I received a request for a gender reveal cake. The client only needed 12 servings. I talked her into a 6" square cake instead of a 1/4 sheet based on how many servings she needed. She wanted white cake with buttercream, a pink or blue colored cake, a fondant bow, pink and blue dots all over and the phrase, "Emma or Isaac?" written on the cake board. 

My basic cake price is 3.25/slice for buttercream cakes. I quoted her 4.00/slice since this was a level 2 cake (fondant bow, colored cake). This made the price $72.00 + tax. She turned this down even though I explained that this cake was twice as tall as the sheet cake. 

Is this too expensive? I'm just getting started with my business. I want to set fair prices but also want to make a profit of course!

$4.00 per slice x 12 servings comes to $48.00 and maybe the client did that math in her head.

I would have charged $60 for an 8" square cake and let the client decide how many servings to make from it.

Thanks for you reply. I use the wilton serving chart, which is where I got 18 servings from. I told her that a serving = 8 square inches of cake and a 6" has 18 servings.

You're right about the number of servings in a 6" square, but that's more than she needed so she probably just didn't want to pay that much. I agree with the one-layer 8" square, that would give you more space to put al the writing on too. Your pricing isn't too high, by the way, but when someone wants a tiny cake like that you have to decide whether you want to make a tiny cake or just say that you have a minimum and stick with that. When people start calling for a 4-serving cake you'll regret charging by the serving and offering that kind of thing, it isn't worth the time.

AI personally think it's too high. Maybe it's because I'm from Texas....but I don't see a 6" serving a party with more than six guests. I've never had a customer that would accept the, 'well that's what Wilton says' explanation.

When I added it up, I almost did a double take because it did sound high for a 6" cake. Then I went back and said to myself, well this IS what I want to be charging per serving. I think my prices are fair because I've compared them to every bakery in town. Maybe I should have drawn the bow onto the cake and not had the fondant bow upcharge.

A@costumeczar- what kind of minimum do you have?

If you are starting out, you can't set your prices equal to other in the area that are established.  You shouldn't undercut them either.  When I started I was very "cheap" but as my cakes got better, my prices increased, as well as minimums.  You need to do what it takes to start the business and sometimes that may mean making $1 on a cake.  Next time may be the 1st birthday and you'll make more money.   Also, if square cakes take you longer to get perfect, then offer rounds instead.  I can get two rounds done in the time it takes me to do a square, so I charge more per serving.  I'm 6.5 years into this and you charged my prices, so yes I think you are quoting too high.  If someone is taking a chance on a new business they don't want to pay the same price as the established bakery across the street.  You will get there, but you have to have a following and more business than you have time, then you raise prices.  Good luck. 

A

Good insight, and I see where you are coming from. It is very difficult to find that balance between not undercutting someone and not being equal. I know that I can't be more. I am higher than a few places in town, but I do everything from scratch. The rest are considerably higher than me.

I don't want to fall into the scenario where I start out doing cheap cakes and when it comes time for people to reorder, I am too high for them.

My primary job is as a hairstylist. I try to relate new business to that. When I was first starting out, I didn't charge less because I was new. I slowly built my business with clients who would pay my prices to begin with.

Thanks for your reply, guess I have somethings to think about.

To start off, I somewhat agree with some of the previous comments. I definitely don't think that you need to worry yourself about undercutting other bakeries or cake businesses. That's just over-thinking the situation and it's not your concern. At the end of the day most if not everyone starts a business to be able to do what they love and still make a living. Usually new businesses will charge somewhat less than established businesses because 1) the following isn't necessarily there yet and 2) because of the business being new, potential customers will expect to pay less money when dealing with a new business. Also 1) & 2) go hand in hand. Therefore there's no need to think about undercutting other businesses. As long as you know to yourself that your prices will be fair; you're not cheating yourself of getting paid your worth and time, and that you're also being fair to the customer and they will be getting their money's worth, then there's nothing to worry about. I don't think it makes sense to start a business worrying about other businesses and if you're undercutting them. Actually your prices do need to be competitive even if not right now, eventually. Focus on your business and your goals for your business. At the end of the day it's a business and you do have to make a living and that depends a lot on gaining customers and a following. Sometimes that may only be done by having more reasonable prices than a more established business.

Now, I do think your price was slightly high from the standpoint of someone now starting out like myself. It isn't outrageously high. I suppose it depends on the state where you live and the neighborhood. Where I am that's not an outrageous amount of money to pay for a cake you described.  I personally would have charged only $50-$60 and nothing more because I'm new like you. Yet i do know people who have paid $75 and even more for the same type of cake even with relatively new business.  

All this just to say that you live and you learn. If it worries you then all you need to do is re-evaluate your price points if needed. 

I would probably balk at that price too if I were a customer. So many of "us" have found the solution. Don't even offer such simple small things. I have a $150 minimum order, and it's a small two tier. If they reaaaaaally just want a little 6" square, that's cool. But I'm not breaking my minimum order for them. :D It's not just the ingredients and time we're talking about here. It's the communication about the order, it's the drawing something up, it's the invoicing, etc., etc., etc. That is not free. 

And there are plenty of people who are quite successful at making multiple cakes a day for $50 to $60. It's not something I personally choose to get into. I'll take 1 or 2 cakes per weekend that will bring me even more money than 3 or 4 smaller projects would.

Agreed.

I like the idea of having a minimum order