Thinking Of Opening Business

Business By Mommyofseven Updated 4 Aug 2010 , 6:27pm by jillmakescakes

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Mommyofseven Posted 4 Aug 2010 , 4:45pm
post #1 of 3

I have been doing cakes for family and friends for the past couple of years. Now many people in the area are asking me what I would charge to do cakes. I have told them I can't legally do cakes till I have a certified kitchen. The health department is supposed to come out next week and tell me what it will take. To give you an idea of local prices I will tell you we live in a rural area and the local bakery(45 miles away) charges walmart prices for their sheet cakes and $45 for more complicated cakes. If I do get a licensed kitchen I am not sure what are fair prices. I know I need to consider cost of supplies,what others charge,and my ability. I know I am not at the point of charging large amounts for my ability. But I trust the opinion of the very talented people on CC and would love to know what you would suggest for prices on some of my cakes in my gallery. I get lots of inquires about the tackle box cake,the avatar, the baby shower cake with the dress, and the cupcake bouquets. So if anyone has time to offer your advice on those cakes I would greatly appreciate your input. I know I have lots more to learn and I am not thinned skinned about it LOL

2 replies
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CWR41 Posted 4 Aug 2010 , 5:30pm
post #2 of 3

Much luck getting your kitchen certified.

I think your work looks fine! Only one suggestion... a few cakes have silver aluminum foil covering your base boards--it would look more professional if you used colored polyfoil or prewrapped cake drums.

For your area, I'd think you'd be able to charge the going rate for sure, or higher. Don't try to compete with rural or Wal-mart prices... charge what you know your time is worth and don't go into business unless it is profitable! If people want your cakes, they'll pay your prices. Surely, they can't get the customized cakes and personal service that you offer at the local Wal-mart.

After figuring your expenses (and I'm sure you already know most of your costs), set your prices to reflect what you want to make. I'd guestimate you should be charging a minimum of $3.50 per serving for buttercream, and $4.50 minimum (up to "the sky's the limit") for fondant, carved, custom, highly-detailed, and intricate designs.

Again... good luck!

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jillmakescakes Posted 4 Aug 2010 , 6:27pm
post #3 of 3

First, kudos for starting on the right path-- now is a great time to ask these types of questions, not after you've opened a business thumbs_up.gif

One thing I've learned with pricing is that if you value your work, so will others. Take a good, hard objective look at your cakes. As CWR41 mentione, see what kind of polish you can put on them, but then I say that your work is definitely good enough to charge a pretty penny. After you check your costs, I wouldn't see anything wrong with expecting a profit margin of 40%/60% ( meaning of the TOTAL selling price, 40% is the cost of goods sold, 60% is pure profit.) It might sticker shock some people at first, but you have to sell them on it. They'll come around.

Now, because I got a woo-hoo from Debi last time, and I also think it bears repeating: Your salary is NOT the profit. Your salary is part of the cost of goods sold. What is leftover to be re-invested into your business, or saved for another purpose is the profit. Please keep this in mind when running your numbers. Pay yourself from the get-go. NOTHING and I mean NOTHING will get you burnt out faster than not getting paid.

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