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Cake Pricing - Nestie Opinions Needed
Preface: The Baker's Bill was made into a law last legislative session and as of September 1st it will be legal to sell baked goods out of a home in Texas.
DH has been really bugging me about starting some sort of side business doing baked goods. I get a ton of compliments on things I bake and have many people who "hire" me to do their cakes for birthdays, etc. I am on the fence about making it official but would like to ask you girls some questions anyway.
The main problem I have is pricing. I way undercharge. I end up making about $1 and hour for my time and I know I can not succesfully run a business making that kind of money. So, my question for you girls is: what would you be willing to pay for the following items? Give me the max you would pay.
For reference:
Not my cakes but for # of slices visual -- 6 inch - 8 slices, 8 inch - 15 slices, 10 inch 30 slices, 12 inch 45 slices.
[Poll]
Please be honest about what you would really pay. If you have any comments or feel like another price would be better, let me know. Even if you think these prices are outrageous, let me know. It won't hurt my feelings at all. I am just trying to see if there is even a market out there.
ETA: Ok, I edited the poll for just simple cake. Please vote.
If you feel like it:
What would you pay for cupcakes per dozen?
Cakeballs per dozen?
What do you feel is a fair upcharge per slice for fondant/complicated frosting work on a cake?
Re: Cake Pricing - Nestie Opinions Needed
I don't really know how to vote on this because we had a family friend make our wedding cake for $1/slice (which was wayyyyyyy cheap, we practically stole that cake!), but at the same time, you shouldn't charge what a high-end bakery charges since you don't have quite the overhead. Tabitha Ballard charges $1.50 for simple cakes, am I right? But, her prices may have gone up.
I know that I am talking in circles and no real help... but I think that it's pretty awesome that you're going to do this!
Bio
If you're talking about a wedding cake, my cake from the Cake Guys was $3.50 a slice (in 2009) which included filling. For a home baker, I'm thinking $2 slice would be the max. And if you're wanting to break into the wedding cake industry, some kind of tasting will need to be provided--I think Tabitha does cupcakes for hers? I have a friend who is doing it and I know the tasting part was the thing tripping her up because of the time and amount of ingredients involved.
As far as birthday cakes, cupcakes, etc. I would just price yourself competitively with what other places charge. For a birthday or other occasion cake, I would probably be just as likely to buy from a home baker that I knew than a grocery store--the last time I needed a cake, I bought one from my friend that I mentioned above.
With All the Trimmings
Just do it!
I'm in the same boat as Brianna. My friend did our wedding cake for free. That same friend was going to start making cakes and she was going to charge $2.50 - $3.00 a slice. I don't know if that helps you or not.
What would you pay for cupcakes per dozen? My favorite cupcakes are from Cakes Amore and I pay $1.75 ea.
Cakeballs per dozen? I buy cake balls at Velvet Bake Shop (or whatever it's called) and I think I pay $1.50 ea.
What do you feel is a fair upcharge per slice for fondant/complicated frosting work on a cake? Umm... I have no idea. Sorry!
Brianna does make a good point about not having the same overhead as a high-end bakery.
I agree... while you can't give away your cake, you also can't charge what a bakery charges. You SHOULD charge enough to cover taxes and business insurance, because if you're writing contracts with clients, you have to be able to back that up even in the event that you're in a car accident and break all four limbs. It sounds extreme, but it's the truth. Insurance, insurance, insurance.
The second you start charging for more than "cost of supplies", you're in business, whether that business is out of your home or not. You either have to be willing and able to 100% compete with the quality and customer service of a full-time bakery, or be willing to charge way less to compensate for that.
I'm glad the Baker's Bill is finally going to allow you to do this, and that it will be a viable source of some "side money" for you. But because of your limitations... meeting space, hours, customer service, volume restrictions, etc, it might not ever really be something that has the "dough" rolling in.
I could be totally off base, and feel free to ignore me if that's the case. I think $1.50 - $2 a slice is valid for a small cake, if out of that you're paying taxes and insurance. But ultimately, it really wouldn't leave you a whole lot "per hour", and I think that's just kind of the nature of the beast.
I'm not sure I buy the "no overhead" argument, because home bakers also won't have the volume to help bring costs down.
Cake Balls - $20/dozen seemed to be the going rate for Etsy local sellers.
Cupcakes - Not sure, maybe $20? They are actually easier than cake balls IMO and take less time/ingredients...so it seems weird to charge more as most places do.
I don't know how many people a regular birthday type sheet cake feeds, but I probably wouldn't pay more than $30 for that type of thing...so whatever that comes out to.
Maybe $10-20 more for fondant or special decor on that size cake, depending on complexity?
