Wondering About Something...how Do You Make A Profit?

Business By tammiemarie Updated 10 Aug 2006 , 10:07pm by SweetThistleCakes

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tammiemarie Posted 7 Aug 2006 , 2:39am
post #1 of 17

I made a cake today and charged $30. Well, after supplies and time, I made a few dollars an hour! Which makes my husband question the time and effort I put into cakes. I know it's because I love it! But how can I ever turn this hobby into a business?

I use doctored cake mix and buttercream. I borrowed the pans from a friend. I covered my cake boards in wrapping and contact paper. And I am not really slow, but with two babies, I have to work in stages. So I bake in the morning, make frosting during naps, and decorate when my husband is home to occupy curious kids.

I don't believe that I can charge more at this point - around here, people only want to pay what Walmart or Dairy Queen would charge. This cake was for a friend of a friend, so it's good advertising for me. It's the ladybug cake in my photos.

Any good advice from those of you who are making a profit from a home kitchen? Does the money come with lots of orders, or do you only do pricey cakes? Or do you make the bulk of your money from wedding cakes?

16 replies
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littlemissmuffin Posted 7 Aug 2006 , 5:09am
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I don't have a cake deco biz yet but I wanted to say that if you try to keep up with WalMart, then you won't make a profit. If they can get a cake for $30 they can go to WalMart. The thing is that you are offering something better and different than WalMart cakes. I understand pricing has to reflect the area you live in. But just look at the prices of some other bakeries in your area.

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cakesondemand Posted 7 Aug 2006 , 6:02am
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The money is in wedding cakes you have to do a lot of all occassion cakes to make any profit.

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TPDC Posted 7 Aug 2006 , 6:36am
post #4 of 17

Wedding...Wedding...Wedding. Really that is where you are going to make the profit. Occassion cakes are fun to do, but you have to think of that as a marketing tool rather than something for profit. Keep getting cakes out there and you will soon see orders coming your way.

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tammiemarie Posted 7 Aug 2006 , 3:54pm
post #5 of 17

I kind of thought so. I am sure there are customers in my area who will pay more, but I know my family and they are cheap! LOL. I am working up my courage to make wedding cakes, and I am thinking I will do one before the end of the year. I have turned down 2 orders so far, mostly out of fear! I think I will continue to look at the big, far off picture and make cakes when I can, and not think about the $$$ yet. Thanks for your replies!

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jmt1714 Posted 7 Aug 2006 , 3:58pm
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you haeto think of it as a business. likely you won't make a large profit if you are only doing it part-time and around your family schedule. You MIGHT, but it is less likley. Also, you can't be afraid to charge whta the cake is worth and whta the market will bear. Maybe your friends and family are the best customer base. Hard to identify a good one, of course, but they are out there. It could be you are at a time in your life and decorating careerwhen your enjoyment is the best "payment" and maybe in the future you'll see more of a real $$$ return.

I wouln'dt make money in my "real" job if I didn't spend a ton of hours doing it. I can't think I'll make a lot of $$ in my cake side if I devote fewer hours to that. It's all a trade-off.

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luvbakin Posted 7 Aug 2006 , 4:05pm
post #7 of 17

You can look at all occasions cakes this way - they are your advertistment AND your practice. We can never have too much of that. So they are the items you will hone your skills on. The wedding cakes will make you the money.

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Dizzymaiden Posted 7 Aug 2006 , 4:06pm
post #8 of 17

You will find clients that will pay for quality. Yes anyone can get a $30 cake anywhere but it can't compare to the taste and love that is put into a home-baked. Most people who buy Walmart cakes are in a hurry and desperate because they waited too long. It disgusted me that someone would expect to pay the same! Your cakes are beautiful and you should price them accordingly. You will find a following and start making money. I did the same thing and found that most people were tipping me extra! I now get $50 for a regular occasional cake.

Your cakes are awesome!

Good luck and remember that your are a artist!

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Bethroze Posted 7 Aug 2006 , 4:09pm
post #9 of 17

Profit!?! What's that? My husband sits at the computer in his office ticking off the hours I spend on a cake and shouting how much more money I should make after each hour.

With my Einstein cake, he was happy at $40. By the end of two days, (I work in kid interrupted intervals as well), he had doubled his opinion to $80. It is just hard when you are having fun and you push yourself to go above and beyond, especially for the practice. I don't even make money on wedding cakes yet.

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knoxcop1 Posted 7 Aug 2006 , 4:09pm
post #10 of 17

First of all, your work is absolutely beautiful. I can tell you really take your time and put great effort into it! thumbs_up.gif

And, I guess I'm not sure where the profit is, unless it'd be weddings.

