Thread for People Who Like Pricing! - Page 4

Sorry to veer the thread, but how much business do you need to have to make renting a kitchen worthwhile? It seems like it would be too expensive to rent a kitchen just for one or two cakes a week.

I actually don't think we've ever sold a smash cake...people have bought 6" cakes a few times, but they are priced the same as 8" cakes.

If the customer wants a smash cake to accompany a $500 order there's some more leeway there than if the smash cake is with a $50 order. It would certainly not be free but we might charge something like cost + 5-10% instead of cost + 20%.

It really depends on your costs, how efficient your processes are, and your anticipated revenues based on demographics and your target market (all this should be in your business plan). If you can rent a kitchen for $10-15/hour and sell two $200 cakes a week it might be worthwhile.

Many successful baking businesses will supplement their custom cakes with a wholesale line of lower end products, this goes a long way towards chipping away at overhead and filling in slack time.

If someone is ordering a custom 1st bday cake, I will do a 4" single layer smash cake in white or chocolate for $5. It isn't on my website, they have to ask for it, and it isn't overly decorated either- sprinkles and a number 1. I have some small single cupcake boxes and just put it in there. It isn't to make a profit, more of a service I can do for my customers, and it's just so darn cute to know a little one will be destroying it in a matter of hours!

However if someone orders one of my $25 dessert cakes, it's not going to happen. And if they want it overly customized, it's not going to happen. If they want it for Johnny's 6th birthday, it's not going to happen. One of the pleasures of owning the business I guess.

There is no reason a 1 year old needs a 6" cake. TOO MUCH SUGAR!! The 4" single layer is probably even a little too much, but at least it is smaller.

My smash cake is 4". The last 2 weekends I've done 2 & 3 tier custom 1st bday cakes. Each also ordered a smash cake. I explained that a 4" round, bc icing, same flavor as top tier (which yielded extra batter anyway), child's name = $5. Neither opted for that & each ordered a 4" with more custom decoration for $15. Seems silly to me but whatever!

To Jason_kraft : I know you're asked these same questions over & over in multiple threads yet you're so patient with us! Thank you for sharing your experience & expertise!

I throw in a 4" smash cake for free with a tiered cake order only. It's literally 5 minutes of my time and practically zero extra ingredients.

The percentages are the profit margin. For a very simple smash cake the cost would be quite low, probably in the $15-20 range, or less if you consider the main cake to take care of the overhead contribution for the order.

Okay, this is gonna be long and rambling. I hope it helps someone and gives you some insight into how much work all of this is.


What do you do best? What do other people say is your best work? What do you want to do? What is your goal for your business? Do you want to do $1,000 cakes? Wedding cakes only? Birthday cakes? Sheet cakes? Cupcakes?

When people see something about your business, what do you want them to think? Upscale? Classy? Friendly? Like getting a cake grandma used to make? Custom? What words would be describe your business?

Lets say you want a wedding cake only business. You want it to be custom work only, no copying other cakes, and you want to do grand centerpiece cakes. All your recipes are scratch and people dont seek you out for vanilla or chocolate. You make chai, boysenberry, whatever specialty flavors with the finest ingredients and will buy local even if it costs more as long as it compares favorably to national brands. You dont do sheet cakes, kitchen cakes, cupcakes, or grooms cakes.

Thats an upscale market. Already you can rule out some income levels are these are not your main clients. Starbuck coffee instead of McDonalds drive thru. What are the most likely venues where your clients hold events? Go online, go in person, make a phone call, or whatever so you get a feel for those places. How much are they to rent? How much are chair, tables, and tablecloth rentals? Who is on their preferred vendor list? Check out those people and their prices. You already know these are not $300 wedding cake people. They expect to pay quite a bit more for the cake but how much more?

Where are the upscale areas near you? Where do they shop? How expensive are the places where they shop? How do they find people to hire? The local cake supply store? Peer recommendations? Whats the latest craze among this income level- can you check out those places to see if advertising there is appropriate? Do you need to advertise in certain publications?

Start checking out the competition for the area. Go online, ask people, ask venues. What names keep coming up over and over? What media coverage has there been for these cake artists and for those upscale weddings? Anywhere that you think will give you info/lead you somewhere, check it out. Check out industry reports and the census stats.

Hang out where they hang out. What do they expect of people? Are they looking for personal relationships where they feel you work exclusively for them? Do you need to provide services not normally provided like table design and set up? Do they need to feel you are helping them out and making them feel like you are making their hectic lives easier?

Perhaps these links will help, as I feel I am rambling.

http://www.inc.com/guides/201104/how-to-narrow-your-target-market.html

http://sbinfocanada.about.com/od/marketing/g/targetmarketing.htm

http://www.marketingmo.com/strategic-planning/brand-strategy/

http://www.brandingstrategyinsider.com/2009/10/10-branding-and-marketing-trends-for-2010.html

http://articles.bplans.com/running-an-online-business/online-business-strategy/your-online-competitive-analysis/163

http://www.census.gov/econ/census/snapshots/SNAP72.HTM

http://www.costofwedding.com/

http://www.e-myth.com/cs/user/print/post/marketing-vs-advertising

http://www.marketresearch.com/

https://www.aibonline.org/resources/statistics/cake.html

You're welcome! I hope it answers the question.