Need Help Pricing My First Cake!
Business By mimi1144 Updated 23 Feb 2013 , 2:18am by Annabakescakes
What size cake are you making? Or are you asking what size cake to make, as well?
Is a rum cake served in smaller/larger pieces than a "regular" cake? At 3" tall, it serves 75% of what a 4" high cake would serve, so considering that, I would say a 10" would serve 28, and a 12" would serve 42. Unless the slices are bigger or smaller, of course.
About how much will it cost you to make your recipe to fit the pan you decide to use, and how long will it take you to make it, start to finish?
Well it all depends on what size cake to are doing, how much material you use, and how long it will take you to create.
I was always told to take the materials, electric/water use, and hours worked and multiply by 3. Then again, I sometimes wonder if the final price is fair or even worth that much or less.
Example:
Cake Mix $5.00
Buttercream $3.50
Fondant $3.00
Oven (I have electric) $12.00
Water $3.00
4 hours Labor @ 3.50 = $14.00
Total Cost: $40.50 x (3) = $120.50
This would be enough to cover your expense, pay your business, and a little for yourself.
This is just a rough break down. Usually I can make an 10x3 plus 6 cupcakes or a 8x3 and a 6x3. Sometimes I divide the price up, like charging $110 and $10.50 for the cupcakes.
I have seen other people charge by slice, but I sometimes think that charging $4.50 per slice for a 19x3 cake that serves 39 is a little bit high. I have seen people do this and the cake is a simple fondant cake with with a ribbon border and charge $175.00 for a 10x3 cake.
I don't know, maybe it is because I am too considerate, but I don't think people should be taken advantage of. Charge for your work according to expense and time.
AHow much annual overhead do you have, e.g. insurance, license fees, accounting, etc.? You'll need to divide your total annual overhead by how many cakes you see yourself selling in a year to determine the overhead portion of the cost.
Does your state have a cottage food law that allows you to legally sell homemade food? If not you will need to rent a commercial kitchen and factor that into the price as well.
A
Original message sent by ChrystysCreations
4 hours Labor @ 3.50 = $14.00
Well it all depends on what size cake to are doing, how much material you use, and how long it will take you to create.
I was always told to take the materials, electric/water use, and hours worked and multiply by 3. Then again, I sometimes wonder if the final price is fair or even worth that much or less.
Example:
Cake Mix $5.00
Buttercream $3.50
Fondant $3.00
Oven (I have electric) $12.00
Water $3.00
4 hours Labor @ 3.50 = $14.00
Total Cost: $40.50 x (3) = $120.50
This would be enough to cover your expense, pay your business, and a little for yourself.
This is just a rough break down. Usually I can make an 10x3 plus 6 cupcakes or a 8x3 and a 6x3. Sometimes I divide the price up, like charging $110 and $10.50 for the cupcakes.
I have seen other people charge by slice, but I sometimes think that charging $4.50 per slice for a 19x3 cake that serves 39 is a little bit high. I have seen people do this and the cake is a simple fondant cake with with a ribbon border and charge $175.00 for a 10x3 cake.
I don't know, maybe it is because I am too considerate, but I don't think people should be taken advantage of. Charge for your work according to expense and time.
Chrystyscreations, do you seriously only pay yourself $3.50 an hour ? .
Well it all depends on what size cake to are doing, how much material you use, and how long it will take you to create.
I was always told to take the materials, electric/water use, and hours worked and multiply by 3. Then again, I sometimes wonder if the final price is fair or even worth that much or less.
Example:
Cake Mix $5.00
Buttercream $3.50
Fondant $3.00
Oven (I have electric) $12.00
Water $3.00
4 hours Labor @ 3.50 = $14.00
Total Cost: $40.50 x (3) = $120.50
This would be enough to cover your expense, pay your business, and a little for yourself.
This is just a rough break down. Usually I can make an 10x3 plus 6 cupcakes or a 8x3 and a 6x3. Sometimes I divide the price up, like charging $110 and $10.50 for the cupcakes.
I have seen other people charge by slice, but I sometimes think that charging $4.50 per slice for a 19x3 cake that serves 39 is a little bit high. I have seen people do this and the cake is a simple fondant cake with with a ribbon border and charge $175.00 for a 10x3 cake.
I don't know, maybe it is because I am too considerate, but I don't think people should be taken advantage of. Charge for your work according to expense and time.
