What Is The Average Profit You Make On A Cake? Can I Ask??
Business By gingersoave Updated 22 Sep 2009 , 6:04am by annisa523
cakebelle, we dont' mean to make it sound like it's all outgoing. Of course there has to be incoming to cover it or the lights and gas get shut off and the landlord changes the locks on your door! 
I think what we are wanting to do, here, is help anyone just getting started with ALL of the expenses involved. There were a lot of things that I overlooked when I first opened up; a lot of expenses I didn't account for (that fifty dollar mop bucket STILL pi$$es me off! 
).
Part of why I share is because what may be considered "good money!" when you're working out of your home, won't even cover all of the new expenses incurred when a shop is opened. That a schedule of 6 or 8 cakes a week might be a big schedule at home, but it won't pay the light bill in a shop.
We're not trying to kill the dream or paint a drab picture .... we just want to open the window with a clear cut view of reality. 
Yeah, I agree. I make what I consider to be "enough" of a profit to make it worthwhile, but there's a lot more that goes into the expenses than just the ingredients for the cake.
I think that the point we're trying to make is that you have to take everything that goes into each cake into account, including all of the miscellaneous things that are small, but that add up. If you don't, you'll be working for $2 an hour, and will burn yourself out really quickly.
Everyone I know who's decided to start a cake business has ended up raising their prices once they see what's involved, and the true cost of each cake.
.... but there's a lot more that goes into the expenses than just the ingredients for the cake.
omg, can we get this phrase posted somewhere in size 42 font? It's been said over and over and over in thread after thread after thread. Once this statement is recognized and accepted, the whole thought process gets easier and easier to comprehend.
.... but there's a lot more that goes into the expenses than just the ingredients for the cake.
omg, can we get this phrase posted somewhere in size 42 font? It's been said over and over and over in thread after thread after thread. Once this statement is recognized and accepted, the whole thought process gets easier and easier to comprehend.
HECK YEAH !!One day I REALLY detailed it, down o my time and gas shopping for items.... you really gotta add those things up or you'll lose out. People say the stupidest things like " well I can add sugar , eggs & water and make it for 1/3 that price..." Well knock yourself out, and send me pics of that $10 cake when your done !! Grrr
Make it worth your wile and I think you'll enjoy it more, I know I do !
I by no means have my actual cost all figured out (overhead is such a guessing game). But I have to say that CakeBoss has really helped me with the ingredients portion of the cost. Anytime I estimate a cost then plug it CakeBoss I am shocked at how much the ingredients actually cost. It helps put a perspective on things for sure.
cakebelle, we dont' mean to make it sound like it's all outgoing. Of course there has to be incoming to cover it or the lights and gas get shut off and the landlord changes the locks on your door!
I think what we are wanting to do, here, is help anyone just getting started with ALL of the expenses involved. There were a lot of things that I overlooked when I first opened up; a lot of expenses I didn't account for (that fifty dollar mop bucket STILL pi$$es me off!
). Part of why I share is because what may be considered "good money!" when you're working out of your home, won't even cover all of the new expenses incurred when a shop is opened. That a schedule of 6 or 8 cakes a week might be a big schedule at home, but it won't pay the light bill in a shop.
We're not trying to kill the dream or paint a drab picture .... we just want to open the window with a clear cut view of reality.
Thank you Indydebi, that's what I was trying to understand!
Oh yes! people just don't realize what goes into making just one cake!!!!!!!!
I try mostly for a good hourly "wage".... I know there are probably a few small expenses I overlook but pretty much I keep track of my monthly profits.
Its working perfectly for me as a home baker....of course the only bad part about being a home baker is being limited as to how many orders that I can accept! On the other hand, if I owned a bakery, it would be alot more stressful if I did NOT have enough orders in a week.
Right now I'm bringing in about as much profit as I would be getting if I were working an average part time job somewhere outside the home, so that's not bad at all. Would like to continue to grow, of course. If I could do more weddings and less party cakes, I'd be able to put in about the same amount of time and see the profits rise a bit.
.... but there's a lot more that goes into the expenses than just the ingredients for the cake.
omg, can we get this phrase posted somewhere in size 42 font? It's been said over and over and over in thread after thread after thread. Once this statement is recognized and accepted, the whole thought process gets easier and easier to comprehend.
Not to mention the age old "Time is Money". Sure people could make a cake themselves for tons cheaper but their cake won't have eight hours of work and custom art involved! You get what you pay for.
profit is a loaded word - to me, as an accountant, your actual profit is calculated after you take out all your expenses, not just the "cost of goods sold". What you've calculated is the barest of gross margins...
YES! Thank you for pointing this out, CanadianChick. It bothers me tremendously when anyone believes profit = wages. Although I can guess at what someone means by this, it is such a wrong-headed way to look at the concept.
When a corporation generates a "profit," it typically uses this to reinvest/expand or to disburse to shareholders. At that point, everyone has already been paid---salary, benefits, *and* bonuses. I worry that the profession of cake-making is devalued when what one receives for one's labor is erroneously termed "profit."
My apologies for the rant--just something that's concerned me for a while.
Defenitely eye opening! But when you are a home baker, when do you go "legal", I started making my family and relatives birthday cakes-no charge. Then a friend here and there - no charge. Then i had to start charging aqcuantances, the first one I charged $20 just for suplies pretty much. I'm doing more but it's not constant I go even a month nearly two with no orders, then maybe 3 in a week, two weeks nothing then one order and so on, I don't have a certified kitchen, and all this insurance and other fees besides utilities and supplies are much more than I can handle. Whatever profit I have made I have invested in all the basics: pans, boxes, stands etc. At the same time I don't want to be in trouble. If I had a business license I could write all that off and come out with no profit. So that's how most everybody starts, but when do you go legit, license, insurance, commercial license etc.
Thanks everyone! I appreciate a response, anyone? everyone?
So for those with shops...can you at least make a decent living? It just sounds like at the end of the day there's no money to pay for anything.
I understand everyone trying to help us understand what it's like as realistically as possible...but I just come away thinking it's not worth it at all.
Why would anyone want a shop?
So for those with shops...can you at least make a decent living? It just sounds like at the end of the day there's no money to pay for anything.
I understand everyone trying to help us understand what it's like as realistically as possible...but I just come away thinking it's not worth it at all.
Why would anyone want a shop?
That's one of the reasons I haven't jumped off that cliff.
For me it only works if I can use my home to work out of and legally I can't do it welcome to my world.
On the upside I got to do a bd cake for my son's gf and I feel human again.
well it cost me 45.00 a day to keep the doors open....that's even on the days i'm closed.
it's a lot of hard work...jammed up into really 3 days a week.
on some cakes i make 100.00 an hour...
my average cake cost me 10 bucks in materials....and i get about 50 for it.
the profit margin on some stuff isn't worthwhile for me, like cupcakes...i'm with duff i hate cupcakes.
i don't have a housepayment, or a car payment, or i couldn't do this for a living....but i guess on the other hand i was able to pay cash for a new roof with a special i ran on wedding cakes for a couple months.
i never thought of it before.....but like someone said in this thread....those famous peeps do get pretty excited about winning 10K on those contests....hmmmmm
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