out how much time you tend to spend on each cake can be helpful to set a base price per serving. The basic idea is to not rip yourself off and underprice things, which a lot of people do.
I think there are a few ways to look at this.
One very important point, which was alluded to earlier, is simply this: do I work at a fast enough pace that I can presently make a profit doing this?
If decorator X can make a certain cake in 3 hours, yet you need 6 hours to make the same cake, can you justify charging for 3 more hours of labor on your part? In general, I wouldn't think so.
However, as has also been stated, if other decorators need 6 hours and you only need 3 hours, you also should not be penalized for this.
The hourly wage idea, I think, is most important in deciding if you can be profitable, or if this is still something that is just a hobby for you.
Of course, the quality of your work also comes into play. The better your work, the more the market place will allow you to charge. The lower the quality, the lower your rate.
It is like most other businesses. If your work is a high quality, you can usually expect raises or other opportunities to work for a better wage. If your quality is poor, you may be stuck at a dead end job with low pay or end up with no job at all.
All of that figures into the bottom line, yes?
I agree 100% with ziggytarheel. Also, with advanced skill is that other old basic economics principle of supply and demand. If you're awesome and lots of people want your stuff, you can charge more for it. My friend who does hair out of her home recently repeated to me what was advised to her "If you're so busy you're turning work away, its time to raise your prices."
I have the cake boss but ALWAYS underestimate time. I always say 3-4 hours ARG Any one actually figure time out? The matrix on here has time on it but really how accurate are they? If they are accurate then I need to up my hours!! but I can do a lot of thing fast as indy said.... So here we go again!
I have the cake boss but ALWAYS underestimate time. I always say 3-4 hours ARG Any one actually figure time out? The matrix on here has time on it but really how accurate are they? If they are accurate then I need to up my hours!! but I can do a lot of thing fast as indy said.... So here we go again!
I can't estimate time. I suck at it. I stated earlier that it takes me 2 hours to make 36 cupcakes based on the last time I timed myself (1 year ago) I had an opportunity to time myself again and I made those cupcakes - frosted, boxed and out the door in about an hour and 20 minutes. (this is pushing it. I prefer to chill them a bit but they were going straight into someone els's refrigerator)
I am rarely working free of distraction and I am rarely working on just one thing. Way back when it took me 5 hours to make those cupcakes I had time to focus on just that order and time myself. It is impossible now. I don't have time to make just one 8" cake, 10" cake ect. and time myself.
I would love to see someone else's estimates of how they spend their time per project
Mamas, depending on what those other distractions are, sometimes they have to be counted.
For example, when my staff puts cookies in the oven, I have them cleaning or wrapping silverware or something. While they are not directly working on that cookie order, their payroll has to come from somewhere; they are still doing work that is required and needed for the business, even if it is not directly chargeable to that particular cake or cookie(s) that are in the oven. It's called overhead and every order pays part of it. So jobs not directly related to the baking project ..... ARE related to the baking project! 
Mamas, depending on what those other distractions are, sometimes they have to be counted.
For example, when my staff puts cookies in the oven, I have them cleaning or wrapping silverware or something. While they are not directly working on that cookie order, their payroll has to come from somewhere; they are still doing work that is required and needed for the business, even if it is not directly chargeable to that particular cake or cookie(s) that are in the oven. It's called overhead and every order pays part of it. So jobs not directly related to the baking project ..... ARE related to the baking project!
I took a cost economics class once a really really long time ago and don't remember much but I do remember thinking how nitpicky people are when I saw a chart of all the things that go into determining the price of a cookie- .0005 cents for dishwashing liquid ect. I don't think they are so nitpicky now! I also remember a lesson on determining profit and this "overhead" and all that goes into it. I sort of get it and I often think about the hidden costs of a project when I am baking and especially when people complain about my prices but I wasn't primarily talking about those kinds of distractions.
I am talking about wiping a runny nose, listening to yet another of the hubby's attempts at humor, a friend who calls (who I have cut off ten thousand times prior) who just doesn't understand that having a phone in the crook of your neck and flipping a cake out of the pan isn't advisable . . . thats the kind of stuff I mean when I say distractions.
A seperate but related issue is the issue of teasing apart how much time is being devoted to each thing when you are working on multiple projects. When I am I try not to have an empty oven or idle hands. NO ONE and I mean NO ONE is allowed in the kitchen when I am really rockin' and rollin'. I think of it in terms of four people getting into a taxi and the driver charging each one of them $10 for going to the same place instead of $10 in total for the trip. As a cab driver it might not be fair but as a cake decorator it is essential. I just whish I could figure out what each fare should be. for now I charge by the slice and pray that the price I have come up with covers the hidden as well as the obvious costs.
Fortunately, I am still small enough that my ineptitude hasn't bankrupted me yet. 
I took a cost economics class once a really really long time ago and don't remember much but I do remember thinking how nitpicky people are when I saw a chart of all the things that go into determining the price of a cookie-
I think that's a great example of academia trying to teach "real world" people! They really think people add in miniscule things like that. When I worked in mfg'ing, we'd clump those little non-measurable items into a one-line charge of "misc".
Also reminds me of Rodney Dangerfield in "Back to School" where he's trying to tell the prof that he "left out a whole lot of things ... like paying off the unions!" hahahahaha!
I am talking about wiping a runny nose, listening to yet another of the hubby's attempts at humor, a friend who calls (who I have cut off ten thousand times prior) who just doesn't understand that having a phone in the crook of your neck and flipping a cake out of the pan isn't advisable . . . thats the kind of stuff I mean when I say distractions.
With a name like "mamas", that's kinda what I thought you might have been referring to .... so that's why I CYA'd (oh wait ... that would be CMA'd, huh?) with "depending on what they are"! 
yeah I'm a mama . . . I tried to explain how disruptive things like a runny nose could be to my friend (who was on the phone in the crook of my neck at the time) I told her how I would have to stop, clean the nose, throw out the tissue, wash my hands, dry my hands . . . and she said "I don't understand. Take your apron wipe and keep going." and I said "Remind me never to eat anything you make again."
yeah I'm a mama . . . I tried to explain how disruptive things like a runny nose could be to my friend (who was on the phone in the crook of my neck at the time) I told her how I would have to stop, clean the nose, throw out the tissue, wash my hands, dry my hands . . . and she said "I don't understand. Take your apron wipe and keep going." and I said "Remind me never to eat anything you make again."
HA LOVE IT!!!!!! so true... people can be a bit.... well....GROSS
yeah I'm a mama . . . I tried to explain how disruptive things like a runny nose could be to my friend (who was on the phone in the crook of my neck at the time) I told her how I would have to stop, clean the nose, throw out the tissue, wash my hands, dry my hands . . . and she said "I don't understand. Take your apron wipe and keep going." and I said "Remind me never to eat anything you make again."
HA LOVE IT!!!!!! so true... people can be a bit.... well....GROSS
This is a great example of how my husband proclaims "everyone says their house is clean, but everyone has a different standard of clean."
His favorite example is a relative who lets her dogs lick off of the dinner plates. Many folks do this, I know, and the logic is "I'm going to wash it anyway", but to hubby this is the most gross thing in the world. To this relative, she is a clean person (and to walk in her home, you'd think so, too). To my hubby, she isn't.
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