So far every cake I've made was either for free, they bought the ingredients or I charged just $65 for a 16" sq. baseball theme cake. I don't consider myself an expert (still have issues with bulging and bc sliding off the sides a little), but after using the Cake Boss software I bought months ago I'm about to hang myself or quit making cakes. I know that without a legit business I'm not suposed to be charging , but the expenses are too much! I have a lady that wants me to make a baby shower cake after seeing the (FREE) Noah's Ark I made. She wants a Precious Moment cake, so here I was thinking on making a gumpaste figurine and add $25 dollars to the $65 I thought I should charge for the cake (again, 16" sq.) Well, the ball park figure for my expenses are 56.02 for a WASC cake, bc, fondant/gumpaste accents and other materials. Short changing myself in labor, I'm supposed to charge about 160.00! Ain't nobody going to agree paying me that much!
Previous to this lady, I had another one that wanted the same sized cake with fondant animals for a zoo themed cake and when I ask her $85 she said gave me the old excuse of I call you later. (By the way I didn't sit to wait ) At this point I am really discouraged. I thought I had could make this my full time job in the future, I'm not so sure anymore.

Join the club, same with me, atleast your getting some money. I have only made a few cakes as you can see from my gallery and all have been free. I paid for the supplies and all. I have spent so much money! I have done mostly for friends and family and they expect it to be free of course. When others see my cakes, I get a call because I "MUST" make their cakes but when I quote them a price I never hear back and its a VERY reasonable price cause I want the practice. I have become beyond discouraged with it I cant compete with Publix and Sams Club pricing and if that what they want then go elsewhere. Thanks for letting me vent! lol

Time is money (plus the cost of ingredients) so your love of decorating is costing YOU big time.

Unfortunately, your desire to do cakes at ANY price is a problem YOU'RE creating in your customer base.

Charging less for a custom cake because you're not legal (is not an affirmative defense for not being licensed) so you might as well charge enough to make doing the cakes worthwhile.

You set your prices to make a reasonable profit, giving away your product isn't going to make that happen.

A custom baked and decorated cake is NOT cheap, but your customers aren't going to realize this if you don't value your own work.

If your potential customers decide you're beyond their budget, it's their problem not yours! If they have a Wal-Mart budget, they can purchase a Wal-Mart cake (as they've always done).

If not being legal is a major concern, perhaps you'd be happier decorating (and make more money) if working for someone with a licensed business.

JMHO

From the postings I've read on this board, you really have to have the nerve (I mean this in a good way) to demand your price. What I find unfortunate is that the various state's make it impossible for a small operator to make a living. So much talent untapped. I'm in California, Los Angeles county, and don't even get me started. I could write volumes about how unfair this is in regard to cakes.

I'm in PA, which is one of the states that allows cake decorating home businesses. I haven't investigated about my particular situation. I feel I still have a lot to learn and am a bit intimidated about business plans, research, etc. My major concern in opening a business is not having enough orders to cover my expenses and ending up losing money.

most business's I know of are darn tootin lucky to break even for the first 2 years.....that's why you have to have some money to sink into it and know it's sunk...but to have your business start and grow you need to move product but dont start off cheap and then have to haggle to raise prices....way too much pressure on you and you'll get discouraged quickly. A good business is a must.
All just my opinions though.

DMCG is right you are very good, love your work. I wish you the best with this situation!

rnp3603:
In Ma where I have an in home business it actually is better if I lose money for the first three years. (because I don't need to support my self with the income) In MA (and probably other states) you can lose money for up to 3 years before it's considered a hobby which means you will get money back on your taxes for any losses up to 3 years. In my case, I would get back more money from my taxes then I could earn in profit.
What my friend told me to do is save all receipts for anything you can think of that is a business expense. Even things like mileage can be written off. So all those craft store visits.... Paper for the business side, internet, phone bill, yada, yada... Tons of stuff. And if your not sure keep the receipt and ask you tax guy if you can use it.
Once I found out that losing money was better for me it took a lot of pressure off and now I can enjoy myself and not worry when people can't afford my prices. I can now slowly build up my clientele.
Jen...

I'm right there with you, rnp3603! I didn't realize I was giving my cakes away until I used Alice's cake matrix. What an eye-opener that was! I have gradually raised my prices to the point I feel I'm getting paid for my labor, although I'm not making any profit. When I get my bakery open that will change, of course. All that equipment has to be paid for from somewhere!!

Your cakes and figurines are great! DO NOT undersell yourself. Just what JanH said about charging less for a custom cake just because you aren't legal; if you are making a transaction, it doesn't matter if you are charging a penny or a $1000. At least charge what you are worth so that you can cover your expenses fully, and make a decent profit.

