Ok so i've really been hesitating selling my stuff up till now, but feel that the demand and possiblity are too hard to resist. I've sat down and figured out what the cost is per cookie, cannoli recipe, how long it takes for alot of my stuff. Now for marking up the product so that i make some money Do you include your wage per hour as part of the profit you make when you are making it all by yourself (no employees)? I'm sorry if it 's a silly question. My DH seems to think you shouldn't include your wage as profit, you should consider yourself an employee. So when looking at profit you should only look at the money you make on the markup of ingredients. Am i confusing you??? Example...For two dozen cannoli

whipped filling cost...6.09
2 boxes of pastry.....7.18
2 boxes of pudding..2.40
Total time 75min @ .25c/min...18.75
Oven time.............. .25c
box......................3.00

total............37.67
30%markup..11.30

total cost to customer...48.97

PROFIT..30.00 (this is the markup and my wage added)
My DH feels that you should only consider the 11.00 as profit. What is your opinion on this? Is 30%markup too high/too little. I'm thinking 2.00 is expensive per cannoli. I just don't know how to figure it all out.

We've purchased a small business book but there is sooo much to learn. The money part has got my mind spinning.
I haven't even figured out cakes yet..there are so many variables. I tried calling and asking around and the bakeries around are soooo private about their costs and wouldn't give me nothing upfront as far as their prices on stacked cakes etc. They all say make an appt to discuss it. I don't want to 'pretend' to be a bride all over town. I feel it's dishonest and frankly i don't think i could lie that well.
Cannolis in my area cost anywhere between...1.10 -2.00 peice. After taste testing many I believe mine are best by far, and people have said this as well.
Honestly the money part of this is enough for me to go crazy. I really do think it's a large part of why i haven't 'sold' my stuff. It's all so confusing. Like i said, i haven't even gotten to the cake stuff and already i am feeling overwhelmed. How does one figure out exactly how much icing is on a cake???doens't it vary from time to time? Different fillings, time...
Ya know my father started a business and he started with next to nothing. I was never really curious about business so i never sat down and asked all these types of questions while he was alive. Now that he is gone i realize i have not only lost a wonderful dad but also a valuable resource on how to start a business and run it effectively. I guess for now i will just have to rely on books and all of you for help in this matter.

suz

Edit to change the amount from one dozen - 2..;0) Typo the first time i posted.

I know I'm going to get it for this BUT. I never understood the idea of paying yourself an hourly wage. Do you think Bill Gates gets paid per hour? Now before everyone jumps, here's why. How do you know someone is willing to pay you that amount? You are always worth more than someone is willing to pay. Remember you are no longer an employee. This is a very hard thing to forget. It doesn't matter to your customer if it takes you five minutes to do a cake, or five hours.

Whenever I figure a price it's through what competition charges, my ability, what the market will bare, and cost of a certain item. I have a basic idea of how much profit I need to make on a certain item. The minimum profit after cost is 100% that is the very bare bones minimum.

Mike

I am not sure I am seeing this correctly.. You are costing out 1 dozen cannoli and you come up with a figure of $48.97... that equals out to $4 per cannoli, not $2

I'm with Mike on that one. Maybe once you get on your feet and know how much you make as profit a week on average...then you can cut yourself a check every week....and keep the rest of the profit for your company.

$2.00 doesn't sound high at all for a cannoli to me. I live in Georgia and they run about $2-$2.50 a piece here. I would pay it and I have paid it.

Good luck with everything and I hope you get on your feet quickly!

Sweetcravings, the pricing makes much more sense now. $2 per cannoli is not an outrageous price at all. Great minds think alike though, I have been mixing white chocolate mousse with my ricotta to make my cannoli filling for a long time now. It is so creamy and yummy. I even passed this recipe on to a "pastry chef" and she loved it. Says she will use it all the time now. Good luck with your venture. I hope it all works out for you!

More on the hourly thing. This doesn't mean your not going to get paid. You have to figure in some sort of salary. OR. Take loans from your company at the beginning. Pay them back with interest. This will build fast.

