I guess this is a question more aimed to you who have a cake business rather than the people who very occationally charge for cakes.

I am aiming towards being able to do cakes as a business although I am still waiting for permits etc to be sorted out. So I am spending my time doing research for when the day comes I can take this to the next level. The cakes I do at the moment I do as gift for friends or for cost for others, but I often receive a good tip as well.

I have been looking at the CakeBoss program and I think it looks just right for me. Most factors are easy enough to figure out in terms of costs, but then it is the age old question; what to charge for your time?

It is not an easy question to post on a board I know, because it really depends on the area/country you live, your cost of living, general wage levels where you are.

Just as an example, I have a babysitter/cleaner who comes in now and again and helps us out, sometimes she comes if I need to get the kids out of the house for an hour or two so I can finish a cake. The going rate for a babysitter where I live is $10 an hour, so it makes sense that my hour labour rate should be at least that or more.

Also, do you charge a flat hour rate for all the hours you spend baking, making buttercreams and fillings, and decorating the cake, or do you have different scales of rates depending on what you are doing?

I would be really interested in hearing how figure out what to charge for your time.

If it was not just you running the business, if you hired employees to do what you do, what would you have to pay them? And don't forget to factor you'd have to pay their social security and other payroll taxes in addition to the hourly rate.

Now, your pay scale, as the professional and the expert, would obviously be higher .... unless you hired a Colette Peters or something.

Hubby and I have already gone thru this exercise because he told me "You think if you're the one working the wedding, then it's cheaper. But they're getting the head honcho, the cream of the crop! Your time is worth a lot!" So we figured out what my hourly time is worth. We figured the 'sacrifice' factor (if I'm at a wedding cutting cake, then I'm NOT sitting with a new bride and booking a $2500 reception!).

With my catering, we worked out that my time is billable at over $100 an hour. So I quickly got over the idea that I had to be the one at each and every reception and I hired a couple of good people to train as Event Supervisors.

I can hire someone at $10/hour to work 6 hours at a wedding and I'm "out" $60. If I work 6 hours, then my expense is $600.

I'm not the hottest match in the box, but I can figure the math on that one!

So how much are you "spending" if you are the one washing dishes and cleaning the kitchen, vs. hiring someone to wash the dishes and clean the kitchen?

Well, I sidetracked slightly on this one, but it's an exercise everyone should really go thru.

Figure what your payroll WOULD be with employees, if you weren't the one doing all the work, as part of the expense of making the order.

that was very useful!

indydebi, thank you very much. You make an excellent point there. I had not really thought about it in those terms.

Have you always had a business or have you gone through the whole process of taking it from hobby to professional business?

I think one of the difficulties about pricing and starting out is that you just cannot start too low. Sure, cannot charge Colette Peters prices if your skill level or reputation/demand is not there, but I still feel my time is worth something. And I really do believe that it is much harder to start hiking up prices later than if you have started out at a reasonable level.

If anyone else have anything to add please do!! I am really interested in hearing how people deal with this.

me too....Love to hear more about the pricing!

I started out because I went with a SIL to order her wedding cake and decided it didn't look hard, so I taught myself. As I began buying all of the equipment, I soon realized this little hobby had to start paying for itself real fast! So I was selling cakes "on the side" but never really thought of it as a business until my first hubby went to get a loan and our income was just short. The loan guy asked if we had any other income and I said, "Well I make a few cakes on the side." (oh yeah, like THAT was going to make a difference!). I just handed him my purse calendar and told him to add it up.

Well omg it did! The loan guy said, "You've built quite a little business there!" Business? THis can be a business? Huh!

So yes, I have been in your shoes exactly ..... never thought of it as a business, didn't really run it like a business, but somehow ended up on a grand journey that enables me to make a living doing something I love.

It was a hit-n-miss journey and I'm still learning a lot of "business sense" .... but that's also why I get so long winded on here (and my apologies to those who are sick of hearing from me!) but if my experiences help someone reach their goal faster and can save them some money and headaches, then I am more than happy to share it.

But it's not a one-way street ..... the list of things I've learned from CC in under a year is amazing! I never knew how ignorant I was until I got on here! THis place is the best!!!!

For a single-person, very small operation like I have (usually just 1 cake a week, if that), I put in an hourly rate of $15/hr. That's taking into account wages in my area (decorators at the grocery store make $10-$11/hr). I think $15 is the minimum any of us should be charging. In a higher income area I wouldn't think it would be unreasonable to charge $25 per hour. And yes, that's an average. It doesn't take as much skill to make batter and pour it into a pan and bake it as it does to stack, decorate, do special sugar pieces, etc. If there's something extra like fondant booties or a bow, I just add it as a separate line item and charge a fixed price ($20 for the booties, $25 for the bow).

THAT WAS A VERY USEFUL INFO!

indydebi, funny, your story is similar to mine except you are a lot further down the road than me. I got started when a friend was let down by a cake decorator on the day of her daughter's birthday. My friend looked me straight in the eye and said, why don't you do it, you are good at baking! So going from being good at baking I have been teaching myself decorating, using CC and other boards and taking some classes when I have had the opportunity.

I would really love for this to be more of a proper business so it is heartening to see how other people have been through the same and have succeeded.

kelleym, thanks for your input. Do you tell your customers that bow is this much or those booties are that much? I am just wondering how people react, if they start "picking" off the elements which kind of make the cake, but obviously takes time and money to create.

They do think it's expensive, but if you explain to them that it's a handcrafted custom sugar-art topper, they do understand. The nasty Wilton bow retails for $24.95 and it looks awful. If you think your customers wouldn't understand the separate price, I would just raise your hourly rate or price per serving to compensate for it.

Wow everyone's answers are pretty interesting, you're right about how long I spend washing dishes and cleaning up, I am still cleaning my kitchen from the 9 cakes I donated to the carnival yesterday kitchen still dirty! I'm on break right now