Labor Rates

Business By JeniC Updated 4 Feb 2016 , 5:29am by julia1812

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JeniC Posted 31 Jan 2016 , 6:51pm
post #1 of 7

Ok, I know this is a very complicated question.  So many things to consider, like demographic, competition etc.. but any insight I can get will truly help. 

I have been running my cake business fairly successfully from home for a few years. I however constantly find myself lowering my prices (which I know is so wrong) just to get the order.  When I finished all of my year end paperwork it works out that I am working like a dog and really not making any money.

I have the Cake Boss software and I have input all of my costs accordingly so that part isn't an issue really, my biggest challenge is feeling confident in my prices. It's the labor I'm unsure of.  I have researched tons but found nothing that make me confident in my pricing scale.  

Do you all charge a flat dollar per hour labor rate?  What is the fair dollar per hour rate for a custom cake decorator? If you would like to share your labor rate with me, PLEASE do, if not no worries.  Do yo charge a different labor rate for something custom as opposed to something standard?  I mean If I hired another decorator I wouldn't pay them $5.00/hour... that is often what I end up making.. I also want for my business to make a little profit too..

Any input you all have would be greatly appreciated.   :) 

6 replies
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costumeczar Posted 1 Feb 2016 , 1:09am
post #2 of 7

I try to aim for about $30 an hour for my own work. That's after expenses and profit blah blah. But I aim for at least that, if not higher.

I added this but don't know if it saved it...I aim for $30 minimum but can earn up to $100 an hour depending on what I'm doing. I also have a friend who owns a couple of storefront bakeries and she charges $100 an hour if she has to get involved in a project.

*Last edited by costumeczar on 1 Feb 2016 , 1:13am
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costumeczar Posted 1 Feb 2016 , 1:15am
post #3 of 7

Oh for pete's sake, my edits are't showing up. But they probably will later so it will look like I'm repeating myself. Anyway, I aim for at least $30 an hour, up to $100, and I have a friend who bills at $100 an hour if she has to do something that her staff can't do. apologies in advance if this shows up three times.

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Jackie Posted 4 Feb 2016 , 4:20am
post #4 of 7

I just wanted to post a quick update to let you know this thread has been restored. Sorry for the bugs, but thank you for reporting them!

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julia1812 Posted 4 Feb 2016 , 4:31am
post #5 of 7

@JeniC you say you are running your business FAIRLY SUCCESSFUL but end up making 5$and hour many times. That doesn't add up in my head. Not sure where you are based but if it's Europe or US or AUS I'm sure that is even way below your minimum wage isn't it?

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JeniC Posted 4 Feb 2016 , 4:43am
post #6 of 7

@julia1812 ‍  I said many times not every time.  I started this business from my home kitchen and as far as I am concerned if my business is still in the black that is successful. I don't do what I do to get rich, I do it because I love it.  I am however looking to make a better and more consistent hourly rate hence the motivation behind this post. 

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julia1812 Posted 4 Feb 2016 , 5:29am
post #7 of 7

Yes, I get what you said. And I feel you are on the right track by adjusting your hourly wage. Being in the black means making a profit for the business after paying all the expenses which include your own salary. So for example if a cake costs you 30$ to make, you take 25$ per hour (just an example) working 4 hrs than you can't charge 130$ only because you haven't paid tax yet etc etc and you haven't made a profit for your business yet. So let's say you ask 150$ for the cake, that's when your business actually starts making money. I think one of the mistakes many decorators do is thinking that as long as they get something out of the cake for themselves it's a success but looking at it from a business point of view it's not. 

Even if you don't want to become rich by making cakes at least get paid a fair price for your time - unless you are a cake charity ;) Don't let people take advantage of you passion! 

I didn't  read @costumeczar ‍s pricing guide but am sure it will help you. Good luck with everything and I hope your business will thrive! 

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