But it is a great hobby for me that does provide a few extra $$. Not many hobbies you can say that about!

Best of luck and congrats on your amazing work,
--Knox--

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debsuewoo Posted 7 Aug 2006 , 4:10pm
post #11 of 17

Until you get to where you are satisfied that you have all of the "Hardware" you need (tools, pans, etc..) and make use of the stuff you have on more than one, two, or even three occassions to where they are beginning to pay for themselves, you will not make a profit. That's why, for me atleast, while I am making a bit of cash here and there, it is still a hobby for me.

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debsuewoo Posted 7 Aug 2006 , 4:12pm
post #12 of 17

Oh, I forgot to say that I have also stopped buying character pans since I don't want to get causght selling a character cake by the cake police.

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cookieman Posted 7 Aug 2006 , 4:16pm
post #13 of 17

tammiemarie,

Regardless of what you are making (cakes, wedding cakes, cookies, favors, etc.) to start making any profit--and if you want to to be serious about it--you have to charge at least 2.5x the amount of your materials to start with. So if you spent $12 total in cake mix, milk, eggs, buttercream, cake box, boards, contact paper, etc. (you must account for every penny), then you would charge at least $30. (12x2.5=30)

Now remember, this does NOT factor in your time. What are you worth? $10/hour. $15/hour? How many hours did it take you to make the cake? Let's say total time is 3 hours. Then using the formula and accounting for your wage per hour:

$12x2.5=$30; 3 hours x $10/hour=$30. $30+$30=$60. Therefore, you should charge $60 for a cake to make a reasonable profit. Will people realistically pay you $60 for a cake? If so, then you are on your way to making some $$. If not, then you are practically doing it for cost. It's the time factor that really eats away at your profit.

I hope this helps you understand things a bit better. icon_smile.gif

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indydebi Posted 9 Aug 2006 , 10:23am
post #14 of 17

Everyone is right....weddings weddings weddings. It's high volume selling at one time. But you will get there.... we all promise! I don't even do birthday or all occassion cakes anymore. It's a business decision. I can spent three or four hours doing a birthday cake for $40 OR spend those four hours sitting with 4 brides to book their wedding cake and catering worth over $8000.

When I first started, every dime I made was going back into equipment and supplies....it's called growing a business. Husbands who sit at computers calculating your time per hour just don't get it. Sole Proprietorships are not 40-hour work week jobs. It's time, time, time spent to grow the business. 25 years later, (with some years off for personal reasons) I've just signed my lease on a real storefront for a commercial kitchen. I'm picking up the CAD drawings from my kitchen designer tonight. My husband thought this was a "cute little hobby" for the wife to "play around with" ..... until my wedding cake and catering money bought him a brand new pick up truck! Now he's my biggest fan (and hardly ever complains about living in a warehouse now!) icon_biggrin.gif

What's been said in this thread by everyone about making smaller cakes is correct: I dont' regret one minute all of the time I spent doing the smaller birthday cakes......they were my advertising and practice that helped hone my skills to get me where I'm at today. The money you think are not putting in your pocket is the investment in yourself and your business.

If you bake it.....they will come. I promise.

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greenhorn Posted 9 Aug 2006 , 10:56am
post #15 of 17

Well put indydebi!

tammiemarie...you make beautiful cakes. I have no doubt that if you wanted to do this full time, you would have an amazingly successful business. I work full time outside the home and parent several kids full time in the home (as do MANY CC'ers). I LOVE to decorate cakes and just started this hobby several months ago. Many people have asked me to do a cake for $$. Some I accept and most I turn down. I would love to decorate full time, but have neither the ability (yet) or the time. Decorating is my stress relief. I'm considering the next 10 years as "practice" and after I retire, I'll hopefully have enough practice, and a following to allow me to make money. Cake decorating isn't something most people can wake up one day and decide to make money at...it takes time, patience, and practice to be a good cake decorator. You definitely have the ability.

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littlemissmuffin Posted 10 Aug 2006 , 3:47pm
post #16 of 17

I also have to say that cake decorating, the really good ones are an art form. People don't expect to go to WalMart and find something unique. They do expect to find cheaper prices on items they can get from other stores. WalMart doesn't deal in specialty and detail. That's where cake decorators or rather cake artists come in. You can't go to WalMart and expect to buy a Picasso or Mona Lisa. People realize that or at least should realize that. No smart business should try to compete with WalMart but rather differentiate themselves from WalMart-itis. You're a specialty baker so play on that strength, that they can't go to WalMart and get the kind of cake you are creating.

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SweetThistleCakes Posted 10 Aug 2006 , 10:07pm
post #17 of 17

I am convinced that it takes at least two years before you really start to make $$. Just my $0.02

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