Sorry, I'm probably not helping much.
ETA: What if, for cakes, you had a low base price of $1.25 or so a slice for a simple standard design cake with one flavor, no filling.... and then quote on a case by case basis for everything else?
We did cupcakes for our wedding. $2 a cupcake for the "simple" style, and $2.50-2.75 for the more "gourmet" flavors.
I never looked into getting a wedding cake, so am not really sure of pricing. However, if I were ordering a special event cake, I would expect some sort of decoration (fondant, writing, flowers) to already be included in the pricing.
Hope that helps. I think it's great that you're looking into this. If you have a special talent, may as well look into how you can make money doing it!!!
I agree with Chelsea. Just to give you an idea, a friend of mine did this a few years when she was on theknot/getting married and made wedding "cupcake" cakes ( you know the towers of cupcakes) and wedding cookies. I think she had on and off business for about a year that she got through knottie friends and word of mouth, but eventually it came to an end.
Is there going to be a lot of up front cost for you to experiment with this business to what kind of money it will bring in before investing a lot? I would hate for you to invest a lot up front in case it doesn't pan out.
For me personally, there would have to be a significant cost saving before I would consider a non-bakery source.
My Ovulation Chart
<a href="http://www.thenest.com/?utm_source=ticker&utm_medium=HTML&utm_campaign=tickers" title="D
Chelsea - Don't worry, I understand the need for insurance. I have already had our agent quote pricing for a policy to cover the business. I have had my attorney explore the business and tax liabilities. If I am going to do this it will be 100% the right way.
DH is 100% in on this, but he also isn't the one doing the baking. I feel like I need to explore pricing more. It's a hollow feeling to realize you actually ended up paying someone for a cake you spent an afternoon on.
This was all sparked by a search to show my CW what a cake ball was. There was a website for two women selling cake balls for $1.50 each. Their cakeballs looked exactly like mine and their flavor list was actually more limited than mine. It confirmed to me that I should probably be charging more than I currently am.
Thanks for the feedback girls!
YAY! I'm glad to hear you've covered your bases. Because you knew all about the bill, I was fairly certain you'd looked into insurance... but I wanted to bring it up, just in case.
I'd pay $1.50 for a good cake ball. Because OMG yum.
Tiffany - Yes, overhead absolutely. Rent for the store front, paying the utilities there, furnishing the store, outfitting your kitchen, paying employees, having a "brand", marketing, etc. Overhead for a bakery is much higher than out of your home.
There's a bakery over here in Plano called Velvet Bake Shop. Their cake balls are $18/dozen. I wouldn't go any higher than that... it seems to be the going rate.
And I agree with Kathy - for me to choose a home baker (or to even scout one out), the savings would have to be fairly decent compared to a bakery. That's also the nature of the beast.
With that said, what are you doing in January? I have a pretty special soon-to-be 5 year old's birthday that I am planning.
Bio
Yes, I realize that....but it is not what I meant. I was referring to pricing.
What I meant is that bake shops have a much higher volume to cover their costs and can often still be very competitive on price as a result. My point was that a home baker shouldn't necessarily be significantly less than a bakery simply because a bakery has overhead.
True, but if there is a higher overhead, sometimes they have to charge more than the home baker, but they both still have the same profit per items.
That's all
Bio
I was all ready to vote $2, but then remembered that for a shower I did in January, we paid about $2.50 for a home baker to do a buttercream cake with polka dots and a sugared C that laid flat... so not simple, but not super complex. So, I voted $2.50.
I'd probably do about $18 for a dozen cupcakes or cake balls - no idea how relevant this is, as I've never bought either in bulk.
Depending on the complexity, a buck or two for detailed cakes? The same home baker who did the shower cake above did my wedding cake, and I think it was around $3.50 or something. It was amazing.
I don't know that I'd ever search out a home baker for an event - birthday party, office event, wedding, whatever. However, if it was someone I knew, I would go with that person hands-down over a bakery if their work stacked up and satisfied my needs for my event. If it was a friend of a friend, I'd debate a little more with myself, but would probably ultimately choose the home baker as well - I grew up in a small town where we support those who are making the effort to do something over the bigger businesses.
I am super excited for you to be considering this, and I hope it works out for you! I'll also keep you in mind should I have a need for your sweet services in the future
For my wedding cake, I paid someone $3 a slice. I have no idea where she did her baking -- I had my consultation with her in her home, so I assumed she worked from there too.
She came highly recommended by wedding professionals I trusted, so I honestly never gave a thought to where she made the cakes.
In your poll I voted $2.50 just because your "simple design" wording threw me. I was totally fine paying $3 a slice for the cakes we designed (pics are in my bio).