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Use this as a very, very, cheap, $5 lesson in what "NOT" to do.   Involve a friend or relative who will be able to offer solutions to put in place so this doesn't happen again.

If you are timid about money matters, then appoint someone else to handle the money matters.  If  you are concerned over $5, a small amount in the overall cost of a custom cake, you are not charging enough.  Is this a hobby and you just wish to recover your actual ingredient and supply costs, or do you wish to "make" money?   Either way, you need to have someone who is excellent with money review your procedures. 

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Apti:  Excellent points.

Original message sent by luvmykids2bits

Apti - I know.  I'm hobby toying with business, but I struggle so much with the business side of things.  I KNOW that I underprice my cakes, but I just can't bring myself to charge more, so it ends up being the cost of ingredients and a pittance for my time.  That's why I'm not sure I could do this as a business....and that's why I'm thinking I should push myself and ask for the full amount rather than just "letting the $5 slide".  The easy way out for me would be to let the $5 slide, but that's not good business sense, because next time it might be a bigger amount.

I need big girl cake panties and I don't know where to find them.

If your talent lies with the artistic side (baking and cake decorating), then I say again, LET SOMEONE ELSE HANDLE THE MONEY SIDE.  Getting this $5 back is just a symptom of a HUGE problem.  You already know that.  Is there someone among your family or friends who is good with business matters?  Ask them to help you.  Show them this thread. 

If you can't handle the "un-fun" side of a hobby "toying with becoming a business", you already know you cannot succeed as a business.  (this is probably why the $5 is bothering you so much)   

Here are some excellent articles/threads:

http://cakecentral.com/t/742057/new-cake-business-at-home-help

(notice the superb response by Leah_s from 4/3/12.)    I LOVE her last line:  "Then of course there is the baking."

http://staceyssweetshop.blogspot.com/2011/08/howd-you-arrive-at-that-number.html

http://www.cakeboss.com/CakeStuff/Articles/HowMuchShouldICharge.aspx

Write down every single thing you needed to make the exact cake you mentioned in your original post.  Paper towels, hot water, toothpicks, flavoring, frosting, filling, cake boards, fondant--EVERY SINGLE THING you had to touch in order to make that cake.  Then, assign a cost to every single item.  (Not fun is it......)   Then, write down exactly how long it took you to shop and buy the supplies and ingredients, the gas/mileage to get to and from the store, put up the items, bring out the items, store the excess, and breakdown the amounts used for the recipe and figure out if you can use up the excess ingredients on a ?Coupon=CC2015"future order".  (Not fun is it......) 

You are not allowed to "guess-ti-mate".  If you didn't keep track by writing all this down when you made that cake, then make a second, identical cake.  (You can always freeze it for a "future order.)  Write down EVERYTHING.  Then, after the cake is done and setting on the kitchen table, ready for "pretend" delivery, the dishes are done, the supplies are put up, and everything is restored to order and cleanliness..... Take the number of hours that you spent, probably between 4 and 15+ and multiply those hours and minutes by the prevailing minimum wage.  [the federal minimum wage of $7.25 per hour, which translates to just $15,080 per year for a full-time worker.]

Let's suppose your COST of ingredients and supplies was $23.20 for the cake.  (Total guess on my part.)

Let's suppose your time to do everything related to the cake was 4 hours.  (Total guess on my part.)

4  hours at $7.25 per hour = $29.00

$23.20 + $29.00 = $52.50

$52.50 is your COST if you are only paying yourself minimum wage.    (Total guess on my part.)

Let the $5 slide.  The $5 is not the problem.    The problem is to figure out if you paid this person "$xxx" to "take your cake".  Chances are you did. 

If you can't bring yourself to price appropriately, this may not be your thing. People tend to think that going into the cake business is about a love of caking. That's part of it, but to be successful, enjoying the business end is extremely helpful and it could be argued that it's even necessary. At the very least, it's an inescapable time consuming part of it .  Sometimes I have days when I spend 8 hours answering emails. Not fun, but it suits my nature, if that makes sense.

Can you overcome your fears? Of course!  But personally, I'd let this one go. I don't know that confronting this person is the place to start. It was basically your fault that it went down the way it did in that it was preventable had you reiterated the total, used an invoice and made sure your husband collected the right amount of money.

Five dollars is just drop in the bucket if you're charging correctly. I know how aggravating it is to not get that $5 since you did the cake for so little in the first place - it's like adding insult to injury. Just treat yourself better and charge what you're worth from now on. That the place to start pushing yourself.

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Sounds like you have no business at all selling cakes. That's Lemonade Stand 101, the basics of doing business, you know?

I am amazed at what you posted. You need to re-read what you wrote above. Then read it again.

Being a hobby baker is fine if you stick with free cakes (and whatever else you make) for friends and family. But if you continue "hobby toying with business" then the next time you do not charge correctly, read your post again, along with the responses. Instead of posting here. 

