AI just googled several nice looking custom cake outfits.in your town, and one of them is $5 to $8 serving to start. So the market is obviously there. Yes, do lots of research and.figure out what will be profitable for you and makes you happy to do the work.

AExcuse the random periods. Fat thumbs, tiny phone keyboard.

Thank you for the help. I'll definitely do some more research before I set my prices. I removed the pricing page from my website and added a kijiji ad directed to brides. My only problem is that my storefront isn't open yet - I have my license and I can work in my kitchen in the space, but I won't have my business open for a few more months.

 

Anyways,

 

Hopefully I can iron out the kinks of my small business!

 

Thanks to everyone who helped. I'll keep you all updated.

AThis is where market research comes into play, and why it is so important to identify a competitive advantage and a target market as part of your business plan. Find the customers in more affluent areas (income demographics are publicly available) and target them with ads in their medium of choice.

Another alternative is to look at midmarket customers: people who are looking for simpler, high quality cakes for smaller events but don't have the budget to pay the $6-8/serving an upscale bakery would charge. Many of our customers were in this market and we did quite well...our basic BC 8" round cake starts at $44 ($74 with fondant) and a 12" round starts at $69 ($119 with fondant), at our volume level they were both pretty profitable at these price points even after paying commercial kitchen rent.

A

For relatively simple single tier cakes it may not make sense to stick to the same per-serving price for different sizes. With bigger cakes you may have some room to offer some downmarket options with lower per-serving prices...the marginal cost curve flattens out since overhead is fixed and the increased cost of making larger cakes does not scale 1:1 with increased number of servings.

Work out what your actual cost is for a 12" cake (just ingredients, labor, and allocated overhead) vs. a similar 8" cake, the answer may surprise you.

A

They'll be nearly identical. Only difference should be a slightly lower ingredient cost for the 8.

My ingredient cost is actually triple for my 12" cakes. My 12" cakes are pretty big ... 5-6" high. I've tried making them shorter but to me they don't look as pleasing. And without a sheeter covering them with MMF is a great pain.

AThats a tall cake, taller than what is typical, yet you are charging less than what is typical for your area... AZ Couture and I both have taller cakes than norm, but we charge accordingly. We both hate squatty cakes, too.

ATo clarify, my prices are lower than AZ's, but her skill and patience is higher than mine also! But I still charge a bit more for my taller cakes than I would if they were squatty, and you should too, since there are more ingredients and labor in a tall cake.

Sorry posting from my android and I hate it! I can't see what I am typing, sorry if it is a mess!

Haha no it's all good! I think I should just hire somebody who can handle the business side of things for me ... Playing around with numbers, while I make cake.

AUmmm, yeah a jump from an 8 to a 12 is a bit. Maybe an 8 to a 10, that's pretty close.

A

Ontario offers free business consulting at small business enterprise centres: http://www.ontario.ca/business-and-economy/small-business-advice-support-services-regulations

AThe main issue here is inconsistent sizes, a customer would expect that an 8" round and a 12" round would be the same height unless otherwise requested.

The volume of a 4" high 8" round is 3.14 * 4 * 4 * 4 = 201 sq in. The volume of a 4" high 12" round is 3.14 * 6 * 6 * 4 = 452 sq in, so ingredient costs should be 2.25x higher. The multiple is the same regardless of the height of the cakes, as long as they are both the same height.

An example for very basic BC cakes: let's say allocated overhead is $15 and your wage is $15/hour. If the ingredient cost of the 8" is $10 and the cake requires 1 hour of hands-on time to complete, your cost for the 8" is $10 + $15 + $15 = $40. For the 12", the ingredient cost would be $10 * 2.25 = $23 (rounding up), and if it takes 1.5 hours to complete, your cost for the 12" is $23 + (1.5 * $15) + $15 = $61. Adding a 25% markup for profit to both cakes yields a price of $50 and $76 respectively.

On the other hand, if you are making more complex tiered designs where the labor for larger cakes scales up more quickly (and the targeted customer is used to seeing pricing by serving in the marketplace) then it makes more sense to have a single per-serving starting price for all sizes.

I need to figure another way of advertising - however I don't have any orders, so the money for advertising is not there either. I made physical advertisements; magnets, flyers, business cards, etc but it doesn't seem to be enough 

A

Your customers will end up paying for your advertising costs in the form of overhead allocated to each product you sell, but as a new business you will need to pay for advertising up front out of your business startup fund.

