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Home bakers who undercharge... - Page 2

post #16 of 52
Quote:
Originally Posted by Katiebelle74

PiccoloChellie I think you are exactly right. I had enough trouble deciding what I should charge and I know 3 local cake business owners that I consulted with to figure things out in the beginning plus years of Exec. Pastry experience/degree and program to cost out things... but taking a guesstimate on what that funky 3d cake you've never done before should cost is still tough for those of us with experience. Now you take a hobbyist or the new wanna-be with out experience and they've no clue at all what they are up to on the business side EVEN if they can execute the cake.



I'm remarkably lucky in that one of my previous jobs I was responsible for all the job costing for all products for two companies under one "umbrella." I had to sort out every little thing that went into each job - from the sheets of paper and ink used to print out the production schedules to the labor to the exact amount of time each item spent on each machine. It was tremendously complex, but it's the only way the company knew how much to charge for the products!
Those were marketing materials and had absolutely nothing to do with caking, but when I decided to follow my dream, the FIRST thing I did was job cost my practice/family cakes the same way I job costed those production orders.
It took time just to get my baselines sorted out and then to bring those in line with established businesses in the area. It took a lot of time. It took time that the hobbyists and wannabes have no desire to take, and quite possibly have no idea how to even start doing it.
(and, as an aside, I'm still struggling to not think of myself as a wannabe... but this is a business and I am a businesswoman! I have one of my new business cards taped to my desk directly in eyesight to remind me of that every day!)

It took me 3 years of planning to get to the stage that I felt ready to do this for real. My competition is NOT the person who makes one star-tip character pan and figures they can get rich quick selling them for $15 to the Walmart customers. And those Walmart customers are not my customers. I'm okay with that. My prices are my prices. I have two "budget cakes" available for those who want something a little fancy but can't afford to spent $75 on a cake and everything else is available to those who view fresh, custom, delicious dessert as something important.

EDIT: Katie, could you perhaps stop off at the Penguin and grab me a couple(dozen) orders of fried pickles and deliver them up here to the Great White North? I lived in Charlotte for several years and oh, God do I miss the food.....
post #17 of 52
Quote:
Originally Posted by RoccosMom

Piccolo you are in rare form and have made me laugh out loud with the brass cakeballs and living in a van comments from upthread.

No worries!!!

High five!!!



Ditto!!! icon_lol.gificon_lol.gificon_lol.gif
post #18 of 52
Quote:
Originally Posted by Caths_Cakes

Believe me, i started out the cruddy way, Charging way less than i should have, And i learned the hard way!
i would love to be be able to say im making a mint and getting rich of making 3 cakes a month *snorts* as before, 90% of the population in my area will just not pay above the price for cake, they know they can go to asda and get a cake for less than £10 and there's no way in the world i can compete with that if i want to not live in a tent in a field some where lol! I'm just saying, Alot of it does depend on the area,and taking that into account is important.



I agree that taking the area into account is very important and if my area will not pay my price then my decision would be to get into a different line of work.

I set my price. I control my work. Nothing worthwhile is easy. It's easy to say oh yeah they can get a cheaper cake somewhere else. It's hard to market yourself.

Do people in the designated area drive cars and eat out and sometimes get new clothing and ipods and new electronic gadgets? The income is out there you just gotta mine for it.

Just some 'I'm much more important than that' thoughts for you.

I mean you said it yourself--market to the other 10%!!!!!!!!!!!!!!!
my cookies are prettier than your cookies because this is the second time i substituted my opalescent sanding sugar when i ran out of sugar to make the batch ha!

 

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my cookies are prettier than your cookies because this is the second time i substituted my opalescent sanding sugar when i ran out of sugar to make the batch ha!

 

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post #19 of 52
Lots of home bakers seem to start out underpricing, but shouldn't it be the other way around? If you base your price starting out around the highest quotes for your area, you either do well and stay at those prices, or you can lower them a little at a time based on what you need to make and what your area is willing to pay. At least that way you don't have to worry about losing clients because you had to raise your rates, plus the added bonus of being able to compare the amount of orders you had at higher prices to the ones with the lower prices and being able to tell if your profit has changed. If you can do three cakes a month as opposed to 10 and make the same amount of money, maybe you were in the right place to start with.
Love is all you need. Well, love AND cookies.
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Love is all you need. Well, love AND cookies.
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post #20 of 52
thats just it Roccos mom, I cant just market to the other 10%, I do sell to them, And usually they are bigger cakes because the person is willing to pay it , But i cant have one price of cake for one person, and one for another just because i think they look a bit better off, The majority of cakes i do are small and mostly for things like birthdays and christenings and thats because they will look at my list, and get what they can with what they can, which usually isnt much . i don't consider myself to be cheap and im not aiming to be cheap just so i can get more customers, If that worked, we'd all be doing it!
post #21 of 52
Caths_Cakes, I see what you mean and whatever works for you.

