Yet Another Pricing Question

Business By Writecakes Updated 11 Oct 2009 , 1:56am by Writecakes

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Writecakes Posted 10 Oct 2009 , 6:30pm
post #1 of 4

Okay, I finally have my "base" prices down, but how do you figure costs for fondant accents, chocolate transfers and all those little extras that go on cake? Your input is greatly appreciated! icon_smile.gif

3 replies
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prterrell Posted 10 Oct 2009 , 10:42pm
post #2 of 4

Cost of ingredients + your hourly wage for how long it takes to make them. So, if a bow takes you 2 hours and you pay yourself $10 an hour and you use $15 of ingredients in the bow (just making numbers up off the top of my head here), then you would want to charge at least $35 for that bow.

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indydebi Posted 10 Oct 2009 , 11:58pm
post #3 of 4

prterrell, I'm going to add to your numbers a bit. Charging $35 in your example merely reimburses you for the expenses. I paid my supplier $15 for the supplies; I paid my employee $20 in payroll. The business earned nothing toward profit, toward overhead expense, toward business expansion, etc.

Even if a caker doesn't have an employee, if they are running a business, they have to think like a business. If the caker is the only "employee", then that's their payroll expense, not their profit.

If my 'cost' was the $35 in your example, I'd charge at least $50 or more for the bow. What I usually tend to do is figure labor at a flat $25/hour, regardless of what the person is actually paid, as this covers my payroll tax expense, my accountant expense, and contributes to the overhead and profit margin. (unless they just pi$$ me off and then it's $100/hour!)

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Writecakes Posted 11 Oct 2009 , 1:56am
post #4 of 4

Thank you! And Debi - how do I word the "piss me off" clause in my contract? icon_wink.gif

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