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Price the Cake

This is a recap from the Instagram live with Minette Rushing & Laney Cowan (me).

In general, I cringe when I see the "how much would you charge for this cake." I do want to help with pricing. I cringe because simply answering this question with an amount does very little good and often a good bit of harm. That is why Minette and I dedicate so much of our time to offering pricing information. We want you to be able to price your cakes.

What someone else charges for cake may not be profitable for you. It may not be the right price for your target client. You need a price that covers all costs (more than ingredients), pays you a wage for your time and expertise, and pays the company a profit. How do you even know the people answering know how to price? I wish the people answering would give more details. Today, we are doing just that!

This is the cake we used. Minette created this incredible work of art!

Let's start with the very first important truth of cake pricing..

We need more information! As professionals, we need to be asking questions. I can't tell just looking at this what Minette used, and I may have chosen differently for my clients. When a client sends me this photo, I still need to know: servings, flavors, & delivery location.

For this exercise, Minette and I agreed this cake is a 6 x 4, 8 x 6, and 10 x 8. The flavors of this cake are what we consider "midrange." Because we both deliver to Palmetto Bluff, we used that venue.

The final price is not as important as the costs, labor, & profit. Knowing these variables can help you truly compare and adjust your price. If your labor is way different on a cake, why? Is it because you are under or over estimating the time it will take? Is it because your skills and expertise are different and you pay yourself a different wage? The truth is it doesn't matter one bit what someone else is charging. What matters is that YOU cover all costs, pay yourself a wage, and profit. Yes, I am repeating myself. It's important. As a business owner, the goal is to be profitable. Period.

This is the absolute cold hard truth. If you "can't charge enough" then you don't have a business. Knowing that is also very important information.

Minette and I are often asked what to do if you live in an area where people won't pay. The answer is you don't start a business there. Large corporations spend lots of money researching an area. They ensure there are enough clients to sustain the business before building. If you don't have enough clients willing and able to pay your price you'll either need to rethink your business model, reduce costs, or recognize your business isn't sustainable.

However, before you go throwing it all out the window, do the research. Are you absolutely certain no one will pay your price? You may be surprised. Remember that often times we are not our target client. I am not! I am not willing or able to pay my prices for cake. That is ok. I don't have to be my client. I just need to ensure there are plenty of people who are.

So, are you ready to see what we would charge?

I was really certain Minette's price would be soooo much more than mine. It wasn't so different. You'll notice that Minette's costs are significantly higher than mine and my wage is more than hers. When calculating, Minette added the sole prop tax to her cost and I added it to my labor. My labor before tax is $676. Another significant difference is the rent Minette pays for her commercial space.

The most important information in this reveal is that we DO cover all costs, pay ourselves a wage, & pay a profit for the business. This means we both have profitable prices. That is why both of us have been able to survive in this tough industry.

We would love to hear what you would charge for this cake. Are you more? Less? The same? Would you have been profitable? I want you to know that Minette and I didn't know. We made a lot of mistakes building and growing our businesses. We had to learn.

Please visit Minette at Her blog is filled with amazing recipes.

We thank you all for joining us for these talks. You can join Minette and I each Tuesday at 3:00 ETD on Zoom. Meeting ID: 486 703 2301 Passcode: Cake

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