Selling Your Homemade Cake

cake pricingThe value of gifts that are homemade cannot fully be measured. Of course, small children may be fascinated with the bright colors and decorations of a commercially made birthday cake, but eventually, many prefer homemade creations. One reason is because parents often take the time to work with the child, measuring out the ingredients and baking the cake to perfection. Although society has become so much faster and efficient, making it easy to forget how rewarding and delicious a homemade cake can be, there are many people who would pay well in order to bring home something they do not have time to make themselves. The question you should ask is, “how do you price a homemade cake?”

Make a List of Ingredients

To begin, if you want to determine how much you should charge for a homemade cake, figure out how much it costs to make. This will include listing all ingredients you use for one cake. For example, consider how many eggs will go into the cake. If you paid approximately $2.00 for a dozen eggs and used five, then you divide the number of eggs into the price. $.40 per cake is how much you spend on eggs. Go through each ingredient and determine how much it will cost. This will provide a base amount for the cost of ingredients, but remember that prices fluctuate. Use the standard price as your measure and if the cost of ingredients rise, recalculate this number to keep a fair market price for your records.

Determine Cost of Labor

Do not underestimate the value of the time you spend making your product. If you do not know how to set a price for your labor, consult a website with a salary calculator, such as http://bakersalary.com. You have the opportunity to enter your ZIP code to find out what cake bakers are earning in your area. For example, in the Houston, Texas area, the lowest salary is $18,000. With a Culinary Arts Degree, this amount rises significantly. The average hourly wage for a baker, then is right around $9.37. As the owner of your own business, keep in mind that the cost of labor does not include overhead such as the price of ingredients or equipment.

Make a Price List for Extras

As you develop your plan for selling your homemade cakes, you might decide to offer your clients special options for their cakes, depending upon whether it’s for a birthday, wedding or other special event. These extras include; decorations, garnish and disposables. If you plan to use premade flowers or bows, candles, separator plates, columns, bases or any other items, then add them to your list. For items that come back to you, set a price for a deposit that ensures you are able to replace the item if it is not returned.

Set a Price For Time Consuming Tasks

When a customer wishes to have time-consuming additions to the cake, such as hand-applied or airbrush decorations, create a fee. Do not undercut yourself by giving too much. You will not make money if you are too generous and it defeats the purpose of setting a price for your homemade cake. If people are willing to pay for the product, always give quality, but keep the added costs of time and products in mind.

Other Charges

Set up a list of miscellaneous costs such as delivery charges, transportation, catering fees (if you wish to offer this service), and all other expenses delivery of the product may incur.

Conclusion

Once you have your list of working expenses, calculate and total them. This will give you a base price. You may also want to add the cost of electricity (your oven and kitchen lights will add to the utility bill). If your area has sales tax, add this to the total amount if you are planning to make this a small business. There are laws and forms that need to be filled out in order to run a small business. Please visit us to learn more about cake pricing, you’ll sure be glad you did!