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Networking at playgrounds and with random people on Facebook will probably not be helpful without a clear competitive advantage and an identified target market.

When pricing a cake, the most important thing (besides knowing your cost structure) is what your customer feels it is worth, not what you think it is worth.

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I'm very sorry to hear that. It doesn't really change the business side of things though, if I were in your situation I would want to make as much as possible for my kids.

There's also the fact that starting and operating a business by yourself is a huge time sink, it's basically the equivalent of two full-time jobs if you are successful, and that's not even including a retail storefront. If you are more interested in the cake decorating side you may be better off finding a partner with an existing business so you can hit the ground running and make the most of your time.

AWhat is sspe? Bring samples and business cards to your hair salon, dr office, to work with your hubby, the playground, military social events, etc. Donate to fundraising events, etc.

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A lot of your customers probably know its wrong to take cakes from you that they paid so little for but it doesn't stop them. Chances are, if you really added it all up you're probably making pennies at best on most of your cakes, and with time you could have spent with your kids. Market yourself to people who appreciate a well made cake and don't mind paying for it. Leave the grocery store budgets for the grocery store.

I'm sorry to hear of your diagnosis.

Being practical here (as a person who also suffers from a chronic, incurable illness - though not fatal), have you thought about your ability to work effectively given the progression of your illness? This will affect who you direct your services to, and thus your marketing efforts.

Given that many larger events like weddings have a longer lead time (I am booking weddings for the end of 2014 now), you may find your 'market' is limited to less-intense, lower-key events in the near future where if you do find your health has deteriorating it won't affect your clients' orders.

By pricing lower (as you say you plan to), you are going to be guaranteed tonnes of enquiries and requests for cakes, so you need to be aware of your physical limitations.

If I was facing the same situation, I would focus on things like baby and wedding showers, christenings and birthdays and cupcake orders, and book no further than a month ahead of time. I would also ensure you have a back-up person who can take over and complete an order for you if you are unable.

In this respect (and finally reaching the point of your original enquiry!) I don't think you need to do a high-scale advertising/marketing effort. Let the work grow organically and you will find within 3 months you will probably have more work than you know what to do with. Networking (partner's work, schools, social and sports groups) and word of mouth are the most powerful tools you can have. Print up some business cards. Leave them on noticeboards and at cafes and playgroup centres and preschools and so on. If there is a local weekend market, make cupcake samplers and sell them so flks begin to get excited about your products. Avoid magazine ads, newspaper ads, wedding directories and other leach-method marketing (ie where someone who creates nothing turns a dime on YOUR talents and efforts). Running a FB page is a good idea, and probably sufficient given you are not plannign on developing into a fully-fledged business.

Be very aware though:

1. Working for next to nothing sucks, and turns a hobby into a PITA

2. The inability to say "No" to requests will leave you working harder and longer than any other job you may have held in the past, and this will affect your health and your family life. That precious word of mouth publicity will be a wildfire spreading one word only - "cheap".

3. Thinking you can start off low and raise your prices later is a sure way to kill off a growing business. You will lose the clients you have serviced (and all their friends) and have to start from scratch with new clients in a higher price range.

4. If you are going to make a cake, you might as well make one for $200 a week, rather than 4 for $50 per week. I understand you think the bakeries/storefronts are ripping people off but its really not the case. And as an artistic creator of designer cakes, paying yourself $40 an hour is NOT a huge wage! At least double your $12 so as not to hurt the other businesses in your area.

I hope this helps a bit, and please forgive me if my comments regarding illness and work/life balance above were too personal.

AHave you thought about teaching? Many decorators also offer classes, this will still let you do what you enjoy and get paid for it, (also if you have an order and your not feeling well you have someone who could help you out in a pinch). Of course you'd have to be careful about giving up personal recipes. You could be a Wilton instructor, I've never taken any of there classes but I think once you complete them all you can express interest in becoming an instructor.

