What To Charge For A Cake

Business By Maureen121 Updated 9 Apr 2012 , 9:53pm by Apti

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Maureen121 Posted 9 Apr 2012 , 7:40pm
post #1 of 4

I started making cakes for my family but recently have been getting alot of request to make cakes for other people, I have no idea what to charge. Can someone please help me??? thank you so much icon_smile.gif

3 replies
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jason_kraft Posted 9 Apr 2012 , 8:39pm
post #2 of 4

The best way to determine prices is to add up your costs, including what you pay for ingredients, your time (number of hours required for prep, baking, decorating, and cleanup multiplied by your hourly wage), and your overhead (insurance, license fees, utilities, etc) on a per-order basis, then add a profit margin (typically 15-30%). Once you have this price, you can check what your competitors charge to see if you need to adjust the price up or down depending on local market conditions, just make sure not to adjust it too far down or you won't make any money.

The cost of your overhead can vary considerably depending on which state you are in -- if your state has a cottage food law that allows home-based bakeries you may be able to use your home kitchen, otherwise you would need to rent a commercial kitchen which can cost $10-30/hour (this cost would be built into your price). In any case you'll need to track your expenses and income carefully so you can report any net profit or loss to the IRS.

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MimiFix Posted 9 Apr 2012 , 9:13pm
post #3 of 4

Welcome Maureen121. Jason Kraft gives great advice. Also, to track this info some people use CakeBoss software (CC members receive a discount) or if you're tech savvy create an excel spreadsheet.

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Apti Posted 9 Apr 2012 , 9:53pm
post #4 of 4

Welcome, Maureen!

You can get a ton of excellent information from a current thread:
"New cake business at home...help!"

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