The Business of Cake Decorating #9
Pricing your cakes
by Earlene Moore
Of all the comments (with a question) I hear over and over and over
again is. “ I feel funny about charging people for what
I do. I know it takes my time but, I am learning with every cake.
How much should I charge for my cakes?”
Why do you feel funny about charging people for a product that they
request from you? Do you feel funny about paying to have the oil
changed in your car? Do you feel funny about paying for cookies
in the store when you get to the check out stand? I don’t think
I have ever heard anyone get to the check out stand and tell the
checker “ I would like these cookies but I really think that
they are only worth 69¢ instead of the 89¢ that they are marked.
When people request a product from you it has worth. How you determine
the price is by the ingredient cost, the time you put into that
product and the quality of that product. Then there is also one
more thing that figures into how much you can charge - your reputation
and the demand for your product.
When you first begin in this business you will need to keep your
prices competitive with your local competition. Check out what the
bakeries and other specialty cake decorators in your area are charging.
NEVER, never NEVER under price the local bakeries. As you gain skills
and improve the taste and textures in your cakes you can begin to
raise those prices accordingly. The reason people are coming to
you for a specialty cake is because they want a product that is
better or technique that the bakeries are not willing to do. Back
in the dark ages when I first started cake decorating I think the
prices were about 50¢ a serving for buttercream work and really
that is all anyone knew about. People will only pay you what you
ask. If you only ask for $1.00 per serving for your cakes believe
me they won’t pay you more. Begin pricing those cakes slightly
higher than the local bakeries and then as the demand begins to
come for your cakes because they taste and look better, you begin
raising your prices. When the demand gets to the point you are turning
more work down than you are doing it is time to raise those prices
again. Every six months or so raise them 10¢, 25¢ or 50¢ a serving
and over a period of time you will be able to elevate them to where
they need to be.
I know one cake business that is charging very low prices for sheet
cakes because she says that her local people won’t pay more
for the cakes. In truth she is paying more to get those cakes done
by her employees than her customers are paying for the cakes. Every
cake that goes out her door - she is loosing money on because she
is paying salaries to employees to accomplish the overload of work
she has. You must be compensated for your time and your employees
time to stay in this as a business. You must consider the time it
takes to mix up the cake, bake the cake, make the icing, make the
decorations and decorate the cake. If that customer wants a custom
design and you have an hour into mixing the cake, making the icing
and etc. Three hours into creating her custom design and you figure
your time is worth $5 to$10 per hour. Then that cake at a minimum
should sell for at least $25 to $45 with the cost of the ingredients
figured in. Don’t under compensate yourself.
Now when you add more techniques to your expertise such as gumpaste
flowers, fondant techniques and time consuming run sugar work then
you must charge additional for the time and work in those techniques.
Sure this starts as a fun hobby but when your friends and neighbors
find out what you are doing - you soon find yourself in a time consuming
business. Many of us only started in this business to be able to
do cakes for our families and then found our hobby had turned into
a full fledged side business. If you aren’t smart about charging
for what you do, you will find this a drain on your time and your
resources. You will become discouraged with no time to spend doing
other things with your family, all of your extra time is spent in
the kitchen, constantly needing more equipment (that does get expensive).
I know I have spent thousands and thousands of dollars on cutters,
tips, ovens, colors, bags, racks, mixers, ingredients, computers,
tables, and then many classes to learn more new techniques. The
cake money has allowed me to be able to afford those things without
ruining our household budget. But you must be willing to charge
a reasonable amount for your work to be able to afford those things.
No one can tell you exactly how much to charge for a cake. I don’t
know your expertise or your clientele. I only know mine and what
I can charge here. Each of us must determine prices we are comfortable
with that fit within our community. Be Fair to your customers and
yourself. Be generous with your servings. Give your customers the
very best tasting cake you can offer. Always do your best on every
project or cake you take on. Even if you realize you under priced
a cake - still give your best and adjust that price the next time
you are asked to do that same design. Keep a good picture record
of your cakes so that customers will feel comfortable knowing what
you can do. Why should they pay more than bakery prices if you can’t
do better quality work than the bakeries. Those pictures are very
important to your being able to charge more for your work. Quality
in the cake and the decorating will be expected as your prices go
up. Always striving to do better work (even after 40 years of decorating)
will assure your quality stays high and your customers stay happy.
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