One other thing, equipment. Set up a separate leasing company. Heaven forbid something happens, but this is a lil umbrella. Your decorating company actually ends up leasing the equip from your leasing company. If things don't work out, or you get sued you won't lose everything. Nobody ever wants to hear that something bad could happen. This is a very hard business to compete in, and actually make $$$. There has to be a contingent plan to fall back on

Mike

[quoteOhhh i've never put ricotta with it..just the mousse.[/quote]

Totally outside the point of this post, but how can you really call it a cannolli without ricotta? lol Guess I'm just a purist for some things lol.

And darling, who told you to mark your costs up 30%... I think the canned answer is usually 3x cost. It will be hard to get that price tho when your cost is so high from buying everything retail. Can you look into bulk options for at least the items that don't expire?

I think I would price the canollis at the 2.50 to start, and if you really can't sell them, then you could lower the price. I think it might be offputting to your customers to have the price raised immediately -- why does the same canolli suddenly cost more? Whatever price they see as the first price is going to be the anchor in their head, so they will always see $2 as the normal price, and if you raise it, they will see it as being above the normal price. If you want a lower price to reel in some customers, then you price it as $2.50 but you offer a special like the first ten orders receive a 20% discount (which would make the canollis $2).

I think you are overly stressed about whether your profit includes your wage or not. Seems to me that only matters to the accountant if it makes a difference in how you are taxed. I would think your concern is to make sure that you are not working for free, and also to have a reasonable way to set prices. Well, if you want to set a wage amount plus a profit, nothing wrong with that. If you choose to go by a per item price at what you see as the market rate or just set some amount times cost, also fine, but obviously you will figure out what that means to you as an hourly wage to make sure it is worth your time. I have noticed that the professional decorators on this site usually charge a per slice price. I suspect you will find that pricing is something of an art, and you will probably want to use cost plus wage as your minimum price to see whether it is worth doing, and then see how much higher you can go.

Good luck.

I live in a rural area in Alberta, and quite frankly the only thing I know about canollis is what got written in this thread plus I think they talk about them on everybody loves raymond. I thought they were those big round noodles stuffed with cheese! From this thread, the impression I get is that they are closer to being like an eclair or a longjohn donut stuffed with whipped cream. If it is that sort of dessert thing and they are sort of a handful size, then I don't think $2.50 is unreasonable IF yours are better than whatever else is available. Remember, you are not competing with the cheapest ones. You want to have people who will pay for the extra quality of your product. The people who are only concerned about cost can go to a grocery store where the product is made to be cheap. I read somewhere, I think on the Earlene's cakes website, that you should never price your cakes at less than what the local bakery charges because you are going after a different class of customer.

I bought some pyrogies (sort of a filled dumpling) from a lady around here and she charges at least twice what they would cost from the grocery store, and hers are smaller, but MAN OH MAN, they were delicious. I will order from her again because they are just so much better. I could, in theory, make them myself for cheaper BUT they are a pain to make (for me) and mine don't actually turn out all that well.

I think with the costs you listed, you will make nearly as much profit from selling two orders (4 dozen total) at 2.50 per canolli as you would make from selling three orders (6 dozen total) at 2.00 per canolli. So the question is, does the higher price drive away more than one third of the orders? If not, then go with the higher price and you will make the same profit (and I did it counting your wage as part of the profit) with less work. BTW, if you only look at the profit without your wage, then you make twice as much by charging 2.50.

Another thought is that if you start charging more now, you can wait longer before raising prices even if your costs go up.