It hasn't been until the last year that I have felt comfortable charging proper prices; it's not easy. I make a set price per slice for bc, for fondant, and then extra for things like figurines. I made up an "invoice" that I give to all customers, so there is no question to what they have paid, and what they owe. If your customer doesn't like your price, OH WELL! They were looking for Wal-mart prices, and guess what?! YOU ARE NOT WAL-MART! Don't sell your cakes short with thinking, "My customer won't pay THAT MUCH!!!" A lot of times customers DO recognize that these are custom cakes. That happened with me a few months ago with the baby onesie cake in my photos...I quoted her $140, and thought, NO WAY she will pay that. But she handed over cash, no problem...and an extra $45 for a small plainly decorated 1/4 sheet.

Having said that, I do still make the occasional free/discount cake for close family and friends. If it is a friend of a family member or a friend, they get my regular prices.

Please don't sell yourself short, your work is lovely & I am sure your cakes taste really good. Stick to your price, that Noah's ark cake is worth $200.00 at least. One of our CC members gave some very good advice........ask the potential customer what their budget is, then you can tell them what you will do for that price.....I love that advice & use it all the time, if a customer wants supermarket prices then they must go to a supermarket, if they want something special then they will come to you.

Agree with everyone that your work is great! Luv that baseball cake! (I never would have thought of the 2-toned grass detail! Awesome "above and beyond" detail on that one!)

I have people whose eyebrows shoot thru their hairline when I tell them a sheet cake for 100 is $150 ... and I have people who just write the check for it. You're going to encounter both kinds.

Sometimes you can do a pre-emptive strike by first pointing out something like, "....yeah, you sure won't find a cake like that in the local grocery store! Let's see what I can do for you ...."

I had one inquiry just recently and I could tell she had no idea how much a carved cake would cost. She mentioned she loved Ace of Cakes. I emailed her back with "Do you realize that Duff has a $1000 minimum order for his cakes ... and most of what you see on TV is WAY more than $1000. The good news is my price isn't QUITE that much." But it planted the idea that it wasn't going to be a twenty-dollar cake.

Your work is worth their true value!

I completely agree. I'm in Oklahoma, RURAL WESTERN Oklahoma. Nobody will pay what cakes could/should be priced at. The only way that happens is if it is a wedding cake, and then they still try to get the cheapest possible.
And, yes, I know, people will pay for the "taste", for the "quality".......well, not here! They would much rather have the dry cake without taste just to get it cheaper. Out here, they have to save enough to fill the XL gas tanks of their Dodge Hemi's!
I, too, have given plenty of cakes for free or for cost only. I actually did a wedding cake and ended up putting $80 into it, my MOL thought it was a nice "gift".....for a couple I didn't even know prior to making the cake!!
Stinks, doesn't it!!

Thank you all for your words of encouragement. Ok, so I called the lady and told her that in order for me to quote her a price we needed to discuss the design, etc. On our first conversation I told her that I've been starting my cakes at $65 but was working on figuring out my actual cost so I could come up with a price list. I informed her that after figuring out my expenses, I couldn't make the 16" for less than $90. I figured a was giving her a huge discount (62 wilton party sizes @ $2.50=$155), she backfires with "but you told me $65 , and that's all I can spend right now, I'm running with all the expenses of the baby shower...blah, blah, blah" Whatever! I agreed to make a cake for her. She wanted me to go over her house to show her what I came up with. After that I got online and read your posts and decided that is got to change! I'll do this lady's cake for the $65 and treat it as a "portfolio building discount", an idea I got from another cc'er, but she better not expect me to go to her house to discuss her cake, neither am I making a 16" cake. I'm not getting anything out of this cake. If she doesn't like it, she can go to Walmart and discuss with them in which color they can make her roses and the border I'll make sure to give her an invoice and discuss in detail the actual cost of the cake so she knows exactly what I actually charge. Next time, she'll know what to expect to pay, IF she comes back.

LOVE your work and your time and talent are soooo worth it. I'd say $65 gets her a decent decorated cake but figurines will cost extra.

Good luck and no more free cakes!

Your work is awesome! I love your figurines. Stick to your guns. You're worth it!


Lisa

Frankly if she wants a $65 cake give her a $65 cake, NOT a $100 cake.

In other words tell her sure i can do a cake for $65 but it will be X size as opposed to XX size/style.

Thats why we say Custom Cakes, if they want just a plain Ol Plain Ol then go to Wal-Mart where they use plastic parts. Dont feel bad, Stick to your guns