Thinking about higher prices... - Page 2

That was the only relevant link I could find. I had this discussion with an inspector from Santa Clara County when we first started our business, she said that home bakeries could be certified if they passed inspection. Of course that doesn't happen very often due to the onerous requirements of the inspection.

That's the whole point of cottage food laws, to set up alternative rules for home bakeries so they don't have to go through what commercial bakeries do, so when CA passes a CFL the ease of running a legal home bakery will go from "very difficult" (not "impossible") to "relatively easy".

Ignoring all of the attitudes on here........

I think you are definitely undercharging! No cake that you -hand decorate- should sell for 50-70 dollars!
Babysitters make more money then you do!

You definitely have the talent- so my suggestion would be to up your confidence level and charge accordingly. If people get upset at your prices, then don't sell to them, they will have to go elsewhere and buy either a less beautiful or much more expensive cake....then they will get the hint...and probably even be back!

Sure they do. We started off charging pretty much what we charge now (aside from ~5% annual price increases to cover rising costs). While we were conducting R&D at home we gave away lots of cake, but we didn't sell anything until we had a commercial kitchen to rent. Trying to build a customer base by selling at a loss is counterproductive, since there probably isn't much overlap between customers who will buy a cheap cake and the customers who will pay a premium for quality, you'll want to build your business around the latter.



If you can't afford to start a business the right way, then you can't afford to start a business. Operating out of an existing rental commercial kitchen doesn't require a lot of up-front capital...we spent around $3K in startup costs, and much of that was recurring (inspection fees, LLC, liability insurance).

Before going any further if this sounds chiding my apologies. It is not meant to be so and tried to control the tone.

Placing aside the question of legality and going off what you have here, the question I would ask is why are you only charging $2.50 per serving? What calculation did you use to come up with the figure? Your wage should be part of your costs (that is not profit).

Factoring minimum wage(not sure why you would value your skills as being worth less than minimum wage) your labor cost alone would be $79.75- and that does not count the time you spent baking them. Thus labor alone is more than what you charged for the cake. To say you are making less than minimum wage is an understatement.

In this case it seems you have a few options which are not mutually exclusive:

1) Alter your pricing structure to better cover your costs--including labor. If you are worried about customers not paying it, the question to consider is do you want to continue to run a business where you are essentially unable to pay yourself a wage. Profit is the excess of selling goods over their cost--your labor is part of the costs. Your wage should not be thought of as something that comes from profit. In the example you cite that $18 is not profit, it is what you have left to cover your labor costs associated with the cake including all the time you take getting the order and baking it At this point it is not a question of giving up a "profitable" business as you are currently unable to cover costs.

Worrying about going out of business seems strange if you are doing a bunch of work and you can barely pay yourself a little over a dollar an hour--if that. I get that you love doing it, but if you want a wage then you are going to have to come up with a price structure that accounts for your labor as part of your costs.

2) Become more efficient--note I am not saying you are inefficient but more efficiency means your labor charge will not be as high (assuming the same level of skill). Thus your cost increase would not have to be as much.

3) Do not use Earlene's chart or price according to larger servings. This has been debated more than once but you are essentially giving away cake. I am not sure what you mean by ensuring that they have the servings they need. Using the Wilton guide gives them the servings they need, now if they want to cut the pieces bigger than what the guide recommends then they need to order more cake.

However if you want to offer larger servings then you should price for those larger servings. So for an 8 in Wilton says 24 Earlene's says 15. If I needed to charge, per the Wilton guide, $4 a serving for an 8 in to cover costs (including labor) and get a 20% profit (totally making up those numbers) that is $96.

Whether I use Earlene's method, I still need to sell if for $96 to cover costs and make a 20% profit . Thus servings under Earlene's system should be $6.40 per serving--you must charge more for the larger servings. No matter how you slice it (pun intended) your costs and profit are the same for the 8 in. If you charge only $4 per serving use Earlene's system there is no way you will cover your costs and make a nice profit.

