Cake Pricing-The Way a Honey Bunny Would do it.

Many of us have trouble pricing cakes and there are so many thoughts and opinions to why we should or shouldn’t talk cake pricing. I have read the blogs and watched almost every youtube and periscope video regarding this subject. The conclusion that I came up with… show you what I would do if I decided to turn HBBS into a business.

F.Y.I. There are classes on Craftsy and so many of our cake mentors have books and online tutorials about running your cake business. Here on CakesDecor there are some great blog posts about starting a cake business. I highly recommend that you invest in your cake education and purchase these tutorials. This blog only scratches the surface and I am no business expert, this is just what I think I would do if I decided to work out of a commercial kitchen or open a bake shop.

Things to know about me (your personal situation will influence your decisions)

1. HBBS in not a business, it is my HOBBY. I work from 630am -330pm mon-fri as a registered operating nurse.
2. I cake mon-fri for (2)-(4) hours a night and on the weekends
3. I don’t have children but I have (2) cats that have VET bills
4. I’m still paying on my student loans (aka, I’m broke all of the time)
5. I live in Chicago and pay a pretty high price for monthly rent

As with any hobby I am happy to put my own money into cakes knowing that my return is the knowledge and joy I get.

Where to start?

1. took a look at my group of friends. What do they do for a living? What are their skill sets and hobbies? Do I have someone good with finances that could teach me how to keep records and do taxes. Do I have someone who knows the law and could help me with filling for a business license and do my taxes? Are they willing to do trades with me?
2. GOOGLE
3. PEERS, we belong to a wonderful online cake community. Private message your cake friends and have a discussion. If you promise not to tell and trust each other, they will probably help you!

The dreaded business plan!
First, you don’t have to have one. There are many successful cakers that did not start their business having a business plan. The reason I bring it up is because in my area I found that the local government was giving out grants to minority and or women to open store fronts and improve the neighborhood. It is also required if I were to apply for a small business loan from my bank And for that you definitely need a plan!

What they want to know (these are just a few)

1. miles to the nearest bakery
2. foot traffic (yes you can look this up. every storefront has a foot trafic number attached to it)
3. what’s different about your business, who is your client base for that area (are there a lot of kids in our area? You might want to go for high end kids cakes)

Why do we care about prices at our local bakeries…
I looked into this because you do not want to undersell in your area. I know that whatever they are pricing at, I would be higher. I don’t want to lower the value of the product in my area, I want to prove that my product is better and worth paying more for. Make sense!

I decided that I wanted to make everything from scratch and I have spent many hours developing MY recipes and experimenting. It is very interesting to figure out what the clients in your area like as far as taste (I would take samples to work).
In my area my friends:

• hate american buttercream
• love swiss meringue which (more expensive to make)
• Love chocolate ganache
• don’t like buttercream fillings
• like mousse and curds (more expensive to make)
• like torted cakes with equal amount of sponge to filling

Skill level (this is where we talk about hourly pay)
I have been doing this for (3) years next month. Does that dictate what I am capable of, no, but it speaks to how much time I have had to learn and practice. Of course, if you picked up everything quickly and are at a high skill level after, say (1) year by all means change your pricing accordingly.

1. you want to be paid an hourly wage.
2. every year you want to give yourself a merit raise. Pay yourself for everything you have learned over the last year and be proud of the skills you have mastered.
3. take into account the equipment you have purchased over the year. You can now offer more variety of looks because you have more “stuff” (molds, cutters etc)
4. Take into account any classes you have taken and tutorials you have purchased

Think about actors. They get paid a huge amount of money to be good at what they do. We pay them to entertain us. So, they take acting lesson, singing lesson, martial arts lessons and you better believe they are getting paid to do it.

Let’s do a hypothetical, me vs. a well known establish cake artist (we will call them ECA)

ME: 3 years experience, medium skill level, very artistic, lots to still learn but pretty good and decent speed. I am completely making up numbers here!

ECA: 12 years experience, nothing they haven’t done, really fast, tons of fun equipment (molds, cutters etc)

I can not charge the same hourly rate as ECA. What would take ECA an hour may take me four. Over the years as I get better my hourly rate will increase and the time it takes me to complete a task will decrease thus increasing my profit margin.

So, let’s do a gumpaste rose.
ECA can do them in their sleep and has purchased every rose cutter there is. I have one rose cutter set and I’m still looking at pictures in the book I bought from ECA.
ECA: 2 hours total over 2 days to finished rose
ME: 4 hours total over 4 days to finished rose
ECA: $50.00 per hour = $100.00 per rose
ME: $15.00 per hour = $60.00 per rose

I think the key here is to be honest with yourself and know your skill level. Use collaborations and competitions to practice new techniques and develop your skill set. Don’t take on paid projects that you have no business saying you can do and then charging for a product that is half a**ed and took you forever to do. You won’t make a profit, you’ll have a mad client and it will reflect poorly on the rest of the cake community.