Here's another thought if you can't quite bring yourself to charge 2.50 and if you don't have anyone whom you can ask for an honest opinion about whether there will be any demand for your canollis at 2.50 (and why can't you call someone in your family and ask them what they think of 2.50 as a price?). I said this before, but tell your neighbour that your price for canollis is GOING to be 2.50, but because you are just getting started, you will let her order for 2.00. Then see what she says. Does she order but say she won't be buying any when the price goes up? Does she order dozens extra (assuming they are freezable) to avoid the higher price? Does she say that sounds reasonable? You could even say that the 2.00 price is good for orders placed in the next 2 or 4 weeks. Does she call all her friends and tell them to order your awesome canollis right away (which would be great marketing wise, right?)? You can even say that you had a hard time working out a price for them, but really it's not worth your while to charge less than 2.50, and ask her what she thinks. If the choice is between 2 and 2.50, everyone will choose 2. If the choice is between 2.50 and no canollis, it's a different story.

I'm interested in hearing how she reacts to the price and whether she orders.

Aaaauuugghhh.

I can't keep my mouth shut any longer (or would that be.... I can't keep my fingers still any longer?).

Cannoli is spelled C A N N O L I. Only one *L*. A single pastry is called a 'cannolo', and the plural is then *cannoli*.

There is no apostrophe *S* when talking about plural ANYTHING!


That said, I can now let you get back to work.

Don't listen to family. My aunt told me this one cake I made she thought it would be worth about $20.00 or so. The one in my avatar. Everyone at the party loved it and were sorry to hear I lived so far away cause they would want to order.

This was a 3 layer, 8 inch cake, special request order made from scratch with real butter, fresh strawberry's, canned pineapple and coconut, home made frosting etc. I spent about 2.5 ours from start to finish and the ingredients/box/board alone cost me $15.00!!

Some people just have no idea the care and hard work that is put into things. Thankfully my customers do. lol

Anyhow what places are you "competing" against? If yours are so much better it seems to me you should be able to charge more.

Sorry about the misspelling. I thought I was probably going to misspell, but it sounded so sterile to keep saying "your product". Go ahead with the slap if I did the 's on any plurals. Yikes.

Re your brother paying $2 without hesitation -- I've noticed that about men in general. If they like it, they pay what seems to me to be a shocking price for anything domestic-like. So there you are, there's your ideal market, men, especially single ones who don't know how to cook!

Don't stress about your quote. At least you figured it out and you know you won't be working for free.

Update...my neighbour called..ordered 2dozen cannoli 45.oo. SHe didn't even hesitate at the price. Now granted she has admittingly said, "i will pay top dollar for something i know is fabulous". She herself has a home business of making baskets so she knows how much work and time goes into these sorts of things. We started talking costs and i told her it was possible i would be raising this costs and she said, "ya know,you will have to see what people will pay. Some, like me will pay it no problem, others will say no way and go get it cheaper somewhere else. Some people just don't care about quality they are more concerned about price." So i think had i told her a higher price she probably would've payed it.
I guess time will tell if this is a reasonable price or not. There will be alot of people at the party so i'm sure the word will get out quickly.
Thanks to everyone for their help on the matter.

suz

so why don't you split the difference and charge $2.25???

A little story....my BIL is very wealthy.....has been all his life. in his "world", his attitude is, if Mary is selling cannoli at $2.50 and Sue is selling cannoli at $2.00 ..Mary's must be better and he will buy Mary's. What is wrong with Sue's that she is only selling them for $2?

It took me a while to understand this as I have never been wealthy, but I am starting to see it with my clients. If they want Walmart cakes, they go to walmart. If they want "special" cakes, they come to me. If your cannolis (sorry Chutzpah) are as good as you say they are, you need to get the price for them.

I love that comment cakequeen!! That is everything in a nutshell!

Are you sure you're making a cannolo :



and not a Cream Horn





Cream Horns are baked, Cannoli are fried. Cream Horns usually have whipped cream based mousse type fillings, Cannoli have cheese based fillings.

For what it's worth, we get $2.75 for a cannolo, and can't keep them in stock.

Well, at one of our favorite italian restaurants in TX, they charge about $6.00 for two cannolis! I pay that because they are yummy and they are a nice treat!

If people like them and want them, then they will pay what you are asking.


A cannolo sounds good... Yummy!

Here in Colorado they sell for $2.99 ea. at a local supermarket and they are selling. The price you have isn't bad at all. Can you share your secret ingredients? Thanks..