Once you figure out your pricing structure, donate cakes or gift cards (with an expiration date) to fundraisers:the YMCA has silent auctions, sculpt a small dog cake for you Humane society fundraiser, send cakes to school, go to farmers markets and set up a drawing at your booth, do a smaller bridal show if you think you can handle that (I mean no disrespect, you just mentioned your health problems and someone previously mentioned about people booking in advance, that's definitely something to think about), many decorators in my town don't do wedding cakes.

No one means any disrespect to you, relocating can be very tough after you've probably worked hard to gather a following only to start over, or maybe your new town will help you expand your business. The first thing I read concerning pricing was NEVER undercut local bakeries, not just Custom Cake Co also stores like Walmart, Costco, etc. It just hurts YOU in the long run. As well as disrespecting other Bakeries. I understand that you don't have higher overhead or employees to pay, and the desire to give discounts or want to just to get started in your new area, and it's nice that you want to work with people. It sounds like you really care about making your customers happy but there are ways to do that without hurting yourself in the long run. When I first started I was just happy to be baking, I gave my friends discounts (or even free cakes), then family, then it was expected from everyone and I realized I was losing money big time! My bills were going up, I was paying to have the highest quality ingredients shipped to my home, etc. I didn't realize I actually had overhead costs and since the improvements I made were to my home I looked at it as an investment (which it was) but I wasn't making enough money to keep going. So, I had to step back and reevaluate my business plan, my pricing structure, everything! I'm just now expanding my business and starting to enjoy what I do again.

So please don't take offense, everyone really is here to help.

AEvoir gave excellent advice...can't add much more to that.

While your pricing doesn't have to be the same as a top tier bakery people should pay appropriately for what they are getting. The same as buying a car or anything else. Not everyone can afford a Lexus so they may go to a Ford dealership. Nothing wrong with a Ford, but you won't find big pricing differences at different Ford dealerships. Price for your skill level.

It's great that you pay yourself an hourly wage but businesses pay their employees (you) a wage and then a profit margin for the business (you). You want to have your living wage and the profit can be rolled back into the business for new supplies, advertising, to pay for insurance, etc... Your overhead may not be huge but if you don't figure that in your pricing then you are cutting that from your profit and not making as much as you think. Also consider the time you spend shopping, cleaning, planning, researching....this should all be added in at your hourly rate.

I am active duty military...retire Sep 30. I would bringing in my practice cakes to work when I wanted to make a new design, recipe, etc.. I gave a couple to neighbors with business cards. I offer a 15% discount for military themed cakes. I handed out business cards at my retirement forums...lots of folks there needing retirement cakes! I struck up a friendly relationship with the facilitator and she just ordered 2 cakes from me this week and keeps a stack of my business cards on her desk. When I am at Party City or Michael's I strike up conversations with people and give them my card. I volunteered to sell cupcakes at a Breast Cancer event with 100% of the profit going to the charity....notice I said profit. Not my wage, overhead, or material cost. Then I of course write this all off as advertising.

For anyone interested I pay $35 for 1000 thick card stock, glossy, double sided business cards. Shipping included. PM me for details.

Evoir put it very well. I would only add that one of the things that occurred to me recently was that from a customer's prospective,  I can't afford my own cakes- I am not my target market. I can't afford to pay $200-300 on a 32 serving birthday cake. Maybe as a splurge, but not for every birthday. I  think many have trouble charging "so much" for a cake because it seems so expensive to them. Expensive yes, but overpriced, it's not.  I'm a home baker and the sole source of income for my household is my cakes and I am not getting rich doing this. Far from it. I know how much I have to charge and  undercharging is a also not a luxury I can afford. One might think I have lower overhead since I have to pay my bills, etc. anyway. But all of that balances out as at home one doesn't have the streamlined operation that bakery has and I can't produce as many cakes in the same amount of time. Delivery trucks won't bring supplies into residential areas, I can't buy all my supplies in bulk, etc.

All that said, fwiw, in my opinion someone in your situation should do whatever makes you happy.