What do you use for advertising?

AWe had a strong competitive advantage in a specific niche (people with food allergies and other dietary restrictions) so I started out with Google AdWords for keywords like "nut-free cake", "gluten-free cake", etc. targeted within 30 miles of our business, while participating in local food allergy support groups (both online and in person). After a couple months reviews started hitting Yelp so I discontinued Google Adwords as we were already getting more business than we could handle.

Before our daughter was born I was working on a few other strategic expansion strategies that involved partnering with specialty grocery stores and manufacturers of complementary products in the same niche, but we ended up moving out of the area and selling the business to an employee.

A

I wish there was a "like" button for this!

I didn't mean it like that

AWhen your ready you can do bridal shows in your area, donations to auctions for charities, rent a booth at a local fair/market, etc. In my area, there are several people that sell Thirty-One, Avon, Bath and Body stuff...(I live in a smaller town with larger cities about 30min in every direction) so someone is always hosting some sort of event and the tables range from $ 0-25. I met a salon owner who has private spa parties so I'll make margarita cupcakes and sell them just to get my name out there. I always have a little box for drawings, just little things like a $5 discount or a free smash cake with a 6"&8", I get email addresses to send thank you messages or sometimes I'll have a special during slower times. I have received many orders that way. I have taken samples to receptionists at my daughters DR's office and made cakes for the teachers lounge at her school, that sounds terrible doesn't it ;)

I'm trying to expand my business and I'm working on updating my webpage. For me that's the most difficult part, so don't get discouraged, you are not alone.

Those are wonderful ideas.

 

I really would like to do a bridal show, however the limited spots are tough to get. There are currently two reining bakeries here in London who are ALWAYS at the London Bridal Expo. Seems like they've got a contract for the next bazillion years. I think I could put on a nice presentation. Have any of you done bridal shows? Any tips? There is one coming up in January, maybe I could attempt to get into that one. Do you have to have a storefront open? My kitchen is inspected & certified already but I can't open my store for another few months, worried I may not yet be open by January. I need to decorate and buy furniture I'm a little bit of a control freak. Spent all of my savings on my kitchen, and I figured that I would get a few orders here and there that would help pay for decorating my place. (BTW, I don't pay rent - my dad owns the building).

ACheck out the flyer for the previous years Bridal Show and contact the person who hosted it, the ones I've looked into/done were first come first served. I don't know the actual laws where your located, but oddly enough they didn't ask me for any pertinet business info. I just had to fill out a form saying what size booth I wanted, if I needed tablecloths, chairs, if I needed an outlet, etc. they wanted my business name, address, website, email, and phone number but that was for the handouts and newspaper add and my payment. I guess they just assume no one would invest the money if they weren't a legitimate business. I had my certification and everything but I hadn't completely finished my separate kitchen yet so I was still using my main kitchen at the time, which my inspector said was fine. I have a room attached to my garage, an extension to my house where I've setup now, so no I don't have a storefront but I do abide by regulations. So far I've just done the one. I had a banner, phamplets, business cards, and a personal raffle at my two tables. I had several decorated cake dummy's and two flavors of cake, all presliced in Togo ramekins with tiny forks so I didn't have to stand there slicing cake, I was able to interact more. I had to donate a couple gift certificates (as did every vendor) and a day later the host of the show gave me a list of every couples name, address, phone number, email, and wedding date. I sent out thank you emails, I think there were about 150-200 people attending and I made the money back that I had paid just for my booth with 2 cakes. They are a lot of work, but it was well worth it for me! I highly recommend getting at least one friend/family member to help for the day.

Check out CupADeeCakes.blogspot.com, she has a few posts about Bridal Shows she's done with tips and suggestions. I plan on doing another one soon in a neighboring town.

"I honestly don't give myself an hourly wage just yet. All I do is calculate my costs, and multiply by two. I figured that a 50% profit would suffice."

 

And when you do finally start charging for your time, it's going to be a BIG shock to your customers! Why wouldn't you pay yourself yet? What are you waiting for?

 

Just for an example, let's say my ingredients for a little two tier come out to $20. By your way of doing things, I'd be charging the customer, what, $40? For REAL!?!? That is NOT profit.

What does this mean? 

 

We provide party and wedding cakes for as low as $2 per serving. Our cakes are compared to $6-10 per serving.

For customers who didn't know the real value of my cakes and thought my cheap prices were expensive