Me, I will market to the people who can afford me. Often when pople celebrate they come up with budgets that normally do not exist--the family goes in on G'ma's 70th b-day party stuff like that--I'm there for them.

Stuff like that.

All the best to you.
my cookies are prettier than your cookies because this is the second time i substituted my opalescent sanding sugar when i ran out of sugar to make the batch ha!

 

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my cookies are prettier than your cookies because this is the second time i substituted my opalescent sanding sugar when i ran out of sugar to make the batch ha!

 

Reply
post #22 of 52
I am new to this business so I have been afraid of charging too much myself. The first few cakes I did, I did it for my cost and nothing else, simply because i was happy to be getting the experience. However, a few days ago my best friend asked me to do her grandma's 75th birthday cake. She had a picture of a cake from a grad party she had attended and wanted the same thing. It was 3 tiered square, each tier 3 layers, each tier 3 different flavors, to feed 100 people. Buttercream with fondant cut-outs. She said the woman who did it for that grad party did that cake for $80, and she was looking to get it for that price as well. I gracefully declined the job. I still feel like I could have used the experience with a tiered square cake but that is charging less than $1 per person.
post #23 of 52
I think it's important to remember that people simply do not know what it takes to crank out these types of cakes. I know this, because I was one of them. I decided I could do it for family and friends and give people the benefit of high-end cakes for low-end prices. I felt all philanthropic and crap. But, let me tell you, after trying to do three cakes in one weekend (I have a full-time job and hour away from my home) I almost commited cake-icide. I cannot fault the people, though. They wanted a good deal and I was offering. Of course, then I found out that I was commiting a huge crime by even accepting the pennies that I did. I feel extremely guilty every time I think about the people in my town who have actually taken the time to train and acquire licensing.

I am now taking a hiatus from any caking, learning to actually produce some quality work, so that one day I can become licensed and offer a good product that I will feel comfortable charging fair market prices for.
He's still got the whole world in His hands.
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He's still got the whole world in His hands.
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post #24 of 52
Quote:
Originally Posted by kimmisue2009

I felt all philanthropic and crap.



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Love is all you need. Well, love AND cookies.
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Love is all you need. Well, love AND cookies.
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post #25 of 52
Quote:
Originally Posted by PiccoloChellie

I think these problems come up when a home baker doesn't view what they're doing as a business. They're selling cakes "on the side" or doing it to make a few extra bucks, and feel that making an extra, say, $50 per week over what they pay in materials is profit in their pocket. They don't look at the fact that they're making like half minimum wage not counting the extra utility use and incidental expense (soap, paper towels, etc).
Unfortunately it's because, well, not everyone is cut out to be a business(wo)man. Most people don't have it in 'em. They don't have the business sense that a Bill Gates or an indydebi has, for example, and they don't have the brass cakeballs it takes to be a business owner. How many times do we see posts here about needing a backbone when it comes to charging what a cake is worth? It takes one heck of a backbone to not cave to customers who want a custom cake for Walmart prices, and it takes serious cakeballs to stick to that pricing no matter what.
It also takes a lot of not-so-fun work like cost analysis/job costing, accounting, salesmanship, time management, and all that other stuff that sucks about running a business. It's stuff that the average person never had to deal with as an employee of someone else, and from my reading it seems like a whole lot of home bakers just haven't had business experience beyond working for an employer.

The hobbyist home baker who drastically undercharges for their cakes doesn't rely on caking as their primary -or even secondary- income. If they did, they'd be living in a van down by the river. They never bothered to take the time to do a job costing of a single cake and apply it to their product like an actual business does. They have no interest in doing any of the unfun stuff that's the backbone of running a business and, in some cases, have absolutely no clue what any of that unfun stuff actually is. It's rampant, and we all see it every single day.

