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Have someone else come in and do birthday cakes?

post #1 of 33
Thread Starter 
Quote:
Originally Posted by howsweet View Post

Quote:
Originally Posted by Annabakescakes View Post

My prices are already higher than everyone else in the area.


Do you have employees? If not, maybe it's time to start considering it. You don't want to build up the business of someone else by turning away customers...if you don't have to. If something happens to slow business in your area you're better off having to let go an employee than compete for the business that's left. Just a thought.

I may as well get some advice on this too.

 

 

I have had someone enquire about renting my kitchen, but obviously I couldn't have them become competition, right under my own roof, lol!  I was considering contracting them to make the cakes I don't want to do, or the cakes I don't have time to do, KWIM? I was thinking of paying myself a set fee per serving, to cover supplies, cost, overhead, and bit profit, and having them take what is above that amount. They would have absolutely no overhead, and the benefit of an established name, and I could take more business. I would buy any and all needed cake toys, and they would still be mine. My recipes and methods. I haven't asked her is she wanted to be able to put her own name on them, though. I don't think that would work.

 

Is that weird? There would also be some training involved, but the person I am speaking to has a LOT of potential, and an eye for detail.  I haven't met her, so I would want personalities to mesh before we agreed to anything, but just hashing out the details before meeting, so we can discuss them in person, would be great.

 

If you were me, or this other gal, what do you think would be fair in this situation? If you currently own a business but don't want to have an hourly employee, would that work for you? Or if you live in a non-cottage food state, would you be happy not having your name on your work? What sort of compensation would work in each case? Anything else you can think of?

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post #2 of 33
You are better off either hiring them as an employee or working out an independent contractor situation where they would be paid hourly or based on the job.
post #3 of 33
Thread Starter 
Paying them per cake would be paying them per job. The job is the cake.
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post #4 of 33
Thread Starter 
It would be figure out on a per slice basis, but paid in full. I'm not saying I would pay them for 12 servings if that is all they did, if the cakes served 100. I'm sorry I must not have been clear, I. Was just giving the benefit of the doubt most people with reading comprehension were intelligent enough to figure that out.
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post #5 of 33
Quote:
Originally Posted by Annabakescakes View Post

Paying them per cake would be paying them per job. The job is the cake.

A job may have multiple items, but that's really beside the point. The key aspect to paying by job is calculating how many hours a certain job should take, and paying your employee/contractor based on that labor cost. This adds some overhead for you (and depending on the situation there may be minimum wage issues), but it also protects you from paying more to an employee who is slower than normal.
post #6 of 33
Thread Starter 
Say a cake serves 100 and I charge $350 and buy supplies and bake and fill and it is ready to decorate, and I give them $100-150. That is pretty easy for most people to figure out a percentage on a slice basis. The next 100 serving cake may be a $500 order but cost the same to bake and fill, but have in depth decorating. I could pay $350 for that one.
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post #7 of 33
Thread Starter 
not rocket science.
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post #8 of 33
Quote:
Originally Posted by Annabakescakes View Post

Say a cake serves 100 and I charge $350 and buy supplies and bake and fill and it is ready to decorate, and I give them $100-150. That is pretty easy for most people to figure out a percentage on a slice basis. The next 100 serving cake may be a $500 order but cost the same to bake and fill, but have in depth decorating. I could pay $350 for that one.

It sounds like you are basing the amount you give them on how long the cake should normally take to decorate (depending on complexity of course), this is in line with my advice above on paying based on the job.

The percentage would be labor cost for decorating (and any other services the employee provides) divided by the total cost of the order. If you want a per-serving amount and the order is only one cake you would just divide by number of servings. If you have preset items that customers can buy you can work out a percentage for each item, but with custom cakes you may need to adjust on a case by case basis.

And you're welcome, by the way. icon_smile.gif
post #9 of 33
Thread Starter 
I would never figure or pay per hour since we are totally different, nor do I care how long it takes them as long as it looks good and gets done. If I set a per hour price for myself, I would have to take a huge cut in pay for some of the simple cakes. For many of those, it works out to $80 an hour. I am not going to go below my minimum price just because I or my contracted person smoked through the order in record time. That is where your formula fails.
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post #10 of 33
Thread Starter 
Oh my bad, Thanks for nothing. I can figure that out for myself in about .02 seconds. I stated I would divide the profit. I didn't say I needed someone to do it for me. The question was directed at people with current business facing current times. You are welcome to find another thread to pick apart. Please don't respond any further, you are not helping, since you haven't answered a single qustiin and are just arguing about semantics.
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post #11 of 33
Quote:
Originally Posted by Annabakescakes View Post

I would never figure or pay per hour since we are totally different, nor do I care how long it takes them as long as it looks good and gets done. If I set a per hour price for myself, I would have to take a huge cut in pay for some of the simple cakes. For many of those, it works out to $80 an hour. I am not going to go below my minimum price just because I or my contracted person smoked through the order in record time. That is where your formula fails.

The price you charge the customer would not change, we are only talking about how much you pay your employee.

The whole reason for job-based pricing is to avoid variance based on how fast or slow a specific employee is. If a cake (regardless of size or price) normally takes 6 hours to execute to the level of quality you expect and you value the decorating work at $20/hour, you would pay the employee $120 for that cake. If they are super-efficient and finish in 4 hours and the quality is to your satisfaction, they get paid $120. If it takes them 10 hours because they are just getting started, they get paid $120. If they rush through in 3 hours and need to put in another 5 hours of rework because the quality is not there, they get paid $120.
post #12 of 33
Quote:
Originally Posted by Annabakescakes View Post

I stated I would divide the profit.

Basing employee compensation on your profit may not be the best model, because profit includes markup for ingredients and overhead, neither of which the employee is responsible for. You really want to focus on just the value of the work the employee/contractor is providing.
post #13 of 33
Thread Starter 
I will wait for someone that can add something. So far I haven't had any responses, just over complicated rantings that don't pertain to the question.
Edited by Annabakescakes - 8/21/13 at 2:06pm
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post #14 of 33
Thread Starter 
RMy part would be the same for every cake, i would take the order, discuss it with the contractor, collect payment, bake, and fill most likely, then my part would be done. I know what it costs me, and an average of how long it takes to do my part, and I would still have my own cakes to bake and fill. The only variable is what the customer is paying, so that part the contractor earns would be the variable. I'd really prefer not to over complicate things, and would pay myself the exact same thing for doing it per cake order. The rest would go to the contractor. Simple.

Yes, some orders cost me more, others will cost me less. It all averages out, and I am perfectly fine with that. I also don't have a greedy bone in my body, so I am perfectly fine and even relish the thought of the decorator making considerable more money
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post #15 of 33
Thread Starter 
Than me on every cake she does, and considerably more doing "her specialty" than she ever though she would.

K.I.S.S.
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