Charging By The Hour.....flat Rate. Can It Be Done?

Business By joeyww12000 Updated 5 Sep 2017 , 1:07pm by johnson6ofus

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joeyww12000 Posted 30 Aug 2017 , 2:57pm
post #1 of 7

I would like to know if it is possible to just charge a price per hour to make custom cakes? Do any of you do this? When it's all said and done Id like to make at least $20 hour.

6 replies
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kakeladi Posted 30 Aug 2017 , 6:54pm
post #2 of 7

Do you see how unfair that could be to customers.  Let's say Jane is very,very new thus very slow so she has to charge 3 or 4 times what Misty can because Misty  has been decorating for 20 yrs and can turn out a cake in less than one hour.    There would be no way to justify having to pay one decorator 3X what another does.  Also it could hurt you.  As you progress into this craft your skills will allow you to finish a cake much faster - let's say that now it takes you 3 hrs to finish a wedding cake (from planning to baking to icing to decorating) so you charge $60  but 1 or 2 yrs down the road you can do that same cake  in 1 hr so you only get paid $20 for it.  Does not make sence at all. 

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joeyww12000 Posted 30 Aug 2017 , 8:19pm
post #3 of 7

That makes sense. No way around just figuring up all your ingredients, supplies, and estimated time. I wish there was an easier way to figure up a price. 

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SandraSmiley Posted 31 Aug 2017 , 3:55am
post #4 of 7

@kakeladi ‍ hit the nail on the head, as always!  If I charged by the hour, at $20.00 an hour a four tier wedding cake with 20 gum paste roses and foliage would cost at least $1,000.00.....which, when I think of it, isn't such an unheard of price for such a cake.  Ok, so I fudged.  It would probably take me closer to two weeks, therefore $2,000.00.

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CatherineGeorge Posted 31 Aug 2017 , 2:43pm
post #5 of 7

You should absolutely consider your target rate per hour, or annual income, from your business. But that doesn't mean you need to price in those terms to your customers. Your pricing should be a carefully considered part of your business plan, which DEFINITELY includes considering your time and your target rate per hour. It should also consider things like training curves for yourself and/or your employees and projected growth of your business over time, and what those investments mean in $ near and long term. 

I do have an "hourly" number that I use to quote cakes, but I don't describe it that way to customers because per serving is industry standard and because I smooth out the edges to make everything easier and more clear. It's based on my overhead, estimated hours per week on cakes if I'm fully booked (minus admin time), and how much I want to clear each year. When I look at a cake design, I estimate how long it's going to take me and I multiply that by my "hourly" number (which is of course considerably more than my "take home" number). 

If you do something like that and find your price is wildly out of line with the market, something has to change in your business plan. But what should not happen is that you take home peanuts without a plan.

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erin2345 Posted 2 Sep 2017 , 4:41pm
post #6 of 7

You can't bill them per hour for the cake you make. What you can do is find out how much your cake costs to make, how much you want to get paid per hour and how many hours you think it will take to make, and then the extra 'profit' at the end.

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johnson6ofus Posted 5 Sep 2017 , 1:07pm
post #7 of 7

Billing per hour would be impossible. Calculating per hour and then offering a price is what most do.

I have seen decorators complete a sheet cake in 5 minutes (think WalMart), and I have seen the same process go on for hours (think Wilton student).

Good decorators get faster with practice, and as a result, make or get paid more per hour. Beginner decorators, make less, as they are much slower. While a picture will show me the quality of your final work, there is no way I can tell how long you spent making it.

Scale and efficiency is another factor. A single cake may require 4 hours to "make" for a simple home baker. Mix, clean up and bake, cool, mix icing, simply decorate, clean up. But that same time allows for making dinner, running to pick up kids, laundry, whatever. It is not 4 hours of "working" time, but 4 hours of "elapsed" time. If you are billing me for that, will you bill be "working time" or "elapsed time"? That same 4 hours in a bakery may turn out 50 cakes...

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