“How much would you charge…?”
I see a lot of posts online with cakes asking how much others would charge for a cake. Please be aware, asking others online their costs is NOT a good indication of how much you should charge. Pricing cakes is a very personal thing. What may be an acceptable price to charge to one person, may be too much or too little to another. Also, asking someone what they would charge then purposely charging cheaper and undercutting them is not cool. They have worked out the costs they would need to run their business and with a little calculations, you can do the same.
Pricing is a very personal topic. The frustrating answer unfortunately, is one I can’t tell you. No one can. It is something you have to come to on your own. But I can give you some tips to get there. Firstly, you have to know your costs exactly. This means busting out a calculator and every penny of your cake needs to be worked out. You need to consider;
- Ingredients. If you work out how much 100g of all your basic ingredients cost (flour, sugar, butter etc) and how much it costs per egg, it will make it a lot easier to cost per cake. If in doubt, there are some great apps out there that don’t cost very much (and it’s a business expense!) that will be able to help. If you use online grocery shopping, it’s usually worked out for you in the description of the item
- Overheads. I’m talking about your gas, electricity, petrol (if delivering), rent etc. Again, this is best off worked out to an hourly rate, then you can calculate how many hours it takes to bake.
- Equipment. Boards, boxes, dowels. If you need to purchase a special cutter for a project. It all needs to be included in your costs.
- Your time. This is the one most people struggle with. If you were applying for a job, what is the minimum amount per hour you would accept? It’s at this stage that everyone will undercharge as they are scared of pricing their time too highly. If you don’t pay yourself a decent wage, you will struggle to run this as a business, especially if you are counting on this being your main source of income.
Once you have calculated how much a certain cake would cost you to make, including your time, you can then start to think about how much you want to charge for it. I guarantee in your first few months you will undercharge. You may think you are asking for too much. I promise you, you’re not. Once you have been making cakes for a few months and you realise that you cannot put your heart and soul into a project, only to be paid £1.21 an hour (yep, that’s how much I was paying myself at the beginning!) you will realise something has to change. Your time, your talent and YOU are worth more than that.
Make a pricing guide and stick to it. One thing I did was work out how much I would charge for a basic 6” round, 7” round etc up to a 14” round. I did the same for square and I did the same for fruit cake. That way I knew what my prices started at. When I say started at, it’s because the price we are working out is just for the cake itself.
If someone ordered a cake from you with just a ‘Happy Birthday’ message on it and someone else ordered the same size cake but with two 3D models of the birthday girl and her cat, a message, small models of her favourite things and they wanted the cake to be a specific flavour that you will need to buy extra ingredients for, you simply can’t charge the same amount.
What I would do is have my starting cake cost and then add on costs for modelling/extras. You can do this either by pricing per model (again, work out your ingredients cost to see how much that will cost you and then your time also) or by the hour. It’s up to you. By having a pricing chart to know what your cakes start at, it also makes tiered cakes easier to price. You will need to take into account extra costs for dowels and cake boards etc.
At the end of the day, if you are making cakes for friends and family, you can charge what you want (although, contrary to popular belief, if you are making cakes regularly your kitchen MUST be registered with the council and you must register yourself as having another income, or you could be in serious trouble. For more information on this, check out my book which has everything you need to know regarding this), however, if you want to make cakes for people as a business, you need to work out a proper pricing structure. It will only take a few months of sleepless nights and no money to make you start to resent what you do and if you are turning your hobby into a career, it’s very probably because you love it, and you don’t want to lose that passion.