A little for your self if right!!! YOU are the one being taken advantage of, if that is seriously all you pay yourself! And the saddest thing, is you are doing it to yourself! A cake is a luxury, no one HAS to have one, so you are not taking advantage by charging a living wage for yourself, They can say no, it's not like car insurance!! You could double your income if you went and got a job at McDonald's!
Darn tootin'. Comments like *a little for myself* *don't want to overcharge and take advantage* chap my @$$.
Grow a pair, stop undercharging, stop playing 'business', and for gd's sake STOP undercutting real businesses.
$3.50/hour. You.must.be.joking. I have no idea what minimun wage is, but it can't possibly be that low.
Blegh - now I'm angry!
A
Original message sent by KoryAK
Devil's advocate, she did also then triple that number to get the price.
If you actually read the rest of her post, her pricing examples are reasonable although the process to derive the prices may not be the most accurate.
Okay. For all those ranting about me using this as an "example" lets get one thing straight. Home based is home based. If you are talking about a company that rents a locations, well obviously the rent would be included. But I am only home based. And then again, I am earning $40.50 for myself. If we are to use this example. I was looking at it as charging hourly rate at $3.50 like waierss are paid for their work. I look at the extra $26.50 as a tip in this example.
now going back to mimi1144 before everyone went of ranti about my post, how much would you charge for her cake?
Okay. For all those ranting about me using this as an "example" lets get one thing straight. Home based is home based. If you are talking about a company that rents a locations, well obviously the rent would be included. But I am only home based. And then again, I am earning $40.50 for myself. If we are to use this example. I was looking at it as charging hourly rate at $3.50 like waierss are paid for their work. I look at the extra $26.50 as a tip in this example.
now going back to mimi1144 before everyone went of ranti about my post, how much would you charge for her cake?
Well that "tip" thing only works IF you don't include that $26.50 in your price for the client and *hope* they come up with even giving you a tip, let alond a $26.50 tip. Gratuity, by definition, is something given without claim or demand. It is not added in the price of your cake. It's ok to have that $26.50 included in your wages. It's not a tip though.
Basing your wage off what servers make per hour is not the way to do it. They get paid a lower hourly wage because they earn tips to make up the difference, and that is assuming they get to keep 100% of their tips, which most don't if they take a lower hourly rate. For example, I may agree to work for X restaurant for $5/hour, but I get to keep 90% of my tips and pay out 10% to the bus staff. But if I only get to keep 40% of my tips because I have to pay out to bus staff, hostess and expiditers, then the hourly wage should be in the $8/hour range. See how this does not translate to straight labor making a cake?
You should be paying yourself Federal minimum wage at the minimum.
Well that "tip" thing only works IF you don't include that $26.50 in your price for the client and *hope* they come up with even giving you a tip, let alond a $26.50 tip. Gratuity, by definition, is something given without claim or demand. It is not added in the price of your cake. It's ok to have that $26.50 included in your wages. It's not a tip though.
Yeah, no kidding! It is not a tip, unless it is freely given, such as "You could double your wages if you worked at McDonald's."
I think we need to cut Chrysty some slack here... at the end of it all, she is charging a perfectly adequate price for her cake. If the way she broke it down is what is getting people upset, forget the breakdown! The customer never sees that anyways.
(Edited to fix spelling mistake)
AIMO how you get to your final price is just as important as what the price turns out to be. If you are going through the trouble of figuring out what your ingredients, labor, and overhead costs are, you might as well use realistic numbers in a scalable pricing model you can explain instead of relying on tricks like using an artificially low wage and multiplying by 3.
That's why we ask questions in these pricing threads, throwing out a price for a specific cake is not helpful (even if it happens to be appropriate in the OP's market) since without a model the OP will not be able to adjust that price to different products with different levels of complexity.
A
Original message sent by jason_kraft
IMO how you get to your final price is just as important as what the price turns out to be. If you are going through the trouble of figuring out what your ingredients, labor, and overhead costs are, you might as well use realistic numbers in a scalable pricing model you can explain instead of relying on tricks like using an artificially low wage and multiplying by 3.
That's why we ask questions in these pricing threads, throwing out a price for a specific cake is not helpful (even if it happens to be appropriate in the OP's market) since without a model the OP will not be able to adjust that price to different products with different levels of complexity.
Yeah!
A
Original message sent by jgifford
And for the record, a waitress is paid a lower base wage, true, but if the tips aren't enough to bring her income up to the minimum wage, the employer is supposed to make up the difference. It's called [I][B]minimum[/B][/I] for a reason.
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