New To The Forum, How Do You Know Its Time To Start Charging?

Business By Sweet_tooth_az Updated 12 Mar 2016 , 1:58am by kakeladi

Sweet_tooth_az Cake Central Cake Decorator Profile
Sweet_tooth_az Posted 11 Mar 2016 , 6:32pm
post #1 of 8

Hello! I wanted to introduce myself and ask all of you pros a question. How did you know when tlyour skills were at a level in which your should consider going into business, instead of just being a hobbiest? I have cheked out the local competitiin, and while there aren't a ton of bakerys around, there are some. My skill set doesn't make me the best in the city by any means, but it is also leaps and bounds ahead of some of the people selling cakes here. I work with fondant and buttercream, and while I can always learn more, I do feel confident that I can produce a quality cake. 

So many people I know have been telling me that I need to start charging for cakes instead of just gifting them because I like doing it so much, but I don't want to have a bad start by opening a business and being too underskilled to get customers. I could definitely use some advice!

I am including a picture from 6 months of the largest cake I have made to date. This was a wedding gift for my brother in law, and iced completely in buttercream. Hopefully that will give you an idea of my skill level, and make it so you ate better able to advise me. Please ignore the terrible lighting the in the venue![postimage id="2942" thumb="900"]

7 replies
costumeczar Cake Central Cake Decorator Profile
costumeczar Posted 11 Mar 2016 , 7:03pm
post #2 of 8

Personally, I think that these days skill level isn't as important as your ability to decide whether you want to run a business or not an your willingness to figure out a business plan. If your market is full of custom cake businesses already, will you be able to charge enough to make it worth your time? Are you willing to put the time into marketing that you'll need to in order to sell? What kind of cakes are you planning on selling, weddings or other special occasions? If you're going to lock yourself into one specific category of cake is there enough of a market for that to get enough orders? Do you want to add other things to your product line to expand your reach? 

There are a ton of "businesses" around these days that are run like a hobby, and they're probably not making a lot of money. Or if they're making money the "business owner" is probably working his or her butt off and making their money from volume. You should analyze your specific market to see if there's room for another cake business. Start by figuring out what you'd have to charge for a cake to make a decent profit, then nose around and find out what other people in your area are charging. If it turns out that you'd need to charge $6 a serving, and the established people in your area are charging $2.50 a serving, it might not be worth your time. 

-K8memphis Cake Central Cake Decorator Profile
-K8memphis Posted 11 Mar 2016 , 7:06pm
post #3 of 8

opening a bakery is not about the skill level of the decorator it is all about the business acumen/appetite of the owner -- my best recommendation is for you to get a marketing/feasibility study done professionally --

with that said you can check your local laws and see if it's ok for you to charge for your stuff on the random hobby basis -- you gotta pay taxes and bladeebla more stuff to keep it all clean and legal but check first with the health department and even online with cottage laws in your state and then take it to the local level and see how you do with being allowed to do this without opening a business -- just being a paid hobbyist --

best to you

Sweet_tooth_az Cake Central Cake Decorator Profile
Sweet_tooth_az Posted 11 Mar 2016 , 7:57pm
post #4 of 8

Thanks for the fast responses! I have a lot to think about! Cakes and cupcakes are really all we (my husband and I) do, and all we would really want to do. We don't particularly cake if we are making weddings cakes or birthday cakes.. we just love baking and decorating! We have tallied up our costs for just baking and decorating, and have figured it to be roughly $1.00 per serving. The prices around here typically start at $2.50 a serving (from bakers on Craigslist) and go up from there. I have a hard time figuring out how much we need to actually charge to make a "decent" profit, since even without paying customers, We will still be making a few cakes a week just because we love to do it. Even if we were to charge a little over cost, we would be banking more money than we do now. I fond it so hard to know what to charge people when I am going to be doing the same thing, regardless of wheather or not I have customers. Hope that makes sense?

-K8memphis Cake Central Cake Decorator Profile
-K8memphis Posted 11 Mar 2016 , 8:05pm
post #5 of 8

well now that you mention it -- costumeczar has a new blog she wrote about pricing  -- she writes all this stuff down -- makes it easy

scroll down a bit

Sweet_tooth_az Cake Central Cake Decorator Profile
Sweet_tooth_az Posted 11 Mar 2016 , 11:00pm
post #6 of 8

Thanks I will check it out!

Apti Cake Central Cake Decorator Profile
Apti Posted 11 Mar 2016 , 11:22pm
post #7 of 8

Sweet_tooth_az ~~~ Welcome to the forum.  You have just received 2 of the BEST answers it is possible to receive to your question. 

I'm a hobby baker and started in 2010 (retired from medical sales) knowing absolutely nothing.  Since I go at everything like I'm killing snakes, I made many cakes with many different techniques during the first 3-4 years.  I also learned how to bake, decorate, cut, serve, transport, package, purchase supplies needed for a hobby baker at the lowest prices, etc.   It was FUN.  (Still is when I get off my lazy behind and make something...)  I got compliments like crazy and "everyone" (except my family who knew me best) said:  "You should sell these and make $$$$!  You're crazy to have this kind of skill and give these away!". 

Each time, I smiled with real gratitude and said, "What a lovely compliment!   But I value the skill and abilities I've learned to make special cakes for special people far more than I value any money I may make if I started selling these cakes.  You see, if I started selling them, it wouldn't be fun anymore, it would be hard work--and I love being retired."

For 30 years I worked in sales and KNEW that being able to make tasty, adorable cakes was only about 2% of what was needed to SELL CAKES AT A PROFIT.    The remaining 98% is business know-how.

Your cake in the photo is absolutely of the quality needed to sell at a price that would yield a profit for a business.  BUT, you need to learn how to make product that is:

Good enough to justify the price charged.

Good enough to please the customer.

Good enough to have that customer order AGAIN AND REFER OTHERS.

The product does NOT have to satisfy the baker's need to be a perfect cake. It does not have to have extra bells and whistles added because the baker wants to add them.

"In the words of Ruth Rickey, when determining how far to take a design, think of the customer and ask yourself: 1. Will they notice? 2. If they notice, will they care? 3. If they care, will they pay?"

kakeladi Cake Central Cake Decorator Profile
kakeladi Posted 12 Mar 2016 , 1:58am
post #8 of 8

For those of you out there who have never heard the name Ruth Rickey..........she is an really great decorator!  Her advice is well worth considering.

Quote by @%username% on %date%