The way I figure it...all you can really do in most cases is just wait it out. They'll either get over their passing cake decorating fancy, they'll eventually get sick of making $50 a week at the expensive of every moment of their free time, or some other bad business decision will send their customers running. I suppose others will crop up, but if you're doing things right, you stand a better chance at lasting them all out.



Chellie,
Every once in a while, a post will articulate an issue or theme underlying hundreds of topics on a forum. You've done it here. Bravo.

However, the ones described in your post are the ones who won't 'get' the valuable advice you've offered. The ones who do 'get it' need to just take a deep breath and feel secure that they will be the ones who last in the long run.

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post #26 of 52
Quote:
Originally Posted by kimmisue2009


I am now taking a hiatus from any caking, learning to actually produce some quality work, so that one day I can become licensed and offer a good product that I will feel comfortable charging fair market prices for.



Same with me (plus waiting to live in an area where I can legally have a home business). If anyone does not know how much their cake is worth, feel guilty for accepting money for hours of hard work, then they should still be hobby bakers, IMO. Why start a business when you don't even know how much to charge? There has been so many threads about pricing questions that I just added it here, sorry. But I don't understand how anyone can sell a cake and later wonder if they charged right, too much, too low or what they should have charged. How can anyone start baking a cake (as a professional) without knowing how much or even IF you will be paid for it? And if profit is not in their business plan, then it's better to do it as a hobby. (not toward kimmisue, I just agreed with what she said...)
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post #27 of 52
You couldn't even buy the materials to bake a 4-tier cakes for $25...
post #28 of 52
Quote:
Originally Posted by dawncr

Chellie,
Every once in a while, a post will articulate an issue or theme underlying hundreds of topics on a forum. You've done it here. Bravo.

However, the ones described in your post are the ones who won't 'get' the valuable advice you've offered. The ones who do 'get it' need to just take a deep breath and feel secure that they will be the ones who last in the long run.



I figured some people would "get" what I was trying to say.
I'm glad it came across as intended.

I have no idea if my business will succeed, but I'm approaching this as a business and did my homework before I took a single dollar. I know I have a better chance at success than those who have not done their homework and continue to refuse to do it in a proper businesslike fashion... if yer pickin' up what I'm puttin' down.



Quote:
Originally Posted by Adevag

If anyone does not know how much their cake is worth, feel guilty for accepting money for hours of hard work, then they should still be hobby bakers, IMO.



BIGGEST PET PEEVE EVAR!!!!!!!!

If one feels "guilty" about taking money or, even worse, is too timid/shy/etc to DEMAND money for their product
(i.e. dropping a cake off and not taking payment, and then not wanting to pursue the "client" for payment)
then one is NOT running a business. That is a lack of the business sense I mentioned earlier. Thems are the brass cakeballs required. If you ain't got 'em, you ain't got a business; you have a charity where you get taken advantage of.
General "you," not specific "you," BTW.


Quote:
Originally Posted by Adevag

How can anyone start baking a cake (as a professional) without knowing how much or even IF you will be paid for it? And if profit is not in their business plan, then it's better to do it as a hobby.



Because they're not baking a cake as a professional. They're baking a cake as someone with a hobby. It's a hobby that they obviously love, but it's not a business.
post #29 of 52
PiccoloChellie I love you response!

kAnd when I was told they could do it for $25.00 I told them I really find that hard to believe but be my guest. It's really interesting the people you get to meet.
post #30 of 52
That was exactly my point. I have zero head for business. Take that back - I have zero interest in business. I am a researcher/statistician by day and the cake thing was to be my counter-balance to keep me from going insaner (not a typo - already a bit insane.)

I think that once I did one cake and heard all the "omg - you should do this for money....blah blah blah blah) I lost my head for a second. I simply do not care a bit about getting rich of cakes, even in the event that the Goddess of Cake reigned down on me and gave me magic hands.

I just got really sad when I would think of all the little girls who wished they could have a cool funky cake when they had parents who simply could never afford such a luxury.

That said, I can still "practice" on people who are grateful just to have something without causing woes to the actual cakers in my area.

Believe me, I do not even need to be told how ridiculously I thought for a few months. I do, however, always welcome honesty. If you are worth my time, you are worth my honesty.
He's still got the whole world in His hands.
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He's still got the whole world in His hands.
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