I get asked this question all the time, as many of my students also want to turn their passion for cake decorating into a successful businesses. The simple but frustrating answer is that no one can tell you how much you should charge. Setting a price structure is one of the most difficult parts of any business. With cakes, there is always the temptation when you first start your business to under price yourself, making cakes for family and friends is one thing, but running a business is quite another. Selling your cakes too cheaply is not, in my opinion, beneficial as it under values your skills. So what to charge……?
To help you set your prices I would suggest initially doing a little research to see what other cake companies in your local area are charging as this will give you a feel for the market that you are in. Then you need to work out your costs accurately including all the cake ingredients, including the box and board and your overheads such as the use of your oven and dishwasher. The next point to consider is the amount of your time you will spend on creating a cake, this is time spent planning, shopping, baking, clearing up as well as the decorating time. Then think about how much you need to earn and try and set yourself an hourly rate you are happy with – remember there is a minimum wage!!.
Once you have collected this information there are various ways to use it to help you price your cakes. I recommend that you calculate what it costs to bake and decorate a cake and then add the time it takes x your hourly rate. I would also recommend adding in a profit element as well. It is tricky, especially to start with, but the more commissions you take on the more confidence you will become with your pricing structure. Remember bespoke cakes are edible works of art and should be valued as such, so I urge you to price them accordingly.
If you’d like to perfect your cake decorating skills further take a look my workshop schedule, we have many students attending who run small business, so the classes are often a good networking opportunity, where you can swap stories, experiences and ideas.
Good Luck with your business venture