Hey all...

How do you handle 'discounts' for friends and family (and others?)

I'm just getting to the point where I feel my skills really are up to par to ask for full price for custom cakes, but I still feel like I don't want to charge such high prices to my friends and family (at least as long as this is not my full time job).

Right now I usually do cakes for my immediate family for free, unless it is a really decadent cake, in which case I sometimes ask for some help paying for ingredients (I make one cake where the ingredients alone can be $65, and as much as I would love to give that as a gift, I usually cant afford to spend that much on birthday gifts!)

For close friends/extended family I usually charge the cost of ingredients, plus a bit for time. For instance, most of my 8 or 10 inch round cakes with a fairly simple decoration go for $35 to these people.

People that are close friends of my family--this is where it gets a little sticky--I have been giving a bit of a discount, but letting that person know, so if anybody asks them, they dont tell them "I paid $85" when I would charge normally $120...but I'm not sure if I should continue doing this.

Everybody else...full price.

Thoughts?

I don't have any good advice, but I am curious about the $65 ingredient cake. What's in it?

Your cakes are lovely, by the way!

Once you start giving discounts, it's hard to start charging full price. You should rethink giving friends and family such discounts if you are thinking of making a living doing this. If your friends and family don't support your efforts, who's going to? When I owned a cafe, my friends and family paid for everything they ate or drank except for my kids and husband. If you give here and give there, it all adds up to "oops! I'm broke" before you know it! Just my opinion.

Diane

Well, it has 6lbs of chocolate, and I use an imported Israeli Chocolate that I think tastes better than anything else!

The it also has over a gallon of heavy cream (mousse and ganache). And a fresh raspberry coulis--raspberries arent cheap and it takes a couple cups of em! AND then I top it with an assortment of fresh berries...which also arent cheap.

But it sure is yummy!!!

I usually don't charge immediate family(dad, sister, etc.) for cakes, & I don't charge really close friends for their cakes. I only charge them if its a cake they are asking for someone else.
For other family & friends I give them a 20% discount. When they ask the price I'll usually tell them they are getting my "special family & friends discount".
You do whatever you are comfortable with...only give free cakes or discounts when you want to and to whomever you want to.

If you've been giving a discount & want to continue, but think its too much of one, just tell them that you finally have your pricing list together & your discount is something like 10%(or whatever you chose)

I hope this helps

I just thought of something:

How about doing a barter kind of arrangement for friends and family? You would exchange your service (cake baking/decorating) for something from them such as computer help, babysitting, etc...whatever they are skilled at.

It might be difficult to figure out what a fair exchange is, but I suppose you could trade based on what market value would be for the product or service.

This might help friends and family recognize that your skills and time are just as valuable as theirs, but still provide a way for them to enjoy your cakes without paying quite as much as a regular customer.

Just a thought.

Well as far as family--I'm lucky that they really do recognize what goes in to this--and I feel they also really appreciate me. I would do it all for free for them--but since I'm in lawschool, I just cant always afford it!!

I figure I get 'paid' from them with their honest opinions and constant willingness to play guinea pig!!

Ok, this is a touchy subject and you might find that those you've given cakes to in the past cannot appreciate the amount of time and money that it takes to make a great looking and tasting cake.
One thing I do is charge everyone, but I give a little more flexibility to family and friends... for example I spend more time with them going over options that will cut the cost down. I explain what the job will cost me and find a gentle way to communicate how much of my time will be spent in my kitchen. If you have kids, have them come over and help watch the kids while you do the job... they'll see how much work is involved including what a mess it is to clean up!
There are members of my family that come to me and those that don't. I don't have any hard feelings about it. I just can't give my cakes away and unless it's for a charity or a gift will never offer to do so. I don't like only charging cost either, because then they'll expect it time and time again. It's a trap!
You deserve to be paid for your time and talent. I know it's hard to ask family and friends for money and I had a hard time with this at first, not as much anymore, but just be sure they know how expensive it is to buy products, supplies, tools, pans, boxes, boards, and then your time should be worth something.

Good luck!!!

Right now, the only cakes I am making are for family or close friends (although I do have a few 'real' orders coming up in a few months)

And unless it's a gift, I charge the cost of supplies and "equipment ware" (which is really just a few extra dollars, but I put it away towards buying specialty pans and equipment, that I wouldnt normally be able to afford.)

We are very strapped for cash right now, my boyfriend is barely working a few hours a week, and I'm only pulling $60 a week in unemployment until the restaurant I work at opens again for the summer.

So I can't afford to not charge something.

I even plan on selling the cakes I make for my Wilton classes to my mom to give to the nurses she manages over at the hospital.

I found at the end of the year that I had been giving more discounts than not. Now, I love my friends and family and of course want to do an extra speial job for them, but i am also running a business. So Now I have adopted the genetic rule. You know, when the doctor asks if you have any history of family illness and it only applies to Father mother sister brother and grandparents? Well that is my new discount range. If they can alter my genetics I figure I owe them a discount LOL! Seriously though, the other discounts I am giving are to people that help my business, referrals, letting me setup a display, mention in the newsletter, etc.

I have added a line to my master invoice list to track the type of discounts. That way I can see right when I open the spreadsheet how I am doing.

Of course, it is most important that you do what makes you comfortable. If you feel taken advantage of, then change, if you are ok with it...then let it go until you are not.

Good Luck,

Julia

I own a bakery, and I do the same thing ge978 mentioned. Kids, husband, mom, dad, grandparents and in-laws get free cakes. Anyone else who is a really close friend gets the "friends discount" of 20%, but I make sure that I let them know how much I would have charged someone else for the same cake. That way, if they tell people at their party about my bakery, their friends don't have unrealistic expectations when they try to place an order for a similar cake with us.

My family knows that I don't do free cakes unless I want to.

My mother has four close lady friends in her little circle...they are in their seventies, my mother is eighty (she gets around like she's sixty). They are the only ones that get free cakes once a year...can't say no to my mother, she might box my ears