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Thanks, K8memphis.  This actually really resonates with me.  I KNOW that I am not a business person.   However, I didn't struggle as much with setting prices, etc, until I started hanging out on the forums on CC and seeing how much other people would charge for cakes equivalent to mine (the cake is question I charged $75, on here I'd guess other bakers would charge at least double that).  To be honest, though, I covered my costs and made about $8-10 an hour for my time.  It's something I love to do, I can do it with my preschool son around, on the days that I'm not working my part-time career job.  It's a hobby that makes other people happy, including myself.  I guess I got all dizzy as more and more people are telling me I should open a bakery, and it's got me thinking, well, maybe I should.  But you know what?  I love my career job, I love the flexibility of being able to refuse cake requests if I'd rather take my kids to the beach that weekend, and I think I might end up resenting caking if I have to make a go with it to cover the mortgage and stuff.  I live in an area where there's not a lot of people who will pay $200 for a two tier kid's birthday cake, and that's just the reality of it.

I'm too hard on myself....maybe I don't need to find my bgcp, because I do like things just the way they are.

Thanks.  I guess that was $5 well spent on personal self-reflection!

So, you've decided you'll no longer sell to friends of friends and keep it a hobby. That's great.

People who tell you that you should "open a" bakery, or a restaurant, or a cupcake shop, or a deli don't REALLY mean it literally. It's a way of complimenting you that isn't intended to be taken a face value   but it is a wonderful compliment.

Original message sent by Elcee

People who tell you that you should "open a" bakery, or a restaurant, or a cupcake shop, or a deli don't REALLY mean it literally. It's a way of complimenting you that isn't intended to be taken a face value :)   but it is a wonderful compliment.

Originally Posted by luvmykids2bits 
 

 

I covered my costs and made about $8-10 an hour for my time . 

It's something I love to do ,

I can do it with my preschool son around

It's a hobby that makes other people happy, including myself  . 

But you know what?  I love my career job, I love the flexibility of being able to refuse cake requests if I'd rather take my kids to the beach that weekend  ,

 

 I guess that was $5 well spent on personal self-reflection!

Well said!  Big virtual hug <<<hug>>>!

*K8memphis---"I think what you posted is a very common conundrum for cakers and for a lot if not most all cottage industries..."   I agree wholeheartedly

*Elcee---"People who tell you that you should "open a" bakery, or a restaurant, or a cupcake shop, or a deli don't REALLY mean it literally. It's a way of complimenting you that isn't intended to be taken a face value but it is a wonderful compliment."  Yes, it is indeed.

what is bgcp?  Bowling Green Cumberland Presbyterian?  Burner Gas c o c k Position?  Boys & Girls Clubs of Providence?

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bgcp

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This. I get told every day I should "open a REAL bakery." Well, I have one, it's in my house, and right now if I had to do any more work than I already do I'd go nuts. Being a business is not for the timid, especially if you have a preschooler at home. Good for you to admit that you aren't ready for the big commitment. I would leave the $5 as it is and keep your caking a real hobby until you're ready to turn it into a job. Good luck!

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Completely agree (not that I get any money back for anything I make) but I don't understand why people think it is not ok to get the cost of the ingredients back - if I were to help my sister to put up her fence and I picked up and paid for the fencing materials I would certainly think it was on the proviso that she reimburse for the materials so I really don't understand the difference there, it doesn't make me a fencer, simply a person helping out my sister. Also I am not asking for someone to explain it to me - in my belief it just doesn't and will never make sense.

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I don't think anyone really cares if you get reimbursed for cost of supplies for cakes made for friends and family. Where it starts to matter is when you sell a cake that you KNOW you undercharged for to friends-of-friends-of-family. We all know there are those people who try to hide behind being a "hobbyist" but are really selling a lot of under priced cakes so they make extra money without reporting any of it. THAT is what makes legal bakers most upset. A few bad apples have spoiled the barrel, so to speak.

It's the extra money, on top of ingredients, that they make without reporting it as income. Legal bakers DO report it as income and have to pay taxes and insurance and make less profit because of it. Then those same people who are used to getting cheap cake freak out at a legal baker over prices that they find "overpriced" when it is really the other way around..the illegal baker has under priced cakes and made legal bakers out to be price gouging and heartless.

It's a lot of work to price out your exact costs, try out recipes to create a menu, set up a website, market yourself in a community, learn and abide by all of the local and state laws and regs, seek out and purchase insurance, register your business, keep track of expenditures..all before even getting to the fun part of baking and decorating a single cake. What doesn't make sense to me is how people can so easily dismiss all of that work by saying that a legal baker is overpriced when they haven't ever sat down to figure out any of the numbers themselves. What's heartless is telling a legal baker that we need to work for $4 an hour to compete with the illegal bakers prices because they haven't done their homework to price out costs and are not compliant with laws and taxes. 

I agree that helping your sister with a fence doesn't make you a fencer. But if your sister's neighbor's friend "hires" you to build their fence and pays costs of materials plus an extra $75..that is taking away from a legal fencer who went through all of the right steps to certify their business, pay taxes and pay their workers at least minimum wage. Do you see how that would make the legal person upset?

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This!  Thank you sixinarow for saying what many are thinking.