So I am just starting out, and I know that I should cost out my cakes, add for time, labor and profit, etc., but I also want to make sure that I am cost appropriate for my area. I am new to this, so I can't do the extremely professional stuff yet, so I know that I shouldn't base my costs on those shops (and wouldn't want to, couldn't compete). However, I am also in the DC metro area, where everything costs a ton. I want my cakes to be affordable, but I don't want them to be so below market value that I am undercutting myself or even just giving off the opinion that I'm no good. Any opinions or knowledge of the area and pricing? I was thinking or either $2.50 or $3 per serving base for buttercream and upcharging a dollar per serving for fondant. Does that sound good? Too high or low?

How does that compare to your costs per serving (ingredients, labor, and overhead) before profit?

The best way to find market rates in your area is to look at the web sites of competing bakeries. If they don't list prices, call and ask for a quote.