Cupncake: I started my business with a $300 upfront deposit to my commercial kitchen, less then $100 in licensing fees, and a free Yelp business page for advertising. I didn't even own a car. I started with above market prices and at the time I wasn't 1/2 the decorator you are, but I knew where I wanted to be even if I didn't "feel" I was there yet. I would sell a cake, then buy supplies with the profit. Sell another cake. Buy more supplies. Rinse, repeat. Deliveries were done via cab. Seriously. And I charged people my cab fair.

I have an 8 month old baby and I am a full-time mom. Which means in order to do this, I wake up at 3:00am to drag my butt to the rental kitchen no later then 4am. I have to be wrapped up and home by 8:30 am so my husband can go to work. It takes meticulous planning in advance to make sure I am 100% efficient to make sure I can get done what I need to get done in that time. If I don't, then I am back at the kitchen at 7pm after I put my kid to bed and I stay until I AM done. Sometimes I am right back at the kitchen at 4am to pick up where I had just left off at 11pm. And my baby gets to ride along with me on my daytime deliveries. I now turn down more orders then I can take and that sucks, but I am a good mom, an excellent baker and a decent decorator that is in the game, profitable, and satisfied. And I was able to buy a car after about a year in business.

You have the wrong idea of what it takes to be legal in California - it ain't the money. It's dedication, tenacity, blood, sweat and tears... and the ability to function completely sleep deprived and keep a level head when stuff starts getting out of hand. But as a mom, you should be a pro at that already.

Anyway that's my story, so I hope this inspired you and other reading this thread to break past the wall you think you see.

Well you have inspired me! Seriously!

Totally ignoring all the ''legal/illegal" talk as that was not your post ....I just wanted to say to you Cupncake1 - your cakes are beautiful, you are definitely worth more money and just take that leap and put your prices up. That being said, it is just steps at a time - I know where you are coming from and it is all a matter of confidence...your cakes are great and people will pay you more. People buy with 'emotion' most of the time - not with their head anyway so if they really want the cake they will pay you so don't think your cakes are less that what they are really worth. Just wanted to say 'beautiful work' - you will get there....if I could be half as talented I would be super happy

First, your cakes are fantastic! Start charging what they're worth!!

Second,




It IS possible. I am in the midst of getting my legal kitchen going on our property in California. I meet the zoning requirements, and am meeting the HD requirements. It is not an easy task...but it's the only way I could do caking legally because I'm not in the position family-wise to be able to do it outside the home. I am very fortunate to live where I do (for zoning) to be able to do this.

All I have to say is: I'm kinda shocked and disappointed at the snarky tone in so many of these posts. Until now, I always thought of us as a big extended family of people who enjoy the same thing and we all reach out to each other with help and encouragement. Sorry if I sound like Heidi or something, but really, let's keep things cordial and kind. No need to snip at anyone. Cupncake, good luck to you no matter what you decide to do. If you decide to make cakes absolutely free just because you love to do it, that's for you to decide.

Amylou, what you are doing is awesome! But to be clear, you are not doing cake "out of your house", you are making a secondary commercial space that is not part of your dwelling. Your area must already be zoned commercial mixed use and for all intents and purposes, you are essentially building out a separate commercial kitchen on your mixed-use space. Right? I could do the same, the condo I live in is a mixed use live/work loft with a retail entrance. I could buy the loft next to me, build a commercial kitchen in it and open a store. But that's not a cottage law or home baking. That's having a separate commercial space that I just so happen to own and live right next to. It's not baking out of my own personal kitchen. I want to point this out because what you are doing is awesome! but not the same.

Am I wrong?

Correct Jennifer...it is not out of my home kitchen. For me, zoning is ag (we're out in the sticks) but in the regs I can have a "rural home business" under certain guidelines. It has helped that the guy that has helped me with my plans used to be the head Planner for the county!

It depends on how you define "home baking". It is possible to get a kitchen inside your house inspected and certified if it is segregated from the living areas of the house, just as a separate structure on your property can be certified. Non-commercial zoning is not always a showstopper, since if you can show your business has a low impact on the neighborhood you may be able to get an exemption.

None of this falls under the cottage food law, any home kitchens (or home-adjacent kitchens if you want to be pedantic) must follow the same rules as commercial kitchens.