What’s this price per slice business???
I made the decision to charge the same price per slice and use the same cutting chart for every cake I make. What changes, say for a sculpted cake is my hourly rate (because to me that’s where the skill comes to play, not the recipe).

My price per slice includes the price of ingredients and the cost for running my kitchen (gas, electric, cleaning supplies etc). I decided what I wanted to include in that base price and what I wanted to charge an additional price for dependent on seasonal ingredients and time to make.

For example: Lemon buttercream requires making a lemon curd first which requires extra ingredients and extra time/gas at the stove top.
Lemon and Mocha sponge really doesn’t require that much extra from me so I decided to include those in my base price.

I also decided that because of where I live, distance that my cakes would travel and taste pallets of my clients I would only use ganache under all of my fondant cakes, that’s included in my base price (if you want a fondant cake from me it will be covered in ganache, not buttercream).

SO, after ALL of that, here is a sample pricing list for what I would do if I had a cake business on the north side of Chicago with (3) years of experience.

Servings
Based on industry serving charts (not a secret-anyone can google cake serving charts) and client feedback for my 5 in high cakes. *bigger pieces will yield less servings- I am not responsible for how you cut your cake : ) My cakes are all (4) layers of cake with (3) layers of filling where structure permits.
6 inch round/12 6 inch square/18
8 inch round/22 8 inch square/32
10 inch round/32 10 inch square/50
12 inch round/50
14 inch round/74

12×18 inch sheet (¾ sheet)/96

$ 4.00 per slice Includes (choice of) :

Vanilla sponge , Chocolate sponge , Lemon sponge , Mocha sponge

Vanilla, Chocolate, or Mocha Swiss Meringue Buttercream filling

White chocolate ganache or Dark chocolate ganache “frosting”

Additional charges per slice:

• Lemon Curd $0.50
• Vanilla Custard $0.50
• Raspberry Curd $0.75
• Chocolate Mousse $0.75
• Orange Cream Cheese Filling $0.75
• Strawberry Curd $0.50
• Strawberry Mousse $0.75
• White Chocolate Mousse $0.75
• Whip Cream $0.50
• Cream Cheese Buttercream $1.00
• Lemon Buttercream $0.20
• Red Velvet Cake $1.00
• Carrot Cake $1.00
• Fresh Fruit based on local Seasonal prices

Let’s do another hypothetical:
This is a cake I did for my friends daughters wedding shower. Take away all of the toppers and you have a pretty simple (2) tiered cake. I don’t really remember what flavors so I’m going to make it up.
Bottom: 8 inch x 5 inch Chocolate sponge with Chocolate mousse filling covered in dark chocolate ganache

Top: 6 inch x 5 inch Lemon sponge with Lemon curd filling and white chocolate ganache

requires (1) batch of vanilla swiss meringue buttercream for the filling dames and crumb coat which I always have around and don’t really charge for.

8in= 22 slices x $4.00 per slice plus $.75 per slice for the chocolate mousse
$4.75 × 22 = $104.50
6in= 12 slices x $4.00 per slice plus $.50 per slice for the lemon curd
$4.50 × 12 = $54.00
Say it took me (8) hours to bake, torte, fill, assemble, cover, stack and decorate w/o toppers. I want to be paid $15.00 per hour
$15.00 × 8= $120.00

Hypothetically, w/o toppers, I would charge $104.50 + $54.00 + $120.00 = $278.50

Now, you may think my base prices are set too high or too low or that it took me too long or not enough time to make this cake. Please realize that this is my thought process only; and yes, you have to make some decisions on your own that no one can tell you 100% what the correct answer is based on your skill and price of ingredients in your area.
What I can do is share with you what I have gleaned over the years and hope it helps others out but again I can not stress the value of paying to learn from our peers and investing in your cake education. The more you know, the more classes you have taken, the more experience you have = the more you can charge.

One thing I can tell you 100% with this method of pricing, you MUST know how long it takes you to do something!
I am horrible at keeping track of things. I’m the one who has no idea how I made fondant a certain color, runs out and then has to figure out how I made that color in the first place…YEP! So, it has been painful looking at the clock and writing down how long it takes me to torte and fill an 8 inch cake but I did and I kept updating that time if I got faster.

Anyway, guys. If you made it all the way to the end of this congrats!! Agree or disagree, I just hope it was food for thought. Cheers!

P.S. If you want to know where the base price comes from let me know and I’ll write up the HBBS way of doing that (which is so not exclusive but the way I would think we all do it).